Navistar - Interior Trim Supply

Executive Summary

Navistar has led the North American market in sales of medium and heavy trucks for 17 consecutive years. The assembly plant in Chatham, Ontario Canada has been producing the premium conventional trucks since 1983.

Navistar’s customers have strict requirements to the truck’s quality and delivery date. Andy Ramsz, assembly supervisor in Chatham, has finished gathering 6 months’ worth of data and determined that the interior trim supply is the largest single source of missed delivery schedules. The data shows that this problem is costing Navistar in the area of $200,000 when producing 19,000 units annually. This annual cost is expected to grow to $276,00 when calculated based on forecasted annual sales.

In order to minimize these costly supply issues and the harmful effect this has on customer loyalty and new business development. Navistar should utilize internal and external knowledge by creating cross functional teams to develop new policies and procedures.

Issues Identification

Navistar:

Poor communication of design changes from Navistar Engineering department to Trimco.

High number of customer options creates stocking issues.

JIT lean and not supervised adequately.

Robbing missing parts from future kits just postpones the issues.

Trimco:

Lack of centralized systems.

Limited computer system capability.

Quality controls/ Low Inspection accuracy.

Employee turnover.

Environmental & Root Cause Analysis

Navistar:

Navistar’s premium line of trucks range from no frill models to highly customized units. At any given time customized units represent 50-80% of production volumes. Customers spent a significant amount of time designing their trucks. It is not uncommon for a customer to spend months deciding on various options and accessories. After this investment, customers are intolerant of delays, quality issues, or any other factors that failed to meet their expectations.

Interior trim options...