Students deliver plan to save GM $6.1 million in annual savings per vehicle model

A fresh approach is what companies often need to stem the tide of a business downturn. Benjamin Pascoe, BSE/MSE '11, and Alejandro Pelaez, MSCM '10, definitely came to their 2010 Tauber Team Project at General Motors Corporation without preconceived notions. In fact they brought little or no experience with the auto industry at all.

But what these students did bring was a desire to drive change. They also came with valuable expertise in mechanical engineering and supply chain management.

"Going into the project, I expected it to be challenging and complex and it definitely was," says Pascoe of the in-company consulting experience delivered by the Tauber Institute for Global Operations. The institute is a joint venture between Ross and U-M's College of Engineering, which is how Pascoe and Pelaez wound up on the same team.

"Neither of us had much experience in the automotive industry or the plastics industry so there was a lot of hard work to do up front to be able to address the issues," Pascoe says. "I learned a lot of the technical aspects working with engineers, manufacturers, and operators, and I also learned about supplier relations, which was a critical aspect of the project."

Results of their Tauber project, "Application of Aluminum Alloys to Injection Mold Tooling," revealed millions of dollars in annual savings per vehicle model, and likely will impact GM's plans moving forward.

Alternate Route
The GM Global Manufacturing — Paint and Polymer Center (GPPC) enlisted the students to evaluate the engineering feasibility of using aluminum alloys instead of steel for mold tooling. The team's efforts showcased an opportunity for aluminum tools for approximately 30 percent of the plastic parts found on a typical vehicle. Immediate implementation of this aluminum tooling will yield a 16 percent tool lead time reduction and a 28 percent production cycle time reduction leading to $6.1 million in annual savings per vehicle model.

Pascoe and Pelaez were able to identify an immediate and long-term implementation plan, uncover potential barriers, outline a timetable for application, and utilize an extensive cost model to predict savings.

The teammates also generated savings to their own bottom line. They won $10,000 toward tuition as part of the annual Spotlight! competition sponsored by the Tauber Insitute each September. But Pelaez says the true prize came during the experience itself. "Studying at U-M and working with GM has broadened my view of the world and helped me add to my own brand name," he says.

Riding Shotgun
Collaboration from the start was key to the project's success. These men, both at varying stages of their careers and each from different cultures, found common ground in a universal work ethic. "We worked hard and never missed a deadline," Pelaez says. "Ben and I decided from the beginning we were going to operate that way. The GM people really put their faith in us."

Project sponsor Daul, technical director of the GPPC, recognized the effort and describes the team's results as "an elegant solution."

"The quality of the Tauber projects reflects the kind of engineering and business creativity necessary to compete on a global manufacturing stage," Daul says. "The appropriate application of aluminum alloys for injection mold tooling is a game-changing opportunity for the plastics industry."

About Spotlight! 2010
The 2010 Spotlight! presentations and awards ceremony took place on Sept. 24 at Ross. A total of 77 graduate students from the business school (representing the MBA and Master of Supply Chain Management programs) and College of Engineering competed for more than $30,000 in scholarships. The event also drew corporate executives from P&G, Bosch, Aleris, SPX, Stryker, Dawn Foods, and PepsiCo who served as judges for the 31 team presentations. Second place was awarded to David Shapiro, MBA '11, Xiaofei Zhang, MSCM '10, and Jonathan Loh, BSE/MSE-IOE, who consulted for Grainger to design a cross-referencing and outbound labeling system aimed at saving more than $15.6 million annually.

Andrew Burgess, MBA/MSE '11, and Ben Don, BSE-ME/MSE-IOE, earned third place for their project, sponsored by BorgWarner. They analyzed the supply chain of cast iron and aluminum turbo housings moving from three suppliers in India and China to BorgWarner manufacturing sites in Germany, Hungary, and Poland. The team's recommendations will enable the company to realize savings in excess of $1 million annually.

New Tauber sponsors in 2010 included Cardinal Health, Masco, Microsoft, National Center for Manufacturing Sciences, National Grid, and National Label. First-time sponsor Federal-Mogul hosted Paul Nary, MSCM '10, and Tony Zhang BSE-EE/MSE-IOE, who earned an honorable mention for their project, which implemented a cost-modeling approach within purchasing.

Each year, sponsors host two- to four-person teams made up of engineering, MBA, and/or MSCM students. Teams are advised by both business and engineering faculty. Projects start each May and last for 14 weeks through.

Download Tauber's 2010 Spotlight! book with project summaries. Learn about sponsoring a 2011 project at the Tauber Institute website or by contacting Amy Bellas.