Developed by Automotive Industry Action Plan (AIAG) and Odette International, the Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE) is the global standard for supply chain management. Created to develop and establish a framework that could improve quality within the automotive industry, its containment of numbers and terminology are aligned with common goals of ISO/TS 16949:2002. Today, more than 800 OEMs, manufacturers, and service providers are now members.
Let’s take a closer look at what it is and why it has become the defacto quality standard for so many customers and suppliers in the automotive industry.
What is MMOG/LE
Used to score the competency in materials and handling logistics, MMOG/LE is a supplier self-assessment continuous improvement tool. Designed to reduce the time and work required to determine materials process compliance, its use can be extended to all levels of the supply chain, from supplier to customer, and throughout the entire production process.
Based on OEMs and suppliers’ best practices, MMOG/LE also serves as a benchmark against industry practices. Companies are able to be rated with simple ‘A,’ ‘B,’ and ‘C’ ratings based on the GAP measurements obtained through sophisticated spreadsheets.
Benefits of MMOG/LE
The focus of MMOG/LE, which is central to the improvement of materials management efficiency and accuracy, provides a number of benefits to both the supplier and their customers. The following are some of the most notable:
- Facilitates effective communication between trading partners
- Reduces on-site inventory
- Increases accuracy with electronic shipments
- Enables more effective responses to requirements from customers
- Streamlines flow of information and products throughout all tiers of the supply chain
- Reduces costs associated with waste and errors
Course training that is correlated with the direct use of MMOG/LE is provided in various locations around the world. Those that participate can expect to learn the best practices needed to complete the MMOG/LE assessment, including the ability to access gaps and prepare action plans to improve their ratings. This training is a necessary component to meeting MMOG/LE standards.
About the Spreadsheets
MMOG/LE spreadsheets are typically called the M7. It uses a weighted scoring system that is applied to a series of questions. Each criterion provides an explanation of its importance and its benefits, in order to help the company recognize why they should strive to meet each standard.
The entire assessment is 197 questions, with three different classifications: F1 Requirements, F2 Requirements, and F3 Requirements. Organizations that meet the F1 Requirements are said to understand the intent of the criteria. These are considered ‘Best in Class’ organizations with a ‘Class A’ rating. For organizations unable to meet F1 Requirements, competitiveness can be adversely affected. Organizations unable to meet F2 Requirements can expect a serious negative impact in their performance and customer satisfaction. And if F3 Requirements are not met, organizations are at a high risk of an interruption to their customer operations; additional costs are likely to be incurred.
MMOG/LE Compliance Problems
For companies struggling to meet F3, F2, or even F1 Requirements, the problems may all come down to organization and compliance. Without one, you are unable to have the other. Of course, both can be difficult to achieve, especially with spreadsheets as complex as those used with MMOG/LE. But the right software program can help with organization and compliance. In turn, ratings can be improved with less difficulty.
However, it is important to select software programs carefully. Compliance and organization are only a part of the problem. The propensity for human error must be reduced. Data must be easy to locate. And it must be user-friendly with the potential to increase productivity. Without these key elements, organizations are unlikely to see any real improvements in compliance and ratings.