What suppliers need to know

Automotive Design & Production, Sept, 2004

"Supplier efficiencies and lower component costs upstream in the vehicle production process almost always have a favorable impact on the total cost to produce a vehicle, improving the overall efficiency of the automaker," says Laurie Felax, vp of Harbour Consulting (Troy, MI; www.harbourinc.com). She continues, "The best automakers in the business take these cost savings and reinvest them into product development, the lifeblood of the automotive industry. Robust product development leads to greater customer satisfaction, increased sales, higher quality, improved market share, and increased profits."

Which, of course, is a good thing for the automakers and the customers.

But note the first part of her comment. Note where those improvements are going to come From: Suppliers.

So, what's a supplier to do? Here are some of Felax's suggestions:

* Develop unique products and/or processes to provide market differentiation and thereby reduce reliance on price competition.

* Eliminate waste through lean processes and tools.

* Use flexible manufacturing to negate capacity issues and lessen the effect of product launch delays through common, reusable systems.

* Get involved in product development as soon as possible.

* Establish robust quality systems including those that error-proof products and processes up front.

* Implement cultural change so that hourly and salaried personnel are better aligned.