Dr. Michael Orris

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Global Purchasing Overview
Dr. Michael Orris Executive Director
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Realignment of Core Businesses
2002 Sales 27.4B
Dynamics, Propulsion and Thermal Sector
Electrical, Electronics, Safety Interior Sector

• Engine Emission Management Systems
• Energy Management Systems
• Vehicle Dynamics
• Thermal Management Systems

• Integrated Body Electronics
• Powertrain Electronics
• Chassis Safety Electronics
• Audio Systems Mobile Multimedia
• Safety Systems Interiors
• Electrical Electronic Systems
• Product Service Solutions

Automotive Holdings Group

• Generators
• Instrumentation
• Other

Enterprise Technologies
International Operations and Sales Marketing
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The Game is Changing
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Delphi Heritage

• Through 1996 had implemented
• Quality Network
• Synchronous Manufacturing
• NUMMI Experience
• Crosby Quality College
• Joint Safety Effort and Results
• Past five years
• Focus on learning/Practicing TPS
• Writing own system/structure/processes
• Delphi Manufacturing System
• Common, global manufacturing system

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Delphi Manufacturing System
Focus Identification and Elimination of Waste
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Delphi Shingo Prize

• 2003 Shingo Prize Winners
• Delphi Flint Operations
• Flint, Michigan
• Delphi Energy Chassis Systems,
• Sistemas Electricos y Conmutadores,
• S. A. de C. V. (SEC)
• Juarez, Mexico
• Delphi Delco Electronics de Mexico,
• Delnosa 1 4 Operations
• Reynosa, Mexico
• Delphi Packard Electric Systems,
• Plant 19
• Warren, OH

8 Other Delphi Plants have Won the Shingo Prize
in the Past
The Nobel Prize of Manufacturing
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Linkages
DGP STRATEGIC INTENT
DGP STRATEGY ELEMENTS
THREE YEAR STRATEGY
ONE YEAR BUSINESS PLAN
BUSINESS PLAN LINKAGE MATRIX
Business Plan Templates
DETAILED ACTION PLANS (Corporate / Division /
Commodity / Region)
PBPs
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Strategic Intent
Strategic Intent
To achieve competitive advantage through extended
value stream Excellence!
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Lean Transformation Road Map
5- to 6-Year Journey to Significantly Move DGP
to Lean
Current Processes
Cost Management
Strategic Sourcing
Lean Supply Base
Early Sourcing
Enhanced Relationships
Supplier Development
Commodity Teams
Today
Year 1
Year 2
Year 3
Year 4
Year 5
Feb '02
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Eight Integrated Elements
Cost Management
Supplier Relationships
Quality Improvement
Supplier Development
PeopleDevelopment
Systems Infrastructure
Communication
Strategic Sourcing
Need all eight elements to work in an integrated
way to deliver results
Current processes Current team
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The Turbocharger
Current Output of the Delphi Purchasing
Machine

• Achieving cost reductions and meeting budget
  savings requirements
• Working effectively in a multi-functional team
  set-up
• Following a global and common process to achieve
  the desired objectives
• Flexibility in reacting to all needs and
  tailoring solutions
• Helping in improving supplier quality
• Creating a professional organization

Lean Transformation The Turbocharger
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Extended Lean Enterprise

• For most, an opportunity waiting to happen
• Not about squeezing suppliers profits
• Not about getting prices down
• ALL about
• Getting costs out of processes
• Getting costs out of parts
• Resulting in
• Reduced prices
• Strong, competitive supply base

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Strategic Sourcing
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Cost Management

• Identify best-in-world cost
• Establish new and even lower level of cost
• Achieve best in world cost
• Collaborate
• Share savings
• Improve Delphi and Supplier margins

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Lean Supplier Development

• Effective Supplier Development requires supplier
  and customer to
• Share technology
• Share risk
• Share benefits
• Share accountability

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Ohio Supplier Lean Workshop

• Safety Hazard Removed
• Reduced operation by 1/2 shift (20)
• Team Leader Involvement for production data
• Weekly DMS meeting
• Glass Wall (located at Cell)
• Training

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Workshop Results

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Future State VSM
Future State VSM
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Resulting Planning Targets
Plan Targets Current Image Improv Comment
Operators (Dir.) 16 9 43.75 2 Shifts to 1 Shift
Productivity (Pcs / Man hr.) 150 240 60
First Time Quality (PPM) 13,008 8710 33
Operational Availability (at Constraint - Foamers) 70 92 25
TPCT (days) 8.9 4.001 55
Scrap () () 10 4 60
Floor Space (Sq. Ft.) 682 682 0 2 Shifts to 1 Shift
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Asia Pacific Supplier Lean Workshop

• Established current value stream
• 25 process steps
• Identified three key kaizen bursts in
• Material movement
• Total production cycle time
• Operation availability
• Set preliminary goals

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Resulting Planning Targets
Plan Targets Current Image Improv Comment
Tpct - Photo 16.99 days 8 Days 52.9
FTQ - Photo 86.0 94.5 9.9
Scrap - Photo 2.2 1.1 50.0
Operational Availability Photo DES Cu Plating Downtime Photo DES Cu Plating Change Over Time 65.0 9.0 9.5 11.3 10 Min. 85.0 85.0 85.0 2.0 3.0 3.0 lt5 Mins 77.8 68.4 73.5 50.0
Part Traval In Process
Floor Space In Process
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Indiana Supplier Lean Workshop

• Dramatic results, including
• Triple-digit improvement in productivity
• Elimination of entire third shift

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• Current State

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• Current State

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• Future State Phase I Improvement

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Indiana Supplier Planning Targets
Plan Targets Current Image Improv
Operators 10 5 50
Productivity (Pcs/Person/Hr) 26.7 53.3 100
TPC/t (days) 14.8 11.2 24
First Time Quality 98.7 98.7 0
Inventory Powder (days) 78.5 10.1 87
Scrap 99.6 99.6 0
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Global Purchasing Overview
Dr. Michael Orris Executive Director