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How can TIERs comply with MMOG/LE practices?

19/05/2017

MMOG

In sectors like the automotive industry, that utilize methodologies like Just-in-Time manufacturing, efficiency and control of the supply chain becomes a priority. For this reason, more brands require their suppliers to comply with MMOG/LE (Materials Management Operations Guidelines / Logistics Evaluation) practices. However, in Brazil, many TIERs still do not know how to meet this demand of their customers.

What is MMOG / LE? 

MMOG/LE is a set of good practices defined by ODETTE and AIAG, the two most important regulatory entities in the automotive sector, which aim to improve the performance of manufacturing, purchasing and logistics processes to reduce economic costs.

It is a self-assessment tool that allows TIERs to know their weaknesses and improve them. In total, it audits 206 logistical criteria, related to work organization, the interface with the supplier and customer, production capacity and other areas.

According to the score obtained in these practices, the TIER is classified as level A (when it defined as world class), level B (if it is deficient in 2 or more criteria) or level C (when it is deficient in 1 or more critical aspects of high impact).

Renault, Ford, Peugeot or Volvo are some of the major automotive brands that already require their suppliers in Brazil to comply with MMOG/LE practices to guarantee shorter production times and more precise deliveries.

Solutions to meet MMOG/LE 

Successful completion of the MMOG/LE evaluation requires fluid communication between partners and a high volume of data exchange in real time (from CAD files to commercial messages). Therefore, EDI is presented as an essential solution for companies in the sector. It is no coincidence that this technology was born linked to the automotive industry as early as the 1970s.

Today, communication between major brands and their TIER I partners are carried out in most cases electronically through EDI. However, in the case of lower level providers, who must also comply with MMOG/LE practices, this tool is not so widespread in Brazil.

Meanwhile, the goal is for EDI to be massively expanded among all partners in the supply chain, regardless of their size. In fact, the most recent version of this audit, known as Global MMOG/Lev4, is already extending electronic data interchange to smaller suppliers.

For companies that don’t have EDI, the MMOG/LE evaluations can occur with these solutions that optimize communication and logistics.

  • Business@Mail. This is a platform designed by EDICOM that integrates with the manufacturer's EDI solution. Each time it creates a document (invoices, orders, PDF, etc.) addressed to a supplier without EDI, it is automatically published in a secure web portal.

The TIER receives a notice and can access the information in Business@Mail by way of a username and password. In this way, the confidentiality of the data is guaranteed. The manufacturer has access to process traceability and it is not necessary to duplicate the work using other parallel methods such as electronic mail. This makes communication more efficient for both.

  • Partner Web Portal. The sending of information by suppliers without EDI occurs through different means such as email, fax and paper. This prevents manufacturers from automating the integration of messages with the management system and requires a longer management time.

Partner Web Portal is a solution for TIERs without EDI to be securely connected to send delivery schedules, dispatch notices or other basic transactions. The platform acts as an EDI solution that automatically integrates these messages into the manufacturer's management system.

The advantages of MMOG/LE 

Although the implementation of the MMOG/LE practices requires an initial investment by manufacturers and suppliers, it has been proven to produce significant logistical improvements. In fact, optimization increases annually, even after more than 3 years.  Among the main advantages are the reduction of stock, the reduction of economic costs and a greater precision in delivery.

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