Accuride Corp., a $643 million supplier of components for commercial vehicles, has undergone a complete supply chain transformation. The changes to instill greater discipline and process focus across the company’s operations began in 2011 as part of Accuride’s “Fix and Grow” turnaround strategy.
Accuride hired Senior Vice President of Supply Chain Management Mary Blair to lead the company’s newly strengthened supply chain function. Under the direction of Accuride President and CEO Rick Dauch, Blair began to develop and implement a new supply chain structure that put greater process rigor in place.
Though the foundation of the team was in place, strategic and tactical changes were needed to establish a world-class supply chain function that included strategic sourcing, logistics, supplier quality and development, and inventory control and planning.
Accuride began the transformation with a deep-dive of customer requirements, supplier capacities and capabilities and its internal organizational structure. The first outcome was centralization of supply chain management at the corporate level.
“Accuride’s supply chain encompasses seven disciplines; order entry, inventory control and planning, purchasing logistics, packaging, distribution and supplier quality and development,” Blair says. “It was evident early on that the company needed to establish a strong, disciplined supply chain team, plus documented processes and procedures that would support our ‘Fix and Grow’ business strategy. As we began our transformation actions, the support of our leadership team became key in the success of supply chain team.
“CEO Rick Dauch was the architect of the Fix and Grow turnaround strategy, with the support of the board of directors and the rest of the Accuride leadership team. Rick supported the leadership team through development, training and execution of key principles and values, capital investments, upgrading talent and overall leadership. Academy Leadership, led by Jim Nalepa, provided the entire leadership team with guidance, training and leadership development support.”
Accuride’s supply chain transformation has essentially been a “phase-in” approach. Accuride associates understand that supply chain quality is important to the organization’s ability to support customers more dependably and deliver higher profitability for shareholders, Blair says. “Our objective was to drive behavioral changes at a management level across the company to remove any traditional barriers between suppliers, business units and corporate,” she says. “Then, most importantly, we used a system of tiered metrics to initiate supply chain operational excellence. We instituted these metrics by discipline to drive the achievement of corporate objectives while supporting the company’s vision, mission and values.”
Blair indicates that supply chain represents roughly two-thirds of Accuride’s product costs, in some cases. She stresses how imperative it is for supply chain to align with the company’s three business units, its primary internal customer. Blair states, “Our supply chain team’s responsibility is to ensure that the needs of our end-customers – internal and external – are being met according to our plan. With increased focus on supply chain, we established budgets and performance metrics, as well as tracking of opportunities and risks.”
Accuride partners with strategic suppliers through long-term contracts and strategic alignment to remove traditional barriers that can exist between suppliers and customers. Blair highlights the positive impact this type partnership has not only on behavioral change, but also on bottom-line results.
“We invested in supply chain to preserve short- and long-term sustainability, which made us a more affordable supply chain,” she says. “We achieved stronger partnerships with customers and suppliers through collaboration, value-add/value-engineering, cost savings opportunities and best practices. These improved operational and financial performance by creating greater linkage between our supplier quality and performance and Accuride’s ability to deliver reliably for customers.
“Our expectation was 100 percent quality and delivery ourselves through the supply chain function, as well as from our partners within the supply chain. Our supply chain team constantly looks at the strategic and tactical construct for ourselves and our supply chain partners. The methodology is simple: strategic planning, measurement, analysis and acknowledgment of our operational focus.”
Customer needs are driving Accuride’s culture change. Accuride demonstrates its customer focus throughout its partnerships with suppliers and customers, by maintaining strong collaborative initiatives, and by fostering a partnership culture that removes barriers to success. Tactically, performance metrics ensure that the team drives action plans, improvements, risk assessment/mitigation and communication. As a result of these processes, Accuride’s supply chain team knows not only where it stands at any given time, it more importantly knows where it’s going.
A central part of upgrading supply chain included assigning centralized inventory planning and distribution under Director/Inventory Control and Planning Bill Neil, who led the establishment of upgraded processes for order entry, inventory control and distribution.
As Blair explains, this alignment allows straight-line accountability of important portions of the supply chain.
In addition, Blair added packaging and supplier quality and development to the supply chain function. The intent was to create full visibility – from order entry to distribution of product to customers. This is no easy task, yet Blair insists that the strong support of operations and supply chain teams – and the vision of the Accuride leadership team – enable Accuride and its suppliers to pursue Accuride’s objectives for customer and financial performance.
Blair and the rest of the Accuride leadership stand strong on ethics and integrity. “Our principles and values guide the standards of professional behavior for our entire supply chain team,” she says. “We are engaged in the community to demonstrate our commitment in the areas where we operate, and display loyalty to our organization and the supply chain management profession. To paraphrase our CEO, those with the best supply chains win. It’s no longer a competition between the leading OEMs and component suppliers in our industry, it’s a competition between their supply chains. Accuride’s objective is to build a chain of supplier partnerships that support our objectives for performance and growth while maximizing the value we offer our end-customers.”
North American Leader
Headquartered in Evansville, Ind., Accuride Corp. is a leading supplier of components to the commercial vehicle industry. The company’s products include commercial vehicle wheels, wheel-end components and assemblies, plus specialty cast-iron components for a range of agricultural, construction, mining, and oil and gas applications. The company’s products are marketed under brand names such as Accuride, Accuride Wheel End Solutions, Gunite and Brillion.
Accuride is the No. 2 producer of aluminum wheels for commercial vehicles in North America behind Alcoa, and the leading maker of steel wheels in the industry. Its Gunite brand’s share of the brake drum and disc wheel hub market remains strong, placing the company in the top three producers at any given time.
Accuride’s customer base includes substantially all of the leading commercial vehicle producers, such as Daimler Truck North America LLC with its Freightliner and Western Star brand trucks; PACCAR Inc. with its Peterbilt and Kenworth brand trucks; Navistar International Corp. and International Truck, with its International brand trucks; and Volvo Group North America, with its Volvo and Mack brand trucks.
Its primary commercial trailer customers include leading manufacturers such as Great Dane Limited Partnership and Utility Trailer Manufacturing Co., among others. Its major light truck customer is General Motors.
The company’s business consists of segments that design, manufacture and distribute components for the commercial vehicle market, including heavy- and medium-duty trucks, commercial trailers, light trucks and buses, as well as specialty and military vehicles.
A Single Source
Accuride Corp. was formed in 1986 in a management-led buyout of the steel products division of Firestone Tire & Rubber Co. In 2005, Accuride acquired units of Transportation Technologies Industries Inc., including Bostrom, Fabco, Gunite, Imperial and Brillion Iron Works. Gunite traces its origins to 1854, when it became the first steel foundry west of Pittsburgh in Rockford, Ill. The 619,000-square-foot, 34-acre facility there includes foundry operations, machining, assembly, material storage and administrative and lab functions.
Accuride Corp. is the fifth-largest foundry in North America. Its 511,000-square-foot Brillion Iron Works facility in Brillion, Wis., has the capacity to pour 1,200 tons of iron. Brillion workers are represented by the United Steel Workers and International Assoc. of Machinists & Aerospace Workers; its 450 employees in the Rockford facility are members of United Auto Workers Union Local 718.
Accuride Wheels represent about 57 percent of Accuride’s net sales, Gunite wheel-end components and assemblies 26 percent of sales, and Brillion Iron Works austempered ductile and gray iron castings represent 17 percent of sales.
Accuride explains it is the only supplier capable of serving as a single source of steel and aluminum wheels and wheel end components for a range of commercial vehicle applications.