The industry may be moving toward a technological future but talent remains a key component in vehicle production. Depending on the low-cost nature of labor, however, will no longer be an option for companies wanting to be remain competitive, according to Shinichi Nakamizo, President of DENSO México. “To be competitive in manufacturing activities, we need to invest in technology and develop the capabilities of our human talent.”
As a Tier 1 supplier of electronic components, DENSO México is no stranger to technology developments impacting the industry. The company has already set corporate goals to move toward electrification, automated driving and connectivity. Similarly, Nakamizo says DENSO has already implemented Industry 4.0 practices including Industrial Internet of Things applications and that has already permeated its Mexican operations. Overall, the company’s portfolio in Mexico includes 18 different products involving seven different business units, which means that for any new technology implemented, workers must be familiar with its functionality. “Our workforce must be knowledgeable and capable enough to manage and control advanced technology in electronics, mechanics and heat treatments,” says Felipe Brondo, the company’s Corporate Vice President.
DENSO México has strived to boost the competitiveness of its workers by offering training in new skills and the use of advanced technology. Among the strategies the company implements is the development of Kaizen Circles. “Each area in the production plant creates a team in charge of finding new ways to boost efficiency,” says Nakamizo. “Instead of being a top-down practice, Kaizen Circles are a bottom-up way of improving operations.” DENSO México has over 300 Kaizen Circles and every year it selects the best teams to compete in the National Kaizen Circle Competition hosted by the Mexican Association for Teamwork. The 2017 Kaizen Circles competition was held in Cancun and DENSO México was awarded four gold medals for its improvement models. “Kaizen Circles help our workers understand the concept of continuous improvement and let them reflect on the best way to solve a problem,” says Brondo.
DENSO México’s work with the local labor force has even won it recognition at an international level. In 2017, DENSO México participated for the first time in the WorldSkills competition, an event created by the international organization WorldSkills focused on promoting vocational education excellence among 75 countries through the implementation of best practices. “DENSO Japan has participated for many years in WorldSkills but this was the first time for Mexico,” says Nakamizo. The company took one representative from Mexico to Abu Dhabi to compete in the CNC turning division against 21 other countries, showcasing the capabilities of the Mexican workforce. According to Brondo, participating in WorldSkills was a perfect way to evaluate DENSO México’s capabilities against other global players. Meanwhile, for Nakamizo it was an opportunity to inspire the company’s workforce to keep pushing for better skills and competitiveness.
The company is not only working with the local workforce in-house. According to Brondo, DENSO México shares its best practices with partner suppliers and collaborates with universities and technical schools to boost the capabilities of the Mexican supply chain. Although DENSO México is constantly looking to grow its local supplier base, the lack of competitiveness among these players has been a challenge. “We are working with local service companies and suppliers of spare parts for our equipment but we still do not have many partners in component supply,” says Nakamizo.
The automotive industry relies heavily on globalization and local companies must now compete with countries such as Vietnam, Thailand, China and even suppliers in the US. This means that Mexican players must learn to improve their offering without relying solely on cheap labor. “The local supply chain is very limited at the moment,” says Brondo. Competitiveness is key for DENSO México and he says its suppliers must be ready to implement the latest technology and manufacturing systems. Similarly, he believes there are many companies that still need to refine their manufacturing practices and gain ISO, TS and other certifications. “Process know-how, technology and engineering are key factors to gain a place in the automotive market,” says Brondo.