American Axle & Manufacturing (AAM) is a multi-billion dollar, Tier 1 supplier to the automotive industry, with more than 30 locations, nearly 13,000 associates and more than 100 customers, including General Motors, Fiat Chrysler Automobiles, Ford Motor Company, and Honda. AAM is a world leader in the manufacture, engineering, design and validation of driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles, passenger cars, crossover vehicles, and commercial vehicles.
AAM comprises two main divisions: Driveline and Metal Forming Products Business Unit (MFPBU). The management team of MFPBU was finding it challenging to gain real insights into how the business was performing, how to drive quality, better plan capacity, and how to get a real-time understanding of its financial status. This was because each of the business unit’s seven operations had its own ERP, a partial ERP, or none at all. The challenge was to consolidate and fully understand non-standard and/or untimely data.
“We wanted one business system for all of the operations in our metal forming group. Having developed the original version of Plex as the core Manufacturing Execution System (MES) at our forging facility in Oxford, Michigan, we wanted to explore how the Plex Manufacturing Cloud could be deployed across our entire business unit. We were looking for a comprehensive solution to help us streamline and formalize our business processes, including hire-to-retire, procure-to-pay, order-to-cash, record-to-report and product lifecycle activities,” stated Michael Trathen, Senior Manager Lean Systems at AAM.
Integrating a single ERP across such a large, geographically distributed and busy organization, without interrupting production, losing data or interrupting the workforce required help from fellow experts. Trathen notes: “The senior management team chose to partner with Baker Tilly, because its team was extremely experienced in helping enterprise-size businesses, like ours, undertake deep and broad deployments of the Plex Manufacturing Cloud and drive the right business outcomes.”
Together, and supported by the Plex product team, AAM and Baker Tilly worked through a proven methodology to design, implement and train users on Plex—and implementing the manufacturing cloud in parallel with their corporate Oracle ERP system allowing enterprise wide financial consolidation and performance management.
Peter Pearce, Principal at the Baker Tilly Business & Technology Growth Strategies practice: “One of the biggest challenges for this business unit is that it is very numbers driven. A great deal of this reporting was done manually but what it required in order to make better, faster, more informed business decisions was an integrated and automated way to gather operational data. This deployment was one of the broadest we have ever overseen, incorporating all the core Plex capabilities such as inventory control on the shop floor to quality management and manufacturing performance.”
Baker Tilly spent a number of weeks developing a common model of deployment that was unique to AAM. This allowed AAM to roll-out Plex across the seven metal forming locations in a standardized way, mitigate risk and “go live” as rapidly and efficiently as possible.
To mitigate risk during the Plex implementation AAM established a steering committee that met on a monthly basis to review project schedules and assess risk. Baker Tilly was part of that steering committee to help assess and assuage risk at every step.
AAM has seen an improvement in inventory turns of between 5-10 percent with a positive impact on cash flow.
Plex allows AAM to analyze equipment efficiency and to determine the root cause of any downtime, using real-time information driving continuous improvements. Measuring velocity of flow to understand how effectively equipment is delivering end products, AAM has already experienced a 5 percent increase in manufacturing output.
Quality checks are now completed at every stage. The system is set up so that no one can move on to a new activity until the preceding quality check has been logged. AAM can trace important heat codes right through from the mill that produced the source material, to individual containers and items—a level of quality control that is very important to AAM customers.
To comply with Sarbanes-Oxley regulations on security and role assignment, AAM can assign each person’s job role to a security group, evaluate any conflicts, and receive ideas on how to resolve them. Plex automates the process and requirement to show the appropriate tariff for each product, which must all be harmonized in line with trade regulations.
Data is input at the source and can be accessed by supervisors at any time via internet connected device so problems can be solved even when decision-makers aren’t on site. Improved scrappage, tooling and maintenance—AAM has already reduced waste by some 2 percent partly because the type and quality of data Plex collects.
At the corporate level, data from Plex-managed processes is made available via EDI. Management is now better able to make and refine decisions based on real-time, accurate, and consolidated data.
AAM has achieved BSI quality standards, including TS1649.
For more information on this topic, or to learn how Baker Tilly ERP specialists can help, contact our team.