Ian Former
Automotive Quality Consultant
TierTerror Blog 12-3-2005
As with most industries we come to a place of mergers, failures, bankruptcy and so much more. Today the supplier is faced with rising cost of quality. Our OEM wants 0 defects and PPM's of no more than 1. The reality is that many suppliers end up on 3rd party containment throughout the entire production run of a product. The mounting expense sends them into a tailspin of cost. When you anticipate a net profit of .5% to 2% then roll inspection cost that range from 2% to 9% of the part value you end up giving your profit to some containment company that does not really add value to your process.
Hemorrhaging cash to a none value added process.
Delphi, C&A, Visteon, and many more all either in bankruptcy, exiting bankruptcy or teetering on the edge. All this while the OEM wants bigger savings, higher quality and faster delivery.
This is a cocktail of destruction...... so the OEM encourages you to offshore your product to help reduce your per part cost. Now the dynamic of oversea shipping a 4-week pipeline of defects and a lack of the required quality needs of the "new" offshore supplier.
This cocktail has another dynamic that may not be seen by the bottom line guys. For every job shipped off shore that is one customer that can no longer afford the high dollar car he once drove.
Let's be honest a $6.00 an hr 30 hr a week job with no benefits does not afford the "ex-manufacturing" employee many options for transportation. Now his debt to income only allows a rusty old broken car a $400.00 a month housing payment and he is on government aid or in some sorry retraining program designed to teach a factory rat how to be a techie... something he is not geared for from the start.
What I am trying to understand is how a supplier can keep the American autoworker in a job and also make a fair profit.
Perhaps this is a sign of the globalization and the leveling of worldwide lifestyle.
What we need to do is supply the laid off autoworker with a cardboard box and a garbage dump to put it in. Then we will have the ability to work for 6 dollars a week.
Another idea.... We could use our mounting inmate population and government subsidies to prop up the American supplier base this is a recipe that works in other offshore countries.
Ian Former
Anyone seen my box...... I need to move it to another dump this one is overcrowded
