CSM Worldwide Identifies Profitable Supplier Strategies

FARMINGTON HILLS, Mich., April 6 -- Speaking to clients about the automotive supplier's journey and how to succeed in a difficult and sometimes hostile marketplace, the CSM Worldwide Market Assessment team identified several strategies that characterize today's most successful suppliers in North America. The message from CSM was simple: it is possible to make money as a supplier in the current auto industry, but you must ask the right questions and know the right moves.

According to CSM analysts, there are several questions the successful supplier asks themselves as they develop their business strategy and target opportunities:

   --  Do my existing customers provide me with the best opportunities for
       profitable growth?
   --  What is my position in the market?
   --  Who are my competitors, and what changes are they making to meet
       changing market requirements?  Will new competitors enter the market?
   --  What are the generators of competitive advantage in my market
       segment?  How do I stack up?
   --  Should my scope be regional or global?
   --  How sustainable is my competitive advantage?

Additionally, CSM identified several actions that successful suppliers take to build and protect market share and position:

   --  Focus on products where labor cost is not the only issue.  Labor cost
       is an issue when skilled labor isn't needed, so it makes sense for
       suppliers to focus on products that can't simply be made by whoever
       has the lowest labor cost.
   --  Focus on intellectual content.  This reiterates the importance of
       focusing on products that can simply be farmed out to the cheapest
       source of labor.  Intellectual content helps create "gotta have"
       status in the minds of consumers and can make a supplier an
       invaluable resource to an OEM.
   --  Continue to stress productivity strategies.  The results of lean
       manufacturing have kicked in and show a positive effect on
       productivity in the U.S.  The mindset of doing more with less will
       remain critical for auto suppliers.
   --  Identify components, systems or modules where proximity counts or are
       inefficient to "off shore."  Examples include interior systems like
       instrument panels and overheads, which can be made in great variation
       depending on trim and option levels and require sequenced, JIT
       delivery to an OEM's assembly plant.
   --  Make sure you diversify OEM opportunities with a well-balanced
       customer base.  Some automakers work closer than others with their
       suppliers to co-develop and introduce new technologies.

While there isn't one approach that will work for all suppliers, CSM points out a common trait of all suppliers with a competitive advantage in the marketplace. These companies have all learned that new technology and ideas provide them with marketplace differentiation, global opportunities and sustainable growth.

For more information about CSM Market Assessment service, contact Paul Haelterman, director, Market Assessment, at 248.649.8900 or phaelterman@csmauto.com .

CSM Worldwide (www.csmauto.com ) supports more than 350 of the world's top automakers, suppliers and financial organizations with market intelligence and forecasting services. With corporate offices in Detroit, CSM Worldwide covers the global automotive environment from London, Frankfurt, Tokyo, Sao Paulo, Singapore, Shanghai, Bangalore, and Budapest.