Shanghai General Motors: Ensuring Lean Manufacturing Processes in China

Shanghai General Motors (SGM) is 50-50 joint venture between General Motors and Shanghai Automotive Industry Corporation (SAIC), China's largest passenger car manufacturer. SGM's 24,000-square-meter plant is powered by world-class facilities and leading-edge technology. at the time of the project SGM ranked among China's top-three passenger car manufacturers, with a 10% market share. With its large manufacturing and complex assembly facilities involved, the company has become fully committed to implementing a system of lean manufacturing methodologies.

Shanghai General Motors' manufacturing process involves assembling vehicle components from parts that are imported from around the world, including the United States, Brazil and Korea. Lengthy shipping times meant that parts were ordered up to three months in advance, which was tying up working capital and heavily impacting corporate cash flow. Due to last-minute changes to manufacturing schedules, engine or chassis parts destined for later production runs were sometimes used to fulfill customer orders, resulting in shortages and delays to subsequent production runs.

SGM approached Fusion Systems to help them solve their problem, after multiple integrators in China had failed. Where more than 1 year had been expended, Fusion Systems only spent three (3) months to sort out the problem and implement a new solution (HARP). Fusion Systems custom designed a solution to help SGM to manage their inventory and optimize their purchase orders.

Shanghai General Motors' imprecise inventory management processes also made it difficult to predict the exact break point or changeover time when parts from one vendor would run out and be replaced by parts from another. The inability to establish a clear component break point also led to poor lot traceability in the event of a quality problem or issue. The Fusion Systems solution: HARP, changed all that.

Complete Solution from Fusion Systems custom development

Fusion Systems developed a complete solution with a custom algorithm specifically designed for Shanghai General Motors to manage their inventory, optimize their purchase orders. Features of the system solution included:

  • Generate smooth Purchase Orders (PO) planning even for fluctuating demands(Reduce the amount of Rush Purchase Order)
  • Manages different lead times per vendor, per part
  • Handling of per vendor variation limits
  • Optimization of inventory levels
  • Control component break points so that end inventory is always near zero
  • Full integration with SGM's existing SAP system solution

Usability features

  • The time cost of each part's calculation less than 300ms
  • Can restart and continue calculating when exception occurs
  • Each calculate process works independently, one process won't impact other processes even it is broken
  • Can extend smoothly and flexibly, by adding calculate process, or adding calculate server
  • Supports online extending, doesn't need stop the calculating

Long-Term Business Value

Fusion Systems experts analyzed SGM's requirements and delivered a solution that met the company's needs within a three month time frame. Business users immediately responded in a positive manner to the new system. SGM's Key Business Managers have given a high praise to Fusion's approach to end-to-end solutions methodology encompassing consultancy, design, development, implementation, and ongoing support and maintenance. The Fusion Systems' HARP solution immediately assisted SGM in minimizing business risk and protected their existing IT investment by ensuring this customized solution could be easily upgraded to integrate with future release of Fusion HARP solution.

Toward Just-In-Time Ordering

Using the specialized software developed by Fusion Custom Development, Shanghai GM can now predict the exact changeover time for components on the production line. Real-time visibility of stock levels enables SGM to make part changes promptly. Today, SGM has an accurate bill of materials for each vehicle and complete traceability of all components. Their order cycle for components has been reduced, substantially lowering inventory levels held in stock.

Leveraging Software Investment

Fusion System's commitment to meeting the immediate and long-term needs of each individual customer has enabled Shanghai General Motors to leverage its investment and increase the ROI on its existing software, hardware, and personnel investments. Shanghai GM now regards Fusion Systems as a long-term, trusted business partner.