Background

With a reach that extends to more than 60 countries, logistics is no small challenge for GM. GMM is GM's Mexican subsidiary and a vital part of GM's North American operations. GMM drives efficiency throughout all aspects of its distribution network. Transportation costs had already been significantly reduced. And, more improvements were underway, including the implementation of proprietary software to provide instant access to real-time updates from every supply chain participant. Challenges To reduce costs and inefficiencies in General Motors de Mexico's (GMM) growing inbound transportation network To increase overall visibility throughout GMM's supply chain To establish accountability procedures and measures for GMM's suppliers and carriers GMM works with more than 1,700 suppliers that produce approximately 13,000 parts a day. From railcars to chartered planes, the company's transportation network is sophisticated and complex. With an acute understanding of the Mexican culture and GMM's operating principles, GMM drives efficiency throughout all aspects of its distribution network. Previously, GMM internally managed its complex transportation network, which consisted of eight operations on three sites in Ramos, Toluca and Silao. As higher demands continued to be placed on GMM's production and distribution operations, its transportation network lacked collaboration. In effect, each operation was making individual logistics decisions, creating costly redundancies and inefficiencies throughout the supply chain. GMM was challenged with reducing costs and improving efficiency in GMM's inbound transportation operations. Management would now manage the inbound transportation of materials to each of the plants, as well as manage GMM's carrier relationships. GMM lacked overall supply chain visibility, as well as quality control measures. GMM could not accurately forecast inventory needs at plants or monitor carrier progress. Carriers lacked an efficient way to communicate the status of inbound shipments to plant operators. Plant operators were spending valuable time tediously tracking carrier status. Furthermore, there was no way to effectively identify low performers within the supply chain and hold them accountable.

1.According to the case study GMM (GM's Mexican subsidiary) was challenged with reducing costs and improving efficiency. Suggest and evaluate a lean philosophy that could potentially improve the process for GMM.