The initial findings of a research study authored by the Centre for Automotive
Research at the Environmental Research Institute of Michigan indicate that 77%
of Tier-1 automotive suppliers anticipate consolidation of their supplier base
over the next year, and that e-business capability will be a driving factor in
deciding who remains.
The study, sponsored by SupplySolution, and titled ‘E-readiness of the
Automotive Supply Chain – Just How Wired is the Supplier Sector?’ assesses
the overall e-readiness of the North American automotive supplier sector with
a focus on Tier-2 and Tier-3 suppliers.
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The survey collated responses as to how e-business is conducted today and in
the future and found that 15% of Tier-1 suppliers look for two-way e-business
capability in their suppliers.
This figure will rise to 77% within two to three years.
A second set of responses related to how the Tier-1 suppliers continue to see
e-business evolve within their own organisations.
These initial findings included that e-business expenditures by Tier-1 companies
will increase from approximately 3% of capital expenditures today, to 13% in
the next 2-3 years.
Study participants also estimated the cost reduction impact of e-business in
their organisations today, against when programmes are fully implemented.
In the category of engineering and product design, respondents indicated a
4% cost reduction today and when fully implemented 18%; for procurement a 7%
reduction today and a 16% future reduction; with quality assurance, a 3% cost
reduction today and a 19% reduction when e-business plans are fully implemented.
Tier-1 respondents, in assessing their suppliers’ capability to manage e-business
in specific manufacturing areas, ranked the ‘computer to computer communication
– automated on both ends’ the highest at 49%; logistics and order tracking
at 18%; and finished goods inventory the lowest at 14%.
Assessing the future capability of the Tier-2 and Tier-3 supply base, the respondents
projected increases of between 27-49% in these specific areas within the next
two to three years.
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