In the first six months of the year, Delphi Automotive Systems (NYSE: DPH) has become a leaner, more efficient operation due in part to the integration of two of its divisions, the former Delphi Energy & Engine Management Systems and Delphi Chassis Systems, now
known as Delphi Energy & Chassis Systems.

To date, the integration is making good progress, said Guy C. Hachey,
president of Delphi Energy & Chassis Systems. It is projected to save Delphi more than $30 million for the 2000 calendar year.

"Plans that were laid out by function and by region to take advantage of synergies are on track, with virtually all functional areas realizing savings," Hachey said. "As additional common processes and systems and best practices are identified and implemented, further efficiencies will be achieved."

So far, the benefits have included:

  • Streamlining the structure to eliminate redundancy. The integration of the divisions has resulted in the consolidation of functional staffs that meet the collective objectives of the integrated division. Each function now has one leader with one staff to help support the customer.


  • Delphi's recent announcement that it will consolidate its Energy & Chassis Systems headquarters into a new facility in Troy, Mich., will help to further facilitate this process. Currently, the Delphi Energy & Chassis headquarters is located in Flint, Mich.

    This consolidation will better utilize employee resources and create
    synergies among divisional administrative staffs.

  • Zeroing in on our products and customers. The move to a new
    headquarters is just part of the effort being made to improve efficiency and increase Delphi's product line focus and value stream ownership, all while maintaining the distinct product lines that Delphi has committed to supplying to its customers.


  • The creation of business lines with dedicated product line management is improving the product-line value stream, the product strategic plan, and ensures customer requirements and growth objectives are met.

    "Of course, our ultimate success is defined by our customers," Hachey
    said.

    "We are creating a culture of excellence by making sure everyone is
    focused on the customer. Our vision is to be recognized by our customers as their best supplier."

    The result of this sharper product focus is the booking of new business, which includes:

    -- As previously announced, Delphi's recent signing of contracts with
    three automakers valued at $350 million over the life of the contracts for its portfolio of engine management systems.

    -- The recent booking of 20 contracts from three customers that was
    recently announced totaling approximately $2 billion over the life of the contracts for Delphi's brake product lines.

    -- Sales of Delphi's line of converters and catalysts, which totals
    approximately $134 million over the life of the contracts.

    -- Several agreements for Delphi's line of batteries, which totals
    approximately $65 million over the life of the contracts.

    In addition to this new business, Delphi announced earlier this year that it signed a memorandum of understanding for a co-development agreement with BMW and Renault to use solid oxide fuel cells as auxiliary electric power for cars and trucks.

  • Commonizing practices to gain greater efficiencies. One of the biggest benefits to the creation of the integrated division is the commonization of a business planning process. Each leader within the organization is responsible for monitoring the progress of goals and initiatives that are targeted at Delphi's being recognized by its customers as their best supplier.


  • In addition, the integration has created a single divisional human resources management process that has helped to mobilize Delphi's people around the world.

  • Advancing lean concepts to eliminate waste. Another significant
    benefit to the integration is the common implementation of the Delphi
    Manufacturing System as well as the use of lean concepts in engineering product development throughout Delphi's manufacturing locations and technical centers worldwide.


  • Through the implementation of lean concepts, Delphi's manufacturing
    operations and engineering product teams have made improvements in inventory turns, total product cycle time, overall productivity, time-to-market and asset utilization, Hachey said.

    "The implementation is led by plant managers and chief engineers who understand lean concepts, DMS, and the implementation of improved flow and cost elimination throughout the value stream," Hachey said.

    "The integration has shown us that we can identify savings while still
    maintaining a distinct product focus and reshaping our culture to improve
    customer satisfaction," Hachey said. "We continue to learn every day."

    Multi-national Delphi Automotive Systems, with headquarters in Troy,
    Mich., USA, Paris, Tokyo and Sao Paulo, Brazil, is a world leader in
    transportation and mobile electronics components and systems technology. Delphi's three business sectors -- Dynamics & Propulsion; Safety, Thermal & Electrical Architecture; and Electronics & Mobile Communication -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 213,000 employees and operates 176 wholly owned manufacturing sites, 41 joint ventures, 53 customer centers and sales offices and 30 technical centers in 38 countries. Delphi can be found on the Internet at www.delphiauto.com.