Are you looking for what to expect in the new version? Look no further as QAD has boiled it all down for you. Plus, I will be hosting a webinar on MMOG/LE Version 6 on May 16, 2023. Register here to learn everything you need to know and get up to speed!
What is MMOG/LE?
The Automotive Industry Action Group (AIAG) and Odette International released the sixth version of the Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE) assessment on April 1, 2023. The MMOG/LE is a required document for automotive supply chain best practices approaching 57,000 site assessments globally (and growing) for Tier 1 and Tier 2 suppliers since its first publication in 2002.
MMOG/LE is used by automotive customers to select and evaluate production and parts, service and warehousing processes. Additionally, the assessment establishes common definitions of supply chain management processes to help organizations:
- Determine the robustness of existing internal processes
- Benchmark supply chain operations
- Facilitate continuous improvement
- Increase customer satisfaction
- Mitigate risk and disruption throughout the supply chain
MMOG/LE includes both a Full and Basic assessment. In general, the Full assessment is used between the OEM and Tier 1 suppliers, while the Basic assessment is used in the lower tiers of the automotive supply chain. The Basic assessment is a subset of the Full version, which allows lower-tier suppliers the opportunity to continue with the assessment and reach world-class status.
New F3 Criteria
While MMOG/LE version 6 has reduced the number of criteria to 176, to achieve a Level A or ZA score will be more difficult. The number of F3 criteria has increased to 45. The F3 criteria are core to the foundation of supply chain management. Therefore, if an organization misses one F3 criteria, MMOG/LE will automatically give it a Level C or ZC score.
The new F3 criteria ensures that employees are satisfactorily trained, schedules are sent to suppliers and phase-out parts are properly managed.
New Criteria, Alignment and Concepts
- As much has changed in the industry since the last version of MMOG/LE in the areas of technology, supplier performance and disruption, it’s imperative that you understand what has changed in MMOG/LE v6.
- In light of lessons learned over the past three years due to Covid and the many supply chain disruptions that followed, emphasis was placed on relevant automotive supply chain requirements in the areas of risk management, planning, resilience, shortages and crisis management.
- As the industry moves from ICE to EVs, the impact on the transformation on the supply chain was addressed. In particular, the cascading of requirements and supply chain resilience is critical especially as new entrants come on board (i.e. batteries, semiconductors, lidar). Supplier relationship management is key moving forward.
- Due to lessons learned from the many disruptions over the past few years, ensuring communication internally and between customers and suppliers is emphasized.
- As Environmental, Social and Governance (ESG) continues to be a top priority in the industry, it is now included in the plant’s strategy and down to the sub suppliers.
- As a part of analyzing capacity, scenario planning needs to be anticipated independently from customer requirements.
- As with each new version of MMOG/LE, there’s an expansion of F3 criteria centered around fully automating the customer, internal and sub supplier processes in an ERP system. In this version, the ability to create supplier schedules was added as an F3.
- In the area of Risk management, with a focus on IT systems, ALL systems need to be analyzed to ensure minimal downtimes. To ensure excellent customer service levels, maintenance and contingency plans need to exist to manage IT recovery times.
- There is a continued emphasis on complementary IATF 16949 processes that also support supply chain management. Understanding these criteria and the interaction are critical for quality and material/logistics managers.
What Should You Do Next?
Give yourself plenty of time to review the new changes and prepare for your next submission. The following is what you should do next:
- Watch for customer bulletins and review customer portals to have visibility into which customers are rolling out version 6. Prepare your annual submission between May 1 and July 31 this year if you supply to Ford or Stellantis.
- Lookout for several new OEMs who will start requiring MMOG/LE in 2023 and 2024.
- Ask for the QAD MMOG/LE v6 Answer Sheet to review QAD solutions that support the new version.
- Know that QAD has already added MMOG/LE v6 into Automotive Process maps with the March 2023 launch.
- Understand the complementary IATF 16949 and MMOG/LE processes with QAD’s cross reference mapping that allows quality and supply chain managers to see the complementary processes and how to act on the intersection.
- Listen to a relevant Auto Supply Chain Prophets podcast episode to hear Tanya Bolden, VP of Supply Chain at AIAG and myself discuss the new version and in particular the ESG requirements.
- Register for the Webinar: What You Need to Know Now About MMOG/LE Version 6 on May 16, 2023. Register here.
If your organization is in need of assistance with the new version, support in preparing for a customer audit or a review of MMOG/LE, I highly recommend you attend the webinar for a special offer to those who attend. As always, I encourage you to reach out to me if you have any questions about MMOG/LE version 6 or MMOG.np or need help managing the process.
