Page 34 - MetalForming September 2011

Reduce costs, improve quality and enhance productivity – automated welding, the sensible choice.
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Auto Supply Chain
32 MetalForming/September 2011
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esting trend: In 2007, 32.2 percent of suppliers believed that their customer would help them match a competitor’s efforts to provide a similar product at a lower cost; that percentage jumped to 41.5 percent in 2011. Apparently, “the recession taught firms that they are more likely to survive if they work together to reduce costs,” the survey notes.
...or Combative
The second possible path is one that is familiar to many stampers. It is char- acterized by fickle and antagonistic relationships, margin squeezing and the inability to invest in equipment, new technology, innovation or people. This path is a recipe for industry-wide stagnation and the declining relevance of American manufacturing. The study finds that large segments of the auto- motive supply chain are characterized by each of these two scenarios, demon- strating certain elements of both.
While supplier firms cannot dictate the culture of current and potential customers, to a degree, they can choose who they work for. Interviews yielded interesting stories of firms turning down work in the middle of a recession, refusing terms or even firing major customers. As one executive relayed, his “top-line number may have shrunk (by 40 percent), but the bottom line grew overnight by getting rid of that pain-in-the-butt customer.” Many firms reported very positive relations with their customers, so options are out there.
Strategies for survival are not limit- ed to external relations, however. The data shows that certain inhouse prac- tices are frequently adopted together. Helper calls one such grouping “high road” practices, which includes work- er training and investment, empower- ment at all job levels, and continuous- improvement practices. Such firms experienced 10.9-percent less sales loss during the crisis.
Fig. 1 shows the responses of metal stampers to questions regarding spe- cific continuous-improvement prac- tices, including formal employee