Beating BackClick image to enlargeby Tim Wilson

Competitive pressures in the automotive sector

 To achieve success in the automotive sector requires strict adherence to a few best practices. If a company is considering making a move into the sector, or if they are already committed, the experts Shop Metalworking Technology spoke with have some solid advice. Here are four tips.

Assess, then focus. Research from consultancy Booz & Company has found that executives from both OEMs and supplier organizations expect overall vehicle sales growth to flatten over the next three years. Given the strong industry performance from 2010 to 2013, Brian Collie, a partner at Booz & Company, advises suppliers to assess their strengths, and then focus on them. "In the past, many suppliers tried to be all things to all people," he says. "Now it is: 'let's focus on a few great things that we can be better at.'"

Know your customer. This is easier said than done, because at times an OEM might be going through internal transitions that are not visible to a supplier. But a supplier nonetheless needs a sophisticated view of where it sits on the value chain. "We have found that our most successful suppliers all have several things in common," says Steve Rodgers, president of the Automotive Parts Manufacturers' Association (APMA). "These include a clear understanding of where they fit into the global supply chain, the technology road map for their particular product, and the business language of their customer."

Know your competition. Knowing how the competitive landscape works is crucial in the zero sum game that is looming in the industry, where the only way to grow will be to steal market share. "That will be particularly challenging as more competitors enter the market," says Scott Corwin, a partner at Booz & Company. Sometimes, a company that might look like a competitor can actually provide an opportunity for collaboration, thus strengthening both organizations' market position.

Innovate, always. The word "innovation" has become a buzzword, even a cliché, but in the highly competitive automotive sector innovation must be embraced at all levels of an organization, and on an ongoing basis. "Successful suppliers have an attitude of Kaizen or continuous improvement in everything they do, and a focus on innovation at all levels of the organization," says Rodgers from the APMA. SMT

Tim Wilson is a contributing editor. This email address is being protected from spambots. You need JavaScript enabled to view it.

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