Grand Haven Stamping Products

THE COMPANY
GHSP, formerly known as Grand Haven Stamping Products, is a Tier One designer and manufacturer of mechanical and electro-mechanical assemblies for domestic and international automakers such as Audi, DaimlerChrysler, Ford, GM, Honda, and Toyota. The company's main products are floor mounted, cable actuated, transmission shifter mechanisms for both automatic and manual transmissions, which GHSP supplies to more than 60 percent of the North American market.

"The ROI from the QAD Supply Visualization implementation was realized in days, and not months or years"

Established 76 years ago, GHSP is owned by its management and the JSJ Corporation, a privately held company located in Western Michigan. GHSP's sales grew by more than $35 million and totaled $135 million in 2000. It currently has manufacturing facilities in the USA, Germany, and India, accompanied by other engineering and sales locations.

THE CHALLENGE
Over the years, GHSP has experienced steady business and sales growth and has relied on QAD MFG/PRO to integrate its manufacturing and distribution activities. Prior to its use of MFG/PRO, GHSP describes its system as a "yellow legal pad," which was a completely manual, non-electronic environment. In 1997 GHSP first implemented MFG/PRO in a UNIX format. The company originally chose QAD for its experience in the automotive industry, but after the implementation, other substantial QAD benefits became apparent.

"We gained a lot of advantages when we implemented MFG/PRO," says Jeffrey McCauley, GHSP director of information systems. "We experienced inventory and data accuracy along with new supplier scheduling capabilities. We have since integrated bar code data collection, EDI capabilities, and in-line vehicle sequencing into our QAD applications."

In 1999, GHSP upgraded its MFG/PRO system and converted to an NT environment. All of its domestic sites are centralized via a WAN, and its international sites are connected through a frame relay. The WAN consists of a centralized database accessed by GHSP's other divisions through Telnet. And the company uses Hewlett-Packard server technology in a clustered environment and a T1 connection to the Internet.

GHSP has a long history of operating in a lean manufacturing environment with stringent supply chain management practices, a necessity in the highly competitive automotive industry. It has modeled its manufacturing organization after the Toyota production system. And as competitive pressures mounted over time, GHSP has experimented with various techniques to supply greater visibility of its inventory to its supply chain partners.

To answer the need, GHSP began using different programs and replenishment tools that were effective but required a lot of manual work and processes. One program required the suppliers to physically come into the plant and review GHSP's inventory. Another program allowed suppliers to dial in via a modem to view some of the inventory, but not all of it.

"All of the programs had issues relating to timeliness, ease-of-use, and the ability of suppliers outside of the local area to use them," says McCauley. "We were trying to use the same lean manufacturing principles with our supply base that we use internally, but we were having problems doing that because of communication and timeliness issues."

After trying several different methods, GHSP heard about new web-based tools that provide greater visibility into supply as well as replenishment capabilities.

HOW QAD MET THE CHALLENGE
GHSP conducted four months of research and evaluated several vendors before choosing QAD Supply Visualization to give suppliers real-time visibility into its inventory. In the selection process, several QAD competitors were considered, but after a strict evaluation of benefits and cost, QAD became the clear choice.

"Initially, there were three elements that put QAD at the top of our list," says Bob Matz, GHSP director of materials. "One was the ability to run our business the way we normally run our business, using replenishment or kanban programs. Other key features were the abilities to make replenishment quantities available to our suppliers using an integrated approach with our existing commercial business system."

QAD Supply Visualization met all of these requirements. With QAD Supply Visualization, suppliers are given real-time access into manufacturers' inventories, which enables a collaborative vendor-managed inventory environment and just-in-time manufacturing. Both of these principles are consistent with GHSP's commitment to its lean manufacturing philosophy.

Cost was also a consideration. Compared to other vendors, QAD was by far the best value for the money, according to Matz.

Another important factor that influenced the decision-making process was that third party products were not easily compatible with GHSP's existing MFG/PRO system. Since GHSP already runs MFG/PRO, there were no compatibility issues, no customizations were required, and QAD Supply Visualization could be simply integrated into the overall solution.

The implementation of the QAD Supply Visualization software took only five working days. Since GHSP was one of the first sites to try the solution, it believes most companies can now do this in less than a day. GHSP then scheduled the testing, training and roll out of the solution to suppliers in phases over a period of three months. Once QAD Supply Visualization was installed, GHSP's internal sites began to use the software, so the planners and schedulers could gain a good understanding of Supply Visualization before releasing it to outside suppliers.

GHSP then launched the solution to its major suppliers in groups of four. The suppliers were brought into GHSP, given a presentation on guidelines and expectations, and were asked to review the inventory screens for a week. After the introductory week, the suppliers went live with the system and began viewing GHSP's inventory, conducting replenishment, and using advanced shipment notices (ASNs) to coordinate transactions.

Currently GHSP has 18 suppliers using QAD Supply Visualization. This group of suppliers makes up 50 percent of GHSP's purchases. Now the company is focusing on rolling out to its smaller suppliers, and anticipates having 50 to 75 suppliers utilizing the solution.

"We've encountered minimum issues from our suppliers," according to Matz. "Our suppliers who are using similar products from other vendors favor QAD Supply Visualization, hands down."

THE BENEFITS
The ROI from the QAD Supply Visualization implementation was realized in days, and not months or years. GHSP has reduced the costs of excess inventory on the floor, and reduced administrative activities including phone calls, faxes, and postage. As more suppliers use the solution, GHSP expects to accrue additional cost savings, as well as other major benefits.

Since using QAD Supply Visualization, GHSP has streamlined its processes and freed up the valuable time of its managers and other employees from repetitive administrative tasks, allowing them to work on more strategic functions. For example, instead of schedulers having to print schedules, send them out to the suppliers, gather the incoming information, and call to verify orders, GHSP uses ASNs.

"Compared to other vendors, QAD was by far the best value for the money"

"We no longer have to call our suppliers and get forwarding information," says Matz. "All of that information is now available. It has eliminated a lot of phone calls, and we know what materials are in transit and when they are going to arrive. We never knew this information before."

Another big improvement GHSP has experienced since implementing QAD Supply Visualization is that suppliers are using inventory information that is much more accurate and timely than before the implementation. In the past, GHSP's suppliers would receive inventory information five to six days after the material requirements plan (MRP) was generated. Now suppliers can view GHSP's inventory status at any time using Supply Visualization, take notice of any needs and ship products almost immediately, shaving days off of the fulfillment process and eliminating unnecessary inventory. This increases the speed and efficiency of GHSP's entire supply chain.

"We know that the more accurate our inventory is, the less safety stock we have to carry," Matz says. "The less safety stock we need, the less inventory we have to carry. This has helped to focus our organization on improving our reporting and maintenance of inventory data, which drives our requirements."

"QAD Supply Visualization has also made our business environment a lot easier," Matz continues. "We can let our suppliers know the inventory information at the same time we know it, and eliminate the need to generate schedules and email it to them. And as a result, we expect to benefit from minimized line shut downs, eliminated transportation to customers, and reduced inventory levels and expediting costs."

By empowering suppliers to become informed members of its team, GHSP reports that relationships with its suppliers have improved. Since implementing QAD Supply Visualization, suppliers also appreciate that - unlike other solutions - they aren't charged for usage, according to Matz. Electronic Data Interchange (EDI) communications can cost as much as $25 each, while the entire QAD Supply Visualization solution is available for a low monthly charge to manufacturers and the information is free to suppliers.

"QAD and the Supply Visualization team have been great to work with," says Matz. "They understand what the product is meant to do, and I give them a lot of credit."

THE FUTURE
As the functionality of QAD Supply Visualization continues to develop, GHSP plans to incorporate it into its manufacturing environment. The company also has plans to upgrade to MFG/PRO eB and implement QAD EDI ECommerce.