Are Autonomous Cars Disrupting the Supply Chain?

Are Autonomous Cars Disrupting the Supply Chain?

Apr 25, 2017

By Charles, Murray, DesignNews In the development of self-driving vehicles, Tier Two suppliers say they’re communicating directly with automakers in ways they hadn’t previously. During a two-week period in early February of this year, Chris Jacobs of Analog Devices, Inc. (ADI) criss-crossed the country, visiting the offices of virtually every major automaker to discuss such technologies as radar, Lidar, and microelectromechanical sensors. A decade ago, Jacobs wouldn’t have gotten his foot in the door with the automakers to discuss such subjects. But thanks to the emerging importance of self-driving cars, Jacobs says he and his colleagues have suddenly become very important. “Just in the last year, it’s been insane,” Jacobs, general manager of ADI’s advanced driver assistance systems and automotive safety, recently told Design News. “Now, the OEMs [automakers] want to develop non-disclosure agreements with us. And they want us to develop prototypes for them without a Tier One [supplier], so they can try them out on their test tracks. This would have never happened 10 years ago.” Meet more than 9,100 qualified buyers and decision makers searching for new products, the latest technologies, and state-of-the-art processes across the full spectrum of advanced design and manufacturing at our East Coast Advanced Design & Manufacturing Expo. June 13-15, 2017 in NY. Indeed, the time-honored order of the automotive supply chain seems to be changing, and the autonomous car may be behind it. In the past, Tier Two vendors, such as Analog Devices, didn’t communicate with automakers. Rather, they reported almost exclusively to the Tier Ones, such as Delphi Automotive PLC, Robert Bosch GmbH, Visteon Corp. and Continental AG. The Tier Ones, in turn, worked with the automakers to build bigger products, integrating sensors, software, semiconductor chips, and other parts from the Tier Twos. Under such arrangements, Tier Twos were generally discouraged from contacting the OEMs (the automakers) directly. “We would want to talk to them, and they would say, ‘Talk to the Tier One,’” Jacobs said. Now, that’s changing. Today, Tier Two electronics suppliers say they’re connected directly to the automakers on a separate dotted line – at least when it comes to autonomous cars. They’re neither more nor less important than the Tier One....

GM to Invest $1 Billion in U.S. Manufacturing Operations

GM to Invest $1 Billion in U.S. Manufacturing Operations

Apr 24, 2017

By Design-2-Part Magazine DETROIT—General Motors (GM) will invest an additional $1 billion in U.S. manufacturing operations that include multiple new vehicle, advanced technology, and component projects, the company announced recently. Details of individual projects will be announced throughout the year, GM said in a press release. The company also announced it will begin work on insourcing axle production for its next generation full-size pickup trucks, including work previously done in Mexico, to operations in Michigan, creating 450 U.S. jobs. “As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” said GM Chairman and CEO Mary Barra, in the release. “The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.” GM’s announcement is part of the company’s increased focus on overall efficiency over the last four years. With a strategy to streamline and simplify its operations and grow its business, GM reports that it has created 25,000 jobs in the U.S.—approximately 19,000 engineering, IT, and professional jobs and 6,000 hourly manufacturing jobs—and added nearly $3 billion in annual wages and benefits to the U.S. economy over that period. At the same time, GM reports that it has reduced more than 15,000 positions outside the U.S., bringing most of those jobs to America. During that period, the company says, it has moved from having outsourced 90 percent of its IT work outside the U.S., to an insourced U.S.-based model. “We will continue our commitment to driving a more efficient business,” said Barra, “as shown by our insourcing of more than 6,000 IT jobs that were formerly outside the U.S., streamlining our engineering operations from seven to three, with the core engineering center being in Warren, Michigan, and building on our momentum at GM Financial and in advanced technologies. These moves, and others, are expected to result in more than 5,000 new jobs in the U.S. over the next few years.” General Motors (www.gm.com) has also been facilitating its supplier base to do the same. The company has been executing...

Gaming the System: How One Manufacturing Company…

Gaming the System: How One Manufacturing Company…

Apr 19, 2017

“Gaming the System: How One Manufacturing Company Saved Itself With Radical Transparency And Created A Slew Of Blue-Collar Millionaires” By Peter Carbonara, Forbes There are three basic conditions if you want to work for Jack Stack, and they go for everybody from senior executives down to the people who clean his company’s bathrooms. The first is you have to learn how to read and understand the company’s financials, the second is you really have to believe there is no “I” in “team,” and the third is you have to get into the habit of asking, “What could go wrong, and what are we going to do when it does?” Stack, 68, is the CEO and cofounder of SRC Holdings, a Springfield, Missouri, company owned entirely by its 1,600 employees. Since its launch in 1983, SRC’s main business has been remanufacturing engines and other components for trucks, tractors and other heavy equipment, which means taking worn gear and returning it to like-new condition. It’s a tough, highly cyclical business. “If GDP is less than 2%, we’re flat,” Stack says. “If it’s above that, we’re on fire.” Last year, SRC booked $16 million in profits on $532 million in sales to customers like General Motors, John Deere and Navistar. Over the years, SRC has evolved into a highly entrepreneurial miniconglomerate that has launched more than 60 companies in industries ranging from banking to medical devices to furniture. It has also developed an unusual culture–a humane, Midwestern blend of quantitative management, radical transparency and practical paranoia–that has made it the flagship of what’s known as the open-book-management movement. SRC, a place where sports metaphors rule, calls its distinctive brand of open book “the Great Game of Business.” A small but passionate cult of business owners has grown up around two big ideas, which Stack has promoted in two books, The Great Game of Business and A Stake in the Outcome: One idea is that you can boost performance by making a game of tracking and improving key metrics. The other is that if you want employees to care about their jobs as if they were owners, you should make them owners. There are many reasons SRC has...

What Does ‘American Made’ Mean to You?

What Does ‘American Made’ Mean to You?

Apr 18, 2017

By Mark Shortt, Design-2-Part Magazine The words ‘Made in the USA’ are becoming increasingly relevant for reasons ranging from pride in workmanship to protection of corporate and national security interests. Here’s a look at some of the forces that are driving companies to keep their manufacturing close at hand. It’s a pretty dynamic landscape for American manufacturers today, much of it being spurred by enabling technologies, economic uncertainties, and agile business strategies that can quickly adapt to changes in market forces and customer demands. There’s also a new administration in place that figures to alter the landscape in significant ways. Amid all the new developments, it’s useful to hear what people in the thick of the action think. With that in mind, D2P reached out to manufacturing leaders—executives, entrepreneurs, and advocates—to hear their insights on the current state of U.S. manufacturing, as well as a number of issues relevant to the industry. What’s the State of American Manufacturing Today? Scott Paul, president of the Alliance for American Manufacturing (AAM), gives it a passing grade, saying that “it’s doing okay, broadly speaking,” but faces significant challenges. While the automotive sector has been a real bright spot, leading the economic rebound from the Great Recession, there have been ongoing challenges with respect to global competition, he said in an interview. “In particular, firms that are in direct competition with China have, I think, very mixed experiences with that. And unfortunately, that imbalance has helped to dampen the potential job gains that we’ve so far realized. “Obviously, the political environment has changed quite a bit, and many people in manufacturing see a lot of opportunity for changes in public policy that would help grow manufacturing in this country,” he continued. “A few see some risks to progress, as well. And, underneath all of this is the fact that technological progress, innovation, and management practices continue to evolve. And I think that will inform the future of manufacturing as well.” What Does ‘Made in the USA’ Mean to You? Paul believes that when a label reads ‘Made in the USA,’ every bit of the product should be made in the USA, other than if there’s a minimal exception....

The long, rough ride ahead for ‘Made in America’

The long, rough ride ahead for ‘Made in America’

Apr 17, 2017

By Nick Carey, Reuters Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China. But it will be a long ride before it can stamp its products “Made in USA.” The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago. “There’s just no way to source parts in America right now,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant. “But by planting the flag here, we believe suppliers will follow.” Monster Moto’s experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law. When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist. For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N) vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods. Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price. Take Monster Moto’s bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China. “Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box,” Keechle says. “You have to remain price...