Restructuring supply chain & assuring sustainable quality Automek Inc. & Agile Electric Boilerup Consulting Aniesh Aravind Bharat Varshney Shantanu Agrawal Andrew Tye Agenda for Today OUR COMPANY Problem Recommendation Analysis Risk Mitigation Implementation Question & Answer 2 Boilerup Consulting We are encountering resistance PROBLEM Problem Recommendation Analysis Risk Mitigation Implementation Downstream customers experiencing failure of products supplied by Agile • Urgency: more failures threatening to stop operations • Importance: • High cost of recall and shutdown • Direct impact on revenue streams and business relations • Objectives: • Contain current issues at minimal cost • Address root cause to resolve problems now and in the future 3 Boilerup Consulting Let’s restructure our supply chain! RECOMMENDATION OVERVIEW Problem Recommendation Analysis Risk Mitigation Implementation Replace Tier 3 & 4 suppliers using Automek’s global network Redefine contracts and invest resources in Agile Transfer penalty costs levied by OEM to Agile 4 Boilerup Consulting Underlying causes downstream TIER 2 ROOT CAUSE ANALYSIS Problem Recommendation Analysis Risk Mitigation Implementation Received parts didn’t go through SMT process Not involved with sub- suppliers to ensure Agile lacks skill set to TS16949 requirements manage sub-suppliers No support to suppliers in e developing process flow l and control plan i g Assumed Automek bore A risk of suppliers they approved Communication gap between Automek & Agile Didn’t strictly follow APQA process with suppliers Visual inspection only for quality check 5 Boilerup Consulting Underlying causes upstream TIER 3 & 4 ROOT CAUSE ANALYSIS Problem Recommendation Analysis Risk Mitigation Implementation Sub-supplier should be TS16949 certified No process to trace L incoming parts P C No stringent regulation to Sub-suppliers should E ensure quality parameters preferably have core / business in automotive Unsatisfactory overall L effectiveness of process industry P control system I B Insufficient management involvement in action Sub-supplier management implementation should be actively involved 6 Boilerup Consulting Who really cares? STAKEHOLDER ANALYSIS Problem Recommendation Analysis Risk Mitigation Implementation Increasing Relevance BIPL ECPL Agile Automek OEM Increasing Cost 7 Boilerup Consulting Taking responsibility CLEANUP ANALYSIS Problem Recommendation Analysis Risk Mitigation Implementation OEM Incurs losses due to failures and delays •Set a Precedent going forward. Automek •Meet Contract Charged by OEM for their losses +losses due to •Reduce Financial Losses production stoppages •Root Cause was with Agile Agile Should Agile bear some charges? 8 Boilerup Consulting What really matters? IMPORTANT CONSIDERATIONS Problem Recommendation Analysis Risk Mitigation Implementation Quality Implementation Time Assurance Supply Implementation Cost Chain Relations Turnaround Future Product Time Portfolio 9 Boilerup Consulting What are the options? OPTION ANALYSIS Problem Recommendation Analysis Risk Mitigation Implementation Future Quality Implementation Changeover Supplier Turnaround Product Assurance Time Cost Relations Time Portfolio + + +- + + - 3 Option 1 +- +- - + + +- 1 Option 2 + - - - - + -2 Option 3 - Option #1: Change sub-suppliers - Option #2: Increase sub-supplier margin - Option #3: Change primary supplier 10 Boilerup Consulting
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