1 don ratliff executive director - scl regents and ups professor of logistics [email protected]...
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1
Don RatliffExecutive Director - SCL
Regents and UPS Professor of [email protected]
Observations from Analyzing GM New Car Delivery Network - 2005 Data
Supply Chain & Logistics InstituteSupply Chain & Logistics Institute
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GM New Car Delivery“Network Map”
Plant
RailRamp(VDC)
SwitchYard
Dealer
GM controls what gets
loaded on rail
TTX controls rail car
allocation
Hauler controls• truck allocation• truck schedule• what gets loaded
Railroad controls train
schedule
RailTruck
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GM New Car Delivery“Geographic Map”
Border Points
Demand Areas
Plants
Ports
Rail Ramps
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Average days in each process
Assemble Car
Car Available
Wait at Plant
Dispatch
Transport by Truck
Transport by Rail
Arrive at Dealer
DispatchArrive at
VDCWait at VDC
Dispatch
Transport by Truck
Arrive at Dealer
Wait at Plant
D
D
D
D
5.98 days
1.36 days
3.10 days
8.76 days
4.15 days
.44 days
Total = 7.3 Total = 16.4
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GM New Car DeliverySingle Plant
UU Plant-Demand Lanes
UU Plant-Rail Lanes
UU Rail-Demand Lanes
• Inventory cost is ignored in mode selection• Trips < 1000 miles:
• truck = $0.50/mile/car • rail = $0.32/mile/car
• Why was new car inventory of little concern?
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Summary 2005 Plant Rail Wait Times
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
3B 3M 3W DC EA FF HL JX LR MM NV RA RO SD SO UU VO XX
Day
s
Average Days
85% Waiting
90% Waiting
95% Waiting
99% Waiting
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Inventory of cars at plant
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Moraine-(Days 300-400)
Lag in Shipments When Plant Restarts
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Plant “rail” Inventory
• Same symptoms at each plant• What causes big inventories at plants
– GM’s failure to anticipate production
– TTX’s model for minimizing empty movements
– Lack of oversight technology
– GM attributes problem to rail car shortage
– GM had no interest in trying to change the system
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Summary 2005 VDC Truck Wait Times
0.00
10.00
20.00
30.00
40.00
50.00
60.00
VT
WL
RS
VG
VU
VM
MQ IB VI
GA
FR
SU
DY
VH
VR
VW
VC IG LV
VE
TB
RL
JC
MR
OD
KT
SZ
RQ
Da
ys
Average Days
85% Waiting
90% Waiting
95% Waiting
99% Waiting
0.005.00
10.0015.00
20.0025.0030.0035.00
WE
OX LS NA
BC NZ
GU DZ
UL
RR
GZ
QT
DR
PB
BE TU DO
HW JA CE
WX
NM D
I
RV 4J MN NJ
PH
LM
Day
s
Average Days
85% Waiting
90% Waiting
95% Waiting
99% Waiting
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Truck Synchronization
• Load building is primarily manual– One day delay to manually plan truck deliveries
• Carriers build their own loads– Fees based on origin, destination and car class– Carriers have a conflict of interest since they can reduce their own
costs by accumulating inventory which increases delivery time – Load builders hold cars until they get “good” loads
• Load building is complex– Carriers lack technology to automate and optimize load building
• GM had no interest in trying to change the system
GM Supply Chain Characteristics
• Competence– Little supply chain knowledge
– Little analytic capability
– Heavy reliance on “experience”
– Many really dumb policies/strategies
– No interest in changing systems
• Complexity– Very complex systems have evolved
– No appreciation for the implications of complexity
– If it is complicated, outsource it (e.g., Vector SCM – Menlo)
• Technology– Little modern supply chain technology
– Little interest in changing anything
• Variability – up to 2 months after car is built– Huge impact on dealer inventory and sales
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