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How Oshkosh is Building Durability and Transparency into a Stronger Supply Chain

Exiger provides Oshkosh a unique and powerful solution with PAC and SDX that yields both visibility and control.

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THE CHALLENGE

When Oshkosh Corporation reached out to Exiger for help, one of their largest business units, JLG, had already implemented a ‘directed buy’ program—wherein JLG negotiated carbon steel plate on behalf of its n-tier suppliers to secure preferential price and service levels. They were struggling with the administrative costs associated with maintaining a very manual, spreadsheets dependent process. In addition, they were performing tedious and unreliable quarterly reconciliations & part price adjustments with their suppliers to ensure their plan and process was followed.

In general, communications and data organization were highly unstructured; there was no way for their supply partners to interact with the data in a live, responsive way. The program lacked rich, easy to interpret, ‘actionable’ information. For example, Oshkosh was unable to easily understand what form/alloy/grade/specification and sizes of material their vendors were buying or investigate viable alternative materials for cost savings.

THE SOLUTION

Exiger provided Oshkosh a unique and powerful solution that yields both visibility and control over the aggregate carbon steel plate consumed across their extended supply chain. Attributes for over 40,000 detail parts and assemblies were normalized and loaded into SDX, a proprietary multi-tier supply chain platform. A proprietary software and engineering process called Part Attribute Characterization or ‘PAC’ was then used to quickly, accurately, and inexpensively add an additional 6,000 parts and associated bills of material. The PAC process uses technical data packages (parts lists, blue prints in .pdf format, and raw BOMs) as a starting point for item level illumination. Importantly, PAC avoids the unnecessary and often unwelcome process of collecting item level data form N-tier suppliers through manual surveys. Once good, clean, structured data was in SDX, the next step was to link demand for parts to the highly structured bill-of materials data associated with them.

This enabled SDX to generate an accurate forecast of material requirements across all JLG sites and suppliers by form/alloy/grade/ specification and dimension – a critical first step to gaining the kind of insight that enables the collaborative purchase and supply of raw material and the detection of supplier and item-level risk. Moreover, it paved the way for the purchase of common carbon steel plate in economic order quantities that would generate a tangible return on investment in the form of lower cost and enhanced service levels.

Working in tandem with JLG personnel, Exiger onboarded dozens of contract manufacturers. A group of Tier 1 fabricators were selected to login to SDX to view and validate their bills-of material and enter information they uniquely had access to—i.e. initial starting stock sizes and make/buy relationship. The initial validation process took less than 6 weeks. Today, over 40 Tier 1 fabricators have logged in to SDX to validate their bills of material for Oshkosh.

THE IMPACT

  • Established visibility and control over 80+% of network spend for carbon steel plate. 
  • Increased employee efficiency and enabled a proactive versus reactive work management approach. 
  • Created formalized and automated tracking and reporting to eliminate master spreadsheets and manual data entry. 
  • Reduced administrative overhead to maximize resources and focus on program gap assessments and remediations with bottom line impacts. 
  • Streamlined and automated part repricing and eliminated quarterly part price adjustments with fabricators. Created processes to manage market price fluctuations for carbon steel plate directly with the mills/distributors. 
  • Achieved economic order quantities with fewer part and material suppliers. Consolidated common part and material demand with preferred suppliers yielding step changes in cost. 
  • Enhanced accuracy in record keeping and accounting: SDX automated the majority of legacy manual processes for conducting quarterly financial true-up’s with mills/distributors. 
  • Increased accuracy in financial risk management through stabilized long term contract volumes and prices. 
  • Improved forecasting accuracy by 10 – 20 percent with favorable working capital impact. 
  • Proven performance in the Access business unit resulted in expansion to the Commercial business unit, and plans to expand to Fire & Emergency and Defense in 2023. Brands within these units include: JLG, Jerr-Dan, Oshkosh Defense, Pierce Manufacturing, Oshkosh Airport Products, Frontline Communications, Maximetal, McNeilus Truck, IMT Field Service Vehicles, and London Concrete Mixers.
KEY METRICS

80+%

ESTABLISHED VISIBILITY AND CONTROL OF NETWORK SPEND FOR CARBON STEEL PLATE

~10 – 20%

IMPROVED FORECASTING ACCURACY WITH FAVORABLE WORKING CAPITAL IMPACT

 

We have had exceptional success leveraging SDX… Improved supply chain visibility of BOM level requirements allowed us to aggregate 80+% of a division’s steel that aided us in realized cost avoidance through contract negotiations and raw material consolidation…Our forecasting used to be 60 to 70% forecast vs. shipped. With SDX, we now have seen improvements to 75 to 80% allowing for better management of working capital … We are in the process of rolling out SDX to our other business units.”

JULIE RICHMAN-HALVORSON
Sr. Supply Chain SpecialistOshkosh 

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