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Eliminating Backlogs and Achieving Operational Excellence in Heavy Truck Manufacturing

Transforming an Automotive Manufacturer in Mexico Through Continuous Improvement and an Operational Excellence Program

Key Metrics:


Unfinished Trucks Reduction


Parts Backlog Reduction


Elimination of Overdue Orders


Shift/Labor Savings


Operational Throughput Savings


OEE Improvement

Situation: Overcoming Supply Chain and Operational Challenges in the Automotive Industry

A leading automotive manufacturer of heavy trucks faced critical challenges in operational efficiency and supply chain management. Their problems ranged from late deliveries and part shortages to inherited backlogs from problematic vendors. These issues had a significant impact on their overall business performance, posing threats to their standing in the competitive automotive industry.

When a problematic vendor failed to fulfill orders at a facility near Saltillo, Mexico, one of the world’s largest heavy truck manufacturers hired a new Tier 1 supplier to take over production for its largest assembly plant. The beginning of production, however, did not proceed as expected.

The supplier quickly learned they needed to address a backlog of nearly 9,000 parts that they had inherited from the former vendor. Plus, they had to outfit over 700 heavy trucks with the critical part before the trucks could be delivered to customers.

Recognizing that the outstanding work could consume a significant portion of resources and hinder their ability to handle new orders, the supplier enlisted the services of Cornerstone Consulting Organization, based off their proven track record of delivery. The supplier recognized they would need support to identify and execute corrective actions that would eliminate chaos and restore order at the facility.

Approach: Comprehensive Operational Excellence Strategies for Immediate and Sustainable Improvements

CCO, as one of the top automotive consulting firms with deep industry expertise, took a multi-phased approach to tackle these challenges head-on.

The Cornerstone team had boots on the ground within days to evaluate the situation at the facility.

Given workforce instability and pandemic-related travel restrictions that prevented the supplier's leaders from traveling to Mexico, Cornerstone consultants temporarily assumed day-to-day management roles to stabilize operations and reduce back orders.

Phase 1: Rapid Implementation of the OpEx Model and Accountability Room

Upon immediate engagement, CCO performed a detailed assessment of existing operations and created an "Accountability Room." This served as a central hub for daily communications and performance monitoring. It was here that key performance indicators (KPIs) were posted, providing transparency and setting the stage for improvement.

The Cornerstone team quickly jumped in to perform an audit of existing operations—a critical first step that informs the execution of the Operational Excellence (OpEx) method. The comprehensive assessment of operations, staffing, and supply chains helped the consultants to define solutions that would restore order at the facility. For example, the Cornerstone team developed complete work instructions and redefined workflow to balance the manufacturing line after completing a time study using the Modular Arrangement of Predetermined Time Standards (MODAPTS).

Phase 2: Data-Driven Performance Metrics and Workflow Optimization

CCO's consultants, serving as managing partners, worked hand-in-hand with the in-house teams to gather necessary data and define the facility's capacity plan. They created visual pace boards for kitting operations and other team boards for process improvement tracking. The focus was on optimizing throughput velocity and eliminating all forms of waste, aligning with the goals of sustainable, profitable growth.

The top priority was to return operations to balance, focusing first on outfitting the unfinished trucks to ensure orders could ship and meeting daily production goals to eliminate the backlog. Once all past-due orders were fulfilled, the Cornerstone team turned their attention to establishing the supplier as a shelter service company and claiming VAT rebates to recover millions in paid taxes, which helped with overall cost savings.

Phase 3: Long-Term Solutions and Technological Interventions

Finally, the Cornerstone team worked to improve inventory accuracy to optimize operational performance. Realizing that the supplier did not yet have an inventory system, the consultants compared a modified daily cycle count against customer orders to establish a “days on hand” metric that proved effective until a more systems-based approach could be implemented.

CCO didn’t just leave after presenting high-level solutions. Instead, our experts stayed on the ground, collaborating daily with plant management. We focused on not only solving immediate issues but also preparing the organization for future challenges in the automotive industry.

Results: Significant Impact on Operational Excellence and Financial Metrics

Recap of Key Metrics:

In just three weeks:

  • 92% Unfinished Trucks Reduction

  • 75% Parts Backlog Reduction

In just two months:

  • 100% Elimination of Overdue Orders

  • $3M Shift/Labor Savings

  • $2M Operational Throughput Savings

  • 20% OEE Improvement

In just a matter of months, both companies saw drastic improvements in their operations. From a 90-day recovery process to immediate reductions in backlogs and unfinished trucks, the results were impactful. The methodologies and technologies deployed helped in achieving these remarkable outcomes.

Conclusion: CCO’s Operational Excellence Services—The Roadmap to Success in the Automotive Industry

CCO isn't just another name among automotive consulting firms; we are a partner committed to long-term success. From employing digital transformation strategies to adapting to consumer preferences like electric vehicles, the approach was holistic. Our strategies are tailored to offer immediate improvements and long-term sustainable growth, addressing current challenges while preparing for future innovations such as autonomous driving and electric cars. By choosing CCO, companies not only achieve operational excellence but also ensure a sustainable and profitable future.

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