MT Magazine November/December 2023

FEATURE STORY

16

which they can do better planning – and planning based on data is something that Harbour says is essential. But planning goes beyond keeping the factory floor operating at an optimal tempo; it includes determining what other things can be done. She suggests that managers need to have staff – whether internal or external – who can assess what alternative industries are good fits for the company’s capabilities. Dave Andrea, principal on the Plante Moran automotive strategy team, focuses on suppliers and manufacturing and agrees about the need for companies to look to other industries, something that may be completely foreign to them: “Auto is so large that companies have not needed to create relationships with other sectors.” However, there is one group that a company can leverage in terms of looking for new technologies, prospects, and suppliers: the board of directors. Generally these board members have external visibility that is otherwise limited – or lacking – within a company. Andrea suggests that just as companies have advanced engineering staffs, they should create something of an advanced purchasing activity that will look at new suppliers that can address new customer requirements. But both Harbour and Andrea point out that automotive has historically been such a big part of the business for any given company that replacing that volume will be difficult to say the least. And both Harbour and Eichenberg say that there are some company owners and executives – even at companies making fuel systems for ICEs – who don’t want to acknowledge that things are changing. It is easier for them – for now – to ignore it. Eichenberg suggests that the auto industry is in a cycle of disruption that will last for the next 20 years. Companies that have a three-year planning window are not going to see what’s on the horizon for them. Or possibly even what they’re in the midst of. Again: You may not have a buck’s worth of business with automotive. But you can count on disruption sooner rather than later.

implications.) Eichenberg acknowledges that there is certainly plenty of casting expertise in the auto industry today. But the casting equipment is a fraction of the size of that being used to produce gigacastings, and to make the transition would be costly. In a situation where money is hard to get, this change may be hard to make. Eichenberg points out that other OEMs are pursuing their versions of gigacastings, so this is something that will become a trend, not a fad – something that is going to become more of the norm. And that norm will have a tremendous impact on entire sectors, with some seeing their business diminish and others growing. For example, for the admittedly low-volume forthcoming Cadillac CELESTIQ, GM is building the underbody with six precision sand-cast aluminum components, each of which will cut stamped part count by 30 to 40 components – or from 180 to 240 stampings per vehicle. “What happens …?” Consider companies that had done solid business chrome plating plastic grilles. There is no grille on a Model Y. Nor are there grilles on the Mustang Mach-E or the Chevy Bolt. And those EVs that continue to have a grille – like the BMW i7 – don’t have a shiny one, Eichenberg says, because the chrome signifies old tech. “What happens …?” So, What Do You Do? There is a theory in biology named “punctuated equilibrium.” It argues that there are times when evolution goes from being fairly stable to a sudden change. Arguably we are in a state of punctuated equilibrium, one that started on June 22, 2012, when the Tesla Model S was introduced. What can be done to handle these changes – or benefit from them? Laurie Harbour, president and CEO of Harbour Results, a consultancy that focuses on manufacturing, operations, and strategic management, says there are several things that manufacturing facilities can do: “Flexibility is the most critical piece, the ability to react to the unexpected.” She says leading companies her team works with are investing 8% to 10% capex on automation and software technology. The first is helping manage labor. The latter is providing a means by

Then ask yourself: “What happens …?”

If you have any questions about this information, please contact Gary at vasilash@gmail.com.

This suite of vehicles from Tesla has had a disruptive effect on the global auto industry. Initially global OEMs pooh-poohed the Model S when it appeared in 2012. Now there isn’t a company that isn’t trying to replicate what Tesla is doing, both in terms of product and process. During the first six months of 2023, according to S&P Global Mobility figures, Tesla sold 325,291 vehicles in the United States. That is more than the next 19 OEMs – including GM, Ford, Mercedes, and VW – combined. That’s disruption. (Image: Tesla)