moss - material off-shore sourcing

1

Material Off-Shore Sourcing – MOSS Project

Midwest User Group March 20, 2006

Presented by:

Kevin Wade - Honda of America Mfg.Michael Comerford - Global Commerce Systems

2

Customs / Logistics Strategies to Strengthen Long Distance Supply Chains

Story Points:

• Define the Problem

• Adverse Impact

• Goals and Objectives

• Industry Survey, AIAG Project/Scope

• Current Status, Next Steps

3


Current Long Distance Supply Chain Problems

• an inordinate amount of paper documents has resulted in substantial delays in moving freight,

• many service providers are faxing, emailing and even carrying paper documents,

• faxed documents, and faxes of faxes are often unreadable or missing critical information,

• end to end shipment visibility is limited to numerous proprietary systems, many of these are not real time and do not cover all events end to end,

• split shipments and other disruptions are difficult to manage.

4


Adverse Impact:

The identified problems result in:

• Cost associated with increased Buffer Stock

• Cost associated with increased Expedites

• Cost associated with “Follow-Up” • Cost of human interventions in normal processing

• Cost of human interventions in problem shipments

• Problems associated with deficient visibility

5


Project Goals and Objectives:

♦ eliminate or significantly reduce the use of paper documents and enhance the electronic flow of information,

♦ improve compliance, improve predictability,

♦ enhance security (C-TPAT, WCO),

♦ real-time visibility based upon real-time business events,

♦ improve strategies for the mitigation of supply chain disruptions, split shipments, alternate routings, changing carriers,

♦ decrease uncertainties in the supply chain thus significantly improving overall timing, consistency and visibility,

♦ increase corporate profitability: saving time and money by developing economies in the overall compression of the supply chain.

6

Expediting continues for most.Expediting continues for most.

Over the past 2 years, the incidence of expedited shipments has...

Remained the same28%

Decreased26%

Increased46%

74% of the respondents continue to incur the cost of expediting to support business needs.

7

Common Benefits Among Auto SCCommon Benefits Among Auto SC

22%

46%

61%

74%

73%

78%

35%

58%

71%

75%

71%

63%

Increase government-relatedcompliance levels

Improve data quality/integrity

Improve visibility to materialflow

Reduce use of premiumfreight

Reduce the cost of expediting

Reduce buffer stock inventory

OEMs

Suppliers

Which benefits would you expect your company to achieve from improvements in offshore/long distance supply chains?

8

Real time visibility is a challengeReal time visibility is a challenge

80%

39%

40%

46%

25%

23%

30%

47%

21%

61%

60%

54%

75%

77%

70%

Arrive destination

In-transit movement fromcustoms

Clear U.S. Customs

Arrive North America

In transit movement fromforeign port

Depart foreign port

In transit from supplier

Depart supplier

Have real time visibility No real time visibility

87% of respondents indicated improvement needed in visibility.

Real time visibility thru each stage of global flow of goods:

53%

9

79% believe standardizing ‘exchange of info’ will reduce disruptions in supply chain.

Which communication methods cause the greatest number of problems?

16%

25%

28%

22%

8%

1%

Emails Phone calls Faxes Paper EDI EDIFACT XML

% who use these methods to move data through the long distance SC

90% 83% 81% 56% 53% 18% 11%

Communication of Mtl Movement Communication of Mtl Movement

10

Customs Mandates Adds CostCustoms Mandates Adds Cost

(1=No impact / 5=Significant impact)

17%

24%

32%

21%

6%

1 2 3 4 5

No impactSignificant impact

30% of the survey respondents have added staff to handle problems, disruptions and/or issues related to govt. compliance over past 2 yrs.

What has been the impact of enhanced customs and other government agency security on your long distance supply chains?

11

32% 31% 31%

47%44% 48%

21% 25% 22%

Business Customs Shipping

Not re-keyed

Multiple times

One time

Data Redundancy ExistsData Redundancy ExistsThroughout a multi-stage offshore supply chain, how many times is data re-keyed into various systems, including proprietary systems, for business, customs & shipping?

15% of shipments experience delays due to inaccurate or incomplete data.

12

Operational Impacts w/Ocean FreightOperational Impacts w/Ocean Freight

Yes

50%

No

50%

Yes

41%

No

59%

OEMs Suppliers

Production stoppage due to delayed ocean freight?

Both OEM & Suppliers experiencing production stoppage.

13

How many days of inventory to cover delays in ocean shipments?How many days of inventory to cover delays in ocean shipments?

12%

4%

13%

30%

40 %

Manufacturers are carrying excessive levels of inventory

11%

7%

20%

26%

37%

None

1-4 days

5-9 days

10-20 days

More than 20 days

OEMs

Suppliers

Buffer Inventory for Ocean DelaysBuffer Inventory for Ocean Delays

14

Summary of Findings

• 91% still use manual procedures to correct shipments, communicate status and visibility.

• 15% of shipments experience delays due to inaccurate or incomplete data.

• 79% believe standardizing ‘exchange of info’ will reduce disruptions in supply chain.

• 87% believe improvement in long distance supply chains is needed.

15


AIAG Core Planning Team

♦ Automotive Industry Action Group♦ Bosch♦ Daimler Chrysler Corporation ♦ Ford Motor Corporation♦ General Motors Corporation♦ Honda of America Mfg.

16

♦ Project Scope Document♦ Project Business Case♦ Project Charter♦ Project Plan

AIAG MOSS Project Management

17

MOSS Project Plan Timeline

Completed In Process Planned Work

March 2006

Pre-Planning

Plan / Analyze

AS IS

Build Solutions

Define Deploy Post Review

Plan / Analyze

TO BE

2006 20062006 20072005/620052005 2007

Q2/Q3 Q4Q3/Q4 Q1Q4/Q1Q4Q3 Q2

Validate

18

MOSS: Plan / Analyze AS-IS State

Pre-Planning

Plan / Analyze

AS IS

Build Solutions

Define Deploy Post Review

Plan / Analyze

TO BE

2006 20062006 20072005/620052005 2007

Q2/Q3 Q4Q3/Q4 Q1Q4/Q1Q4Q3 Q2

Validate

AS-IS or Current State Model ♦ Developed Workflow Process Models ♦ Developed Associated Metrics ♦ Initiated Lead-User Interviews ♦ Developing USE CASE ♦ Developing Data Element Matrix

19

Honda of America Manufacturing:Import Logistics Functions & Future Image

Honda of America Mfg., Inc.

20

KD

(JSP

) K

D (J

SP)

From JPN KD PlantFrom JPN KD Plant

KD

(M

issi

on)

KD

(M

issi

on)

From Southeast Asia HM PlantsFrom Southeast Asia HM Plants

Dire

ct

(OEM

)

Dire

ct

(OEM

)

PUR to procure from NAPUR to procure from NA

2004.08.27_North American LogisticsHonda Procurement Logistics Styles•Standard Global Procurement Processes

•Asia•Plant PC Issued Orders

•KD Set•Plant Issued Orders

•Part by Part•Honda Motor Order Receipt

•Local Procurement•Final POD responsibility

•North America•Purchasing Issued part by part•Canadian Import

•Supplier or HAM IOR•Direct Pickup at Supplier

•Mexico Import•Supplier responsibility•Pickup at Texas WH Honda of America Mfg., Inc.

21

Honda Import Honda Import Intermodal FunctionIntermodal Function

Honda Export Honda Export IOOIOO

TransportTransport

Order, Receipt, Order, Receipt, Packing, Delivery, Packing, Delivery, Manifest TransmissionManifest Transmission

Full Container LoadsFull Container Loads

W7, W3 Order Lead 10-days ocean transit <5 days OH Inventory7-days Inland

Honda - International Overseas OperationsN.A. Honda N.A. Honda

Plants Plants SuppliersSuppliers

5-days IOO process

Manifest Receipt, Manifest Receipt, Clearance, Performance Clearance, Performance Tracking, Expedite Tracking, Expedite Control, Distribution Control, Distribution ManagementManagement


Honda Motor Inc.Honda Motor Inc.

22

Expedites Must Be Arranged 24 hrs. Prior To Port ETAPort N-2 AEP

VESSEL SS Line ETD Updated ATD Sch. Day Updated Actual Location Sched dep. SS Projection Actual dep. Sch. Day Updated ETA Actual Train Truck Air RTA Prod Comments

Hyundai Duke APL 2/11 2/11 2/12 Sun 2/20 2/22 2/22 Sea 2/21 2/24 2/24 Tue 3/1 3/3 3/3 X Labor short in Tacoma caused late Seattle arrivalHyundai Duke MOL 2/11 2/11 2/12 Sun 2/20 2/22 2/22 Sea 2/21 2/24 2/24 Tue 3/1 3/3 3/3 X Labor short in Tacoma caused late Seattle arrivalEver Ulysses EVG 2/8 2/10 2/10 Fri 2/18 2/20 2/20 Tcm 2/20 2/22 2/23 Wed 3/2 3/4 3/1 XVerrazano Bridge K-L 2/16 2/16 2/16 Thu 2/24 2/24 2/24 Tcm 2/25 2/25 2/25 Fri 3/4 3/4 3/4 XSpringtide NYK 2/12 2/12 2/12 Mon 2/21 2/22 2/22 Oak 2/23 2/23 2/24 Wed 3/2 3/2 3/2 XHyundai Emperor APL 2/18 2/19 2/19 Sun 2/27 3/1 3/1 Sea 2/28 3/3 3/2 Tue 3/8 3/10 3/10 X X Late previous voyage, missed chicago interchangeHyundai Emperor MOL 2/18 2/19 2/19 Sun 2/27 3/1 3/1 Sea 2/28 3/3 3/2 Tue 3/8 3/10 3/10 X Late previous voyage, missed chicago interchangeEver Ursula EVG 2/15 2/16 2/16 Fri 2/25 2/26 2/25 Tcm 2/27 2/27 2/28 Wed 3/9 3/9 3/10 XVirginia Bridge K-L 2/23 2/23 2/23 Thu 3/3 3/3 3/3 Tcm 3/4 3/4 3/4 Fri 3/11 3/11 3/11 XSanta Barbara NYK 2/19 2/19 2/19 Mon 2/28 3/1 3/1 Oak 3/2 3/3 3/3 Wed 3/9 3/14 3/14 X Engine trouble at sea, Ca. Rail track project, Cinci congestionHyundai Admiral APL 2/25 2/25 2/25 Sun 3/6 3/7 3/6 Sea 3/7 3/8 3/8 Tue 3/15 3/16 3/15 X Chicago congestionHyundai Admiral MOL 2/25 2/25 2/25 Sun 3/6 3/7 3/6 Sea 3/7 3/8 3/8 Tue 3/15 3/16 3/15 X Chicago congestionEver Ultra EVG 2/22 2/23 2/23 Fri 3/4 3/4 3/4 Tcm 3/6 3/6 3/7 Wed 3/16 3/17 3/15 XVincent Thomas Bridge K-L 3/2 3/2 3/2 Thu 3/10 3/10 3/9 Tcm 3/11 3/11 3/10 Fri 3/18 3/21 3/19 X Rail congestionSanta Monica NYK 2/26 2/26 2/26 Mon 3/7 3/8 3/8 Oak 3/9 3/10 3/10 Wed 3/16 3/21 3/19 X Weather at sea. Ca. rail track projectHyundai Commodore APL 3/4 3/4 3/4 Sun 3/13 3/14 3/13 Sea 3/14 3/15 3/15 Tue 3/22 3/22 3/21 XHyundai Commodore MOL 3/4 3/4 3/4 Sun 3/13 3/14 3/13 Sea 3/14 3/15 3/15 Tue 3/22 3/22 3/21 XCalifornia Mercury NYK 3/5 3/6 3/7 Mon 3/14 3/16 3/16 Oak 3/16 3/18 3/18 Wed 3/23 03-24/03-27 3/25 X Late previous voyage, Ca. rail track projectVancouver Bridge K-L 3/9 3/9 3/9 Thu 3/17 3/17 3/17 Tcm 3/18 3/18 3/18 Fri 3/25 3/24 3/24 XHyundai Baron APL 3/11 3/11 3/11 Sun 3/20 3/21 3/21 Sea 3/21 3/22 3/23 Tue 3/29 3/30 3/29 X U.P. power problemsHyundai Baron MOL 3/11 3/11 3/11 Sun 3/20 3/21 3/21 Sea 3/21 3/22 3/23 Tue 3/29 3/30 3/29 X U.P. power problemsSanta Cruz NYK 3/12 3/12 3/12 Mon 3/21 3/22 3/22 Oak 3/23 3/24 3/25 Wed 3/30 4/4 4/4 X Ca. rail track project. N.S rail delaysValencia Bridge K-L 3/16 3/16 3/16 Thu 3/24 3/24 3/23 Tcm 3/25 3/25 3/24 Fri 4/1 4/1 4/1 X X KKTU7073737 being trucked at MMP requestHyundai Duke APL 3/18 3/18 3/18 Sun 3/27 3/28 3/28 Sea 3/28 3/29 3/29 Tue 4/5 4/5 4/5 XHyundai Duke MOL 3/18 3/18 3/18 Sun 3/27 3/28 3/28 Sea 3/28 3/29 3/29 Tue 4/5 4/5 4/5 XVerrazano Bridge K-L 3/23 3/23 3/23 Thu 3/31 3/31 3/31 Tcm 4/1 4/1 4/1 Fri 4/8 4/7 4/7 XHyundai Emperor APL 3/25 3/28 3/28 Sun 4/3 4/4 4/4 Sea 4/4 4/6 4/6 Tue 4/12 4/13 4/13 XHyundai Emperor MOL 3/25 3/28 3/28 Sun 4/3 4/4 4/4 Sea 4/4 4/6 4/6 Tue 4/12 4/13 4/13 XStarlight NYK 3/26 3/30 3/30 Mon 4/4 4/8 4/8 Oak 4/6 4/10 4/11 Wed 4/13 4/18 4/18 XVirginia Bridge K-L 3/30 3/30 3/30 Thu 4/7 4/7 4/7 Tcm 4/8 4/8 4/8 Fri 4/15 4/14 4/14 XHyundai Admiral APL 4/1 4/4 4/4 Sun 4/10 4/12 4/12 Sea 4/11 4/13 4/13 Tue 4/19 4/20 4/20 XHyundai Admiral MOL 4/1 4/4 4/4 Sun 4/10 4/12 4/12 Sea 4/11 4/13 4/13 Tue 4/19 4/20 4/20 X CAXU4681035, CRXU3057245 due on 04/27Santa Barbara NYK 4/2 4/2 4/2 Mon 4/11 4/12 4/12 Oak 4/13 4/14 4/14 Wed 4/20 4/21 4/21 X Mechanical problem at sea. N.S. congestionVincent Thomas Bridge K-L 4/6 4/6 4/6 Thu 4/14 4/14 4/13 Tcm 4/15 4/15 4/15 Fri 4/22 4/22 4/21 XHyundai Commodore APL 4/8 4/9 4/9 Sun 4/17 4/18 4/18 Sea 4/18 4/19 4/19 Tue 4/26 4/27 4/27 X Possible Chicago delayHyundai Commodore MOL 4/8 4/9 4/9 Sun 4/17 4/18 4/18 Sea 4/18 4/19 4/19 Tue 4/26 4/27 4/27 X Possible Chicago delay

Transportation MethodMIT ArrivalJapan Prt Departure U.S. Port Arrival Port Departure (Train)

HAM Inbound JSP Tracking


JPN Port DepartureExpected/Updated/ActualUS Port Arrival

Sched/Updated/ActualUS Port Departure

Sched/Projected/ActualHonda ArrivalSched/Updated/Actual

23

Honda U.S. Inbound Rail Routes

Cincinnati

HAM

Chicago

St. Louis

Oakland

Los Angeles

Seattle

Tacoma

HAMHMAHSCHPE

Honda Company

(APL, Mitsui)

(NYK)

(K-Line)

HSC

HPEBNSF

BNSF

NS

CSX

UPUP

(Evergreen)

(P&O Ned Lloyd, MOL )

Norfolk

Atlanta

BNSF (Maersk)

Savannah

Jacksonville

HMA

(K-Line, MOL)

UP

BNSF (NYK)

Philadelphia

Boston

Baltimore

Charleston

New Orleans

Miami

Houston

UP (MOL)

Memphis

Birmingham


24

Carrier E

Met ETA @ MIT45%Late

55%

Percentage of containers

Carrier C

Met ETA @ MIT31%

Late69%


Carrier A

Met ETA @ MIT74%

Late26%


Carrier B

Met ETA @ MIT26%

Late74%


4/04-3/05 Intermodal Delivery Performance for HAM (MIT)

Carrier D

Met ETA @ MIT29%

Late71%



On Time range

25

HOO PC

【 10/29/03 CA WILD FIRE Response Process 】Plant

Vessel Departure

Overseas Transport

US Port Arrival

Inland Transport

MIT Rec’v

Cross Docks

CC Rec’v

NAL

MS

VesselCompany

HOO PC

10/27Wild Fire effects

Rail Info

Vessel containersMIT arr. info

UP date

Prod. tracking@ each Plant

10/29Container transportprocedure change

consensus

Request containerssubject to

Transp. ProcedureChanges

Arrangetrucks

Load totrucks

PartsStaging

Rail info 10/28 Prod.Assessment Req.

10/21Wild Fire

Rail infoconfirmed

10/28NA overallProduction

Assessment req.

・ Production tracking request at each plant（ Container # / KD Order Lot / Prod. Date info ）

・ Container # / KD Order Lot / Prod. Date info

Inbound KD parts report

10/27Wild Fire

effects info

10/27HMA Wild Fire

effects notification

10/27Wild fire info rec’d

10/29Rail STOP

10/29Container transport

method changeconsensus

10/28Prod. Assessment

Key Concern:・ Lead time is 3 days from INFO REC’V to PLANT PROD. ASSESSMENT to ACTION PLAN DECISION　　　

⇒ Establish a mgmt procedure/system for container/production date correlation

HOO PC

HAMAssessment

Status

ContainersReceived

・ Unclear wild fire status・ Unclear when prod. will be impacted

・ Wild fire status understood・ Railway info understood・ Unclear when prod. will be impacted

・ Railway status understood・ Unclear when prod. will be impacted

・ Production impact date understood・ Action proposal understood

Rail stop Info

HMA/ ＨＣＭContact/

Activity request

Inbound JSP Daily Tracking & Response Processes


10/21Wild Fire

10/27Wild fire info rec’d

10/28NA overallProduction

Assessment req.

10/28Prod. Assessment

10/29Container transport

procedure changeconsensus

Arrangetrucks

26

HAM Inbound Tracking System Proposal

•Improve accuracy and efficiency of decision making for daily & crisis situations

•Requirement for accurate, real time information to production allocation

•Single source data base to retrieve and update key information

•Automatic data mining from ocean carriers, rail lines and customs


27

HAM Inbound Container Management System Process Overview 　　NAL

Containertracking system

production assessment

NALTransportInfo Mgmt

MSProd. Date

Mgmt

HOO PCOverall Central Mgmt

ContainerTracking System

Confirmation

ContainerTracking system

automatic Creation

Rec’vManifest

VesselDepart/US Arr/MIT Arr

Change InfoOceanCarrier

PortStatus

Inland transportationInfo/MIT Arrival

Results Info

Request for part-level

assessment

NAL / PCC/M proposal establishment

Impacted LOT #

assessment

Vessel Departure Overseas Transportation US Arrival Inland Transportation MIT Arr.

Daily Mgmt Crisis Mgmt

Transportationmethod change

proposal

TOPDecision

Transportation Method Change

・ Compare container receiving actualand production plan⇒Production judgment update

Assess impactto production

Go approval for action

OKNG

・ Vessel unit・ Plant unit・ Container #・ Vessel depart・ US Arr.・ MIT Arr.・ RTA

Containertracking system

update

・ Vessel actual Dep. results・ＥＴＡ - Updated・ Input actual arrival of container

Confirm impact to production

（ Overall consensus ）

Part-levelAssessment

PartsTracking system

・ Container #・ PC #・ KDLOT #・ Prod. date・ MTOC

PartsTracking system

Port InfoAll Delays

Port InfoAll Delays

Port InfoAll Delays

Info Mgmt

Information Sharing

ContainerTracking System/

Confirmation

Crisis InfoReceived

Crisis Info

System Update

・ Involvement・ Transport methodchange

System Update

System Update

System Update

RTAvs.

ETA Capability

Information Update Sources:

S.S. Line, Port feedbackWeb Site Tracking


Information Mgmt

Live Information

Access

Daily Mgmt Crisis Mgmt

28

Log costLog cost

2step2stepTracking parts in packing Tracking parts in packing processprocess

OrderShippingDeliveryPackingVanningShippingCustomsDeparture

Port departure ETA forecast Port Arrival

Production

Line deliveryInventoryArrival

Initiate response to abnormality

Initiate response to abnormality

Pack pro.Pack pro. Plant shipPlant ship

3step3stepTracking by linking local port to local Tracking by linking local port to local operation (actual)operation (actual)

CustomsCustoms DCCDCC ProductionProduction

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTY

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVessel

Pack pro.Pack pro.CTRL systemCTRL system

Bas

ic In

foB

as

ic In

fo Lo

gi In

foL

og

i Info

Steamship Steamship compcomp

DBDB

G Tracking DBG Tracking DB

1step: Establish tracking function from JPN 1step: Establish tracking function from JPN shipping to local portshipping to local port

Forwarder Forwarder DBDB

Info linkageInfo linkage Info linkageInfo linkage

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustoms dateCustoms date

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustoms dateDeparture dateDeparture date(Flight date)(Flight date)

KD Order NoKD Order NoPart NoPart No

Part namePart nameQTYQTY

Pack specPack specContainerContainer

VesselVesselCustoms date

Departure datePort arrival datePort arrival date

Arrival dateArrival date

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustoms DeparturePort arrivalRAIL ONRAIL ON

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustomsDeparturePort arrivalRAIL ONRAIL OFFRAIL OFFCustoms dateCustoms date

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustoms Departure Port arrival RAIL ONRAIL OFFAct. customsActual partActual partdelivery datedelivery date

KD Order NoKD Order NoPart NoPart NoPart namePart nameQTYQTYPack specPack specContainerContainerVesselVesselCustoms Departure Port arrival RAIL ONRAIL OFFAct. customsAct. Del. dateAct prodAct prod

Port arrivalPort arrival

Steamship Steamship compcomp

DBDB

PlanPlanPack specPack spec

ProdnProdnsimulationsimulation

DCCDCC

Prod. CtrlProd. CtrlInventory Inventory

CtrlCtrl

Railroad Railroad DBDB

Ac

cu

mu

late

d

Ac

cu

mu

late

d

info

(Pla

nin

fo(P

lan /A

ct.)

/Ac

t.)

Port departure

Port departureCustomsCustoms

Digitalize customs documents/ accumulate data in Digitalize customs documents/ accumulate data in DB that will be developed in futureDB that will be developed in future

KDOrder

Track from part delivery in JPN to production Track from part delivery in JPN to production by creating link with actual local production/ by creating link with actual local production/ Inventory/prod. simulation functionsInventory/prod. simulation functions

★Part delivery

★Act.packing

★Act.shipping

ForwarderForwarder★Act.customs

Steamship compSteamship comp★Port (flight) departure

★ ★ ★Ocean

situation

★Act.arrival

Railroad comp DCC HAM★In-landON

★In-landOFF

★Act.Delivery

★Act.W/H

★Act.customs

★Prod. Act (Progress)

Phase 2Phase 2

Track part delivery to local portTrack part delivery to local portby creating linkage of planning by creating linkage of planning to packing processto packing process

GPCSGPCS

Phase 1Phase 1

Phase 3Phase 3

Part Logistics OfficePhase 3Phase 3


Honda Global Logistics Tracking System

Key Points:• Global Tracking Data Base• Digitized customs documents• Link to production allocation

Implementation Phases1. JPN Supplier to local Port2. JPN port to destination plant3. NA IOO to destination plant4. Global IOO

29

DEST 81KI PROD. # OF PARTS

JAPAN 377,527 143TAIWAN 6,420 40CHINA 142,980 41INDIA 2,970 29

THAILAND 16,050 65MALAYSIA 4,560 51MEXICO 22,880 1,057BRAZIL 24,120 306

CANADA 386,634 6ALABAMA 213,331 10SATURN 62,532 26TOTAL 1,260,004 1,774

EXPORT OPERATION DESTINATIONS

AFGHANISTAN

TURKMENISTAN

HONDA SIEL CARSLIMITED. - INDIA561

MALAYSIA

THAILAND

INDIA

RUSSIACANADA

UNITED STATES

MEXICO

CHINA

MONGOLIAKAZAKHSTAN

INDIA

UZBEKISTAN

PAKISTAN

KYRGYZSTAN

TAJIKISTAN

NEPAL

BHUTAN

BANGLADESH

BURMAVIETNAM

THAILAND

LAOS

CAMBODIA

MALAYSIA

INDONESIAPAPUA NEW GUINEA

AUSTRALIA

NEW ZEALAND

VENEZUELA

COLOMBIA

ECUADOR

PERU

BOLIVIA

BRAZIL

ARGENTINA

CHILE

PAR AGUAY

URUGUAY

JAPANNORTHKOREA

SOUTHKOREA

PHILIPPINES

TAIWAN

HONDA MOTOR - SAYAMA CIOO 011, 01EHONDA MOTOR - SUZUKA SIOO 031

HONDA TAIWAN (HTW)34A

HONDA CARS MFG.AYUTTHAYA HATC 373

HONDA MALAYSIASdn. Bhd. 33Y

HONDA AUTO MOVEIS DO BRAZILSAO PAULOHAB 41B

HONDA DE MEXICOGUADALAJARAHDM 120

HONDA OF CANADA MFGALLISTON,ONTARIOHM 146, 145

GUANGZHOU HONDA AUTO CO., LTD.HUANG PU - GHAC 32A, 32B

HONDA MOTOR - WAKO 012

HONDA OF AMERICAMARYSVILLE, OHIO

HONDA MOTOR - HAMAMATSU SIOO 021

HONDA DE AMAZONMANAUSHAB 41B

HONDA MOTOR - HAMAMATSU SIOO 023HONDA MFG ALABAMA 15B

JAPAN

CANADA

MEXICO

BRAZIL

ALABAMACHINA

TAIWANHONDA WUHAN CHINA (HWC)

32F

GM-Saturn

NA CKD Business RelationsThis map identifies all the

Honda and Non HondaCompanies that AH/HAM

have a business relationshipwith.


HAM International & Domestic Part Supply Customer Map

(IDPS)Phase 3 Implementation•HAM Export

30Honda of America Mfg., Inc.

•Honda requirement for increased International Supply Chain visibility

• U.S. Port & Rail volume frequently exceeds capacity• Decreasing opportunity for Rail Network diversions• Increased CBP examinations & potential port security shut downs• Normal rail maintenance and unplanned disruptions (derailments, maintenance, etc.)• Lead Time reduction initiatives• Increased Global Procurement activities• Shipping Capacity fluctuations• Labor Capacity fluctuations

Conclusions:

31

•Honda to participate & support the AIAG Materials Off Shore Sourcing Project•Key areas for integration

•Customs clearance•Ocean Carrier status•Rail Lines status•3PL, Expeditors

•Utilize best business practices for the Honda Project

Conclusions:


32

Workflow Process Mapping:

♦ Physical Flow:

Identify all parties and all hand-offs at each physical location as the goods move from point to point. ♦ Information Flow: Business Operational View: Identify all business documents used to effect the movement of goods.

Technology Function View: Identify all electronic messaging used to effect the movement of goods.

33

Trucker Receives204 Load Tender

Trucker ProBill

CommercialInvoice

EX1 Or T1 Packing List

Trucker DepartsSupplier with

goods

Supplier EDIcapable

YES

NO MM creates ASN

Inland Foreign Trucker

Trucker DeliversFreight to

ConsolidationCenter

Trade Lane Process Map EU In-Direct to USA

A

Trucker Arrives atSupplier

Suppliergenerates

Invoice, EX1 andPacking List andTOT to Trucker

TruckerGenerates ProBill

CommercialInvoice

Trucker ProBill EX1 Or T1 Packing List

Supplier sendsASN to MM and

Buyer,

MM forwards ASNto FF, CC and

Buyer

4PLProprietary

System,Milestone 1

PAS

Consolidation Center (CC)

FFProprietary

System

Trucker Arrives atConsol Center

Trucker ProBill

CommercialInvoice

EX1 Or T1

Packing List

Is the ASN onfile

Move freight toPending

Trucker sends214 Arrival

Notice to MM

CC performsmanual

intervention toobtain correct

Data

4PLProprietary

SystemMilestone 2

ACC

NO

YESFreight Now

Arrived at CC

B

MMProprietary

Systemsends 315

to 4PL

TL920euf/V1.2 p2

34

Trucker ProBill

CommercialInvoice

EX1 Or T1

Does Freightmatch Part#,

QTY, etc.

Packing List

YES*

NO**

FF notifies CC allpaperwork ready

for Export

YES

NO

CC TOT DOCSto FF

Freight NowReceived by CC

Trade Lane Process Map EU In-Direct to USA

Consolidation Center (CC)

B

Freight now Arrivedat CC

CC performsmanual

intervention toresolve

discrepancy

CC sends RECADVto MM

MM ProprietarySystem sends

RECADV to 4PL,

CC Pre-stagesContainer

*Minor discrepancies resolved while freight is being consolidated.**Major discrepancies freight placed in Pending until issue resolved..

Trucker ProBillCommercial

Invoice

EX1 Or T1, andCustoms OGA

Docs

FF Pick UpSheet

Is all paperworkready for Export

FF performsintervention andobtains required

and complete docs

4PL ProprietarySystem

Milestone 3 RCC

FF makesnecessary

adjustments

FF couriersEX1 to

customs atPOD for

processing

IS EX1processed by

customsNO

IS EX1processed by

customs

Freight Forwarder (FF)

CC EmailsFF a

Pre-LoadList

CC EmailsMM a

ConfirmedLoad List

Pre-Load List

CC Loads Container

Container NowLoaded

Confirmed LoadList

CC sends DESADV - Cto MM

FF ProprietarySystem

4PL ProprietarySystem

Milestone 4 LOC

MM sendsDESADV-C to FF

and Buyer

C

C

FF updatesASN withdocs and

freight rec’din Proprietary

System

TL920euf/V1.2 p3

35

Doc

umen

t Typ

e

SUMMARY INBOUND PROCESS FLOW: EU-CAMTR-USA

Pur

chas

e O

rder

Eve

ntP

oten

tial F

ailu

re P

oint

s

Sup

plie

r pr

oduc

es g

oods

LatePickup

WrongGoods

No ASN

IncompleteShipping

Documents

Inaccurateinformation in

documents

InaccurateStatus

Reporting

Late Deliveryto CC

Goods placedin Pending

Port ofDeparture

capacity delaysNo EX1

InaccurateEX1

OSDGoods

24 HourRule Failureto Comply

CustomsExport Hold/

Exam

ShipmentSplit

Document& EDI

KeyingErrors Data Deficient

Customs andOGA Docs

CustomsEntry NOF

Failure toComply with

AEN

Note: throughout Eventactivity there is numerous

315 status reporting

CustomsImport /Export

Hold/ ExamCustoms Hold

or Exam

MissingCustoms /OGA Docs

Deficient/Illegible Faxes

OSD Goodsto Pending

Port ofDeparturecapacitydelays

Out ofScope

TransportationMode Change

TransportationMode Change

MOSSAFD011006a

Supplier

MaterialManager Drayage

Carrier

Inland ForeignTrucker

ConsolidationCenter

FreightForwarder

Ship ToParty /

Customer

Document &EDI Keying

Errors


Errors

OGA Holdor Exam

ShipmentSplit

Act

or

POA PortAuthority

SteamshipOperator

ExportCustoms

POD PortAuthority

POE CustomsBroker

RailRoadCarrier

HighwayCarrier

POACustoms

POECustoms

POE OGA

POE ServiceProvider

DomesticInland Carrier

DeConsolidationCenter


Errors

36

DISCUSSION POINTS FOR 01/24/06 MOSS MEETING1 MOSS BASELINE METRICS Participating OEM’s and Suppliers will provide the below listed trade lane metrics on both a pre-implementation and a post implementation basis. It is requested that both sets of metrics include data for a specific trade lane over a representative period of time. Baseline Metric Explanatory Note

1 Transit Times Mean Average number days goods are in transit from: depart Supplier to Delivery to Ship-to-Party, incurred for this Trade Lane during the representative period of time (include all transit times and all dwell times). (what about late pick-up : deviations from scheduled departure time?)

2 Trade Lane Uncertainty The Standard Deviation from Mean Average incurred for this Trade Lane during the representative period of time (may be used as an indicator of the degree of uncertainty in the Trade Lane). Also want this for each segment of the trip.

3 Expedites Provide both the Number of expedites and the Percent of total shipments requiring expedited transportation for this Trade Lane during the representative period of time. If doable, differentiate between expedites caused by: transportation deficiencies, demand variation and forecasting deficiencies.

4 Premium Freight

Total cost of Premium Transportation incurred for this Trade Lane during the representative period of time. If doable, differentiate between premium transportation costs caused by: transportation deficiencies, demand variation and forecasting deficiencies.

5 Buffer Inventory

Average number of days of buffer stock inventory normally held for this Trade Lane during the representative period of time (supply chain uncertainty vs. forecasting uncertainty). If doable, differentiate between buffer inventories held for: transportation deficiencies, demand variation and forecasting deficiencies.

6 Holding Costs

Total value of goods shipped for this Trade Lane during the representative period of time (will be used to develop holding cost indices).

7 Transportation Costs

Total transportation costs for goods shipped in this Trade Lane during the representative period of time (includes all associated logistical and material handling costs).

8 Population Total number of shipments transported in this Trade Lane during the representative period of time. (containers and or shipments).

9 Compliance Percent of shipments that cleared customs first pass in this Trade Lane during the representative period of time.

10 Visibility

What percent of shipments did you have real time visibility of (within x hours) at each event during the transport from the supplier to the Ship-To-Party for this Trade Lane during the representative period of time (measured in percent and number of hours – age of data).

11 Responsiveness/Resiliency What was the level of your ability to readily process split shipments, change carriers and or change modes in this Trade Lane during the representative period of time (measured in days and or hours).

1 MOSS Metrics012406a

37

Trade Lane Example 1

Transit -Supplier to

Consol

Dwell -At Consol

Transit -Consol to

Port of Departure

Dwell -At POD

Transit -Port to Port

Dwell -At Port of

Entry

Transit -POE to Final Destination

Total Transit -Supplier to Destination

Shipment Data Points 546

Average 3.78 7.38 1.12 7.49 10.09 4.39 4.62 36.03

STDEV 9.08

AVG+STDEV 45.11

AVG+2STDEV 54.19

# Shipments >AVG+1STDEV 61

# Shipments >AVG+2STDEV 25

INDICES 61 or 11.2 % of shipments took >45 days from SU to ST

25 or 4.6% of shipments took >54 days from SU to ST

15.8% of all shipments incurred above average delays

38

MOSS Trade Lane MetricsStandard Deviation as a Measure of Supply Chain Uncertainty

Days

Fre

quen

cy

10 20 30 40 50 60 70 80

36 = Mean Average Number of Days in Transit from

Foreign Supplier to Delivery to Domestic Ship To Party

1 STDEV = 9 days

2 STDEV= 18 days

3 STDEV= 27 days

68% of all shipments were delivered within 45 days



61 shipments

25 shipments

Sample Population was 546 shipments, of which: 61 took greater than 45 days and an additional 25 shipments took greater than 54 days in transit. Thus, 86 shipments, or 15.7% of total shipments, took between 46 and 63 days to transit from EU to USA.

As a result of the uncertainty in the supply chain as to which shipment will arrive on time (the average of 36 days) or take up to 63 transit days, Buffer inventories are established to mitigate this uncertainty of shipment delivery .

•

•

•

•

•

•

•

•

•

••

•

•

•

•

•

•

39

Actors Roles Consolidation Center

Makes decision to arrive goods into consolidation center pending resolution of discrepancy and may detain other goods until documentation discrepancy issues have been resolved.

3PL May be involved in resolving discrepancies Customer May be involved in resolving discrepancies Freight Forwarder Receives documentation from CC and reviews to ensure compliance for exportation. Supplier May be involved in resolving discrepancies

Goods in Pending or HoldStatus at Consolidation Center

Supplier

ConsolidationCenter

3PL

FreightForwarder

Customer

CASE 10b Goods have been placed in pending status and or detained at Consolidation Center

Use Case Diagram

40

Use case name Goods have been placed in Pending Status and or Detained Actors Consolidation Center, 3PL, Customer, Freight Forwarder, Supplier Description This Use Case describes what takes place at the Consolidation Center when an inland foreign

trucker attempts to deliver goods to the CC and the CC has no ASN on file and places the goods into a Pending Area, or the goods are accepted ‘Arrived’ by the CC and then during unloading etc they discover discrepancy issues that result in the goods being placed into a hold status until documentation issues have been resolved. e.g. quantity issues, part # issues, OSD issues, etc. Also, a third instance of potential hold occurs when after ‘Receiving’ the goods the goods may be detained and withheld loading into a container because all paperwork has not been deemed ready for export customs by the Freight Forwarder.

Pre Condition Inland Foreign Carrier has delivered goods to Consolidation center and CC has unloaded then and or arrived them into CC.

Post Condition Consolidation Center has placed goods into a pending and or hold status until various types of discrepancy issues have been resolved..

Begins When Consolidation Center unloads goods and places them in pending status or arrives goods into CC and placed them in Hold Status prior to ‘Receiving ‘ goods or placed them in detain status awaiting certification from Freight Forwarder that all paperwork is ready for exportation.

Main Flow 1. Consolidation Center accepts goods from inland foreign carrier with some discrepancy issues such as no ASN on file and then places goods into Pending status. Goods are not considered ‘Arrived Consolidation Center” and thus no status reporting has taken place. 2. Goods remain in Pending status until discrepancy has been resolved. 3. Goods which have been ‘Arrived’ into Consolidation Center are found to have some discrepancy issues such as part#, quantity, OSD, etc. These goods are placed in a hold status until the discrepancy has been resolved. 4. Goods have been ‘Arrived” and “Received’ by Consolidation Center but are placed in a hold status because all documentation has not been certified ready for export by the freight forwarder.

Ends When Goods are loaded into container. Challenges/Pain Points

a. Need to identify specific reasons for goods being placed into pending and assign reason codes for reporting purposes. b. Need to identify exact reason for goods that have been ‘Arrived’ by Consolidation Center but are being detained and have not been received due to some type of discrepancy that may involve quantity issues, part# issues, OSD issues etc. c. Need to identify exact reason for goods that have been “Received” by Consolidation Center but are being detained and withheld loading into consolidated container because paper work is not ready to clear export customs. Need to determine how each of these problems are communicated and to whom. How they are monitored for milestone reporting purposes. May need enhanced milestone reporting. What is the root cause for goods being placed in pending or hold status?

Suggestions/Comments for “To Be” Use Case

Use Case 10b. Goods have been placed in pending status and or detained at Consolidation CenterDescription Example

41

MOSS Next Steps:

Pre-Planning

Plan / Analyze

AS IS

Build SolutionsDefine Deploy

Post Review

Plan / Analyze

TO BE

2006 20062006 20072005/620052005 2007

Q2/Q3 Q4Q3/Q4 Q1Q4/Q1Q4Q3 Q2

Validate

AS-IS or Current State Model ♦ Continue to use developed Workflow Process Models and add K-Line Models ♦ Develop Associated Metrics for pre (and post implementation) ♦ Continue Lead-User Interviews ♦ Finalize and Validate USE CASE ♦ Finalize Data Element Matrix

TO-BE or Future State Model ♦ Develop Future State Model ♦ Continue Lead-User Interviews ♦ Construct Gap Analysis ♦ Finalize Future State Model ♦ Begin Model and Build Phase ♦ Conduct Proof of Concept

42

Contact Information

♦ Pat Snack and Morris Brown at AIAG

♦ Co-chairs:Michael Comerford ([email protected])Kevin Wade ([email protected])

THANK YOU!!

moss - material off-shore sourcing

Documents

real time visibility

customs logistics strategies

long distance sc

realtime visibility

impact of enhanced customs

shipment visibility

deficient visibility

customs clear