Harbour Consulting to Auto Suppliers: Manufacturing Must be a Competitive Advantage

TROY, Mich., Aug. 3, 2004 -- Many North American automotive suppliers continue to ignore manufacturing skill and efficiency as a competitive advantage, a mistake in today's hyper-competitive industry. Suppliers must stop denying that their customers will go anywhere in the world to find competitively priced, high quality parts, says Harbour Consulting.

"Too many North American suppliers, and even some of the automakers, fail to view manufacturing as a competitive advantage -- but they should if they want to grow during the next several years," said Laurie Felax, vice president of Harbour Consulting. "The best companies in the global auto industry optimize product design, process design and manufacturing to make parts faster, better and cheaper. There is still plenty of room for improvement in efficiency and further cost savings in North America."

Felax's comments were made during today's Manufacturing Competitiveness Forum, taking place in Traverse City as part of the 2004 Management Briefing Seminars. Felax served as co-chairperson of the forum, which featured a panel of political and industrial leaders and explored strategies for world-class manufacturing competitiveness.

Additionally, Felax offered several points of advice to auto suppliers for ramping up their overall level of competitiveness:

* To grow, suppliers must continue to make performance gains in cost and quality to continue attracting business from Japanese and Korean automakers, which are expected to capture 37 percent of the North American market by 2008.

* Suppliers counting on significant sales gains through the Big Three automakers are treading a slippery slope of continued sales market share declines during the next few years.

* OEMs must understand that suppliers can better manage costs and pricing requirements, as well as customer expectations, by forging more collaborative relationships early in product development. In most instances, leading automakers begin working with preferred suppliers up to three years from the launch of a new product.

* Suppliers will remain on the preferred lists of automakers and Tier I integrators by developing unique, innovative technologies and manufacturing processes that reduce reliance on price competition. Labor-intensive activities and generic technologies will increasingly be shipped overseas.

"Suppliers can't expect the automakers to care about all the challenges they currently face," Felax said. "It's easy to rationalize the situation and gripe about off-shoring and other so-called competitive imbalances, but it's time for suppliers to address the real issues and become more efficient and productive in their manufacturing."

Since 1989, Harbour Consulting has provided manufacturing management consulting services focused on strengthening the overall competitiveness of manufacturers through improvements in quality, productivity and lower total cost. The company continues to study and service manufacturing organizations throughout the world in a variety of industries. Its annually published The Harbour Report serves as the influential scorecard for manufacturers in the automotive industry.