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Presented at DUTIV September 2004

Presented at DUTIV.org September 2004 Canadian Automotive Industry Canadian Assembly Plants ASSEMBLER PRODUCTS Vehicles Key to the North American Market CAMI Suzuki Equinox * ** DAIMLER/CHRYSLER Magnum / 300M * ** Dodge Caravan / Chrysler Town & Country 2004 Pacifica* FORD

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Presented at DUTIV September 2004

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  1. Presented at DUTIV.org September 2004 Canadian Automotive Industry

  2. Canadian Assembly Plants ASSEMBLER PRODUCTS Vehicles Key to the North American Market CAMI Suzuki Equinox * ** DAIMLER/CHRYSLER Magnum / 300M * ** Dodge Caravan / Chrysler Town & Country 2004 Pacifica* FORD Freestar * (formerly Windstar) F-Series Pickup Crown Victoria / Grand Marquis / Marauder* GM Chevrolet Impala, Monte Carlo * 2004 Grand Prix* Chevrolet Silverado / GMC Sierra Trucks Buick Century, Regal * HONDA Acura EL* / Civic Hatchback * Odyssey, Pilot* Acura MDX Coming- A Pick-up Truck TOYOTA Corolla Matrix, Lexus RX 330 Canadian Auto Industry - ABCAN Consulting© * Solely Ontario-Sourced ** New Vehicle Launch Source: APMA

  3. Canadian Assembly Plants Total 550,000 people employed in the industry. 20 assembly plants 550 parts manufacturing plants Capacities (000): Oshawa (566) Brampton (250) Alliston (368) Oakville (294) Cambridge (211) Ingersoll (107) Windsor (273) St. Thomas (237) Source: APMA Canadian Auto Industry - ABCAN Consulting©

  4. Parts Manufacturers International • Dana • Delphi • Ube • Nemak • Eaton • Textron, Oetiker • TRW, Lear Seating • Johnson Controls Canadian • Magna • Woodbridge • Linamar • Wescast • ABC Group • Dominion • AG Simpson • Trillium Metal Canadian Auto Industry - ABCAN Consulting©

  5. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Est. Source: APMA Source: APMA Vehicle Production 1992-2003 Canadian Auto Industry - ABCAN Consulting©

  6. OEM Supplier Shipments 1991-2003 NAFTA Source: APMA Canadian Auto Industry - ABCAN Consulting©

  7. Canada – US Automotive Trade • $67 b cars and trucks • $24 b parts, engines • $26 b cars and trucks • $38 b parts, engines Source: Statistics Canada 2002 Canadian Auto Industry - ABCAN Consulting©

  8. Automotive 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 Canadian Auto Industry - ABCAN Consulting©

  9. Automotive 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 Canadian Auto Industry - ABCAN Consulting©

  10. Automotive Statistics North America 2002CanadaUS 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 Canadian Auto Industry - ABCAN Consulting©

  11. 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 Canadian Auto Industry - ABCAN Consulting©

  12. Trends 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 Canadian Auto Industry - ABCAN Consulting©

  13. Inventory Inventory Inventory Inventory Inventory Inventory Inventory in Supply Chain WIP FG RM OEM Tier 1 Tier 2 TRADITIONAL MANUFACTURING COMPANIES Lead times are long, weeks or months planning SRM planning SRM planning OEM Tier 2 Tier 1 Delivery Delivery Manufacturing Assembly Manufacturing ADVANCED COMPANIES REPLACE INVENTORY WITH INFORMATION CAPACITY IS REPLACED WITH CAPABILITY TO DELIVER Lead times are very short; hours or minutes Canadian Auto Industry - ABCAN Consulting©

  14. JIT OEM Bulk delivery Just in Time Delivery - Example JIT Warehouse Supplier Demand Pull • 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 Canadian Auto Industry - ABCAN Consulting©

  15. Other 1st Tier Suppliers OE Painted Body Storage Point of Pay OE Assembly Line 1st Tier Facility JIT Broadcast Point of Assembly JIT Sequenced Sequencing Assembly Line Returnable containers JIT Synchronization - Example Canadian Auto Industry - ABCAN Consulting©

  16. OEM Satellite Model 2nd Tier 2nd Tier 2nd Tier 1st Tier 2nd Tier 2nd Tier 1st Tier OEM Tier 0.5 2nd Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 1st Tier 2nd Tier 2nd Tier 2nd Tier Canadian Auto Industry - ABCAN Consulting©

  17. 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 Canadian Auto Industry - ABCAN Consulting©

  18. 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 Canadian Auto Industry - ABCAN Consulting©

  19. ABCAN 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 Canadian Auto Industry - ABCAN Consulting©

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