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Ron Harbour

Oil Pump. X. Pistons. Piston Pins. Oil Pan. X. Water Pump. Front Cover. X ... Oil Pump. X. X. Clutches. X. X. Stator Assembly. X. X. Converter Stampings. X. X. Converter. X. X. X ...

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Ron Harbour

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    Slide 1:Ron Harbour

    President Harbour Consulting

    Slide 2:The Definition of an OEM

    Presented by Ron Harbour May 17, 2007 Evolution of the Manufacturer / Supplier Continuum

    Slide 3:The Harbour Report™

    Slide 4:Recent Clients

    Slide 5:The Harbour Enterprise Model

    Quality Products and Improved Profitability Product Quality Improvement Part Count and Piece Cost Optimization Assembly Time Reduction Greenfield Plant Design & Development Leadership Training Manufacturing Assessments & Transformations Global Competitive Benchmarking Product Teardown and Analysis Global Strategic Footprint Strategic Sourcing & Supplier Optimization Lean Product & Process Design Manufacturing Process Optimization

    Slide 6:2006 Harbour Report™ HPV Trend

    GM excludes medium duty. Honda, Nissan and Toyota data includes partial reporting of North American plants. Percent Change from 2005 3.3% -5.4% -1.5% 6.0% -0.2% 3.3%

    Slide 7:Introduction

    What is an automotive company? What function does an automaker perform? What does a manufacturer produce (core business)?

    Slide 8:(Continued)

    Where is the line between an automaker and a supplier (or is there one anymore)? What forces are most influential anymore… market economics or labor unions? How will the transition define the future?

    Slide 9:The Plant of Yester-Year

    Ford Rouge Complex

    Phase 4 Phase 3 Phase 2

    Slide 10:Progress

    Phase 1 High Vertical Integration Modern Sourcing Definition Includes foundries, steel mills, rubber plants, textiles, upholstery, wiring, chassis components Vehicle assembly, metal stamping, engine, transmission, and select key components Early to mid 1900’s 1950’s to 1980’s 1980’s to Present The Future Outsourcing Rush, Core Re-Defined No Accepted Norm Marginal outsourcing of services, components (seats, IPs, door trim, chassis, bumpers) Sequencing centers “Hallowing out” of engineering Lean logistics Supplier ownership & responsibility for body, paint, chassis Supplier work in OEM plants Pay on production Major modules delivered

    Slide 11:Assembly Plant Component Sourcing Trends

    GM / Chrysler / Ford New Domestics

    Slide 12:Assembly Support Services Sourcing Trends

    Slide 13:Engine Sourcing Trends

    5 C’s 3 C’s * U.S. Owned Companies *

    Slide 14:Transmission Sourcing Trends

    Slide 15:The Evolution of the Manufacturer/Supplier Continuum

    Slide 16:Assembly Plant Capacity (1990 – 2008)

    Annual North American production grew 28% from 12.5 million vehicles in 1990 to 16 million in 2006. Net

    Slide 17:Component / Service Sourcing

    Labor Cost and Availability Product and/or Process Technology Control of Overall Quality of Key Components Logistics, Containers The “Core Business” Strategy Part Cost Available Capital What influences the sourcing decision?

    Slide 18:Why the Major Shift?

    Growing gap between supplier and OEM wages Limited funds for R&D Growing technical complexity of product Lack of flexibility to manage lower volumes

    Slide 19:What Does the Future Hold?

    Demand for more flexibility Less manufacturing process / performance differentiation Spread of capital required for new product development

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