A Magneti Marelli Company
MANAGING BUSINESS COMPLEXITY THROUGH CROSS-FUNCTIONAL MATERIAL RATIONALISATION Archamps, 7 & 8.12.2006
PRESENTED BY: Helmut Rojas
© Copyright Automotive Lighting A Magneti Marelli Company 2Helmut Rojas, Archamps, 7 & 8.12.2006
01 AL – AUTOMOTIVE LIGHTING
02 THE PROBLEM
A Magneti Marelli Company
03 ISSUES AND SOLUTIONS
04 CONCLUSION
© Copyright Automotive Lighting A Magneti Marelli Company 3Helmut Rojas, Archamps, 7 & 8.12.2006
ELECTRONICSYSTEMS
• Instrument Clusters & Displays• Telematics
• Body Computer / Electronic Modules
LIGHTING• Halogen / HID / LED
Front / Rear Lamps• AFS Modules
EXHAUSTSYSTEMS
• Complete Exhaust Lines / Components
• Emission Control Solution (DPF)
MOTORSPORT
Magneti Marelli is a €5bn international group leader in developing and
manufacturing high-tech automotive systems and components
With 53 plants, 31 R&D centers in15 countries and a workforce of 24,600, Magneti Marelli is a world class global automotive supplier
• Engine / VehicleElectronic Control Units
• Telemetry / Data Systems
• Engine Components• F1
• Rally• Moto GP
POWERTRAIN• Engine Control Systems
• Gasoline, Diesel and Multi FuelSystems / Components
• AMT
SUSPENSIONSYSTEMS
• Complete Systems• Sub Modules
• Mono / BitubeShock Absorbers
MAGNETI MARELLI GROUP
© Copyright Automotive Lighting A Magneti Marelli Company 4Helmut Rojas, Archamps, 7 & 8.12.2006
AL – Worldwide 2006
Barcelona (ES)R&D, RL
Angoulème (FR)RL
EUROPE
Reutlingen (DE)HQ, R&D
Brotterode (DE)R&D, HL
Jihlava (CZ)R&D, HL
Ryazan (RU)R&D, HL, RL
Venaria (IT)R&D, HL, RL
Tolmezzo (IT)R&D, RL
Bursa (TR)R&D, HL, RL
Sosnowiec (PL)HL, RL
Detroit Area (US)R&D
Contagem (BR)R&D, HL, RL
Querétaro (MX)RL
Juarez (MX)HL
AMERICA
HQ = Headquarter, R&D = Research & Development, HL = Headlamps, RL = Rearlamps
Wuhu (CN)HL, RL
Penang (MY)R&D, HL, RL
ASIA
Yokohama (JP)R&D
Shanghai (CN)R&D
AUTOMOTIVE LIGHTING
© Copyright Automotive Lighting A Magneti Marelli Company 5Helmut Rojas, Archamps, 7 & 8.12.2006
AL - Key Data
1.025
Employees 2005Total R&D
10.100 585
7.100
3.000
4350
200
400
600
800
1000
1200
1400
1600
2003 2004 2005 2006
Turnover Mio €
AL is amoung the 3 world leading companies !
© Copyright Automotive Lighting A Magneti Marelli Company 6Helmut Rojas, Archamps, 7 & 8.12.2006
Products
HEADLAMPS REARLAMPS
AUXILIARY LAMPS, OTHER PRODUCTS AND ELECTRONICS
© Copyright Automotive Lighting A Magneti Marelli Company 7Helmut Rojas, Archamps, 7 & 8.12.2006
A simplified view on Head lamp:
Electronic & Mechatronic
Bulb
Plastic parts
reliable and low cost standard Balast + standard stepper/ECUElectronic Control Unit
+
+
efficient design to manufacturelow cost tooling (China & Eastern Europe sourcing) short tooling lead timestandard resin materialefficient molding suppliers
Our Purchasing Environment
© Copyright Automotive Lighting A Magneti Marelli Company 8Helmut Rojas, Archamps, 7 & 8.12.2006
Actual Projects – Headlamps
DC S-Class
Citroen C6Audi A4
© Copyright Automotive Lighting A Magneti Marelli Company 9Helmut Rojas, Archamps, 7 & 8.12.2006
Actual Projects – Rear Lamps
Alfa 159Volvo C70 Cabriolet Audi Q7
MB B-ClassPeugeot 307
© Copyright Automotive Lighting A Magneti Marelli Company 10Helmut Rojas, Archamps, 7 & 8.12.2006
The Vision
We aim to be global leader in exteriorautomotive lighting and the preferred
partner of the car manufacturers.
© Copyright Automotive Lighting A Magneti Marelli Company 11Helmut Rojas, Archamps, 7 & 8.12.2006
01 AL – AUTOMOTIVE LIGHTING
02 THE PROBLEM
A Magneti Marelli Company
03 ISSUES AND SOLUTIONS
04 CONCLUSION
THE EXAMPLE OF PLASTIC RAW MATERIAL
© Copyright Automotive Lighting A Magneti Marelli Company 12Helmut Rojas, Archamps, 7 & 8.12.2006
Raw Material Complexity - Plastic
wide range of products and components
different technical requirements
temperature resistancestructure of surfacemechanical resistancetransparency
700 different plastic materials – goal: 300equals 30% of purchasing turnover (direct +indirect)cost improvement potential : 10%
HL+RL-Housings
© Copyright Automotive Lighting A Magneti Marelli Company 13Helmut Rojas, Archamps, 7 & 8.12.2006
Product Complexity
Complexity of projects and time
requirements of the car manufacturer
transparency of actions information in advanceactions to be released by customer
headlamp / rear lamp business
18 months development time3 years mass-production 15 years after end of production, availability of parts
© Copyright Automotive Lighting A Magneti Marelli Company 14Helmut Rojas, Archamps, 7 & 8.12.2006
through different and changing requirements continuously new challenges
solutions with new plastic materialstechnically ok but commercially critical
Product Complexity
Num
bero
f mat
eria
ls
time
Limit
© Copyright Automotive Lighting A Magneti Marelli Company 15Helmut Rojas, Archamps, 7 & 8.12.2006
Structural/Organisational Complexity
Purchasing R&D QualityTesting Production
Obj
ektiv
es
Cost reduction,Supplier Quality
New productdevelopment
New productcomponent
testing
Stable process- no changes
Stable process- no changes
ONE GOAL !
© Copyright Automotive Lighting A Magneti Marelli Company 16Helmut Rojas, Archamps, 7 & 8.12.2006
01 AL – AUTOMOTIVE LIGHTING
02 THE PROBLEM
A Magneti Marelli Company
03 SOLUTIONS AND ISSUES
04 CONCLUSION
© Copyright Automotive Lighting A Magneti Marelli Company 17Helmut Rojas, Archamps, 7 & 8.12.2006
Why Look for a new Approach?
Current and ongoing approach:from
negotiationsto
definition of specifications in early phase
But we have to be innovative to remain a high performer
Support the company result by crossfunctional activities contributing to P&L.
value engineering / value analysismaterial rationalisation
© Copyright Automotive Lighting A Magneti Marelli Company 18Helmut Rojas, Archamps, 7 & 8.12.2006
Areas of Impact
1. rationalisation of plastic raw material for components in production
setting prioritiesdefine resources
2. harmonise via an approved material list in new project development
define approved raw material list (plastic)reshape of the main products in production within 5 years
© Copyright Automotive Lighting A Magneti Marelli Company 19Helmut Rojas, Archamps, 7 & 8.12.2006
Organisational Approach / Process Level 1
CEO, VPs of Purchasing, R&D, Ind. Development,
Quality
Plant 1 Plant 2 Plant n
© Copyright Automotive Lighting A Magneti Marelli Company 20Helmut Rojas, Archamps, 7 & 8.12.2006
Organisational Approach / Process Level 2
Plant Manager + first levels
Department 1 Department 2 Department n
© Copyright Automotive Lighting A Magneti Marelli Company 21Helmut Rojas, Archamps, 7 & 8.12.2006
Rationalisation Process
Purchasing, R&D
R&D, Testing, Quality
Sales
Production
identify products and saving potential
test and approve internally
involve customer – customer approval
implement
new cost basis
© Copyright Automotive Lighting A Magneti Marelli Company 22Helmut Rojas, Archamps, 7 & 8.12.2006
Getting Operational 1
Who - When - How
Top down approachto be initiated and kicked off by top management towards the plantsplant managers towards their teams
Regular review with top management1 x month
feedback of plantsactions plannedprogressdecision makingallocate resourcesgive priorities
© Copyright Automotive Lighting A Magneti Marelli Company 23Helmut Rojas, Archamps, 7 & 8.12.2006
Getting Operational 2
Who - When - How
Systematic and transparent approach in the plants2 x month working meeting1 x month progress + result reporting1 x month ev. supplier involvement
Information sharing between the plants through transparent activitiesuse common accessible database
Collect commercial and technical savings
Continious improvement of application
© Copyright Automotive Lighting A Magneti Marelli Company 24Helmut Rojas, Archamps, 7 & 8.12.2006
Needs and How to Support the Activities
Deployment
Finance to be involved to track, report and consolidate savings fromeach area
Breakdown of target to all areas and all members
Cross functional and cross location info sharing
Decision making meetings
Projectmanagers necessary to remain focused
© Copyright Automotive Lighting A Magneti Marelli Company 25Helmut Rojas, Archamps, 7 & 8.12.2006
KPI‘s Phase 1
KPI
Kick of by Top Management and break down by plant
Bi-monthly meetings
Supplier involvement program
Saving potential Year 1 / year 2technical / commercial
© Copyright Automotive Lighting A Magneti Marelli Company 26Helmut Rojas, Archamps, 7 & 8.12.2006
KPI‘s Phase 2
KPI
commercial savings
technical savings
realisation project 1
realisation project n
© Copyright Automotive Lighting A Magneti Marelli Company 27Helmut Rojas, Archamps, 7 & 8.12.2006
Problems and Risks of Deployment
Long term actvity – risk of loosing momentum
Lack of cross-functional communication – blocking points
Decision making
Dedicate needed resources
Purchasing is the driver but contribution of all departments essential
© Copyright Automotive Lighting A Magneti Marelli Company 28Helmut Rojas, Archamps, 7 & 8.12.2006
01 AL – AUTOMOTIVE LIGHTING
02 THE PROBLEM
A Magneti Marelli Company
03 ISSUES AND SOLUTIONS
04 CONCLUSION
© Copyright Automotive Lighting A Magneti Marelli Company 29Helmut Rojas, Archamps, 7 & 8.12.2006
Conclusion
Purchasing contributing to company excellence
Define and discover potential
Drive the process
Get people involved
© Copyright Automotive Lighting A Magneti Marelli Company 30Helmut Rojas, Archamps, 7 & 8.12.2006
Conclusion
Key success factors:
Top management attention
Cross-functional communication and allocated resources
Break down of targets
A Magneti Marelli Company
THANK YOU FOR YOUR ATTENTION.