Big-3 JIT

Automotive companies download their requirements to their suppliers via EDI (Electronic Data Interface). The requirements come from the automakers MRP systems. As you can see, Ford's demand for piston pins was rather erratic. We called it the cardiac schedule. When confronting Ford about this, we found out they did cycle counting without reconciliation efforts. So on one day, they would lose the parts and the next day find them. They would also scrap parts in their production and assembly and then recover them. 

A few years later we proposed to Ford Purchasing personnel to let us establish a kanban system directly at the point of consumption on the assembly floor at Ford. The purchasing people said, "stay out of the shop." As of this writing Ford is shrinking.

Also, this was not unique to Ford. General Motors and Chrysler likewise produced cardiac looking requirements. What is amazing about this is the disconnect between the parent items schedule and the component requirements.

The y-axis on the charts is blank to protect proprietary information. Please scroll down to see what a world class producer's requirements look like. 

We delivered gear and pinion sets directly to the point of consumption at Honda. Although kanban demand methods were employed Honda also used EDI. As you can see it was without the appearance of cardiac arrests.

The Big-3 forced JIT on their suppliers. They interpreted JIT as a way to beat up their suppliers. You cannot optimize your supply chain processes by starting with suppliers. You must start from within and work outward.



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