Suppliers face extinction over lack of project skills

29 November 2001
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29 November 2001 | David Arminas

Many first and second-tier automotive suppliers in Europe face bankruptcy unless they improve their project management skills, a senior director of Toyota Motor Manufacturing warned.

Car makers increasingly turn to their first-tier suppliers to develop standardised components for use in many vehicle ranges, Bryan Jackson told delegates to the Auto Conference Wales 2001 in Newport.

But he said European suppliers can have longer lead times than their Japanese counterparts, highlighting a relative weakness in project management.

"From European suppliers, we tend to see a wider range of performance than we do from Japanese companies," he said. "Many of our EU suppliers are excellent but regrettably we have a tail of under-performers behind the pack in terms of quality and productivity."

Doors that used to open are closing for inefficient suppliers, in particular the ones that suggest the increased complexity of their products makes it nearly impossibly to achieve zero-defect production.

"Our data suggests this is not the case," added Jackson. "We have many examples of highly complex components achieving zero defects."

However, Jackson stressed that Toyota is neither dissatisfied with its European suppliers, nor is it especially aggressive with them. The company is particularly keen for suppliers to use Kaizen improvement techniques and will send its experts in to help a struggling supplier.

Toyota's concern about European supplier quality comes as it plans to boost the share of bought-in components for each car from 70 per cent to around 85 per cent. This means raising spend from £1.4 billion to £2.2 billion in the next few years.

Jaguar, too, plans to increase production to 100,000 cars a year, said Jackson. Like Toyota, it is seeking more commonality of parts for savings as owner Ford tightens its budgets, particularly in its European operations.

Delegates were told by Nick Barter, director of product development at Jaguar, to be sceptical of recent reports that Ford plans to halve its £1.1 billion European spend.

He said: "Our strategy is to continue growing and we are very fortunate in having had far fewer cuts than anyone else in the company, so our plan is pretty well intact."

SMnov2001

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