Although some challenges are beyond the capacity of any individual company to address, teaming up with like-minded organizations can provide a means to effect real change. For evidence of that, look no further than an event this past October that attracted more than 200 people representing the entire automotive supply chain, including most major OEMS as well as a number of Tier 1 suppliers. The big draw? A new study that identifies and proposes solutions to a projected vendor tooling capacity shortage amounting to nearly $6 billion. By the time the results were unveiled, the scope of this study had expanded to cover the interests of the entire value stream. However, it was initially conceived in response to concerns raised by companies occupying the lowest rung—relatively small, independent tool shops that, until recently, didn’t have a collective voice.
The Original Equipment Supplier Association (OESA) Tooling Forum aims to provide that voice. Open to independent companies that manufacture automotive molds, stamping dies, gages and fixtures in North America, the forum has provided toolmakers with a means to discuss common problems, share best practices and gain market intelligence since September 2012. Cash flow and other problems resulting from the unpredictable payment schedules associated with PPAP (production part approval process) terms were among the chief topics of discussion at the group’s initial meetings, says Margaret Baxter, OESA’s senior vice president, operations and international affairs. These discussions led directly to efforts that culminated in the 2013 Vendor Tooling Study, conducted by consulting firm Harbour Results in partnership with the OESA and officially unveiled during the October gathering in Novi, Mich. (To view an article on the study from MMT’s December issue, visit short.moldmakingtechnology.com/toolstudy.)
In addition to demonstrating the power of working together to attract attention to a critical issue, the study is just one of many examples of the sort of concrete deliverables that drive the success of the tooling forum, Baxter says. In many cases, these action items arise not from any specific effort like the study, but from open roundtable discussions, which often result in the drafting of “best practice” guidelines. “Talking about what keeps everyone up at night can be cathartic, and members appreciate that,” she says. “But when a topic like online auctions comes up, and someone can offer a concrete example of how their company has turned those auctions to its advantage, that’s where the real value lies.”
This type of sharing didn’t come easily at first, says Shaun Karn, co-chair of the forum and executive vice president and chief financial officer at Hi-Tech Mold & Engineering (Rochester Hills, Mich.). Although many of the companies the OESA consulted about forming the group in summer of 2012 participate in other industry advocacy organizations, none knew of any focused solely on automotive tool manufacturers. All agreed that such a group would be valuable. Still, attendees were apprehensive at first, and many seemed more interested in just “seeing what this was all about” than really opening up and participating, Karn says.
That apprehension is still common among companies that audit the peer group’s quarterly meetings to gauge their interest in joining. However, just as the original members did, they soon find that the risk of losing any competitive advantage is minimal at best. Indeed, the now 25-company group has added at least one new member after each meeting, Baxter says. One reason she and Karn cite for the increased comfort level is that the group is not designed to discuss competitive secrets or technical information about the shops’ manufacturing processes. Rather, discussions revolve around broad, strategic topics that affect all members, such as staffing and workforce development, diversification, benchmarking, supplier audits, capacity constraints, OEM product launch cadence, scheduling, and industry forecasting, among others.
The fact that these topics are chosen by members themselves has also proven critical to the group’s effectiveness, Karn adds. He emphasizes that the OESA supports and facilitates, and it provides valuable resources for items such as the tooling study and detailed forecasting that might otherwise be unavailable to individual shops. Nonetheless, he says, “The bottom line is that for this forum to work, it has to be driven by the members.”
To that end, the board of governors that guides the group’s interactions consists solely of representatives from member companies. Meetings last about five hours, which includes lunch, an overview of antitrust guidelines, announcements, member introductions and chosen discussion points. That’s followed by a formal presentation, whether from members themselves or guests. In one instance, the group brought in speakers from the Center for Automotive Research and Ferris State University’s Engineering Technology program to discuss the state of employment in the automotive industry and educational initiatives, respectively. Following that, a panel of group members shared their own best practices for finding, hiring, training and retaining employees, and an OESA representative shared information on potential state- and local-level training resources. In another, more recent example, representatives from Nissan addressed the group about the company’s tooling strategy and expectations for suppliers. Proceedings conclude with a roundtable discussion, typically regarding an issue previously agreed upon by the board, and refreshments.
This March, the OESA Tooling Forum will reach a critical milestone. At its inception, the peer group was set up to operate for a period of 18 months, at which time members could opt to disband or renew it for another 18 months. Both Baxter and Karns expect that members will be eager to renew. “My sense is that, in the long run, these companies would like to see this industry remain competitive in North America, and they recognize the potential of the forum for helping to do that,” Baxter says. “It provides an opportunity for peers to discuss issues they all face and promote sound business practices that improve the performance of the entire supply chain.”
For more information:
Harbour Results Inc.