Preparing for Post-Strike Success in Automotive Supply Chains

[Transcript]

Jan Griffiths: 00:03

Welcome to the Auto Supply Chain Prophets podcast, where we help you prepare for the future in the auto supply chain. I'm Jan Griffiths, your co-host and producer.

Cathy Fisher: 00:13

I'm Cathy Fisher, your podcast host. Our mission is to help automotive manufacturers recognize, prepare for, and profit from whatever comes next in the auto supply chain.

Terry Onica: 00:23

I'm Terry Onica, your podcast host, will be giving you best practices and key supply chain insights from industry leaders.

Jan Griffiths: 00:29

Because the auto supply chain is where the money is. Let's dive in.

Jan Griffiths: 00:37

Hello, and welcome to another episode of Auto Supply Chain Prophets podcast. Terry, my co-host, how are you today?

Terry Onica: 00:46

I'm doing great. Jan, how about you?

Jan Griffiths: 00:48

Good. What have you been up to?

Terry Onica: 00:50

Well, recently, I ran Run Woodstock. And I was going to pack a pickup. And I did the half marathon. So I'm walking up to pack up pickup, I pick up my packet. And I'm going to walk away, and it's really dark. And this woman comes up to me and says, "Hi, Terry. I watch your podcast, I'm a big fan of it." And I was just so shocked in the middle of the darkness packing a pickup at a marathon race that I would run into a fan. So that was really super cool. She was the wife of a husband that I know through running. But it was just a great experience to see that we got fans out there that you don't even know of.

Jan Griffiths: 01:29

It is, and that's the beauty of podcasting, right? Because we can see the number of downloads, but we don't know who's downloading it. And it's lovely when somebody actually recognizes and complements the content and says, "Hey, you know, I really enjoy it for XYZ reason." I love getting that feedback and to our listeners out there. We want your feedback, you can email us we have all our contact information in the show notes. But that's really good to hear, Terry. Well, as you know, I've been in the local news a lot lately. I've been on three different channels in the last three days, talking about the Tier Two impact of the strike. And for our audience, we need to let you know that it is today we are recording on Wednesday, September 20, 2023. And we are in the middle of the strike. The UAW is striking against the big three, against General Motors, Ford, and Stellantis. And we're right in the middle of it, right in the heart of it. And I could think of no better guest to bring on today. And somebody who could bring the perspective of the OEMs and the perspective of the supply base, all wrapped in a wealth of knowledge in this industry. It is, of course, the one and only Bill Hurles, former executive director of supply chain for General Motors, who is no stranger to the mic here on the ASCP podcast. Bill Hurles, welcome to the show.

Bill Hurles: 02:53

Oh, good morning. Thanks, Jan and Terry, it's great to join you today.

Jan Griffiths: 02:57

And it's lovely to see you- to see you again. We saw you live and in person. Last week, as we all supported Wayne State University's Supply Chain Management Advisory Board. We are all on there together. And it is lovely to see you live and in the flesh and to celebrate our students, because we're all about our students, and the future of supply chain and getting talent into supply chain and transforming this industry for the future. And we're all in this together. And I love it.

Bill Hurles: 03:27

I agree a 100%.

Jan Griffiths: 03:30

Okay, let's get into the nasty stuff, shall we, Bill? Let's talk about the strike. What is going on? What is going on in the mind of a supply chain leader at an OEM right now? What are they worried about, Bill? What are they thinking about?

Bill Hurles: 03:46

I think probably the greatest opportunity, and I'm gonna call that opportunity, that the strike presents for supply chain leader is twofold. One is anticipation of restart. This will get settled. I don't know when it could be in a day. It could be in an hour, it could be in a month. I just see last night there was a settlement with Unifor and Ford Motors. So that likely is going to set a bit of a pattern for the agreement with the UAW. I believe that, but I can't predict that. But with that being said, I think a supply chain leader right now needs to be anticipating what will we do when we restart, and this is edible for OEM at a supplier level. Obviously, the market has been very strong, and the automakers each will want to make up that volume as quickly as possible. So what does that mix look like? How do the schedules that are out there today the suppliers we're seeing prior to the strike? How do they reflect what the operating plan will be? And then last but not least, how do you use this opportunity to further develop your team and I'm talking, training, cleaning up records. Anything you can do to better position yourself for the restart needs to be done right now. And as a supplier, I think it's also essential that they consider what do they anticipate that mix might be? What will their demand look like? I would anticipate the OEMs will run overtime to make up units. How are they positioned with their raw materials and their capacity and their manpower to plan for that? And I think they can communicate with their contacts at the OEMs to get some insight to what do they think is the restart is going to look like and what the requirements may be. So it's all about anticipation and planning. And I think that's the essential part that both OEMs and suppliers should be doing right now.

Terry Onica: 05:44

I want to mention that Cathy Fisher and I developed an operational restart readiness checklist during COVID. And we recently went back and updated it, looking at long term restarts like this for the UAW, and that's actually posted on our Auto Supply Chain Prophets podcast, so you look for the download there. Last I knew it was downloaded over 3000 times. So I'm hoping during the strike is helping out a lot of people, especially those suppliers in the lower tier, we had a great success story out of a supplier that contacted us from Colombia to say how helpful it was. So I wanted to mention that when you're talking about the restart.

Jan Griffiths: 06:23

No, that's, that's a great point. Bill, listening to you talk about the restart, we all know and our audience knows that you don't shut down and start, no, and startup an OEM assembly plant, one of the big three, in a matter of minutes or hours, there's a process, it takes time, there are checks, there's a whole procedure that has to be followed. It makes me think about the technology that we need to get visibility into all of that, because we don't know what plants are gonna go down until Shawn Fain announces it on a Facebook live. So not only do the OEMs have to react very, very quickly, but the supply base and then the OEMs have to signal the supply base through the ERP system, through EDI; what's happening, make changes very quickly. Tell us about the technology side of this Bill.

Bill Hurles: 07:17

Yeah, that's a really good point, Jan, because often in supply chain, we think about the physical flow of product, the transportation, the receiving and the movement of the material. But just as importantly, is the communication, and I'm really talking to electronic communication that's taking place between supplier and receiver of material. Today's technology continues to advance. And I think the biggest change we're starting to see is the adoption of AI to replace some of the manual tasks that are done at both ends of the supply chain. I think the technology is advancing quickly, I think the probably the greatest challenge for all supply chain practitioners right now. It's making sure that I've got the skills and abilities with the individuals that will be using the technology. And that's why I think the education and I know you referenced the Wayne State session we had earlier this week with the students, I think the learnings that need to go on and be adopted within the workforce by those people. At the same time, I think it's inherently important that everyone within the supply chain organization continue to up their game in their capabilities of leveraging their MRP systems and leveraging the communication tools that are out there to better plan and predict and communicate what's going on.

Jan Griffiths: 08:40

Yeah, that's right. Terry, nobody knows the technology better than you do. You're in that space every single day. What are some of the best practices that you see when people have to react very quickly to these changes at the OEM assembly level and communicating that message that down through the supply chain?

Terry Onica: 08:59

Well, to Bill's point, I think EDI is really critical now more than ever. And I think what suppliers need to be doing is within their ERP systems, be able to when they pull that data in to be able to see what the adjustment has been right away. So has it gone up or down out of my 10 to 15%, right? So really closely monitoring what that's doing, in today's tools, you can do that very, very quickly. The other thing that you must be doing that we still I think struggle a little bit but it's getting better at the Tier One level is pass the EDI down to the Tier Twos and get the Tier Twos to pass EDI down the chain. Because when that pipeline is open, you can get communication down the supply chain really quickly. The other thing that I think is super important today is having a good supplier relationship management tool. Bill, would you agree, I look at, like, the ability to map so you know where your suppliers are at very quickly, to be able to see what kind of capabilities they have, to see if they are risks to you or your organization, especially during a UAW strike, you know, you could have something very fragile in your supply chain. So I think those are really important. And Bill, would you agree having a good supplier relationship tool and be able to find that data is really important today?

Bill Hurles: 10:15

Absolutely. When you think about your resiliency, the most important tool that you have in your toolbox is supplier relations. When you have good supplier relations, you have good communication. When you have good communication, you're able to respond and support in both directions, both supply and receiving of the materials. So building on that supplier relations is no different than a personal relationship. When you've got a good bond between two individuals, things move much smoother and much more flawlessly. I think all efforts have got to be to continue to improve supply relations.

Jan Griffiths: 10:54

I love that. And I respect the fact that you come from an OEM, let me give you some experience as as you both know, I am a recovering supply chain person from the Tier One space. And as you go further down the chain; data availability, data visibility, it's not there. So, in this crisis situation like this, the Tier One supply chain leaders are dealing with hundreds and hundreds of suppliers, I would say every company I've ever worked for had at least a thousand direct material suppliers in the supply base. And you've got a limited number of resources reaching out and actually talking; and checking and seeing how they're doing from a financial health standpoint, from a movement of goods standpoint, is very, very difficult. And you just don't know which supplier is going to fall next. We know that the Tier Two supply base is in a precarious situation right now. They're weakened, they're weaker now than they were before COVID or even immediately after COVID. So what advice, Bill, would you have for those Tier One supply chain leaders who are grappling with this? They've got over 1000 suppliers, they don't know which one is going to go under first, or where the weakness really is. What would be your thoughts around that?

Bill Hurles: 12:21

Yeah, really two-fold. And you describe the situation very good. And I think the capability of the Tier Ones and the Tier Twos is probably more fragile than any time and in recent history. I think the element that's entered in that's very, very difficult to predict, is the impact of labor shortages. I know as I talked to some of my colleagues in the supply chains today, where traditionally you would have disruptions related to quality or machine downtime. Today, what's become very prevalent is lack of manpower, where suppliers not able to run its operations, and or you're bringing unskilled people into roles that are very, very critical to keep the flow running efficiently. To your question, Jan, I think what a Tier One needs to do is number one is I really believe in supply chain record integrity is really critically important. I would stress the importance of making sure that I'm keeping all of my records: inventory records, receipts, scrap, et cetera. That I'm doing everything I can to maintain a solid base of information, that then I can use both to run my own operations, plan my own operations, and plan my capacity, but also that I'm putting out accurate schedules to my suppliers in a timely manner so that they can then react and then pass on, as you say, to Tier Two, Tier Three. So I think that's what I would say is critically important. And then I think secondly is the importance of communication. If the supplier identifies the disruption, communicate right away, let your downstream receiver of your material know that I have a problem, here's what it is. The most frustrating situation I would find myself in is when we would find out that a supplier had run into a difficult situation, didn't communicate. I understand they're doing everything they can to protect your deliveries. But raising your hand too late doesn't allow the organizations to work together to solve the problem. The OEM is just as interested in your success as they are on their own. So work together. It's about communication that goes back to Terry's comment earlier about supplier relations. When you have good relations, you have good communication.

Terry Onica: 14:41

And one thing I want to add to is back to MMOG/LE, the Materials Management Operations Guideline Logistics Evaluation, go back to that in these times. I often see, to your point, Bill, there's been a lot of churn in the industry. And the people that knew MMOG/LE may have been gone, and now you've got a new team. And I think it just provides so much wonderful guidance, especially chapter six talks all about how to manage suppliers. And that's just the years and years of knowledge of what can go wrong. And really, what you should be doing, make sure you have stable operations. So, in this downtime, another thing I'd recommend, go back to MMOG/LE and really validate; are you really keeping it up to date? Is there anything we can glean from there to make it better? Because I've seen myself personally, when people start managing the supply chain and start communicating electronically and doing all these things, there's anywhere from a 15 to a 60% reduction in inventory. So it just streamlines operations, suppliers, they always are concerned suppliers are going to be upset about getting EDI. In fact, they love it because they get that demand faster. And they don't have to carry that just in case inventory. So, I would like to add that too, go back and look at MMOG/LE, have you slid in any areas, does anybody, everybody understand that? It's just a great tool.

Bill Hurles: 16:04

You know, Terry, you bring up a good point. The other part that you have helped develop and publish is the 24 Essential Supply Chain Practices, it falls right in line with that, it's all about understanding the next move that takes place, you know, we refer to supply chains, as a chain. And the strength of a chain is its weakest link. And so the better we could have our individuals, maybe it's the people on the receiving dock, and maybe it's a follow-up person, maybe it's a leader themselves. But the more we're each able to play our position and understand the interdependence between what we do. And those that are working with us or receiving our information, the better we can strengthen that, we strengthen the entire supply chain.

Terry Onica: 16:49

And to your point, Bill, I'm glad you mentioned the 24 Supply Chain Processes, because that's a good place also during downtime. Those are the core basics, table stakes for building a strong supply chain from both a quality perspective, a supply chain perspective, and an IT perspective. So going back and looking at those and even picking three, Cathy and I just always say, let's just start by picking three. And really looking at that, and educating everybody and see where you're at today. Again, we've seen so many positive impacts to the plants by doing that process.

Jan Griffiths: 17:25

Bill, you mentioned interdependencies, and that makes me think about silos and whether we like it or not in traditional legacy automotive world, we deal with silos, we operate in silos, but silos, they slow us down under normal operating conditions. But in a time of crisis, they really slow us down. We can't wait for approvals and bureaucracy. We need people to work collaboratively together with speed in this crisis situation. What are your thoughts on that Bill?

Bill Hurles: 17:56

Silos are both a curse at the same time, it's an opportunity to break those down. When you've got silos, you lose efficiency. And granted, especially in the automotive industry, where there's so many different disciplines required to work together to develop and to produce a vehicle, you're going to have different functional groups that have different roles. And everyone can't be an expert in every field. But when you operate independently, and you allow information to flow up before it flows across, you've lost time, you've lost speed, you've lost efficiency. But more importantly, you've lost the input of others that could make a better decision about an event or a product, or a change that needs to take place. So the better an organization can work to eliminate silos, the more efficient they're going to be, the communication is going to be better, people are going to be able to anticipate what is being done, and can then thereby react quicker. Now, there are also some disadvantages. As you try to break those silos down, you have to make sure that you're managing that effectively. I spent some time at our Saturn operations down in Tennessee during my career. And the structure there was set up where everything was done collaboratively, across shifts across departments, etc. What I also saw when that happened is it was often difficult to get a decision made in a timely manner. Sometimes too much input can actually be laborious and not provide an efficient outcome that you're looking for. So I think leaders have to recognize, as your work broader with other input from other organizations, that you still need to time manage the work that's being done and the decisions being made. Because it's easy to get bogged down and getting everyone's input when maybe it's not needed. Remember, speed gives you the opportunity to move faster, and be more productive both of the time and the output of what you're working on.

Terry Onica: 20:09

Bill, sustainability is a hot topic today in the supply chain, a lot of OEMs are doing assessments, and it's just growing and growing in importance to the industry. One of the things that I always think of, especially at the manufacturing level, if we were operating probably like we should be, we would have all kinds of proof of things that we're doing to be sustainable, just in the plant environment, right? And oftentimes, I know we get lacks, there's been a lot of workforce shortages in turn there. And so we kind of move away from doing what we should be doing to be efficient. What are your thoughts about sustainability in the supply chain and at the plant? We know in the car, we're trying to reduce emissions, but at the plant level, what can we be doing to contribute to sustainability?

Bill Hurles: 20:58

Yeah, it's a really good topic, Terry. And I know we've had a chance to talk together on this a bit in the past. First of all, sustainability in your contribution is really, obviously, a moral responsibility that all of us have in trying to make this world a better place to live, you know, in how we preserve energy, how we preserve water, how do we clean air, as someone that grew up in the 60s and 70s, in industrial areas, I saw what happened. I remember early on, you know, air pollution so bad, you could barely see across, you know, the street. Cars covered with dust in a foundry area that I worked in. Today, you don't see that, but the remnants of it, the rivers are still polluted. I came from the Saginaw area, and you look at that area, and you can still see the results of something that occurred over 50 years ago. So what can we do individually? Number one is be aware that anything that you're touching or planning or working with your peers around energy usage, around fuel, especially in supply chain, we work closely with our logistics partners, and how we can more efficiently plan our supply chains flow. Sometimes we forget about the fact that closer that supplier is not only better for reaction and for availability, it also uses less fuel. So you know, how do we work with our partners to better optimize your supply chain locations is probably one of the key areas. And then I think the other is just supply chain can also influence safety, safety within the workforce on the factory floor, as you said, a clean environment not only is safer for the employers, it also is helping eliminate waste, you know, and that's just more material that ends up in a recycling bin or have to be in a landfill. Those are all simple things that we can have an influence. And I think we need to continue to educate. There are so many opportunities in this space that I don't know yet. But I think we got to continue to learn and to share and work together to really optimize our whole sustainability plan. And I would also encourage all employees, most organizations have published their sustainability requirements and expectations. And I would encourage an employee to read what has our company committed to and work with their supervisor and their peers to contribute?

Terry Onica: 23:31

I completely agree. I think at the plant level, there are so many opportunities to really contribute towards sustainability back to what you were talking about earlier, just making sure your systems are up to date, your inventory levels, your position, all of that, because the more accurate and correct that is the bright, the less inventory waste that we'll have in the system, whether it's too much or too little. So I think that's really important. And really having that culture for everybody's quality supply chain, thinking of sustainability from the beginning. And even recognizing that a lot of things that we do every day at the plant level really do contribute towards that, that we may not even be thinking about are taking credit for. So, I really like what you had to say there. So, Bill, what do you think should be at the top of mind today for either plant managers or VPs of supply chains?

Bill Hurles: 24:24

What would be my greatest concern? What would keep me up at night would be talent. What am I doing to continue to grow the capabilities of my team? Have I positioned the right players at the right time that they're able to contribute at their optimal performance? And just as importantly, how am I helping them develop so that they can be in future leadership positions or be able to contribute to even a greater level? So I think each individual, including the leader themselves, needs to be committed to continue to learn, things are changing fast. And you need to keep ahead. And I think that means encouraging your team members, but also yourself, to continue to learn and to share those learnings have an environment that has opened communication, there are so many opportunities to continue to develop. We talked earlier about Wayne State, and AIAG offer a number of sessions and opportunities to grow. There's Tomorrow's Leaders Today is a session we put together for middle-level and senior managers to grow their knowledge of what will be expected of supply chain leaders five years from now. And how do we share best practices that can help prepare them for those spaces? So again, I would just go back and say, What would keep me up at night is, am I creating the strongest team? Do I have the versatility to react to things like we're experiencing today, effectively and efficiently? Am I using the tools? And are we developing the tools needed to give us even greater capabilities?

Jan Griffiths: 26:09

You know, what's interesting about what you said, Bill, is we had just released an episode with Naseem Malik talking about the talent supply chain, which is right on with exactly what you're saying. And we're not used to thinking about talent, under this idea of a supply chain of talent. But it is exactly the same, we've got to have that pipeline, you've got to have students coming in early, you know, and you've got to recognize diversity in that talent supply chain early, early on, get engaged with universities with the world of academia, to shape as we're doing to shape the agenda for the universities and the colleges out there. But to bring that talent in as quickly as possible.

Terry Onica: 26:56

And I think to your point as well, Jan, not only the talent, but one of the things I've seen is that is AI, and letting this younger generation coming in, let them go apply the technology that we really need to automate and refine our processes and to really make them better, especially in the manufacturing level, I think that's going to be so critical. And what a great opportunity, because they're eager to do that.

Bill Hurles: 27:18

You need to make sure they have the tools that are able to do that. And I know there's tools that are being developed, tools that are being taught that the leader may not necessarily know. So you need to have open communication and ask for input from your people at all levels of, how can we improve? What tools are out there? What capabilities. And again, I'm a strong proponent of open communication is in both directions.

Jan Griffiths: 27:45

Bill, what is the one piece of actionable advice that you would give to our listeners today to act on tomorrow?

Bill Hurles: 27:54

My response would probably build on what we just discussed a few minutes ago, I would say everyone needs to be committed to learn, and to advance their learning every day. But set a personal goal. Each quarter, I'm going to either read a book, I'm going to attend a session, I'm going to visit something that I've not seen before, maybe it's a supplier, you know, one of your outstanding suppliers, most organizations recognize their best and brightest. Take a visit, learn from each other. And during that discussion, you're also getting communication about how can we help each other in both directions. So be committed to learning, commit to every quarter, that I'm going to make a tangible effort to improve the skills of myself and my team members. That's the word I would suggest.

Jan Griffiths: 28:48

And there it is. And it starts with you as a leader, whether you're a leader of yourself, or a leader of others, it starts with you. Learning is where it's at. Bill Hurles, thank you very much for joining us today.

Bill Hurles: 29:02

Thanks, Jan. Thank you, Terry.

Terry Onica: 29:05

Thank you, Bill, for joining us today and spreading all your knowledge with our listeners. We really appreciate it.

Jan Griffiths: 29:14

Are you ready to find the money in your supply chain? Visit www.autosupplychainprophets.com to learn how, or click the link in the show notes below.