QAD embeds global materials movement standards for long distance auto supply chains

The release opens the door to effective long distance supply chains in the world-wide automotive industry, with a set of best practices and systems based on standardised material flows and automation. QAD is the sole ERP provider on the MMOG/LE update committee, and says that it can now simplify the path to compliance based on the prescribed materials management principles from the Automotive Industry Action Group (AIAG) in North America and Odette in Europe. More than 1,000 global MMOG/LE supplier audits have been conducted in North America and Europe since the guidelines were introduced in 2004. As suppliers in emerging manufacturing centres adopt the principles of the established markets, the guidelines are serving as a standard for long-distance supply chain materials flow. “There’s a steep price to pay for inventory that’s in the wrong place at the wrong time, and a thriving global automotive industry will depend on a standard level of performance for materials flow, no matter where the supply base is located,” says Dr Yilong Chen, AIAG’s general director of Asia-Pacific affairs and chief representative in China. “Already, Global MMOG/LE guidelines have streamlined suppliers’ evaluation process, and AIAG-sponsored training for suppliers in China will help perpetuate a degree of consistent supply chain function that benefits the entire industry.” Suppliers are reporting advantages of compliance, ranging from better ability to participate in the automotive industry to gains in operational performance. An Odette survey of 50 compliant suppliers in Europe revealed impressive benefits – including reduction in line stoppages, rework, logistics incidents, premium freight expenses, obsolete material, inventory carrying costs and data entry time, as well as improvement in delivery performance. “Global MMOG/LE guidelines help smaller suppliers in emerging markets such as the Czech Republic, Turkey, Romania and Slovakia gain insight into improvements they can make that will put their materials management practices on a par with Tier-1 suppliers,” says John Canvin, managing director of Odette. “We’re seeing momentum in Central and Eastern Europe already, with an increase in Global MMOG/LE compliance training participation.” Suppliers such as Freudenberg-NOK, a leading manufacturer of elastomeric sealing and noise, vibration and harshness (NVH) products are using QAD for help in achieving compliance. QAD has identified aspects of its ERP that support each point of the latest MMOG/LE guidelines, and now offers an assessment service to help suppliers evaluate their processes and systems.