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Auto-Parts Suppliers Gaining the Upper Hand

By: Brad Kuvin

Monday, April 01, 2013
 

Happy 20th Anniversary to the Precision Metalforming Association’s (PMA) annual Automotive Parts Supplier Council (APSC) meeting, slated for Novi, MI, April 30-May 1, 2013. Launched in 1993 to provide a forum for metalforming-company executives serving the automotive market, the event provides a unique opportunity to exchange ideas related to profitability, capacity, market forces etc. Aside from the invaluable networking opportunities afforded by the APSC meeting, attendees also learn about best practices being performed by metalformers in the automotive-parts supply chain, hear presentations on capacity constraints and receive valuable forecast data.

“As an automotive supplier, this is the most important PMA event that you can attend,” says Wes Smith, president of E & E manufacturing, Inc., “both for content and networking.”

“How can you be selling to the automotive market and not take the opportunity to hear such information and facts about the market,” adds Arnie Mayher, sales manager, Stripmatic Products.

And, adds Neil Allen, president, Sunstone Components Group:

“I know of no other place to obtain an al-encompassing outlook on the state of the automotive industry.”

High Single-Digit Profits

“Metalformers serving the automotive industry should be earning solid and improving profits, taking costs out of their businesses while riding the escalating volumes we’ve seen in the last few years,” says Craig Fitzgerald, Plante Moran, a long-time industry consultant and contributor to the APSC meeting. As he did last year, at this year’s meeting Fitzgerald will moderate an industry panel on Automotive Supplier Best Practices, with an emphasis on strategic positioning.

 
Dave Andrea, senior vice president of industry analysis and economics of the Original Equipment Suppliers Association, once again will moderate the Automotive Forecast Panel, one of the most valuable agenda items of the APSC meeting. Last year Andrea discussed several “mega-trends” affecting automotive-parts suppliers, including the energy and material markets and social and environmental sustainability.
“The underlying message and key discussion points will focus on how metalformers can improve competitive dynamics,” says Fitzgerald. “The goal is to create a value proposition that effectively reduces the number of competitors capable of bidding on projects, so disciplined pricing practices of the best suppliers become the norm rather than the exception. That’s a winning formula for earning higher profits.”

What strategic moves are metalformers making to get there? “At the upcoming 20th anniversary APSC meeting, we’ll discuss how metalformers have differentiated themselves in recent years,” Fitzgerald says, “and the moves they need to make in the near future to ensure success through the rest of the decade and beyond.”

Of note: Fitzgerald says that while 30 percent of the global volume in the industry currently is on a multi-continent platform, by the end of the decade that percentage will grow to 50 percent. “Metalformers will not be able to effectively provide to those global platforms without multi-region capabilities —Europe and China, for example,” Fitzgerald says.

Another area of focus for metalformers in coming years, Fitzgerald says, is design for manufacturability. “Suppliers should look to increase process robustness and quality, on behalf of customers,” he says. “Suppliers cannot rest on their laurels—they need to continue to invest, creating a moving target that further allows them to differentiate themselves.”

For years Fitzgerald has prodded automotive-parts suppliers to invest in larger, higher-tonnage presses, and to increase value-added capabilities. “A lot of capacity has been taken out of the market,” says E & E Manufacturing’s Wes Smith, a regular attendee of the APSC meeting. “Adding capacity gives metalformers power in the market. And, in addition to gaining pricing power, at E & E we’ve always emphasized efficiency and improving the metric of value-add per employee—a metric Craig (Fitzgerald) always preaches and discusses at the APSC meeting. It’s a key characteristic of highly profitable companies.”

Forecasting Enables Action Rather than Reaction

As E & E and other automotive-parts suppliers continue to add capacity, accurate forecasting of automotive-OEM production requirements takes on as critical a role as ever. For that reason, one of the most valuable agenda items of the APSC meeting is the Automotive Forecast Panel. This year’s panel discussion once again will be moderated by Dave Andrea, senior vice president of industry analysis and economics of the Original Equipment Suppliers Association.

Website is Home to Speaker Info, Hotel and Travel Details, and More

Learn more about the 20th Anniversary Automotive Parts Supplier Meeting, and register to attend, by visiting www.pma.org/apsc. Hotel reservations are available at a discounted room rate of $149 when mentioning PMA and making your reservation no later than April 13. Meeting registration deadline is Monday, April 22.
“The forecasting information provided at the APSC meeting provides tremendous value,” says Jim Zawacki, CEO of GR Spring & Stamping, Grand Rapids, MI, a supplier of parts for several makes and models of hybrid and electric vehicles, and other models. “We cross-reference the data gathered at the APSC meeting with data gained from other sources, which allows us to accurately plan and schedule our metalforming resources.”

Jeff Clark, president and CEO of Waukesha Metal Products, Sussex, WI, concurs. “From a value perspective, attending the APSC meeting offers a unique opportunity to interact and exchange information with others from the industry,” he says. Clark and several of his company’s managers have attended the meeting regularly since 2001, and notes that “over the past several years, the APSC meeting has become our primary source for forecast data. And, we have gained important insights into other concerns, such as warranty items and contracts. Learning what others are seeing in the industry allows us to plan ahead and take timely actions, rather than sitting back and reacting to changing market conditions.”

“I don’t think I’ve ever had an original idea,” adds Zawacki, “merely modifications of what other people are doing. And that’s the real value of attending the APSC meeting and other PMA events—networking and learning from others. For example, a few years ago we were struggling to collect receivables from one of the OEMs. When I discussed this with another supplier at the APSC meeting, I learned of a contact at the OEM with whom I had not yet worked. I made contact with this person immediately following the meeting and we worked through the problem shortly thereafter.”

Agenda—a Winning Formula

This year’s 20th Anniversary Automtoive Parts Supplier Council meeting convenes at the Sheraton Detroit Novi in Novi, MI. The meeting kicks off Tuesday, April 30, at 12:00 p.m. with the Women in Automotive Luncheon, which includes a panel discussion moderated by Laurie Harbour, Harbour Results. On the agenda: The critical issues affecting women in the automotive-market sector.

At 2:30 p.m., attention turns to the topics of Supply Contracts amid Rising Volumes and Prosperity. Speaker Dan Sharkey, Brooks Wilkins Sharkey & Turco PLLC, will discuss how companies can proactively protect their businesses against volume volatility, capacity constraints and raw-material shortages.

Following a brief break, the Supplier Best Practices Panel convenes, under the direction of moderator Craig Fitzgerald. The lively panel discussion with three prominent PMA automotive supplying members will address best practices, supplier relations and other related topics. The evening’s cocktail reception follows, hosted by Plex Systems.

Here’s the agenda for Wednesday, May 1.

7:30 a.m.Continental Breakfast in exhibit hall
8:00 a.m. Tier One Automotive Forecast, Dave Andrea, OESA
9:00 a.m.

North American Automotive Industry Outlook
Michael Robinet, IHS Automotive

Robinet will deliver an auto-industry forecast for 2013 and beyond. Topics include forecasts on global sales, production and capacity; future vehicle program intelligence; platform/system consolidation and flexibility trends; OEM/component manufacturer strategies; and vehicle sourcing/logistics trends.

 10:00 a.m. Capacity Constraints, Laurie Harbour, Harbour Results
Meeting customer requirements has become an ongoing challenge for many suppliers as volumes increase and suppliers must support multiple launches and vehicle changes. Increasing capacity is a hurdle for many as capital remains tight and human-resource shortages loom.
12:00 p.m.Networking Lunch
1:00 p.m.Supply Chain Panel, Jeoff Burris, Advanced Purchasing Dynamics
 

During this exhilarating 90-min. panel discussion, key procurement officers from OEMs and Tier One companies will share their supplier-development strategies and forecasts. MF

 

Related Enterprise Zones: Management


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