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Increased Demand Straining Automotive Supply Chain

by APICS staff | N/A 2013 | 13 | 12

Increasing sales and a proliferation of car models is stretching the auto parts supply chain to near a breaking point, USA Today reports. During the recession, consolidation of operations, plant closures, and layoffs reduced capacity, making a smaller number of parts suppliers struggle to deal with the auto industry’s rebound, as new car sales are expected to reach 15 million in the United states and 85 million worldwide.

“Everyone has parts shortages,” says Carla Bailo, head of research and development at Nissan Americas. “The supply chain is one of our biggest threats. Everyone cut back and is now ramping up. We can’t get up to speed as quickly as in the past.”

While automotive suppliers tend to be cautious about increasing capacity, there is further reluctance to make investments while profitability is easy to attain. “We won’t be a bottleneck but also don’t have to be at the leading edge increasing capacity,” says Roland Zitt, president of power train maker Mahle Industries.

One potential silver lining is that today’s automotive suppliers are healthier than before the recession because weaker companies were bought or died out, says John Henke, chief executive of supplier relations firm Planning Perspectives. However, the increased demands for capacity are straining even the most efficient factories.

Small-Business Optimism Reaches Yearlong High 

US small-business confidence is at its highest level since April of 2012, reports the National Federation of Independent Business (NFIB). The NFIB’s optimism index increased to 94.4 from 92.1 in April as the six-month economic outlook brightened.

Small-business optimism has been slow to recover post-recession. “The small-business half of [gross domestic product] is clearly not participating much beyond growth generated by population gains,” writes NFIB chief economist William Dunkelberg. He adds, “More businesses are being formed than lost, so there is some boost to job creation there, but too many existing firms have not yet started to replace the workers shed during the recession.”

The index uses 10 different components to measure confidence in the economy. Eight of these increased, including current inventory, current job openings, and the expectation of higher sales. The two components that decreased or remained flat from April’s measurements were plans to increase employment and plans to make capital outlays.

Exploring Tomorrow’s Manufacturing Trends

The Advanced Manufacturing Partnership is a group created by President Obama to help revitalize American manufacturing. The group recently highlighted 11 areas of technology and development it believes will determine the future of competitiveness in manufacturing, the Wall Street Journal reports. Some of the most interesting developments include the following.

Sensing, measurement, and process control. Advanced manufacturing techniques are driven by computers capturing large amounts of data obtained from sources including sensors, global positioning systems, and high-tech calipers. Today’s factories rely on automation to track products from inception to delivery and beyond, detect defects and alert operators, and drive machinery and production.

Digital modeling. While computer-aided design has been employed for many years, modern technologies, including cloud computing and inexpensive 3D scanning with smartphones, are accomplishing tasks that once required expensive mainframe computers, increasing accessibility to entrepreneurs.

Sustainable manufacturing. Energy-efficient manufacturing is about squeezing out the most energy or matter from every element of production and wasting as little as possible. Today’s engineers refer to the “lights-out” factory, a facility operated primarily with robots that can be operated continuously in the dark and don’t require the same degree of heating and cooling as humans.

Flexible electronics. Products that have the potential to adapt to different conditions, including tablet computers that bend when sat upon and clothing that can automatically cool the wearer are technologies that will define the next generation of consumer devices. While this is expected to be a fast-growing product category, it will require advanced manufacturing processes.

Other areas of transformation and growth include biomanufacturing, nanomanufacturing, advanced forming and joining technologies, and additive manufacturing or 3D printing.

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