canadian automotive industry outlook by a bukey, october 2004
TRANSCRIPT
Canadian Turkish Business CouncilKanada-Türkiye İş Konseyi
www.ctbc.caABCANABCAN Consulting Inc. www.abcanconsulting.com
Presented at DUTIV.org
September 2004
Canadian Automotive Industry
Canadian Automotive Industry
September 2004DUTIV
Canadian Auto Industry - ABCAN Consulting©
2* Solely Ontario-Sourced ** New Vehicle Launch
Vehicles Key to the North American MarketVehicles Key to the North American Market
Matrix, Lexus RX 330
Coming- A Pick-up Truck
Odyssey, Pilot*
Buick Century, Regal *
2004 Grand Prix*
F-Series Pickup
2004 Pacifica*
CorollaTOYOTA
Acura MDX
Acura EL* / Civic Hatchback *HONDA
Chevrolet Silverado / GMC Sierra Trucks
Chevrolet Impala, Monte Carlo *GM
Crown Victoria / Grand Marquis / Marauder*
Freestar * (formerly Windstar)FORD
Dodge Caravan / Chrysler Town & Country
Magnum / 300M * **DAIMLER/
CHRYSLER
Suzuki Equinox * **CAMI
PRODUCTSASSEMBLER
Canadian Assembly Plants
Source: APMA
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Oshawa (566)
Oakville (294)
Brampton (250)
Alliston (368)Cambridge (211)
Windsor (273) St. Thomas (237)
Ingersoll (107)
Total 550,000 people employed in the industry.
20 assembly plants
550 parts manufacturing plants
Capacities (000):
Source: APMA
Canadian Assembly PlantsCanadian Assembly Plants
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Parts ManufacturersParts Manufacturers
Canadian
Magna
Woodbridge
Linamar
Wescast
ABC Group
Dominion
AG Simpson
Trillium Metal
Canadian
Magna
Woodbridge
Linamar
Wescast
ABC Group
Dominion
AG Simpson
Trillium Metal
International
Dana
Delphi
Ube
Nemak
Eaton
Textron, Oetiker
TRW, Lear Seating
Johnson Controls
International
Dana
Delphi
Ube
Nemak
Eaton
Textron, Oetiker
TRW, Lear Seating
Johnson Controls
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Vehicle Production 1992-2003Vehicle Production 1992-2003
Source: APMA
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Est
.
Source: APMA
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OEM Supplier Shipments 1991-2003 OEM Supplier Shipments 1991-2003
NAFTA
Source: APMA
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Canada – US Automotive TradeCanada – US Automotive Trade
• $67 b cars and trucks
• $24 b parts, engines
•$26 b cars and trucks
•$38 b parts, enginesSource: Statistics Canada 2002
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Automotive Statistics, CanadaAutomotive Statistics, Canada
Shipments of all vehicles and parts: $100 billion+
23.2 hours of labor per vehicle (19.9 per light) car assembly
Total 550,000 employed by the industry
20 plants, 554 parts manufacturers, 3,600 dealerships
2.6 million units production, 1.7 million units domestic sales
Production: 55% cars, 45% light trucks, vans, utility
19 million vehicles in operations, 2.3% of world’s share
$82.7 billion vehicles sold at 3,600 dealers in 2002
$17.4 billion parts sold at after market
Shipments of all vehicles and parts: $100 billion+
23.2 hours of labor per vehicle (19.9 per light) car assembly
Total 550,000 employed by the industry
20 plants, 554 parts manufacturers, 3,600 dealerships
2.6 million units production, 1.7 million units domestic sales
Production: 55% cars, 45% light trucks, vans, utility
19 million vehicles in operations, 2.3% of world’s share
$82.7 billion vehicles sold at 3,600 dealers in 2002
$17.4 billion parts sold at after market
September 2004DUTIV
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Automotive Statistics, CanadaAutomotive Statistics, Canada
12% of GDP comes from the automotive sector
85-90% of production is exported
8th largest vehicle manufacturer in the world
$22 billion direct investment over the last decade
$7.2 billion trade surplus per year
Cost of manufacturing: USA = 100, Canada = 94
12% of GDP comes from the automotive sector
85-90% of production is exported
8th largest vehicle manufacturer in the world
$22 billion direct investment over the last decade
$7.2 billion trade surplus per year
Cost of manufacturing: USA = 100, Canada = 94
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Automotive Statistics North AmericaAutomotive Statistics North America
2002 Canada US Mexico
Population 32 m 290 m 102 m
Vehicle Sales 1.7 m 17.1 m 1 m
Production units 2.6 m 12.3 m 1.8 m
Assembly Employees 51,000 331,100 57,500
Parts Mfg. Employees 98,100 489,400 390,000
Vehicles per Assembler 52 37 31
Light Auto labour hrs. 20-24 21-29 …
Production per 1000 84 43 18
Sales per 1000 people 55 59 10
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Competitive Applications Competitive Applications
Continuous productivity improvement and cost reductions
JIT and TQM applications, especially on shop floor
Focus on certification of suppliers
More modular systems manufactured by Tier 1 suppliers
Integrated R&D with OEM using concurrent engineering
Integration of supply chain, shop floor control, ERP systems
Sequenced delivery, eliminating inventory for expensive items
QS9000 and TS16949 standards with process orientations
Continuous productivity improvement and cost reductions
JIT and TQM applications, especially on shop floor
Focus on certification of suppliers
More modular systems manufactured by Tier 1 suppliers
Integrated R&D with OEM using concurrent engineering
Integration of supply chain, shop floor control, ERP systems
Sequenced delivery, eliminating inventory for expensive items
QS9000 and TS16949 standards with process orientations
September 2004DUTIV
Canadian Auto Industry - ABCAN Consulting©
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Trends to watchTrends to watch
Supply chain visibility from OEMs into Tier 2 companies
Synchronized planning and execution (OEM Tier 1 Tier 2 )
More ERP, CRM and SRM integration
Collaborative Planning Forecasting and Replenishment (CPFR)
Six sigma and lean manufacturing applications
Tier 0.5 concept is in the works
Outsourcing of IT, logistics, HR, and similar services
Global optimization of after market supplies
Environmentally friendly and fuel-efficient vehicles
Hybrid vehicles, fuel cells, solar power
Supply chain visibility from OEMs into Tier 2 companies
Synchronized planning and execution (OEM Tier 1 Tier 2 )
More ERP, CRM and SRM integration
Collaborative Planning Forecasting and Replenishment (CPFR)
Six sigma and lean manufacturing applications
Tier 0.5 concept is in the works
Outsourcing of IT, logistics, HR, and similar services
Global optimization of after market supplies
Environmentally friendly and fuel-efficient vehicles
Hybrid vehicles, fuel cells, solar power
September 2004DUTIV
Canadian Auto Industry - ABCAN Consulting©
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Inventory in Supply ChainInventory in Supply Chain
Tier 2Tier 2 OEMOEM
InventoryInventoryInventory
TRADITIONAL MANUFACTURING COMPANIES
Lead times are long, weeks or months
Tier 1Tier 1 OEMOEMTier 2Tier 2
SRM
Delivery
SRM
Delivery
Inventory
Inventory
ADVANCED COMPANIES REPLACE INVENTORY WITH INFORMATION
CAPACITY IS REPLACED WITH CAPABILITY TO DELIVER
Lead times are very short; hours or minutes
planning
Manufacturing
Inventory
RM WIP FG
AssemblyManufacturing
planning planning
Tier 1
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OEMBulk delivery
Demand Pull
JIT WarehouseSupplier
• Supplier delivers bulk shipments to JIT Warehouse based on use and set limits
• Warehouse breaks the inventory into smaller delivery containers
• OEM sends Kanban pull request to the warehouse based on consumption
• Warehouse delivers specific replenishment quantity to OEM
JIT
Just in Time Delivery - ExampleJust in Time Delivery - Example
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OE PaintedBody Storage
OE Assembly Line
Sequencing Assembly Line1st TierFacility
JIT Sequenced
Returnable containers
Point of Assembly
Point of
Pay
Other 1st Tier Suppliers
JIT Broadcast
JIT Synchronization - ExampleJIT Synchronization - Example
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OEM Satellite ModelOEM Satellite Model
OEM
1st
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
1st
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
1st
Tier
2nd
Tier
2nd
Tier
2nd
Tier
2nd
Tier
Tier 0.5
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Canadian Investments in Automotive Industry - Turkey
Canadian Investments in Automotive Industry - Turkey
Dominion Spring and Stamping (Dominyay
ve Makina Sanayii) serving Mekaplast,
Bosch, Teba, Arcelik, etc.
Intier (via Italy)
Technology transfers possibilities
License agreements possibilities
Dominion Spring and Stamping (Dominyay
ve Makina Sanayii) serving Mekaplast,
Bosch, Teba, Arcelik, etc.
Intier (via Italy)
Technology transfers possibilities
License agreements possibilities
September 2004DUTIV
Canadian Auto Industry - ABCAN Consulting©
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Canadian Turkish Business Councilwww.ctbc.ca
Canadian Turkish Business Councilwww.ctbc.ca
Promotes bilateral trade/investment between Canada and Turkey Volunteer and not-for-profit, run by corporate representatives Establishes a forum for business and investment Provides networking and experience sharing Facilitates access to each market Regular trade missions by senior level business and government,
one scheduled Spring 2005 to Turkey Advocacy for Canadian-Turkish business interests Sponsored by Canadian Manufacturers and Exporters, Ontario
Investment, International Trade Canada, … Counterpart: DEIK and Turkish Canadian Business Council
Promotes bilateral trade/investment between Canada and Turkey Volunteer and not-for-profit, run by corporate representatives Establishes a forum for business and investment Provides networking and experience sharing Facilitates access to each market Regular trade missions by senior level business and government,
one scheduled Spring 2005 to Turkey Advocacy for Canadian-Turkish business interests Sponsored by Canadian Manufacturers and Exporters, Ontario
Investment, International Trade Canada, … Counterpart: DEIK and Turkish Canadian Business Council
September 2004DUTIV
Canadian Auto Industry - ABCAN Consulting©
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ABCAN Consulting Inc.www.abcanconsulting.com
ABCAN Consulting Inc.www.abcanconsulting.com
Consulting in supply chain, operations management,
industrial engineering, enterprise resource planning
Solutions for manufacturing companies in supplier
relationship management (SRM), ERP, JIT, CI
Education and training in operations management
25 years of expertise in manufacturing, ERP, JIT,
SCM, SRM and integration of business systems
Offices in Canada, US and Turkey
Consulting in supply chain, operations management,
industrial engineering, enterprise resource planning
Solutions for manufacturing companies in supplier
relationship management (SRM), ERP, JIT, CI
Education and training in operations management
25 years of expertise in manufacturing, ERP, JIT,
SCM, SRM and integration of business systems
Offices in Canada, US and Turkey
ABCAN