MMOG/LE v5 – A Tyre Hoop to Jump Through OR a Catalyst Converter for Opportunity?

The self-assessment Materials Management Operational Guidelines/Logistical Evaluation (known as just MMOG) continues to advance new global standards for supply chain processes with the imminent release of v5. With the automotive industry currently navigating seas of change by way of WLTP, electrification and self-driving cars, you need the process and IT capability to change course at short notice with regards to the way in which you are ranked as a supplier.

Materials Management Operational Guidelines/Logistical Evaluation

However, it’s not all doom and gloom…with some strategic thinking and a small investment, MMOG/LE v5 could actually be the catalyst needed to elevate your ranking as a supplier above your competitors (see ‘Automotive Supply Chain – Supplier Ratings’ blog for more information on the importance of rankings).

SEEBURGER actively supports this evolution of MMOG/LE standards as a longstanding contributor of ODETTE, AIAG and VDA. As such SEEBURGER can support you meeting some of the most important MMOG/LE criteria for a state-of-the-art supply chain. MMOG/LE is a collection of best practice guidelines under an assessment scheme for certification.

MMOG/LE’s focus is on evaluating and improving supply chain processes in the automotive industry and through higher efficiency reducing costs for all parties involved.

A MMOG/LE assessment is issued by the OEM and all suppliers in scope complete their OEM customers’ assessment. Under MMOG/LE suppliers are assessed for their digitalisation of the supply chain e.g. for EDI or at least WebEDI with their suppliers, automatic onboarding of new trading partners and connection of the shop floor with the top floor for smart manufacturing.

Changes with MMOG/LE v5 that will impact your ranking

• Number of MMOG/LE Factor 3 (High Importance) criteria will increase from 34 to 43 – focussing on ERP, EDI/Web, barcoding and quality processes. Missing just one of these F3 criteria will automatically downgrade your ranking to a Level C or ZC score.
• Full electronic exchange of data with sub suppliers – by striving to achieve 100% based on Electronic Data Interchange (EDI)/Web.
• Adoption of advanced technologies (machine learning, smart manufacturing, digital transformation) – to increase performance and efficiency.

Let’s consider some of the challenges that you may face in addressing each of the above:

Increase in F3 Criteria
The main focus of the expanded criteria is to evaluate your level of electronic autonomy and accuracy for the processes governing back-end ERP integration and front-end EDI / web based portal integration with sub suppliers.  Without an appropriate IT platform in place, this could pose a real challenge. It’s not uncommon for IT solutions to be procured on a piecemeal basis. Over time this results in a disjointed IT landscape that makes it increasingly difficult to automate with accuracy the end-to-end processes addressed by the new MMOG  key integration criteria concerning ERP and EDI/web integration.

Full electronic Exchange of Data with Sub Suppliers
EDI may have been invented ~35 years ago, but the ability to automatically exchange supplier related information between systems is just as relevant today as it was back then.  Open based standards allow this to now take place over the Internet, with web based portals being made available for human initiated exchange. It’s not uncommon for EDI requirements to be fulfilled by legacy Value Added Network (VAN) providers.  However, these tend to be i) costly, ii) limited in capability, and iii) slow to on-board new suppliers – all undesirable qualities when looking to improve your ranking (see ‘Your EDI Supply’ blog for more information on the disadvantages of using VANs). Another challenge holding back supplier EDI is having the time to manage on-boarding of suppliers. Only few companies can afford to dedicate a resource to collecting/understanding and on-boarding their suppliers.

Adoption of Advanced Technologies
Just as the automotive industry has embraced advancements in manufacturing techniques and materials to build vehicles faster, cheaper and to higher standards, so too has the IT industry made big strides in helping to increase performance and efficiency by way of initiatives that help modernise EDI such as digital transformation, API Management, IIoT integration etc. Utilising specialist IT vendors to provide capability in each of these areas will certainly add functional capability, but at the cost of not having a cohesive platform based solution that provides end-to-end process autonomy and accuracy – both required as discussed above (see ‘Increase in F3 Criteria’).

The Next Step?

If any of the above has resonated with you, then may we suggest that you take a moment to reach-out to us here at SEEBURGER. We were conceived ~35 years ago to help the automotive industry communicate electronically with tier 1 manufacturers with cost-effectiveness. Today we have advanced our technology and experience into the most cohesive and robust digital integration platform – powering solutions across our ~10,000 clients.

SEEBURGER’s centralised workflow engine provides the end-to-end autonomy and control of processes required by the increase in new F3 criteria. Our EDI capability negates the need to use costly VANs – thus providing for full electronic exchange of data with sub suppliers.

Our digitalisation capabilities such as API Management, IIoT integration and MFT for the secure exchange of files containing confidential CAD drawings, contracts etc. provides for the easy adoption of advanced technologies. We can even vastly decrease the time it takes to on-board suppliers by way of self-onboarding technology.

Don’t just jump through the MMOG v5 tyre hoop with what you have today, use it as a catalyst for conversion into an opportunity and contact us here at SEEBURGER to explore how we can help you.