"MAPICS (now Infor) Supply Chain Management has enabled our WIP inventory to dramatically fall, our manufacturing cycle time has dropped 75% and on-time shipments have risen to 100%. " Manuel Valdes Materials Manager

Company Overview
Located in Monterrey, Nuevo León–one of Mexico’s most important industrial cities, Dirona is a major manufacturer of front axles, rear axles and brakes for heavy-duty trucks and buses. Like many automotive and heavy vehicle factories, Dirona is organized around four separate business units, each supplying parts that eventually meet and come together at final assembly. According to Manuel Valdés, Materials Manager at Dirona, "Because we sell internationally and receive our supplies from international sources, optimal scheduling is of the utmost importance and is a serious life-and-death issue for our manufacturing concerns."

The Complex Problem: Reducing the Complexity of the Manufacturing Process to Meet Customer Demands
Working in a complex manufacturing environment characterized by high, fixed-production costs, a huge mix of parts and machines, interdependent events, multiple-step processes, and shared resources, Dirona faced a difficult process in streamlining functions to better serve its marketplace. The company’s target markets, truck and bus manufacturers, are increasingly driven by customers demanding aggressive delivery performance to satisfy their own enhanced production of more products and options.

"Plant schedulers had no idea when any specific part could be available for shipment, and manufacturing times were inflated in order to meet and compensate for the schedules," said Valdés. "Despite our hard work, we were only averaging 72 percent on-time delivery."

The company had an immediate need to streamline its production processes and did not want to wait for multi-year implementations. "We needed to develop a scheduling and planning system that would be both versatile and flexible in order to synchronize the material flow into the final assembly. Because we are part of the automotive industry, which is increasingly complex, it also becomes increasingly difficult to manage a plant focused on providing the client with the option needed, the quantity wanted and at the moment it’s required," states Valdés.

Striving for Optimal Delivery Performance
Dirona wanted to synchronize the flow of materials throughout the supply chain, and desperately needed to increase on-time deliveries to its customers. The company would no longer tolerate on-time deliveries at less than 100 percent, and, at the same time, it wanted to reduce inventories and operating expenses.

Dirona had experienced improvements previously by creating a new organizational structure. "Applying the world-class manufacturing philosophy, Dirona divided the plant into four business units using group technology and created a separate organizational structure for each one so that each plant could work independently on its specialties," stated Valdés. "Out of this process we arrived at four main categories of products: gears and carrier assemblies, brakes, components, and axle assembly. This categorization made things much clearer for the company."

Even so, the company still did not have the due date performance they were looking for and inventories were not turning as quickly as Dirona needed them to. The new production strategies reached beyond the shop floor into the company, but did not reach all the way through the supply chain to affect and improve planning and scheduling.

"As Dirona continued to offer mass customization, the complexity of the production processes grew, and our scheduling systems were not able to keep up. The company still had major problems, not only bringing in materials from suppliers, but also with scheduling the plant," said Valdés.

"Plant schedulers had no idea when any specific part could be available for shipment, and manufacturing times were inflated in order to meet and compensate for the schedules," said Valdés. "Despite our hard work, we were only averaging 72 percent on-time delivery."

The Solution: MAPICS (now Infor) Supply Chain Management
After a thorough evaluation of available software solutions that directly addressed Dirona’s pressing scheduling needs, the company selected MAPICS (now Infor) Supply Chain Management. "We selected MAPICS (now Infor) because complex manufacturing requires a simple and straight forward solution, and MAPICS (now Infor) is exactly that," reported Valdés.

After only three months of scheduling its operations with MAPICS (now Infor) Supply Chain Management, Dirona increased its on-time deliveries to OEMs (Original Equipment Manufacturers) from 72 percent to 100 percent. Dirona also implemented line-sequenced deliveries with two of its major customers– Navistar and Kenworth–reducing its inventories, in most cases, from ten days to one.

"With MAPICS (now Infor) Supply Chain Management, Dirona has greatly impacted its four main business units. All scheduling and planning capabilities are handled with one software solution, so it made sense to have people owning both of these processes," Valdés added. "We now have people in each different business unit acting as the owner of both the planning and scheduling processes. Dirona went from a departmental organization to a process-oriented organization from the order-entry process, to the scheduling of the supplier and the shop, and onto the delivery of the product," said Valdés.

Practical Tools to Get the Job Done
MAPICS (now Infor) Supply Chain Management provides Dirona with practical tools that enable plant floor workers to address material flow and internal supply chain issues. To improve the velocity and stability of material flow, the software enables Dirona to focus its IT resources on the primary constraints affecting flow. By controlling the release of work into the production flow, establishing and managing constraints, and establishing buffers, Dirona is able to manage the natural variability that is inherent in a complex manufacturing environment. With this simplified, proven approach, Dirona reduced manufacturing cycle time by 75 percent simply by managing their material flow. Dirona quickly and easily synchronized the internal supply chain of interdependent business units throughout the extended enterprise in order to compress lead times and meet customer demand.

The Bottom Line
By implementing MAPICS (now Infor) Supply Chain Management, Dirona’s WIP inventory has fallen dramatically and on-time shipments for OEMs have risen 100 percent. Dirona’s clients are now ordering smaller quantities and are doing so weekly instead of monthly. They have now reduced their own safety stock levels from ten days to only 24 hours, which is ultimately a significant benefit to Dirona and its customers.

"With MAPICS (now Infor), we are able to do more using fewer people in the planning and scheduling areas, and they are now able to strengthen other areas of the company which we consider weak, by placing them where they’ll be more productive," notes Valdés. "On the other hand, if we are unable to deliver orders on time, we can now advise the client about it and explain why." Today, Dirona no longer has to concentrate on time-consuming, abstract business models. Instead, the company can focus resources on a limited number of variables. With a smoother more consistent flow, Dirona is able to easily manage the variability in its complex environment.