Page 6 - MetalForming December 2013

Editorial
Brad F. Kuvin
Burger King, Bimmers and Diemakers
Mass customization has hit the automotive industry, and other industries, hard, with increased demand for cost-effectively mass-produced vehicles highly stocked with customized parts. A whole generation of choosy consumers have been raised on shop- ping experiences like Build-a-Bear and American Girl, where they can follow the “Have it Your Way” shopping model perfected by Burger King oh so long ago. Now these selective shoppers are hitting car lots in big numbers, and they’ll undoubtedly continue to do so for the fore- seeable future. Lord only knows how selective and picky their kids will be.
How does mass customization impact automotive-industry suppliers? A recent vendor tool- ing study conducted by Harbour Results, Inc., in partnership with the Original Equipment Sup- pliers Association, reveals a mountain of insights. Some of the news is good, some not so good. But there’s time to address what’s not so good, says Harbour Results president and CEO Lau- rie Harbour. I recently spoke with Harbour at length about her perspectives on the automo- tive-tooling industry, and will provide a full report next month.
The long and short of it—mass customization means more tools per platform, a lot more tools. For example, I found a presentation slide online from BMW that talks about providing 1000 bumper variations, 4000 instrument-panel choices and 488 different door panels. While this may be music to the ears of suppliers, it adds significant complexity to an already stressed supply chain. “Any negativity already present between the OEM, Tier One and tooling supplier only becomes more irritated and infectious as complexity increases,” warns Harbour.
“To meet coming capacity demands, North American tool shops must invest in new technology and in workforce development,” says Harbour. “And, they need to locate satellite facilities—at least capable of maintaining tools—in the south.”
At the same time, OEMs are launching new vehi- cles faster than ever before. And, production at southern-U.S. OEM facilities (where tool shops are few and far between) is expected to double by 2020. These and other factors have the industry on the precipice of what Harbour calls a “once in a gen- eration convergence.”
What kind of reaction is needed? First, Harbour says, understand that many OEMs believe—and outwardly state—that tool shops should be happy
operating at a five- to six-percent profit margin. With their heels dug in, this OEM attitude does little to promote the collaborative relationships Harbour feels must become the norm.
“To meet coming capacity demands, North American tool shops must invest in new technology and in workforce development,” says Harbour. “And, they need to locate satellite facilities—at least capable of maintaining tools—in the south. It’s impossible to do this with six-percent margins. I think they need to achieve at least 10- to 12-percent margins.
“If we don’t solve this,” Harbour continues, “we will lose more of our home-based tooling indus- try to offshore suppliers—not because their costs are lower, but because they have the capacity.” Among the solutions discussed in Harbour’s study: up-front engineering collaboration between the OEM, Tier One and the tool shop; and, of course, a shift to progressive payment plans for tooling, to provide toolmakers with the cash flow and predictability they need to effi- ciently manage their businesses. These steps alone promise to reduce tooling cost per vehi-
cle by at least five to six percent, Harbour says.
“Do that and we’ll see a huge improvement and really change the face of tooling,” adds Harbour.
Editor bkuvin@pma.org www.pma.org/blog
4 MetalForming/December 2013
www.metalformingmagazine.com
Serving those who create precision metal products using stamping, fabricating and other value-added processes.
© 2013 by PMA Services Inc. 6363 Oak Tree Blvd. Independence, OH 44131 216/901-8800 | fax: 216/901-9669 www.metalformingmagazine.com metalforming@pma.org
PMA President | William E. Gaskin, CAE wgaskin@pma.org
Group Publisher | Andrew Flando aflando@pma.org
Editor | Brad F. Kuvin bkuvin@pma.org
Editorial Manager | Marlene F. O’Brien mobrien@pma.org
Art Director | Donna M. D’Amico ddamico@pma.org
Production Manager | Susan Cubranich scubranich@pma.org
Circulation Manager | Barbara Tillett btillett@pma.org
Marketing Coordinator | Rachel Rokoff rrokoff@pma.org
Sales Staff
MI, OH, Western NY, Western PA, Canada, International Andrew Flando, Group Publisher 6363 Oak Tree Blvd. Independence, OH 44131
Ph: 216/901-8800 | Fx: 216/901-9669 aflando@pma.org
North Central, California
Ryan King
1900 North Hudson #D Chicago, IL 60614
Ph: 773/414-9292 | Fx: 267/219-4308 rking@rkmediaadv.com
New England, Eastern NY, Eastern PA John Wagner
32 Niagara Dr., Suite 101 Mahwah, NJ 07430
Ph: 312/236-4366 | Fx: 312/276-4577 jwagner@wngmedia.com
South Atlantic, South Central Bob West
855 Georgian Hills Dr. Lawrenceville, GA 30045
Ph: 678/377-5749 | Fx: 678/377-9098 metalform_bobwest@msn.com
All rights reserved. Reproduction in whole or part without permission is strictly prohibited.
Use smart phone to go to www.metalformingmagazine.com