AIAG offers supply chain ?best practices? guide

AIAG offers supply chain æbest practicesÆ guide    The Automotive Industry Action Group has published its Recommended Business Practices for Long-Distance Supply Chains, a comprehensive set of guidelines to identify waste, errors and miscommunications across intercontinental, ocean-going supply chains.
   'Companies expect global shipments will be late, so they build waste and inefficiency into their operations to compensate for a bad process,' said J. Scot Sharland, executive director of AIAG, in a statement.
   'AIAG volunteers, who represent stakeholders at all levels of the global supply chain, have proven that it doesn't have to be that way,' he said. 'They have developed an affordable, easy-to-deploy system that will let companies reduce parts inventories and premium freight shipping costs, and dramatically reduce the time employees spend tracking shipments.'
   The guidelines are based on the findings of AIAG's Material Offshore Sourcing (MOSS) project, which studied oceangoing supply chains, including order, transport and customs processes, to identify the root causes of errors that lead to shipping delays. Some of the most significant MOSS projects findings are:
   ' An estimated 15 percent of all shipments experience delays due to inaccurate or incomplete data.
   ' Most errors stem from the manual input of data, which is often rekeyed multiple times by different parties, and through phone and fax communication.
   ' North America-based automakers and suppliers may be able reduce working capital by as much as $1.7 billion if these delays are eliminated.
   (For more details about the MOSS project, read 'Moss grows quickly on logistics,' August American Shipper, pages 16-19.)
   The new AIAG guidelines, developed by a team of 11 suppliers and logistics service providers led by Honda of America Manufacturing and General Motors, are built around a trade collaboration system that uses a 'cloud-based Internet solution' with common message templates.
   'Essentially, every member of a supply chain that adopts the guidelines will have visibility into a shipment at any point in time, and will communicate with one another via a secure Web portal using standardized forms,' AIAG said in its release on Monday.
   AIAG noted that a three-month pilot program involving 20 shipments between General Motors and a Korean supplier reduced shipping errors by 100 percent. Other participants in the pilot included TradeMerit Corp., which developed the trade collaboration software, the National Institute of Standards and Technology (NIST), Pohang University of Science and Technology, Menlo Worldwide Logistics, Marsh, APL, Atlas BX Co., Eagle Global Brokerage, CEVA Logistics and Deutsche Post DHL's Exel.
   Based on the results of the MOSS study and pilot project, AIAG estimates that annual cost savings of 1 percent to 4 percent to the global value of imports, or a conservative estimate of $21 billion, could be achieved if there were global adoption of the guidelines.
   To obtain a copy of the guidelines, access the AIAG Web site.