Auto parts manufacturer Delphi was searching for a method to supply a major client, Mercedes Benz, with parts on a just-in-time/just-in-sequence basis.

Automated materials handling allows Delphi to synchronize the delivery of parts from its third-party logistics (3PL) center to the Mercedes campus. The solution includes returnable plastic totes and containers, a sophisticated warehouse control system (WCS) and an automated storage and retrieval system (AS/RS) with 2,640 storage locations.

The storage system enabled by a tightly integrated information system using manufacturing software, the WCS, bar codes and radio frequency communication to link Mercedes with Delphi and ARD, its 3PL partner, in real time.

Together, Delphi and its 3PL have created a synchronized manufacturing supply chain that spans 1,200 miles, from harness production in Juarez, Mexico to auto production in Alabama. There, the harnesses, each built for a specific automobile, are temporarily stored in the AS/RS, and then sequenced for delivery according to Mercedes' production schedule. The system can handle 66 harnesses per hour, including safety stock.

This is a marked change from how OEMs like Delphi approached manufacturing before.

"In the past, our primary focus was on our processes within the walls of a manufacturing plant," says Gary DeArment, manager for Delphi Packard's North American JIT/JIS Centers. "Now, we have to manage the entire value stream. We do that by integrating our operations with our partners like ARD that understand the needs of customers like Mercedes."

Karl Grant, director of operations for ARD, agrees, "To be successful, we have to be able to integrate technology like the AS/RS into our operation so that we can support both Delphi and Mercedes."

A new IT infrastructure also had to be implemented to link Mercedes, ARD and Delphi. "We had an IT system in place," says ARD's Grant. "But to launch this new vehicle, Mercedes scrapped its existing manufacturing system and started from scratch. Integrating all three operations was another major challenge."

Finally, the system had to work flawlessly. "We went to exhaustive lengths to put redundancies in place because there's a substantial penalty if you shut down the assembly plant," says DeArment. "There's a backup generator, so we can run without power and manual backups."

Delphi estimates that the system can provide 99.6% uptime. Approximately 240 harnesses a year may have to be retrieved from the AS/RS manually should downtime occur.

In short, the solution created by these two partners is recognition of the fact that successful manufacturing doesn't end on the production line.