Celebrating 6 of 60: Review of the Best Supply Chain Practices from our Podcast

[Transcript]

[00:00:00] Jan Griffiths: This is the Auto Supply Chain Prophets podcast, where you'll hear from experts of all facets of supply chain in the auto industry to help you prepare for the future. I'm Jan Griffiths, your co-host and producer.

[00:00:17] Terry Onica: I'm Terry Onica, your podcast co-host. Let's dive in.

[00:00:23] Jan Griffiths: Hello, and welcome to another episode of the Auto Supply Chain Prophets podcast. And today is a very special episode. We have just passed our 60th episode. Can you believe that, Terry?

[00:00:37] Terry Onica: I can't believe it, but it's been fun. I've enjoyed every minute.

[00:00:41] Jan Griffiths: Whenever you start a new podcast, it is important to get your mission straight and clear. And I am proud to say that we haven't strayed from our mission one iota, have we?

[00:00:54] Terry Onica: Never. We've kept our mission every episode.

[00:00:57] Jan Griffiths: Every episode, we are all about focusing on the auto supply chain for the future, bringing content to you, leaders in the auto industry to help you prepare for the future. That's what we're all about, right, Terry?

[00:01:14] Terry Onica: Absolutely. We've had some of the best, most amazing guests that I would have ever imagined to talk about all aspects of the supply chain: transportation, EV startups, EV suppliers, industry analysts, Tier suppliers. We've had just such a great people that have been on the show to talk about supply chain challenges from every different angle.

[00:01:36] Jan Griffiths: And the beauty of podcast, as you well know, is that it's conversational, it's honest, authentic conversation. It's people talking about a subject that they care passionately about. And you can't get that from reading an article or reading a book and certainly not from reading a textbook. But when people are sharing stories about their best practices and what they're doing, it just takes hold, I think, doesn't it?

[00:02:08] Terry Onica: It absolutely does. And in every one of our guests, you can just feel the passion and the pride of what they've done to contribute to the automotive industry. And I love from the very first day, you said, we're always going to ask for one piece of advice. And we've gotten the best advice that you can imagine from all of our guests.

[00:02:26] Jan Griffiths: Yeah. And that's why we're recording this episode today. Terry and I have taken a look back through all of our 60 episodes, and we're going to come up with six of 60 key points from six of our 60 episodes, but then we're going to wrap it all up at the end with five key success factors that we see running, not only through our six of 60 but through all 60. Ready to get started, Terry?

[00:02:56] Terry Onica: I'm ready when you are.

[00:02:58] Jan Griffiths: Let's go. TS Tech. Wow. That was an interesting one, wasn't it?

[00:03:03] Terry Onica: That was really good. The passion and the commitment of both Wendy and Jeff was really amazing. To what they're doing, the way they're rolling out their implementation of MMOG/LE, the Materials Management Operations Guideline. And for new listeners, it's a supply chain standard in automotive, just an incredible approach.

[00:03:20] Jan Griffiths: And often when you think of compliance or a supply chain standard, you can tell by the tone in my voice, for me back in my supply chain career, I would be, "Oh no, please. I don't want to have to do that." But somebody has got to do it, and somebody is going to make it exciting and interesting. And that's what our two guests at TS Tech did.

[00:03:43] Terry Onica: They absolutely did. And they just had a really good approach. They're a Japanese company, and they always have consensus. They always make sure everybody understands the project and you could just see how well that worked in this instance.

[00:03:58] Jan Griffiths: And is it true to say that they're certainly ahead of the game when it comes to MMOG/LE implementation?

[00:04:04] Terry Onica: Absolutely, because they really got everybody pulled together on the project, making sure that everybody understood the mission from day one. That was really key to their success and really educated everybody. Because oftentimes, with standards, we just throw them over the fence. Here you do this, right? And that poor person, oftentimes, I know because I teach them in class, they have no idea what they're doing. So, the fact that they just took time to make sure they had consensus, everybody understood from the plant manager, all the departments, it's just making a big difference in their implementation.

[00:04:39] Jan Griffiths: Yeah. Let's take a listen to what Wendy Horwitz had to say.

[00:04:43] Wendy Horwitz: Anytime you talk to anybody about TS Tech and what's so great about TS Tech, they're always going to say the people. That's always the number one. And what I've found with this is I'm working with the people at the plant. It's giving them even more of a voice. We do have a lot of programs where we try to get feedback from our people in the Kaizen activities. But they're very excited because this is a program where we can talk to those material people that may not always have as much spotlight as the quality people or some of those other groups, and they're just really fascinated and excited to have their management engaged with them in their day-to-day stuff.

[00:05:26] Terry Onica: One of the things that I really liked about what Wendy says and is really underestimated when we look at the compliance for MMOG/LE and completing the assessment. It's the first chance that I've seen, and I know back in my days at Johnson Controls, the supply chain gets a seat at the table. I know when I worked at Johnson Controls, engineering got whatever they wanted, quality got whatever they wanted, and the supply chain was always just running around like chickens with their heads cut off trying to fight the next fire. One of the things that the people really like is that I finally get a voice in what we're doing at the plant. And I see that all the time. It's really great supply chain has that avenue through the assessment to say, "Here's what we're doing good. Here's what we're not doing good." And to be able to get help finally.

[00:06:13] Jan Griffiths: Yeah. And you could tell with Wendy and with Jeff, it was real. It was real, raw, and authentic. Yes, these are the people leading the initiative, but they're the ones also not afraid to roll up their sleeves and do the work.

[00:06:28] Terry Onica: Absolutely.

[00:06:29] Jan Griffiths: Yeah. What I liked about Jeff was when we asked him the question about the one piece of advice. This is what he had to say.

[00:06:38] Jeff Baltazar: I would challenge them to take the challenge, embrace the challenge. There will be benefits reaped in the end. And always remember that your competitors aren't waiting. So, embrace that challenge for change. Look for those efficiency improvements. The material side is always overlooked, but there's a lot of opportunity there.

[00:07:06] Jan Griffiths: So, Jeff is all about embracing the challenge. Don't be afraid of it. Don't look at it as just an awful compliance issue. Truly step up and lead it and embrace the challenge.

[00:07:16] Terry Onica: One of the things that I like what Jeff said, and that I think every automotive supplier needs to think about when they're being compliant to a customer, a customer's going to see your results. And they're going to know how much you care or you don't care because they're going to ask for evidence, right? And I like what he said: you never know what your competitor's doing. So, you need to always put your best foot forward on what you're doing. Because otherwise, OEMs see evidence all day. They know what best practices look like. They know what suppliers are doing good things and what they're not doing. And so, I thought that was really good to remind everybody, you've got to be thinking about your competition and especially as we're moving forward in this industry, only the strong are going to survive, and the strong that can show that they're strong are going to survive.

[00:08:00] Jan Griffiths: Yeah, let's go to Christopher Mattingly in episode 60. Christopher was previously the VP of Transportation for Stellantis with a long, deep history in automotive. He's covered all facets of the supply chain, and he was actually a supervisor at the Warren Truck Plant. He knows what he's talking about.

[00:08:21] Terry Onica: One thing that I really agree with, Christopher, is there needs to be a lot of attention paid to risk management. And Christopher is absolutely right; there's always going to be another disruption. And I know we can't think of everything, but even with existing disruptions, I think the supply chain often is very weak. So, in my role at QAD, I often go out and look at suppliers' risk plans, and they are very sparse. One of the things that Cathy Fisher and I did was that we boiled that all down. When we look at quality and supply chain standards. What do we need to be looking at for risk management? If you go back and listen to episode 46, that's where Cathy and I talk about it. Also, on the autosupplychainprophets.com podcast, at the very bottom, you can actually get our Risk White Paper to help organizations boil down what to look for and what should be in those contingency plans.

[00:09:18] Jan Griffiths: Yeah. Because I can tell you again, as a recovering Head of Supply Chain for a tier one, the idea of spending time to focus on risk management, risk mitigation, planning, putting people in a room to make that happen. I never wanted to do it. You want to deal with what's right in front of you today, whether it's cost reduction, whether it's delivery issues, whether it's program launch or the idea of spending time on this; I never wanted to do it. But I can completely see the value in doing it.

[00:09:50] Terry Onica: But, you know, I've seen our own customers prepare in advance, and it pays off for them. So, one example I can give is one of our customers next year, every month they have what they call a backup day. And the backup performs the activity on behalf of the primary and supply chain with them there. So that way, if I'm reading the work instructions and, hey, this doesn't make sense, I can say something, right? They're always actively engaged in what's been written down and the process for it. But even what was better when COVID hit, I remember talking to the MP&L Director and he said, "We were prepared because we took the time to do that." So, remember, COVID is people were coming in and out and they were sick. Well, they were all set because they had already trained all their backups, and they do it monthly to keep that top of mind in their head. So, it's not like, you know, something I do once a year and I got to remember how to do your job. Can you imagine having to remember how to send an ASN or something for someone? That would be a nightmare if you didn't do it all the time. We can say it's a pain, and I know it's not the easiest thing to do, but when the time comes, and you're ready, you couldn't be more happier that you took the time to spend to do it right.

[00:10:56] Jan Griffiths: Yeah, I know you're right. I think in this episode we had a great quote from Christopher.

[00:11:04] Terry Onica: Yes, we did.

[00:11:05] Christopher Mattingly: He had an expression that I thought really hit the nail on the head, "only the paranoid survives." And it gets to that contingency planning type attitude. When it comes to the supply chain, there are going to be problems; things are going to go wrong. There are going to be failure modes, and so what? We get paid to figure out how we are going to mitigate and minimize the impact of that particular issue. That's our responsibility as leaders is to be able to do that contingency planning to make it happen.

[00:11:39] Jan Griffiths: And he's absolutely right, isn't he, Terry? Only the paranoid survives.

[00:11:43] Terry Onica: Absolutely.

[00:11:44] Jan Griffiths: Let's take a turn from legacy OEMs and let's go into the EV space, the exciting startup world of electric vehicle manufacturers, or specifically, in this case, EV trucks. And our episode with Shiv Tailor, episode number 54, and Shiv is from Volta Truck. If you've been following Volta, you'll know that they were on the brink; they were almost counted out of the game, but they came back, didn't they?

[00:12:15] Terry Onica: They definitely did. It was exciting to see them come right back.

[00:12:19] Jan Griffiths: But they came back stronger. They came back with knowledge of lessons learned and what they needed to do differently. And it was great to have Shiv share some of those lessons learned and, what he knows now that he needs to do in the future.

[00:12:35] Terry Onica: Yes. It was excellent. I really encourage everybody to go back and take a listen to the lessons that they learned. I think even OEMs today that are traditional or you're in any kind of a startup, just some of the things that you learned that you need to do to be ready for the ramp up.

[00:12:50] Jan Griffiths: This episode again, Terry goes back to training, doesn't it?

[00:12:54] Terry Onica: I was so thrilled that, you know, we were able to really help this organization with the 24 Essential Supply Chain Processes that we talk a lot about on the show. So, Shiv actually had us in, and we worked with his team, made up of quality, supply chain, and IT. And I love how he just took it to level set everybody because he strategically brought in people from different backgrounds. They weren't necessarily all automotive. And so, level setting them with the terminology and best practices right from day one, and that discussion really helped the organization. I was so glad to see the benefits that he saw in doing that with his team. And I love the fact that they said they wish they could have Terry and Cathy and other processes, too.

[00:13:37] Jan Griffiths: Yeah. Let's hear what Shiv has to say.

[00:13:41] Shiv Tailor: So, doing that training course with my then a team of BAs and some of my platform owners was critical because it brought everyone up to the same level of understanding of what supply chain and quality processes actually mean for an OEM. And also, it went into our dictionary, right? So, this is what we mean when we say this. It was very specific. There was no ambiguity from there on in once we use those terms, everyone was aligned, and everyone knew. So, therefore, the learning curve kind of accelerated that ramp up for the people, not from the industry.

[00:14:15] Jan Griffiths: If you want to learn more about the 24 Essential Supply Chain Processes, we have an episode and links to documents that you will find extremely useful. I know I would when I was in my supply chain role for sure. And we'll put links to everything in the show notes. Now, Terry, one of our top episodes in terms of downloads was episode number 38 with Fred Coe. And we talked about all things EDI. I would have thought EDI was a thing of the past, but I would be dead wrong, wouldn't I?

[00:14:48] Terry Onica: You absolutely would be, but I think the reason it draws such interest from our listeners is because EDI's been around for a very long time. And I think people probably are a little curious, like, what's up with EDI? Where is it going? Is there going to be any changes? I go back, and I look, Jan, 35 years ago, I was adding it up today. 35 years ago, I started my career in EDI at Ford. And it's just a little side, I am the reason why it's mandated at Ford.

[00:15:19] Jan Griffiths: Really? You are the one. Oh my gosh. People are either going to love you or hate you at this point, Terry.

[00:15:26] Terry Onica: But what happened was I went into the director, and he's like, why are EDI numbers not doing well? Why aren't suppliers testing? I said, "We're making all these calls, and we got two people to test." I said, "They're not motivated." And he looked at me, and he said, "Well, I'll fix that." And he mandated it, and the floodgates opened to test everybody with EDI. Think about it, Jan, 35 years and we really haven't touched it. It just stays in place, and it does its job. I mean, it is truly amazing when you think about it.

[00:15:55] Jan Griffiths: Yeah, it is. It is. Let's listen to what Fred had to say about it.

[00:15:59] Fred Coe: They often compare EDI to electricity. You take it for granted; it runs every day, and it turns on, but when it's off, things just grind to a halt. There was a recent event, and it was termed the lifeblood of the EDI industry.

[00:16:12] Jan Griffiths: He's right, isn't he, Terry? It's the lifeblood of the industry.

[00:16:16] Terry Onica: I couldn't agree with you more. I used to call it the IV into the plant. You'd pull that plug out with EDI; they don't know what to build, and all the sirens start going out. You couldn't find more valuable data than EDI data to a plant.

[00:16:29] Jan Griffiths: Yeah. And we hit EDI in some other episodes, too, with Robert Cameron, Chairman of Odette, right?

[00:16:36] Terry Onica: Yes. So, we talked a lot about APIs. That is one thing that looks like it might be new to EDI that's being investigated right now. So, both with Fred Coe and with Robert Cameron, absolutely.

[00:16:46] Jan Griffiths: Well, talking about technology, I know we talk about technology a lot, but let's talk about leveraging technology. Technology that we know and love onto the shop floor. So, imagine taking technology such as iPads that we're all used to, we know how to use that, and using that on the shop floor. This brings us to our episode with Kevin Shayer and he had implemented Red Zone, right?

[00:17:17] Terry Onica: Yes, it's our connected workforce solution. So, what it does is it allows all the employees on the shop floor to very easily report issues, what's going on throughout the day. So, at the end of the shift, the next shift comes over, they can see what the status is, and management can see what's going on. The employees are so engaged because it's so simple and easy to report. It's been really phenomenal, Jan. On average, the customers that use the Connected Workforce Solution have a 29 percent increase in productivity and a 74 percent increase in engagement. Don't we all want engaged employees? And a 32 percent reduction in turnover. Can you believe that? Nobody wants to lose people. So, it's just amazing. Just giving the shop floor, simple tools, get rid of spreadsheets. I had a plant manager tell me that today, this information is all over the place. So, at the end of the shift, you're running around all over the plant, trying to figure out how to tell the next shift what happened. So, he said, you just got to eliminate so many tools at the plant by just having this solution.

[00:18:17] Jan Griffiths: Yeah. Or you see it often on whiteboards, and then people rub up against it, and then the information is lost. Or somebody has to write it down or input it into a computer system. So, it's double work, and you don't want that. Right. You want data to be real-time, to be there, ready and available, and that's what Red Zone does. What I really loved was when you asked Kevin that direct question about the results. Because let's face it, we're in automotive. We can talk about technology until we're blue in the face. Unless we can prove or show the impact on the bottom line, there will be no interest and certainly no investment in the technology. So, let's take a listen to what Kevin had to say.

[00:19:01] Terry Onica: Have you seen any measurable results?

[00:19:03] Kevin Shayer: Terry, we have, through the course of our project, seen productivity improvements of over a hundred percent. The results were just fantastic. We talked a lot about OEE - Overall Equipment Effectiveness, which was our new rallying point in KPI. And at the outset of the project, it was pretty low. Today, proud to say that we've more than doubled our OEE percentage. Other metrics that have improved through the course of our Red Zone journey is certainly retention. And I like to measure regrettable turnover. And we've seen roughly a 50 percent decline in regrettable turnover over the course of the last 16 months through the use of our platform and the engagement tools that come along with it. And we've also seen improvements in on-time delivery. Our quality metrics have gone up. It's not all attributable to Red Zone, but much of it absolutely is. And the team's really done a nice job of rallying behind it and using it as our platform for improvement.

[00:19:59] Terry Onica: I love what Kevin has to say, and you can hear his passion and his energy, and I tell you, every customer that implements this tool has that same excitement after. And you know what I like about 2GN? Is they gamify the shop floor. It's amazing because what they do is lines can compete. So, they can see how one line's getting against the other one. And so, it drives the lines to be a little bit competitive, like a game. And I just love it. People love that about it, right? Oh, look at what they're doing today. Remember he talked about a Gold Star Day?

[00:20:30] Jan Griffiths: Yeah.

[00:20:31] Terry Onica: So, I just love the way that they do that. One of our customers, an OEM, and they're using it in one of their powertrain plants. And they just rolled it out in January, already an 18 percent increase in production. They'd reduce overtime and downtime. And that's just since January when it went into place. I mean, it's just phenomenal. And it's just by collaborating on the floor.

[00:20:54] Jan Griffiths: The power of collaboration. There it is. Let's talk about our friend, Mike Payoink, at Penn Engineering. So, Mike takes us more into TQMS.

[00:21:06] Terry Onica: Yes. He takes us into having an automated quality management tool. One of the things you're doing right now, and I hope they fix it in the next round of IATF 16949, but they don't really state it has to be automated. So, in the quality, we have these spreadsheets all over the place. We really don't have it in one spot to make it easy to find data and to collaborate. And so, I love Mike. He's so passionate. He saw the value of automating that process. I often see him talk to a lot of our customers. He'll help them to explain that value. So, he was really good.

[00:21:40] Jan Griffiths: Yeah, when he talked about the ability to look across an organization that has different plants, maybe on different systems, and has a standardized process to be able to manage quality, including supplier quality, that is extremely powerful. I can't tell you how many times in my career we've had to deal with manual programs, like you say, spreadsheets. And for those of our listeners who don't know, Terry hates spreadsheets with a passion, but different formats and different ways of doing things bring together a common language and a common standard, and then you're able to act upon those quality issues much faster. So, yes, there is a bottom-line impact when you're able to act on quality issues so quickly and you're able to share knowledge through a multi-plant environment. And that is powerful, Terry.

[00:22:37] Terry Onica: And I think a couple of things that he had mentioned when you look at the benefits he talked about in that episode, two things really struck me: the visibility sister plants have to be able to ask; I saw this happen. How did your plant fix that? Right? You can't do that when you're buried in spreadsheets, and you're in different plants. You'll never be able to see this. And the other one I liked too was the ability to see customer concerns calls to ensure that no steps are being missed. How important is that when you're trying to ensure good quality?

[00:23:07] Jan Griffiths: Yeah, let's hear those benefits from Mike himself.

[00:23:11] Mike Payoink: Some of the benefits have been huge. One, being, we have now visibility for our customer concerns across the globe, right? So, before it was spreadsheets or some kind of file system or an email that was sent out once a month. Now, we can get real-time access to what's happening. We run a report once a day or just on the system, and it's live as it goes in. So, as somebody enters a customer concern, it's in the system, and we can see it no matter where on the planet.

[00:23:38] Jan Griffiths: So, as we wrap up the six of 60, Terry, as we look back through all those hours of podcast interviews and transcripts, what are the key success factors that we see running through all of these companies?

[00:23:54] Terry Onica: Well, Jan, three things come to my mind: first of all, a passion. All of our guests have a passion for what they're doing. They believe the supply chain can be fixed. They're actively out there showing it can. So, I think passion is number one for what they're doing. Secondly, they all believe in the value of technology and that it can help. None of them believe in spreadsheets. So, I like that right off the bat with every guest that doesn't like spreadsheets. But it's true. You have to automate. In today's day, who's ever going to get to AI on spreadsheets? It's just not going to happen. And the other thing is technology moves communication faster. And so, that's why we see all these benefits. That's why we need to do it. And they have that enterprise visibility. The third thing that I see is they all believe in implementing best practices. And Jan, I know, like yourself, sometimes, you're like not another one, but I tell you, every time somebody follows it, they do better. I've seen it so many times in my job. What the OEM is telling you, I know it's like, "Oh, not another one." But everything is absolutely spot on what they're telling you to do. I always think of it like your parents when you're younger, you know, they tell you what to do, "Oh, mom, dad. Whatever." And then, you get older, and then you're like, "Oh, they were right. They were absolutely right."

[00:25:11] Jan Griffiths: So true. So true.

[00:25:12] Terry Onica: And it's just like this with standards, but I like the fact that they're open to it, and they want to embrace it. And it's all those common things amongst all of our guests. What about you? What did you see?

[00:25:21] Jan Griffiths: Well, it might not be a big surprise to you, Terry, but I saw a definite trait of authentic leadership.

[00:25:30] Terry Onica: Absolutely.

[00:25:31] Jan Griffiths: More of a servant leadership mindset. None of these companies operate with a strong command and control model. It's all about inclusivity. It's all about including the people, talking to the people, understanding the shop floor. It's not driven from the top and force-fed down to the shop floor.

[00:25:52] Terry Onica: It's taking the time to do it right.

[00:25:54] Jan Griffiths: It is. It's taking the time to do it right. It's understanding the value of training, making sure that people are properly trained, and not trying to save money because you put together some proposal for some new technology. And then, at the end of the day, you nix the training module because you wanted to save some money. And then, you wonder why the thing doesn't work properly. So, I see authentic leadership at its finest coming through. And the people that we talked to Terry, they're comfortable in their own skin. They're not egomaniacs. They're not on the podcast to talk about how great they are or how wonderful they are. They truly come on the show to share what they believe in. That's what they're all about. And that leads to my second one, which is conviction. They all have a conviction for who they are and what they're going to do. They do not lead with compliance. Yes, there's an aspect of compliance, but what I mean by that is there's a big difference when you lead with compliance versus leading with conviction. Leading with compliance means you follow some outdated, antiquated rule book, and you cannot think beyond that. Leading with conviction means you leave that behind and look forward. You look onward and upward. You look into the future. You look into transformation. And since we're on the subject of transformation, let's talk about the fact that this industry is ready to transform into Auto Culture 2.0. By the way, I just happened to write a book about it. I will put that link in the show notes. But all of this we can wrap up together, Terry, into the world of transformation in the auto industry. All of our guests truly get it. They understand it. They know what they need to do to make it happen. And I'm thrilled that we can share their stories and their journey on our show.

[00:27:48] Terry Onica: I completely agree with you. I think all of our guests are not the: I'm going to throw it over the fence, and I'm going to checkboxes. All of our guests take the time to understand your point, educate people on it, and do it right. And you can see from every single guest the benefits that they get in their organization by doing it that way.

[00:28:07] Jan Griffiths: And that's a wrap, six of 60. Here we go, Terry. Are you ready for the next 60?

[00:28:12] Terry Onica: Absolutely. Let's go.

[00:28:14] Jan Griffiths: Let's do it. Are you ready to find the money in your supply chain? Visit www.autosupplychainprophets.com to learn how or click the link in the show notes below.