David Broccardo, Senior Solutions Engineer at Plex, joined Ultra recently for a webinar to discuss Materials Management Operation & Logistics Evaluation, or MMOG & LE Compliance. David worked with AIAG in the early 2000’s to help formulate MMOG and has extensive experience working with automotive suppliers, making him a great resource to share the “what” and “why” of MMOG & LE Compliance and how Plex can support it. The following is what we learned from David and his perspective on Plex’s ability to support MMOG.
What is MMOG & LE?
In 2002, automotive OEM’s and their suppliers began a joint effort to create some common terminology and gain a consensus on what was important to focus on in the supply chain. They developed accepted benchmarks in materials management, which helped OEMs and their suppliers benefit from the cost savings created by efficiencies.
MMOG & LE was released in 2004, with the fourth and most recent version being released in 2014. The MMOG & LE is a comprehensive self-assessment, required by many automotive OEM’s and Tier 1 automotive suppliers. It includes 206 best practices of varying weights, but there are 35 “F3” weighted criterion that are considered the most fundamental, and help organizations focus on critical supply chain issues such as:
- Customer requirements
- Contingency planning
- Resource allocation
- Capacity constraints
- Employee skills
- Supplier capabilities
David further explained MMOG & LE Compliance by clarifying some of the common misconceptions around MMOG & LE: It is not something that is completed or owned by your customer, it is not a step-by-step guide to managing your supply chain, and it is not an evaluation of product quality. Rather, it is about producing the correct parts and delivering them on time to your customers.
Why You Should Consider the MMOG & LE Assessment
David has seen a number of organizations who want to know why they should consider the MMOG & LE assessment if a customer isn’t requiring it. There are many reasons to consider MMOG & LE, such as making you a more attractive supplier to OEM’s, or giving you an increased ability to attract new customers. Even if you aren’t looking to acquire new customers, every business can benefit from the cost savings created by a more efficient supply chain. Organizations who conduct the MMOG & LE assessment can see delivery performance improve by 15%, an 80% reduction of expedited freight premium, and up to a 50% reduction of inventory.
How Plex Supports MMOG & LE Compliance
The Plex Manufacturing Cloud is an integrated real-time ERP application, designed to help manage an organization’s enterprise and manufacturing operations. Plex has written the entire solution without the need for third party bolt-on applications. Originally developed for automotive suppliers, Plex has the functionality to support MMOG & LE compliance, with strengths in areas related to the fundamental 35 “F3” requirements. A few of these features and functions include:
- EDI – Completely written by Plex and fully integrated in the cloud, Plex’s EDI offering includes hundreds of EDI trading partners pre-built into the system and a comprehensive history of every EDI transaction. This allows their customers to easily meet the MMOG & LE electronic communications requirements.
- Capacity Planning – Complete system integration and real-time information gives organizations the ability to view capacity by forecasts, releases, or individual jobs so that any capacity constraints can be communicated to the customer as quickly as possible. Finite scheduling and suggested scheduling further limit capacity issues.
- Inventory Control – Plex manages inventory by operation giving you the ability to track inventory consumption by serial number, location, quantity and status, including WIP and outsourced operations, at any location across the enterprise or with a supplier.
While these are only a few of the ways Plex can support MMOG & LE, David indicated that Plex has the ability to support some of the most important requirements which are related to shipping, shipping labels, shipping documentation, and advanced shipping notices. Plex’s integrated solution automates the shipping process helping you make sure you’re shipping the right product at the right time in the right container with the right documentation. In addition, Plex offers a compliance module to help you track your MMOG compliance with workflows and approvals.
David points out that leading edge companies don’t see the MMOG & LE as a burden. Instead, they view it as a tool to help them focus on key business processes that help reduce inventory and enhance shipping performance, making them more efficient and profitable. Companies who aren’t considering MMOG & LE, David says, can be sure their competition is.
To learn more about Plex and MMOG & LE Compliance, visit their website here.