AIAG supply-chain project foresees $1.7B in savings

  • 27-Jan-2010 08:26 EST

The Automotive Industry Action Group (AIAG), a global consortium of auto manufacturers and their suppliers, has developed a way of handling automotive supply-chain information that could reduce transportation costs by $1.7 billion over the next five years.

AIAG’s Material Off-Shore Sourcing (MOSS) project is designed to replace the complex mix of media currently in use with systems that will enable strategic continuous improvement. It is a user-led initiative involving all stakeholders in the supply chain: OEMs, suppliers, carriers, logistics service providers, applications providers, freight forwarders, and customs brokers.

Auto analysts estimate that trade collaboration systems, operating in a “cloud platform,” could generate up to $1 billion in immediate savings to the industry, according to J. Scot Sharland, Executive Director of AIAG. A newly released cost/benefit analysis, available via an e-document through AIAG, will assist individuals in identifying and assessing opportunities to improve supply-chain logistics involving ocean shipments incoming to the U.S. The analysis can improve the overall timing, consistency, and costs of off-shore sourcing in a just-in-time environment through transportation lanes.

An AIAG survey conducted by AMR Research found that 79% of the information is entered into systems repeatedly by the various partners—mainly because the partners are using various and differing communication media: paper, phone, fax, spreadsheets, and e-mail. This media mix tends to be created out of the necessity of the moment and has adverse consequences in operation. The survey found that 15% of all inbound ocean containers are delayed en route due to missing or incorrect data caused by the use of multiple, error-prone entry systems consequences in operation.

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