Leading Automotive Parts Supplier Reduces Costs, Increases Accuracy with Greater Efficiency in its Reporting using Altair® Monarch®
A global leader in automotive supplies, this organization has over 300 manufacturing
centers and close to 90 product development, engineering and sales centers in 30
countries. Known for quality part designs and engineering, it conducts tests and
manufactures automotive systems, assemblies, modules and components for original
equipment manufacturers (OEMs) of cars and light trucks around the world. It has won
awards from their customers for delivering innovative technology, providing superior
quality components, and offering competitive enterprise-level cost solutions.
In the early 2010s the company expanded its operations to a new facility in the southcentral United States. This location manufactured components for a popular compact
crossover sport utility vehicle sold by one of the Big Three automakers. Before the plant
became operational, the company recognized the need for a data mining solution that
could help them manage the massive amount of data that would be required to engineer,
deliver and invoice against the many different components used in the manufacture of
items that would be used by the automaker in the final vehicle assembly.
The Challenge
The supplier’s business model is based on invoicing against the cost of each component
used in the manufacturing of a final product. Orders are placed, processed, delivered
and invoiced by the components that go into the finished unit, rather than invoice against
the total number of finished units shipped to the automaker. On average there were
over 100 different components used in each finished unit. However, as the automaker
offered custom variations to when selling vehicles, it was not uncommon to have over
250 components in a single unit that was manufactured and shipped to the automaker.
The parts supplier needed the ability to validate, reconcile and report on all the
components used to manufacture the final unit for the automaker. Poor inventory
controls and inaccurate supply chain reporting impacted the supplier’s operational
costs and revenue numbers. Moreover, the automaker required that each component
used in the final unit be mapped to the Vehicle Identification Number (VIN) of the fully
manufactured vehicle.
Using Self-Service Data Preparation to Jump Start the New Facility
Before the plant became operational, the parts supplier turned to Altair’s self-service
data preparation solution, Monarch Complete as an integral piece of the reporting
process. The workflow begins with job orders by component put into the Manufacturing
Executive System (MES). When an order is ready for production, the components’ data is
passed through the company’s ERP system known as ‘Trans4M’, in the form of a report
that provides the inventory of the order. Once the order has been produced and is ready
to ship, a finished goods report is generated showing the components that were included
in the order. This report is then passed through a pick and pull shipping system from
Hewlett Packard; it is also passed through an ERP system by finished good, product unit
number and the VIN.
Using prebuilt reports and data queries run from inside the ERP system, the manufacturer
uses Monarch to extract, compare and verify the production data from one system with
what is in the shipment from another system to ensure the order is correct and properly
billed. With all of these systems involved in the process, Monarch has proven to be the
solution that mitigates complexity when creating final reports and invoices and analyzing
other datapoints for business purposes.
Results
Using Monarch to efficiently extract data from various sources, the company has
realized tangible results in the time and cost it takes to create reports compared to
similar reporting processes used at other sites. Being able to minimize the amount of
data that is transferred into the general ledger (GL) system (IDEAS from P2 Energy) has
reduced time and licensing costs for this system. When a report of the GL data is run, it
passes through the separate GL system in detail and is then pulled into a SQL table for
future use. There are 300K detailed transactions a month that are kept, but only 1500 are
used for the final GL reporting. The accounting department uses the detailed SQL table to
analyze its business costs, as well as their customers spend, margins realized, and growth
patterns. Monarch’s user-friendly interface is leveraged to access and transform this
data for the analyses. Before Monarch was used, the reports were manually created
in and took hours to complete. The process is now automated by dropping a file into
the Monarch environment. The time it takes to create a report is now measured in
minutes. With the success of the Monarch’s self-service data preparation capabilities,
the parts supplier is now adding Monarch to other areas of the business to increase
reporting efficiencies, reduce costs, and to improve its inventory controls, supply chain
logistics, and to increase its overall value with their customers and partners within the
automotive industry.