Profiles in Supply Chain Enablement: Faced with OEM mandates for quality reporting, automotive supplier Freudenberg-NOK implemented a product lifecycle management solution that also let the company improve its product development process and new product launch performance.
Company: Freudenberg-NOK (Plymouth, MA)
Company Size: Large
Company Sector: Manufacturing (Automotive)
Area(s) of Enablement: Product Lifecycle Management
Enabler: Aras Corp. (Lawrence, MA)
Case Study:Freudenberg-NOK is a recognized leader in automotive sealing and vibration control solutions. Established in 1989, the company is an automotive supplier with annual revenues that have grown to nearly $1 billion. An emphasis on Lean Manufacturing, Six Sigma quality and continuous improvement continue to drive world-class performance and innovative business approaches throughout all aspects of the company.
The Business Challenge
Large automotive original equipment manufacturers (OEMs), such as GM, Ford and DaimlerChrysler, require multi-year price concessions coupled with adherence to quality system standards and regular reporting on status during product development, launch and ongoing production. For suppliers, satisfying the requirements while maintaining efficient business processes and running a profitable business has become increasingly difficult over the years.
Freudenberg-NOK needed to ensure compliance of customer quality reporting requirements during product development. The company sought a solution that could be easily tailored to automate their proprietary processes for project portfolio management and product launch, as well as provide reports compliant to customer requirements. At the same time the company sought to improve the product development process and new product launch performance while maintaining proprietary competitive practices.
Faced with these challenges, Freudenberg-NOK went looking for a solution to address its compliance-related issues. Ease of use, adaptability and affordability were all important considerations in selecting a solution, according to Tom Gill, a director at Freudenberg-NOK.
Ultimately, the company opted to implement a packaged solution from enterprise software vendor Aras Corp. The solution provided a single Web-based application for managing the entire portfolio of projects, the ongoing product development process and the launch to production.
The Aras solution, called Aras Innovator, is based on a unique service-oriented architecture (SOA) delivered over the Internet. Freudenberg-NOK found that the solution could provide the necessary level of flexibility so that it could be tailored to support the company's competitive practices while at the same time achieving compliance with contractual customer quality reporting requirements.
The Aras solution was deployed in eight weeks with considerable tailoring and is now used across the North American development centers. Aras provides a single dashboard view that rolls up projects details to determine progress and displays simple indicators for each defined project phase and milestone.
Getting to Flawless
Currently over 500 component projects are actively being managed through the Aras solution, with 75 projects successfully launched to date. Freudenberg-NOK is able to use the software to produce customer quality compliance reports at a moment's notice based on up-to-the-minute information.
As a result, critical issues can be identified in real-time, providing visibility to responsible managers, along with the ability to drill down to details to determine the cause and take appropriate action for resolution.
The company has also instituted a Flawless Launch Program based on a scorecard defined in Aras Innovator that collects metrics to measure performance. The Flawless Launch scorecard was designed with 13 key performance indicators (KPIs) measuring customer satisfaction and plant launch performance across five dimensions, including quality, readiness, timeliness, service and profitability. The metrics determine the launch score for each project and enable comparisons between similar projects. Freudenberg-NOK has used Aras to establish baseline scores for a range of component projects, and through statistical analysis of the information, the company has identified areas for continuous improvement.
Looking ahead, Freudenberg-NOK is planning to use Aras Innovator's online change management functionality to automate and streamline the engineering change process to reduce cycle times and improve control. In the future, Freudenberg-NOK is considering functionality to track and manage costs during product development including materials, prototype and production tooling costs, and engineering labor expenses.
For more stories of successful supply chain implementation, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.