Case Study - Michelin

Michelin2018-08-30T13:37:51+00:00
supply chain automation

“Demand Driven MRP processes have significantly improved flow management. Since the beginning of the pilot phase, we have not identified any crisis and we have noticed an increase in the sensitivity of the factory to customer needs. Currently, communication with the Valladolid factory is more fluid and this allows us to be able to respond even to modifications of firm orders”.

Business Challenge

As the world leader in vehicle tire manufacturing, Michelin competes in markets throughout the world. In order to maintain and grow their global business, a highly efficient and effective supply chain is required.

After reviewing their supply chain practices, the first area of emphasis was the manufacturing of Original Equipment (OE) tires. The primary charter of the OE supply chain is to achieve perfect service levels to avoid delaying the car production line for their customers.

The pressure to keep inventories at controlled minimums, while having to deal with volatile customer demand signals, was extremely challenging. Despite being a global tire leader, Michelin felt there was still room for improvement in this link of the chain.

Solution

Michelin selected Replenishment+® from Demand Driven Technologies and engaged in a pilot project. The company selected their Valladolid (Spain) factory to develop a Demand Driven MRP (DDMRP) project to address the customer service challenge, improve inventory levels and better react to the constantly changing customer demand signals.

The implementation of DDMRP concepts within the solution -buffer positioning, sizing, demand signal filtering, planning and execution processes -improved information bi-directionally and material flow towards the customer.

The results were immediate and enabled Michelin to:

  • Reduce inventory
  • Stabilize the production schedule
  • Anticipate possible service disruptions at the production line and take early action to avoid impacting the supply chain.

Results with Replenishment+

Service Level

99%

Up 8%

Inventory

20%

Lead Times

15%

Schedule Modifications

3

.03

Per Week

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How can REPLENISHMENT+ improve your supply chain?

Improve demand signal accuracy by shifting from forecast driven planning to sales driven planning.
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