Automotive’s New Container Management Collaboration Initiative, Utilizing Surgere’s Digital Platform

Surgere®, leading provider of digitized visibility and control in the automotive supply chain, has announced a large-scale deployment of their shared platform which it says represents an unprecedented unification of automakers and the growing list of their suppliers, as they seek to establish more effective reusable packaging management. The company made the announcement at the Automotive Logistics Supply Chain Conference in Atlanta on May 22.

Surgere’s platform enables original equipment manufacturers (OEMs) and their suppliers to operate in a single supply chain data ecosystem, sharing data and analytics to more efficiently move, track and manage container and part inventory between companies. “It’s estimated that the automotive industry annually loses more than $2 billion in the supply chain through container, part, and finished vehicle inventory loss and logistics inefficiencies, through a notorious lack of visibility and inherent control,” said William Wappler, Surgere CEO and the brainchild of the ecosystem.

The platform is being widely deployed and is expected to move into an AIAG committee to form industry standards. Founding members of the Automotive Data Ecosystem Design Group and AIAG Committee include Fiat Chrysler Automobiles, General Motors, Honda North America, Nissan North America, Toyota North America, Adient, Denso North America, MAHLE North America and Yanfeng Automotive Interiors.

According to a report in Automotive Logistics, the five OEMs are currently joined by “12 medium to large tier suppliers, two logistics providers and the Automotive Industry Action Group (AIAG) on a data system providing accurate visibility over returnable containers at every stage of their movement between supplier and OEM.”

“Most automotive companies struggle to reduce supply chain costs year over year,” Wappler said. “We conservatively predict the participants in our digitized ecosystem can achieve double-digit cost savings through highly accurate visibility into the supply chain and through the collaborative power of shared information and analysis across OEMs and their supply base,” he said.

The ongoing, industry-wide challenge of container management

“Basically we all came together because we all have a common problem,” said Dana McBrien Associate Chief Advisor at Honda. He spoke at the Automotive Logistics Conference on May 22. “We don’t manage our reusable containers very well. We have varying severity of problems, but it all comes down to not managing our returnables very well. We started some conversation around September last year and got a lot of participation.”

“Really, what we were trying to get to was getting the right container to the right place in the right quantity, in the right configuration, in good condition that we could protect our parts being delivered from our tier 1 suppliers,” McBrien continued.

“We looked at this as being one of the big problems in the auto industry. I don’t think there would be any of us who have annual meetings with suppliers where this doesn’t come up. There are very few venues where this doesn’t come up as being one of the problems.

“We looked at creating a data ecosystem that we shared having an input into,” he said, acknowledging that current management shortcomings lead to production delays, repacking, and the use of expendables. “If we can eliminate those issues we are going to be way ahead of the game.

 

Five top US automakers are collaborating on one data ecosystem to share inventory knowledge and curb supply chain loss. Surgere’s is the chosen data platform. (PRNewsfoto/Surgere)

“We left the proprietary things off the table but we wanted to build a single solution and the common baseline is for the tier 1 suppliers,” McBrien said, noting that the reasons are twofold.  The first reason is to allow a single tier supplier to have a common solution it can use with all OEM customers. The second justification is have a common solution that can be used among tier suppliers.  

A common solution to container management

“One of the things we didn’t want to do was to tear our supply base apart,” McBrien continued. “We didn’t want the tier 1s to have to work through multiple solutions. We wanted to get to that common solution so that there were standards, or at least a best business practice document that everyone could operate from.”

“The tiers were really adamant about using RFID, even more than we were, truthfully,” said Doug Adams, General Manager at Toyota. “And they were really pushing us to make sure we were going to use that data to solve all the problems that are in the supply chain.

“We ended up with a system that will allow us to visualize packaging both with parts and returnables in it. Starting from the supplier, using a common platform, through the Surgere software, that we are able to visualize that inventory going through the supply chain both from the supply base and the OE individually. So now we have the data to problem solve this habitual problem we’ve had forever about how to manage returnables.”

“Perhaps the greatest aspect of this incredible coming together is the intent of the Automotive Data Ecosystem Design Group to make the massive collaboration an open community. All technology providers are welcome to participate. All other OEMs and suppliers are welcome to join. Let’s all move past buzzwords and into the new reality of mass collaboration,” Wappler said.

The initiative will come out later as an AIAG best business practice or case, McBrien said. “It is still being developed a little bit, but one thing I want to leave you with is isn’t the end of it. It is just the first foundational piece to what can happen next.”

McBrien said that the collaboration did not signal a loss of competitive advantage. “Absolutely not…How we operate in that environment is really what becomes the competitive advantage. There will likely be some some of the group who will adopt 100% of it, some that will likely adopt a portion of it…”