AIAG Helps Global Automotive Supply Chain Cut Costs

Nov. 1, 2003
SOUTHFIELD, Mich. - In a landscape where automotive suppliers are forced to cut costs to remain competitive, the Automotive Industry Action Group (AIAG)

SOUTHFIELD, Mich. - In a landscape where automotive suppliers are forced to cut costs to remain competitive, the Automotive Industry Action Group (AIAG) has helped the global automotive supply chain reduce costs in tight economic times.

"As most of the automotive industry is focused on slashing costs to stay viable, AIAG helps the global automotive supply chain remove non-value added costs through streamlined and commonized business processes," said Andrew J. Cummins, executive director for AIAG. Being the organization's first permanent executive director, Cummins was hired in July to bring continuity in AIAG's direction and leadership.

AIAG's standardized business processes and implementation strategies are the end products of its work to reduce cost and complexity; improve quality, health, safety and the environment; and optimize speed-to-market for the global automotive supply chain. The organization's efforts have resulted in more than 80 unique guidelines, standards and white papers that have produced savings for automotive suppliers since 1982.

Some examples of AIAG's cost-cutting initiatives include:

--Inventory Visibility & Interoperability Project (IV&I) - IV&I promises to save the automotive industry $255 million annually by enabling true interoperability of automated inventory visibility systems. Interoperability is the ability for business systems from different organizations to communicate with each other. Through IV&I, companies will no longer have to maintain multiple software applications to assist in making inventory replenishment decisions.

--Product Data Management (PDM) Pilot - This pilot proved that existing standards are capable of bringing high-end technology to a location that currently uses a low-end PDM system or none at all. This breakthrough can potentially reduce industry costs in vehicle engineering systems by $1.4 billion per year.

--Manufacturing Assembly Pilot (MAP) Project - MAP's goal was to improve the speed and quality of information flowing down the supply chain, from the OEM to the last supplier in the chain. Using EDI, MAP identified over $1 billion in savings through the implementation of EDI and internal process improvement.

To address the TREAD Act, AIAG created an information kit to help manufacturers in the reporting process. AIAG also developed a guideline and reporting tool to assist companies in reducing costs when meeting requirements of the End-of-Life Vehicles (ELV) Directive of the European Union. "We want to stress to the industry that AIAG is not a lobbying group, or a supplier advocacy organization," said Cummins. "AIAG confronts existing regulations and develops processes that aid with compliance, and are advantageous for those suppliers affected."

"AIAG is the only place in North America where OEMs and suppliers can sit down at the same table to address issues and resolve problems that affect the entire global automotive supply chain." AIAG's member companies include North American, European and Asian OEMs, suppliers and other related vendors in the automotive industry. These companies share more than $600 billion in annual sales.

Founded in 1982, the Automotive Industry Action Group (AIAG) is a not-for-profit association of companies involved in the automotive industry. Through the cooperation of OEMs and suppliers, AIAG's primary goals are to reduce cost and complexity, improve quality, health, safety and the environment, and optimize speed-to-market, throughout the global supply chain. For more information on AIAG, please visit