Time Cited As "Most Precious Resource" By Global Automotive Executives, Reports New Study
16 March 1998
Time Cited As "Most Precious Resource" By Global Automotive Executives, Reports New Study
Deloitte & Touche And Deloitte Consulting Vision In Manufacturing Study Finds
That Time-To-Market And New Product Development Are Keys To Sales Growth In
New "Era Of The Virtual Customer"
NEW YORK, March 16 -- Contrary to established thinking, it is
not steel, labor or technology that is the most important resource for the
global automobile industry -- it is time, according to the 1998 Vision in
Manufacturing study released by Deloitte & Touche and Deloitte Consulting in
collaboration with Dr. Aleda V. Roth at the University of North Carolina's
Kenan-Flagler Business School.
The study, the most comprehensive research study into the manufacturing
sector, identifies a new era in the evolution of manufacturing -- the "Era of
the Virtual Customer." The new era will be marked by manufacturers grappling
with increasing -- and more difficult to pinpoint -- customer expectations,
new approaches to product innovation, worldwide supply and distribution
chains, and organizational realignment. As a result, technology will enable
customers to be fully integrated into the manufacturing process.
"While quality is an undisputed qualifier for all automotive companies,
delivering value will be the critical differentiator for the savvy automotive
manufacturer," says Daron Gifford, global leader of Deloitte Consulting's
Automotive Practice. "Moreover, technology innovation has created a
generation of virtual customers who want to dictate when, where and how they
interact with products and services."
"Rapid product development and speed-to-market of break through products
is the way of the future," noted Richard Gabrys, leader of Deloitte & Touche's
Automotive Practice. "As automobile product lifecycles grow shorter, new
product design costs must be spread over fewer units. This gives original
equipment manufacturers ("OEMs") powerful incentives to reduce their design
costs and cycle times."
The Vision in Manufacturing study points to several different trends that
will define the automotive industry in this new era: new products,
globalization and stronger supply chains.
Proliferation of New Products
-- The Coming Flood: Executives of growing automobile companies expect
that as much as 36 percent of their future sales growth will come from new
products. For non-growing companies, this number increases to an incredible
53 percent.
Globalization: Not Just an Aspiration, A Reality
-- A Fundamental Need: The ability to grow and prosper in new markets,
along with a better understanding of the customer, are also extremely
important. Over three-quarters of suppliers and OEMs see global expansion as
fundamental to their success.
-- The Emerging Markets Emerge: Interestingly, developing economies are
clearly the focus of outward expansion aspirations. Presently Brazil and
China are the focus of future growth, with 38 percent and 36 percent of
executives targeting these markets respectively. The preferred strategies
for growth in markets around the world remain joint ventures and alliances.
However, the big question is whether or not these executives have the ability
to achieve these expansion objectives, given their limited success at
effective enterprise integration and the financial turmoil in emerging
markets.
Forging a Stronger Supply Chain
-- Improving the Supply Chain is High on Executive Agendas: Sixty-nine
percent of executives have noted that dramatic organizational change has taken
place within their business unit's structure over the last two years. Given
the fact that nearly three-quarters of executives are focusing on enterprise
integration, the winners will be those that execute effectively as they seek
to tighten each link in their supply chain, from the materials supplier to the
distributor and retailer.
-- Electronic Systems: Nearly three-quarters of executives are focusing
upon electronic linkages, which help them transfer important data back and
forth between internal and external suppliers. One recent example of
electronic linkages is the move by U.S. automakers to create global extranets,
which expedites the exchange of e-mail, computer-aided designs, purchase
orders and invoices with their suppliers. Other strategies include increased
global joint ventures and alliances.
"Wherever we find the automobile executive, the common foe is time.
Whether it is getting product to market first, shortening product development
cycles, executing enterprise transformation or delivering products to
customers quickly and dependably. At the end of the day, the automobile
executive is still checking their watch and wondering when the next alarm
bells will sound," Dr. Roth concludes.
Methodology
Beginning in the mid-1980s, strategic development and trends in
manufacturing have been benchmarked biennially through the Vision in
Manufacturing Study, a survey research effort led by Deloitte & Touche in
collaboration with Dr. Aleda V. Roth at the Kenan-Flagler Business School of
the University of North Carolina at Chapel Hill. Since its inception, over
3,000 top manufacturing executives from industrialized and emerging markets
have participated in the study, making it the most comprehensive study of
global strategies and performance ever conducted.
Deloitte & Touche LLP, one of the nation's leading professional services
firms, provides accounting and auditing, tax, and management consulting
services through 23,000 people in offices in more than 100 U.S. cities.
With over 13,500 consultants and 1997 global revenues of over
$US 2 billion, Deloitte & Touche Consulting Group is one of the world's
leading management consulting firms. The firm's services span all aspects of
enterprise transformation, including strategy, process, information
technology, and people.
Deloitte & Touche LLP and Deloitte Consulting are part of Deloitte Touche
Tohmatsu, a global leader in professional services with over 72,000 people in
over 125 countries.
SOURCE Deloitte & Touche LLP