Leveraging the Supply Chain: How DaimlerChrysler Does It
To support production of the 2005 Jeep Grand Cherokee, the worldwide supply organization at DaimlerChrysler Corp. (Auburn Hills, MI) oversees the transport of more than 1,300 components and 425 truckloads of material from more than 300 internal and external suppliers each day.
Components and subassemblies arrive from many different locations around Detroit and the Midwest. Some material comes from as far away as Hamburg, Germany. Any break in the supply chain can disrupt vehicle production, so sophisticated systems are employed to ensure that the flow of parts into the plant is not disrupted.
The design of the supply chain is a function of the flexible manufacturing initiatives implemented at the Jefferson North Assembly Plant (Detroit), says David Hodgson, vice president of world wide supply. "The goal of a lean delivery system is to deliver materials efficiently from the supplier just-in-time to the assembly line operator," explains Hodgson. "Lean delivery supports manufacturing's objectives of quality, reliability, speed and flexibility in production.
"Delivery of major components in frequent, right-sized quantities gives manufacturing the flexibility to manage vehicle options and multiple models," adds Hodgson. "The supply organization is creating efficiencies and cutting costs that are ultimately passed on to Chrysler Group customers."
According to Hodgson, one of the key concepts employed by the automaker to provide production flexibility is sequenced parts delivery. Sixteen Tier One suppliers of large, integrated components ship "in sequence" to the build schedule broadcast from the assembly line. The parts arrive on trailers, are unloaded and delivered directly to the line, and installed on the vehicle. "Sequenced parts delivery helps to reduce parts inventory levels in the plant," claims Hodgson.
To support these efforts, a new 300,000-square-foot material-control facility is managed by TDS U.S., a logistics services provider. The facility receives approximately 27,000 Grand Cherokee parts per day, sequences the parts, and ships them to the assembly plant.
"This material-control facility is yet another step in the evolution of supply chain management, providing great benefit to the assembly plant and Tier One suppliers," explains Hodgson. "It allows us to fully utilize the expertise of our strategic logistics partners."
One of the major transportation carriers servicing the Jeep plant is DaimlerChrysler Transport Inc., a wholly owned subsidiary of DaimlerChrysler that provides truckload transportation and trailer switching services. The company manages 246 deliveries per day from its Detroit terminal. The fleet provides transportation from Chrysler Group-owned manufacturing facilities and external suppliers.
To manage this complex supply chain, the Chrysler Group uses a state-of-the-art material control system. "The system processes the material orders, schedules pick-ups and deliveries, and tracks the material electronically the entire way," says Hodgson. All Chrysler Group carriers are equipped with satellite tracking systems. If there is a disruption, the system automatically notifies the plant to avoid a line stoppage.