Page 27 - MetalForming Magazine February 2023 - Metal Forming for the Automotive Industry

Automotive
Outlook: Pathways to
Continued Success
The automotive-industry landscape heading into 2023 features plenty of speed bumps. But we’ve got some expert intelligence from industry analysts, and advice from three metal formers serving this complex market to help navigate the pathways to success.
BY BRAD F. KUVIN, EDITORIAL DIRECTOR
Today’s metal forming companies supplying the automotive indus- try—whether they be Tier One, Two or Three suppliers—find them- selves facing many hurdles to success, some new and some long-standing. These include challenges determining the right inventory levels to keep on hand; generally smaller order quanti- ties and platform volumes; and wildly fluctuating, and often rising, raw-mate- rial prices. Those issues on top of inter- nal challenges—and opportunities— encompassing technology trends such as improving overall equipment effec- tiveness; accelerating time to market with new programs; adopting plant- wide connectivity solutions between machines and people; and understand- ing the ins and outs of short- and long- term business planning, including cap- ex planning for what amounts to relatively lower-volume production.
In short, the automotive-industry landscape heading into 2023 features plenty of speed bumps. To help navi- gate the pathways to continued success in this challenging but potentially very
rewarding market, we spoke with the automotive-industry analysts at UHY LLP, a professional-services firm pro- viding audit, tax, consulting and advi- sory services to clients primarily to mid-market companies. We also spoke to three metal formers serving the industry for their perspectives.
Confusion, Misinformation and Communication Hurdles
Tom Alongi, partner and national manufacturing-industry practice leader at UHY, along with Dan Bruce, UHY principal and who leads the strategy consulting service team, and Charles Clevenger, UHY principal and whose specialties include supply chain, pro- curement strategy and structure and operations management, all agree:
While revenue streams throughout the automotive supply chain remain relatively healthy, suppliers are fraught with challenges to their profitability, mostly tied to unpredictable OEM schedules and an inordinate amount of turnover at the OEM purchasing level. There certainly is confusion sur- rounding the electrification movement, they say, along with struggles with com- munication. And, they see an overre-
liance on ERP systems and the OEM portals for inventory management and production scheduling as a substitute for well-defined and executed process- es and procedures.
“ERP systems are critical to the suc- cess of manufacturing companies,” says Clevenger. “Systems well-suited for a particular manufacturer and inte- grated with a foundation of sound processes and procedures strongly con- tribute to success. Unfortunately, we frequently see a lack of sound foun- dational processes and procedures or a disconnect between these and the structure of the ERP system. In these cases, management often will over-rely on the ERP system to compensate for these problems. The result: a lack of daily execution coupled with an increasingly negative view of the ERP system by team members.”
At the same time, many OEMs are expanding the scope and use of their supplier portals, says the UHY team, sometimes as a substitute for “people- managed” communication. Toward that end, the UHY team describes a recent client that over-relied on ERP data and lacked frequent customer communication.
24 MetalForming/February 2023
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