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January 14, 2016 01:00 AM

Speakers: Key to auto challenges is early involvement by supply chain

Catherine Kavanaugh
Staff Writer
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    Haidous

    Detroit — There's a revolution going on to meet government regulations and customer expectations in the auto industry, and purchasing managers for automakers and their Tier 1 suppliers have a word to the wise for plastics processors: Engage us early.

    “Autonomous vehicles, technology, connectivity, safety, lightweighting — plastic is a tool we have to achieve those goals,” said Saber Haidous, senior manager of global raw materials and purchasing for General Motors Corp. “Not every idea will go through but the team will listen.”

    A 16-year veteran at GM, Haidous joined Jim Bos, vice president of global procurement, for Yanfeng Automotive Interiors, and John Erwin, vice president of purchasing for SRG Global Inc., which sells chrome-plated plastic parts, to talk about opportunities and challenges for suppliers at the Jan. 12 Plastics In Automotive conference organized by Plastics News.

    Auto executives in their positions are under tremendous pressure to save money and meet goals. Car and truck sales set a record in 2015 with 17.4 million units sold and industry experts say there's a possibility to surpass that mark this year. However, sales look flat a couple years out and threaten profitability unless innovation continues.

    While Haidous's one comment made access to important purchasing directors seem simple, he and the others offered insight into how plastics processors can get their foot in the door in the first place.

    For example, the integration of electronics with plastic trim is a major trend that will only bode well for Yanfeng suppliers that show a full commitment to improvement, Bos said.

    “That's one area I think is most important. It drives performance through the operation, through design, through engineering and through all the disciplines,” Bos explained, describing what the company looks for from its supply base. “It starts with the leadership having a true commitment to continuous improvement.”

    As purchasing directors evaluate materials for lightweighting, some plastics parts come with a higher per-piece price than aluminum right now, Haidous said, but polymer processors may be able to address that with their color capabilities.

    “Eliminating paint is a big advantage,” he said. “That's what you want to do when you look at cost. That really can help us get ahead.”

    Technical analysts in purchasing at GM work closely with engineering to understand their projects and offer feedback about what is happening in the market as far as capacity and capability. Sometimes that puts use of a plastic into question.

    “Sometimes engineering will change specifications and even material based on our feedback,” Haidous said. “For example, polypropylene capacity is right now at max. Do we want to look at a material substitution to be able to make sure we can get it if we put it on a part?”

    At SRG, Erwin said they are wary of resin suppliers that talk about being global companies yet have niche products that vary from region to region.

    “And then you find out the resin isn't quite the same, the performance characteristics are slightly different and your manufacturing process doesn't fit right,” Erwin said. “The next thing you know you've got non-conforming product making it into an assembly plant or worse yet finding its way to an end customer.”

    Haidous added: Transparency and trust is critical.

    “That's why our sourcing process has changed to engage our supply base as early as possible — in early design — because we want you to know what we are doing. We no longer can make the car by ourselves,” he said. “We make great cars because great suppliers supply us with great materials so this relationship is very important.”

    Bos stressed the need to take potential partnerships seriously right away and then do everything possible to make it a long-term one.

    “We'll work with our resin providers — I talked with a few of the Trinseo [Automotive] folks this afternoon — and we've partnered on a variety of resins in trying to differentiate product to make it more competitive and help our customer make that vehicle, that interior more competitive,” Bos said. “It's an on-going process. It is a trust and not a one-time, let's-do-a -road show relationship.”

    SRG looks to the supply base to help it achieve global scale — “globality,” Erwin called it — and it has a group focused on advanced development strategies.

    “How do you achieve functional integration? How do you achieve electronics with plastics as a sensor? How do you achieve replacement of paint? How do you go about developing not only a capability or technology but also the relationships to support that? Because the worst thing you can do is develop a technology that a customer wants, but not be able to achieve it for them,” Erwin said. “Anybody can make one thing once. The secret is to make it a million times and to make efficiently and to the expectations of the customer.”

    So suppliers are needed to not only dream up innovations and make them work, but they have to execute them flawlessly, Erwin said.

    Haidous also urged businesses to invest in research and development and hire extra experts if needed. He called R&D the bread and butter of a company.

    “Whatever it takes, you have to keep up with the changes — and the changes are fast,” he said.

    The auto industry is at peak demand, Bos said, and he thinks it will continue in North America, particularly with growth in Mexico. However, the need to run lean continues.

    “The cost pressure is there,” Bos said. “And certainly we need to engage as a partnership to understand where the industry is going together because we each see different parts of how it is evolving.”

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