“Tooling Barometer” Evaluates Automotive Supply Chain Health

Available from the Original Equipment Suppliers Association (OESA) and Harbour Results, the third edition of the barometer indicates that tooling project delays cost the industry $1.7 billion in idle tool and die shops.

The Original Equipment Suppliers Association (OESA) and Harbour Results Inc., (HRI) recently completed the third Automotive Tooling Barometer (The Barometer) to better understand the impact and cause of automotive program delays. The Barometer indicates that 66 percent of tool shops had more than half of their projects over the past four months delayed two weeks or more. On an annualized basis, almost 15 percent of business is on hold; based on the size of the tool and die industry, that translates to $1.7 billion, or the equivalent of 80 tool shops, sitting idle at any given time.

The leading drivers of program delays were noted as late changes in design and processes based on manufacturing, mold or tool-build feasibility, or changes reflecting cost saving activities. These concessions were driven by design feasibility and formability issues, which could have been avoided with better engineering and up-front work. Additionally, the lack of purchase orders is another cause of program delays, with nearly 25 percent of respondents indicated this as the leading cause.

“Capacity planning can be challenging for tool and die shops due to many factors such as long lead times, lack of data and, most critically, program delays. It makes it difficult to run a business profitability when you can’t consistently predict staffing, machine use or raw material needs,” said Laurie Harbour, president and CEO, HRI. “It is our goal with The Barometer in conjunction with Harbour IQTM to provide accurate data and information to help the tool and die industry better manage these issues.”

The Barometer also showed a collective Tooling Sentiment Index (TSI) of 56, indicating a positive outlook for the automotive tooling supplier industry. Of the respondents, 35 percent indicated a significantly or somewhat more optimistic view of the 12-month outlook whereas only 17 percent of respondents indicated some level of pessimism. Pessimism stemmed primarily from the before mentioned program delays.

“With all the concern over constraints in the tooling industry, the Tooling Barometer’s identification of idle time – its cause and effect – is staggering,” said OESA Senior Vice President, Operations and International Affairs, Margaret Baxter.  “We are making strides in identifying and understanding the issue, but it will take the entire value chain working together to address program delays and holds.”