THE CHALLENGE AUTO COMPONENTS SUPPLIER GOES LEAN WITH RFID

Automate the receiving of eight truckloads of  parts from 160 suppliers daily to reduce cycle times and costs

Continental Automotive is one of the world’s leading suppliers to the automotive industry, employing about 150,000 people in 36 countries. The huge Huntsville plant alone runs thirteen 600-foot assembly lines for two to three shifts per day. Those operations include the manufacture of powertrain components, transmissions, engine controllers, automotive infotainment systems, body controllers, “and a variety of electronics that go into a car,” according to Dr. Gokhan Sarpkaya, Project Leader for Logistics at Continental Automotive. Several years ago, Continental launched its lean manufacturing initiative, intended to identify ways in which the company could improve its manufacturing processes. As part of that initiative, the plant is converting the existing lines into lean manufacturing cells. To feed the assembly lines and cells, the Continental facility each day receives eight truckloads containing some 5,000 types of electronic and mechanical parts originating from about 160 manufacturers. Continental receives those supplies directly from its three third-party logistics suppliers, who receive them from the manufacturers.The logistics suppliers repackage the supplies using one or more of Continental’s 80,000 reusable containers or pallets, which are transported to the Continental facility. The personnel who receive the shipments have traditionally used bar-code scanners to check the incoming supplies against the shipping orders in the company’s SAP enterprise resource planning (ERP) system, while forklift drivers hunt for available space to randomly store the supplies until they’re needed. The containers and pallets are then moved to another on-campus, third-party firm that processes the empty containers and returns them to the logistics suppliers. In support of its lean-manufacturing initiatives, Continental identified the loss of supplies and containers as an opportunity to save costs. Shrinkage was one result of errors made because the locations of parts were noted manually. Time-consuming delays occurred if the advance-shipping notice sent by the logistics suppliers to Continental failed to match the parts that Continental actually received from those suppliers — or, if the advance-shipping notices failed to arrive in time for Continental to compare them to the shipments. Compounding these issues, it was too easy to damage bar codes on the shipments, which prevented accurate reading by scanners. The manual scanning of bar codes and the manual comparison of shipping notices to the orders in Continental’s SAP ERP system were time-consuming, nonproductive, and expensive processes that were inconsistent with the idea of lean manufacturing. Continental’s Sarpkaya and his colleagues had a clear mandate to address the challenges of managing incoming shipments. Lean strategy drove their decision to come up with a new solution for these processes to decrease the time required to scan bar codes manually, to reduce inventory inaccuracies caused by late shipping notices and human error, and to enable the company to track — and, thus, better manage — its 80,000 shipping containers.