Automotive trends: Top practices, issues and metrics
Operations managers at car companies and their suppliers have somewhat different priorities than industry in general.
By Gary Forger, Editorial Director -- Modern Materials Handling, 3/1/2007
Automotive industry operations managers are faced with many of the same pressures as their colleagues across industry in general. But that doesn’t mean they place exactly the same importance on how to meet those challenges.
For instance, automotive puts more importance on inventory levels as a metric that helps drive operations. And when evaluating various issues, automotive managers put less emphasis on training but slightly more on ergonomics and safety.
Similarly, equipment buying trends are somewhat different, too. At the top of their buying lists, both automotive and general industry have many of the same types of materials handling equipment and related software. However, rack/shelving and totes/bins/containers are a higher priority in automotive.
Those are some of the findings from a survey Modern has just completed across the automotive industry from parts and components suppliers to the automakers themselves. All comparisons to industry in general are based on the results of a survey Modern published in January ( www.mmh.com/article/CA6403389.html).
Looking at the bigger picture for 2007, those in the auto industry are anticipating a better year than 2006. Sixty three percent expect their company’s sales to increase by an average of 9%. The 15% who expect 2007 to be a down year are looking for a 13% decline on average.
We also asked how they expected activity levels to change this year in manufacturing, warehousing supporting manufacturing and in standalone warehouses and DCs. Interestingly enough, 58% of those in manufacturing expect activity to increase, yet only 38% of those at warehouses supporting manufacturing expect the same. Nearly as many (34%) of the latter expect activity to stay the same, however. Meanwhile, 44% of those in standalone warehouses expect more activity this year.
To support their operation for the next two to three years, automotive operations managers expect to spend more on materials handling equipment and related information systems. In fact, 58% expect their expenditures to increase while 33% say they will keep spending at current levels. That leaves only 10% who anticipate a decrease.
The table on this page details automotive’s buying plans. More than half of companies surveyed have recently purchased the top five types of equipment and software from rack and shelving to bar code scanners. Looking forward two to three years, however, they seem to have lower expectations for buying by specific equipment types, an interesting contrast to their overall expectations for higher expenditures.
Although there are some shifts in buying trends between automotive and general industry, there is not a wide divergence between the two.
Similarly, major practices in the auto industry closely mirror those of industry in general (table on page 22). On the manufacturing side, JIT production and build-to-order are the only two practices to show different importance, simply reversing position on the list.
There were more substantial shifts when it came to metrics and issues, however. The biggest shift in metrics (table on page 22) for automotive was the move of inventory levels up to the fourth position compared to seventh in general industry. There were several other single position shifts among metrics such as picking accuracy, daily throughput, labor hours and order cycle times.
There was even more movement among key issues (table below). Ergonomics and safety moved up a spot while company growth moved up two. The biggest drop was three spots for training from No. 2 in general industry to No. 5 for automotive. Other issues to shift around one spot include capital availability, labor availability and trading partner collaboration, to name three.
Rack, lift trucks and printers lead buying lists in automotive
| Equipment/software | Recently invested, % | Invest in 2-3 years,% | Automotive rank | General industry rank |
| Rack and shelving | 60 | 43 | 1 | 3 |
| Lift trucks & accessories | 60 | 44 | 1 | 1 |
| Printers | 56 | 35 | 3 | 2 |
| Totes, bins & containers | 55 | 45 | 4 | 6 |
| Bar code scanners | 54 | 49 | 5 | 4 |
| Software for warehousing | 47 | 38 | 6 | 5 |
| Wireless terminals | 40 | 37 | 7 | 7 |
| Packaging | 40 | 31 | 8 | 9 |
| Manufacturing software | 33 | 27 | 9 | 8 |
| Conveyors & sorters | 32 | 29 | 10 | 11 |
| Planning software | 29 | 30 | 11 | 11 |
| Dock equipment | 28 | 30 | 12 | 9 |
| RFID | 21 | 41 | 13 | 14 |
| Hoists, cranes, monorails | 20 | 18 | 14 | 13 |
| Automated storage | 17 | 18 | 15 | 14 |
| Voice systems | 8 | 10 | 16 | 17 |
| Automatic guided vehicles | 7 | 12 | 17 | 16 |
Materials handling spending makes a comeback
12/31/2003
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