COOPERS & LYBRAND FORMS UNIT TO HELP AUTOMOTIVE GAIN 'REDOMINANCE'
DETROIT, March 3 /PRNewswire/ -- Coopers & Lybrand has formed an Automotive Practice Unit, a group of more than 60 partners and other professionals dedicated to the critical issues facing the automotive OEMs (Original Equipment Manufacturers) and their suppliers. The announcement was made today by Dave Eisenhart, lead partner of the Automotive Practice Unit, Detroit office, during the 1993 SAE International Congress & Exposition under way at Cobo Conference/ Exhibition Center, March 1-5. Eisenhart said that the new C&L consulting unit will help automotive OEMs and their suppliers solve issues such as vendor partnerships, the North American Free Trade Agreement (NAFTA), capacity resizing, global sourcing, business process re-engineering, cycle-time reduction and asset management. "The retention of our (North America's) manufacturing base requires that we gain redominance of the automotive industry," Eisenhart said. "This means vast cultural changes, more effective capital investments, and corporate commitment to provide the best in customer satisfaction. We have to provide greater value, we have to continue our quest for world class quality, and we have to be the lowest-cost producers," Eisenhart said. Frank Dunham, partner and co-chairman of the Automotive Practice Unit, said, "North American manufacturers are learning that satisfying car buyers in a global environment depends on understanding customers' true needs, managing their operations as a set of key business processes, and a new vision of the supply chain. "Manufacturers no longer can rely on traditional techniques for improving quality, costs, and service to secure a competitive position. Today, companies need partners within their supply chain to collectively respond to market demands, to jointly enhance the satisfaction of their ultimate customers, and to mutually prosper," Dunham said. Robert L. Anthony IV, co-chairman with Dunham, said, "Companies now are deciding what knowledge and activities represent their core competencies and they are rethinking how their suppliers can provide complementary process knowledge and activities. In turn, suppliers are being asked to provide many of the services and business processes that used to be solely the purview of the OEMs." "This is leading to a restructuring of the entire automotive industry and involves the re-engineering of the critical business processes within the OEMs and the virtual outsourcing of key subprocesses and activities to supplier teams. The supplier team likely will be led by one key supplier who will lead and coordinate other companies that are part of the supplier team. The teams will change and reform from time to time depending on the OEMs' needs and the market direction." Coopers & Lybrand formed the automotive industry unit because of C&L's broad experience in providing financial and consulting services to many of the leading companies in the automotive industry. C&L has been a leader in consulting services including: -- Business Process Reengineering for manufacturing companies. -- Design for Excellence(R) that helps clients improve their product development processes. -- Total Quality Management (TQM) implementation and training. "We have helped many of the leading manufacturing companies save hundreds of millions of dollars in costs and significantly shorten process cycle times," Eisenhart said. With nearly 50 percent of the manufactured content of U.S. automobiles being outsourced -- and that percentage is growing -- the relationships between vendors and OEMs must tighten. It is no surprise that that tightening is being directed by the Big Three. "While the Big Three have been accused of being complacent, Ford, Chrysler and GM are very technically and business competent in the manner they are mandating changes in the way materials, parts and assemblies are engineered, priced and delivered. These changes are needed not only to gain redominance in the automotive marketplace, but also to keep the United States competitive in all areas of manufacturing," Eisenhart said. According to Eisenhart, the degree to which suppliers are gearing up to meet car makers' response challenges often fall short of their competitors' positioning. "Many are not convinced of the need for an aggressive approach to implementation and improved partnership relations. If they remain spectators to a revolutionary concept of partnering for mutual advantage, these companies will struggle to gain the opportunities and market leverage available to those that are favored," he said. "Timing, teamwork and technology are the bases of a three-prong strategy to enhance the supply chain's ability to respond quickly to radical changes in the marketplace and for America to redominate the automotive industry," Eisenhart said. According to Eisenhart, the business processes that must be improved include: -- Production and delivery (fabrication, assembly, logistics, maintenance and repair service). -- Product creation and development (marketing, engineering, cost accounting, production and delivery process). -- Organizational support (administration, human resource management, invoicing, paying, etc.). Eisenhart said that what impedes companies in many cases is "insufficient technical capability and cross-function teaming, the high cost of electronic technology and data interchange systems, and internal resistance to what we call 'Quick Response' initiatives, particularly to the give-and-take cooperation across the supply chain." To rectify this, Eisenhart said manufacturers and their suppliers must: -- Install universal product coding at the stock level. -- Share inventory, sales and marketing information with raw material suppliers. -- Enable customers to link into electronic order entry and payable systems, and establish electronic interchange for invoicing. -- Anticipate delivery needs through automated stock replenishment systems using sales, inventory and stock-out systems data, and managing inventories for their customers. Coopers & Lybrand, one of the world's leading public accounting and consulting firms, has more than 40 percent of its business rooted in manufacturing. The Detroit offices serve OEMs and Tier One and Two suppliers and have specific expertise in the stamping, electronic, and chemical industries in such areas as engineering, operations, finance, marketing and distribution. -0- 3/3/93 /CONTACT: Jim Meiggs of Coopers & Lybrand, 313-446-7179; or Victor Pytko of PR Associates, Inc., 313-963-3396, for Coopers & Lybrand/
CO: Coopers & Lybrand ST: Michigan IN: AUT FIN SU:
ML -- DE001 -- 2347 03/03/93 10:02 EST
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|Date:||Mar 3, 1993|
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