global automotive tooling trends laurie harbour, president and ceo harbour results inc. november 22,...
TRANSCRIPT
Global Automotive Tooling Trends
Laurie Harbour, President and CEOHarbour Results Inc.
November 22, 2011
Current Economic Impact
3
Economy is Still Not Rotating . . .
Volumes are steady but flat acrossindustries; What will the future bring for manufacturing?
Next 12 Months Raw material markets Sales demand Underlying macro economics Operational capabilitiesLonger Term Globalization Operational capabilities Sales demand Staff with right talent Government policy Supply chain capabilities
4
Resulting Challenges
Companies have to flex with the short term bumps and the long term variability both upside and downside
Consoli-dation or
bankruptcy
Sell Capacity vs. Value
Since Last Year . . .
Growing volumes throughout the industry GM did their IPO; Fiat takes more control of Chrysler;
Ford continues their focus Japanese Tsunami significantly impacted OEMs and
suppliers; identified vulnerability As the year ends suppliers and tool shops are swamped Companies are struggling to meet increased volumes;
new problems occurring Thailand floods are the new threat to global OEMs
Still a great deal of uncertainty for future volume in the industry but companies are very busy and feeling better 5
6
Last Year . . . .
PIECE PRICE
ED&DCOST
TOOLINGCOST
No major changes to this direction from any of the OEMs but real problems with execution as supply and demand change
OEMs
Tier 1 Supplier
COLLABORATION
Tooling House
Domestic OEM Strategies - Update
Execution continues to be the biggest challenge for all three OEM’s given the changes in the industry
DIRECT• TAG group continues• Some struggle internally
with execution• Many more programs
launching with TAG strategy
• Still focused on 5 core commodities
• Utilizing DIRECT sourcing to a very limited number of tool suppliers
• Very mixed feedback from tool suppliers about the program
DIRECTED• Tool supplier
certifications continue –50 conducted and over 100 more planned
• New leader put in place this year
• Some modification of the strategy
• Meeting with Tier 1’s to review program
• Focus on DIRECTED with tool supplier and Tier 1’s
DIRECTED• The core tooling group
at GM continues• Realigned under the
manufacturing with a new Executive Director
• The strategy is being reviewed and modified as needed
• Likely the group will be elevated within GM
• All work is DIRECTED with limited DIRECT sourcing where required
7
Foreign OEM Strategies
Many tool shops are working for the foreign companieswith very mixed results
Japanese are looking for more North American tool shops
Very challenging to work for Japanese but more loyalty
Koreans still doing everything in Korea but more North American suppliers will be used which opens opportunities for tool shops
European OEMs using North American shops and more opportunities in the future
8
Current Challenges
Sales and Marketing Focus: Current and New Customers
Scalability of Growth: Operationally and Financially
Operational Excellence: Job Shop vs. Manufacturing Operation
Long Term Strategic Planning
Companies that address these issues will thrive long term and establish themselves with key OEMs and suppliers 9
10
Sales & MarketingOwner Focus
Companies are not planning for the future and the boss is leading sales efforts; where will they be in 5 years?
48%42%
5% 5%
80%
48%
23%14%
Primary Responsibility for Business De-velopment
2010 2011
Yes No
54%46%
40%
60%
Written Sales Plan With Specific Targets
2010 2011
Sale
s &
Mar
ketin
g
Check all that apply
11
FinanceFinancial Stability
Financial performance varies for tool suppliers based on actual operating performance and phase of growth
Fina
nce
< $5M $5.1 to 8M $8.1 to 12M $12.1 to 20M $20 to $25M < $40M2%
4%
6%
8%
10%
Revenue to Net Income Performance
12
OperationsContinuous Improvement
Highly Effective Effective Adequate Not Adequate
9%
32% 32%26%
5%
28%
42%
25%
Effectiveness of Continuous Improvement Program
2010 2011
Yes No
54%46%
59%
42%
Define Objectives for Continuous Improvement
2010 2011
Data illustrates continuous improvement is not a culture but something companies do when they have time
Ope
ratio
ns
13
LeadershipLack of Planning and Linkages
Yes No
57%
42%49% 51%
Written Long Term Plan
2010 2011
Yes No
77%
23%
74%
26%
Written One-Year Operating Plan2010 2011
Tool shops are fire fighting with one year plansand long term thinking is still not the norm
Lead
ersh
ip&
Peo
ple
14
LeadershipLack of Planning and Linkages
Highly Effective Effective Adequate Not Adequate
10%
55%
26%
10%17%
31%40%
12%
Execution Effectiveness of One-Year Plan
2010 2011
One-year plans are not effective because of the lack of linkage to a long term strategic plan and capabilities required for the future
Yes No
51%
49%
51%
49%
Capabilities Required to Meet Plan
2010 2011
Lead
ersh
ip&
Peo
ple
Mgmt Sales & Mktg
HR Finance Ops Eng Mat'ls Quality Prog Mgmt
Total35
40
45
50
55
60
65
70
Plastics Tooling Machining
Manufacturing Comparison
The tooling industry is a leading indicator to other manufacturing industries yet opportunities still exist
Opportunities
System
Process
Function
Task
Sub-Task
‘ON’ the Business to Thrive
Working “IN” the business
Working “ON” the business• Profitable Pricing• Capacity planning & demand
management• Throughput vs. Output• Capabilities architecture• Next generation employees
• Web site• Certification• Quality and delivery “blocking
& tackling”• Budgeting / Forecasting• Training
17
The focus has been on blocking and tackling. . .You have done that now you have to move up the triangle
Capacity Planning & Demand Management
Business Planning
Sales & Operations Planning
Master Scheduling
Detailed Planning and Executing Systems
Sales Plan Production Plan
Fore-casting
and
Demand Manage
ment
Capacity Planning
18
Business Planning
Sales Plan
Operating Plan
Production Plan
Trad
ition
al M
etho
d
Succ
essf
ul M
etho
d
Understanding demand is no easy task but it will be the differentiator for your company to profitability
Throughput - Producing more with the same assets (machines, people, processes) and matching Customer Demand 1 to 1
Output – Producing more because you can without consideration for Customer Demand
Throughput
VS.
Output
19
Throughput vs. Output
An increase in throughput by 20% can more than double your profitability; most processors focus on output
OPERATIONALEXCELLENCE FINANCE
LEADERSHIP& PEOPLE
SALES &MARKETING
20
“Built to Last” Focus
• Detailed 24-month sales plan• Demand
management• Future customer
• Throughput• Capacity
Planning• Flexibility• Program Mgmt• Growth Mgmt
• Growth and scalability• Position fixed &
variable cost for growth• Metrics
• Capabilities planning• Skills matrix• Next gen. • Succession plan
Long term focus
On:
With this focus leaders can take their companies up the next stair step of growth and on to long term sustainability
System
Process
Function
Task
Sub-Task
