Look Inward to Pass the Test of Today’s Automotive ChallengesBy Tarsicio Carreón | Tue, 03/22/2022 - 15:00
If you went to school, surely you experienced three scenarios before a test: You had to study in a rush because you did not prepare for it in advance; you studied two or three days before the test; or you were ready and confident for the test because you paid attention during classes, did your homework and investigated even more. In theory, to pass a test the best strategy is the last one, which means you were a step ahead.
We could say that we are now in some sort of test in the automotive industry, but in this case the teacher is adding new questions and other topics on the same day of the test. There is no way someone could have foreseen the current global scenario nor the one that will emerge in the coming months and years. So, how can you foresee the unexpected? Well, you can’t. So, what to do?
No, I am not turning mystical. The only thing to do, is to look inside our organizations and find all those opportunities to become something different than what you are today. The path starts inside your organization. It starts with all the assumptions that lead to internal policies, all the way from quoting to how you produce.
You may think at first that I am talking about improvement, but I am not; I am talking about evolution. Remember those crazy ideas circling around your head about automating, reducing layout, fixing that bottleneck causing scrap? Well, we are getting to the point where that may not be enough. Why: All costs are increasing beyond a cost improvement target. Labor, material and transport, among others, are putting us in a less competitive environment if we do not evolve in all our manufacturing areas. Here are some suggestions of what to look for during your introspection process and some of the options you may need to evaluate:
Procurement: Develop new, smart and more accurate criteria to forecast and procure just what you need. It may not mean just in time, as we have seen lately.
Material: Test, approve and migrate to newer, more cost-efficient and more common raw materials, even if it is hard to negotiate with your customer.
Automatization, but not with dedicated equipment: You need to look for flexibility so demand variations do not impact your investment recoveries.
Simplification: Think about how you can now do from a laptop or phone what you previously needed to go to many places to do.
Invest. Do not let your manufacturing capability decline, but now you have to be more precise in the selection of your investments. Think about your future evolution and do not invest in the past.
Develop new internal skills. These may reduce your costs or allow you to increase your customer base by adding products or services to your portfolio.
Synergies: Find partners with idle capacities or complementary capabilities to share risks and costs.
So, study yourself for the coming testing times, and be ready.
Tarsicio Carreon is also part of the council of RedCam (National Network of Automotive Industry Custers). This article was written within the framework of a collaboration with RedCam.