Case Study: Auto Components Supplier Cuts Receiving Cycle-Time By 50%, Cuts Costs By 30%

By Motorola

You might be excused for getting lost in the Continental Automotive manufacturing facility in Huntsville, Alabama — because that facility covers 850,000 square feet and supports five of Continental's business units. 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.

Today the plant runs thirteen 600-foot assembly lines for two to three shifts per day. In 2006, 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.