AUTOMOTIVE ASSOCIATIONS, VEHICLE MANUFACTURERS ESTABLISH BEST PRACTICES GUIDELINE SOUTHFIELD, MI—In a joint initiative, the Automotive Industry Action Group (AIAG) and the Original Equipment Suppliers Association (OESA) collaborated with four major vehicle manufacturers—Chrysler Group LLC, Ford Motor Co., General Motors Co., and Toyota Motor Engineering and Manufacturing N.A. Inc.—along with 17 supplier member companies to refine the warranty management process set forth in CQI- 14, also known as Consumer-Centric Warranty Management: A Guideline for Industry Best Practices. “The reduction of field warranty claims is critical to improving consumer satisfaction, as measured by short-term initial quality and longterm vehicle durability and reliability,” says J. Scot Sharland, executive director, AIAG. During an industry rollout event for the second edition guideline, Chrysler Group LLC formally announced that CQI-14 self-assessment will be required of Chrysler suppliers in 2011. Further, AIAG and OESA announced the development of a training program, expected to launch in July 2010, to educate constituents on the CQI-14 warranty management process. Dave Sakata, vice president, technology at Freudenberg-NOK and leader of the Consumer-Centric Warranty Management Work Group, says, “A Cultural change focusing on reducing incident rate is needed. It is necessary to develop continuous improvement processes that keep track of warranty parts information and other data for further investigation, and to conduct root cause analysis so that solutions and lessons learned can be determined and implemented in current and future programs.” Neil De Koker, president and chief executive officer of OESA, adds, “Consumer-Centric Warranty Management: A Guideline for Industry Best Practices demonstrates how companies throughout the global value chain can embrace cultural change and reduce risk by constantly feeding lessons learned from warranty back into the product development process.” The consumer-centric warranty methodology promotes advances in consumer satisfaction and continuous warranty improvement by providing a recommended, robust warranty management program that instills a consumer-centric approach. This methodology begins with the endconsumer in mind, providing tactics, techniques and case studies for all constituencies, particularly vehicle manufacturers and their suppliers. The guideline is organized in steps that organizations can take to proactively reduce warranty incident rates and risks associated with warranty events. For more information on the guideline and training program visit www.consumercentricwarranty.com. SHINGO RECIPIENTS ANNOUNCED LOGAN, UT—Organizations from the United States, Mexico, the United Kingdom and India received honors for their achievements at the 22nd Annual Shingo Prize Awards Ceremony. World-class operational excellence is the hallmark for 13 award recipients of The Shingo Prize for Operational Excellence business program. The Shingo Prize is recognized as the premier international award for operational excellence and serves as an organizational roadmap for vision and strategy alignment; employee empowerment; continuous improvement; innovation and development; quality and sustainable results. “We congratulate this year’s recipients for their broad application of lean principles across all of their core business processes,” says Bob Miller, Shingo Prize executive director. “They are clearly building cultures of continuous improvement and empowering every single individual to contribute to the success of the business. “The award recipients have proven themselves as leaders in operational excellence and have challenged traditional paradigms to face competitive challenges in today’s global economy,” says Miller. “They’ve demonstrated a wide variety of best practices in their business processes and have achieved outstanding results in quality, cost and value for their customers.” The 2010 award recipients include: The Shingo Prize: Guanajuato M • anufacturing Complex North Plant, AAM, Silao, Mexico • Interiores Aéreos S.A. De C.V. Gulfstream Aerospace, Mexicali, Mexico Shingo Silver Medallion: • Goodyear Tire and Rubber Co., Lawton, OK • HID Global, North Haven, CT • Hi-Tech Gears Ltd., Manesar, Gurgaon, Haryana, India • Valeo Sylvania Iluminación, Queretaro, Mexico Shingo Bronze Medallion: • BAE Systems–Samlesbury, Blackburn, Lancashire, United Kingdom Healthcare, Los Angeles • Fleet Readiness Center Southeast- TSRS Shop, Jacksonville, FL • Letterkenny Army Depot, Patriot Missile, Chambersburg, PA • Red River Army Depot, Up-Armored HMMWV/HEAT, Texarkana, TX • Ultraframe UK Ltd., Clitheroe, Lancashire, United Kingdom • Visteon Interamerican Plant, Apodaca, Nuevo León, Mexico For 22 years the Shingo Prize has educated, assessed and recognized operational excellence in outstanding companies around the world. The philosophy of the Shingo Prize is that a sustainable culture of continuous improvement is achieved by focusing on the principles of operational excellence, aligning management systems and implementing improvement techniques throughout an entire organization. The Shingo Prize is administered by The Jon M. Huntsman School of Business at Utah State University. ECONOMIC GROWTH TO CONTINUE THROUGHOUT 2010 TEMPE, AZ—Economic growth is expected to continue in the United States throughout the remainder of 2010, say the nation’s purchasing and supply executives in their spring 2010 Semiannual Economic Forecast. Expectations for the remainder of 2010 have improved in both the manufacturing and non-manufacturing sectors. These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management (ISM). The forecast was presented by Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee, and by Anthony S. Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, and senior vice president— supply management, Hilton Worldwide. “Manufacturing is emerging from a period in which many companies lost significant volumes of business due to reduced demand. While excess capacity and meager capital investment are concerns, the forecast of revenue growth and improved employment will drive the continuation of the recovery,” says Ore. The Manufacturing ISM Report on Business, compiled from responses to questions asked of approximately 350 purchasing and supply executives across the country, tracks industrial production, new orders, inventories, supplier deliveries, employment, buying policies and prices. The report has been issued by the association since 1931, except during World War II. RE-SHORING GAINS MOMENTUM IRVINE, CA—The re-shoring initiative launched by the National Tooling and Machining Association (NTMA) and the Precision Metalforming Association (PMA) to bring manufacturing jobs back to the United States is quickly gaining momentum, with numerous member companies announcing they have won back contracts that were previously off-shored, and larger manufacturers disclosing plans to bring production back to the United States. Re-shoring—also called onshoring and backshoring—means bringing lost manufacturing jobs back to the United States by uniting large manufacturers with competitive domestic suppliers. It is a non-protectionist and private sector-driven way to reduce imports (and the trade defi- Cit), increase “net exports” and create jobs. Going local can reduce a company’s Total Cost of Ownership and offer a host of other benefits while bringing U.S. manufacturing jobs back home. A recent GrantThornton survey published earlier this year found only half of the firms surveyed (49%) found offshoring had produced a positive return on investment. As a result, 59% of companies moving facilities closer to home are locating these operations in the United States. Ron Wosel, president of Shawnee, KS-based C&R Manufacturing, recently won back a customer who previously moved his sourcing overseas more than a decade ago. “We won this job back because we are able to be cost competitive and our reliability and quality saves our customer money,” says Wosel. FORD ON TRACK TO BE SECOND IN 2010 U.S. SALES SANTA MONICA, CA—Data from Edmunds.com, an online resource for automotive information, suggests that Ford could return to being the number two automaker in the United States. “Ford has demonstrated that the key to a turnaround is product, product, product—while pushing costs down,” says Edmunds.com Senior Analyst Michelle Krebs, who covers the subject in more detail at AutoObserver.com. “The company’s market share for 2010 is over 17% for the first time since 2006, and Fords are selling at a higher relative price and with lower incentives.” Edmunds.com analysts also noted the following facts about Ford: Ford’s • average sticker price rose $952 from 2009 to 2010 while Ford’s average transaction price climbed $1,294 during the same period. • In terms of incentives, Ford spent $3,221 per vehicle sold in the first quarter of 2010; last year, they spent $3,338 per vehicle. • The average Ford vehicle took 51 days to be sold once it reached the dealership in the first quarter of 2010. Last year, Ford averaged 73 days-to-turn. • In the first quarter of 2010 the Ford F-150 once again became the top-selling light vehicle in the United States. Manufacturing executives, scientists, students and teachers. The CMSC is known for its expert white paper presentations covering diverse metrology topics. The conference also features well-attended workshops, standards seminars, user group meetings and networking events held in a highly professional venue where ideas, concepts and theory f low freely amongst participants. Once again, the 2010 CMSC’s exhibitor hall will include companies showcasing portable measurement systems (PCMMs), software, accessories, peripherals, and inspection and measurement services catering to the needs of the industrial measurement marketplace. PCMM technology exhibited at the conference includes industrial photogrammetry solutions, laser trackers, laser radars, GPS systems, laser scanners, laser projection systems, articulating arms and theodolites. More information is available at www.cmsc.org. MANUFACTURERS SHOW CONFIDENCE IN A SUSTAINED RECOVERY CHICAGO—Prime Advantage, a buying consortium for midsized industrial manufacturers, announced the findings of its fifth Prime Advantage Group Outlook (GO) Survey, revealing the top economic concerns of midsized industrial manufacturers for 2010. The study results are the latest to indicate a real sense of confidence has returned to small and midsized industrial manufacturers, in terms of higher expectations for revenue, customer demand and hiring. Among the highlights of the survey findings, 45% of respondents indicated that they expected revenue for the first half of 2010 to increase more than it did in 2009. This builds on the optimism demonstrated in the last GO Survey study that was published in September 2009, which saw 37% of respondents predicting that revenues would increase for the remainder of 2009, as compared to the second half of 2008. Only 11% are predicting that revenues will decrease, compared to 20% in the last GO Survey that predicted revenues would decrease over the last half of 2009. This confidence is also ref lected in the Purchasing Managers’ Index, which Has grown steadily for a year and is at its highest rate since July 2004. Also, the Federal Reserve Board’s Beige Book report on manufacturing for April 14 showed that all districts except one, St. Louis, reported increases in orders, shipments or production. Survey data was collected in February from 77 representatives of industrial manufacturing companies, including business owners, vice presidents Of procurement and purchasing professionals. The survey polled respondents on their projections for the next six months of the year, in comparison to the past six months. “As the economy has stabilized, industrial manufacturers are beginning to enjoy increased demand for their products,” says Louise O’Sullivan, president and founder of Prime Advantage. “The main challenge for Small and midsized manufacturers in the year ahead will be to manage the increase in demand with capacity, monitoring how much of the uptick is due to inventory replenishment vs. customer-driven demand, and matching that with throughput and hiring decisions. Strategic procurement planning will help with these decisions, and also enable these manufacturers to control costs while rapidly and efficiently responding to new demand.” Economic Outlook Just as in the 2009 Mid-Year GO Survey, 43% of respondents said they expect revenues to stay the same for the current calendar year, as compared to the previous year. In another sign that there is sustained optimism in the recovery, 89% of respondents expect revenues in 2010 to either stay the same or increase, a jump of nine percent over the 2009 Mid-Year GO Survey. Capital spending expectations also improved, with 34% of respondents predicting an increase from 2009 Spending levels. In the 2009 Mid-Year GO Survey, 14% predicted an increase in capital spending over the levels set in the first half of 2009. In addition, 30% predicted a decrease in spending from 2009 levels, while 36% said their capital spending levels would remain about the same as 2009 levels. In the 2009 Mid-Year GO Survey, 86% of respondents indicated that capital spending for their U.S. locations would either stay the same (55%) or decrease (31%) from the first half of 2009. Top sourcing concerns for 2010 are the ability to focus on business process issues, such as cost savings and efficiency measurement, with 37% in agreement. This echoes the 2009 Mid-Year GO Survey, when 36% selected this as their top sourcing concern for the remainder of 2009. This is followed by an ability to manage the costs of raw materials (33%) and an ability to manage the costs of components (27%). Top Expected Cost Pressures for 2010 For the fifth GO Survey in a row, raw material costs (such as metals and plastics) are the top cost pressure concern, as cited by 36%. However, this number has come down from the past three surveys, when 53% (September 2009), 67% (February 2009) and 93% (July 2008) mentioned it as the top cost pressure concern. Inf lation was cited as the second greatest concern at 16%, followed by healthcare and foreign competition, tied at 13%. This is a shift in opinions about cost pressures, as the previous survey had ‘overhead costs’ and ‘logistics/supply chain costs’ as the second and third-greatest concerns in the last survey. The top three external concerns facing small and midsized manufacturers include customer demand at 38% (and up from 24% in the last GO Survey), price pressure (32%) and inflation (16%). Sustainability and Product Development For the first time, Prime Advantage asked its members whether their companies were making any changes in product development processes in order to make their products more sustainable and energy efficient, with 67% saying that they were making changes and 33% saying they were not making any changes. The leading factors driving these changes include Customer Requirements (43%) and Compliance Regulation (34%). Planning for the Future In anticipation of the renewed demand that should accompany a rebounding economy, Prime Advantage members also indicated that they would be taking measures in 2010 to ensure that their suppliers would be able to deliver on new orders. Sixty seven percent said they would work with suppliers to ensure stability on commodity prices, while 61% said they would be working with suppliers to ensure a consistent level of performance and better quality. Also, 59% of survey respondents said they would work with suppliers to ensure the availability of inventory. Twenty four percent reported that 2010 employment levels at their companies will increase from 2009 levels, while 55% said they will stay the same as 2009 levels and 21% said they will decrease from 2009 levels. Survey respondents again provided some insight into their marketing priorities, with 94% indicating that they allocate less than 25% of their overall marketing budgets to online marketing activities.
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