The automotive supply-base is ripe for capacity consolidation
June 4, 2020
The State of the Automotive Supply-Base
Recent OESA analysis of the automotive supply-base confirmed many of the concerns expressed by OEM, Tier 1, and industry experts. The outlook is bleak. OESA’s Q2 2020 report shows the Supplier Barometer IndexTM(SBI) at 15, which is the lowest level ever recorded in the history of the metric.
Several factors have come together to increase the number of distressed suppliers. To meet increased localization requirements in the USMCA, suppliers have undertaken arduous supply chain modifications . Next, with the ongoing impact and concerns from the COVID-19 pandemic, more suppliers are coming under the watchful eye of customers due to financial distress. OESA reported a 600% increase of distressed suppliers in the last 3 months. Finally, OEMs are planning for significant changes in overall volumes worldwide as the supply chain comes back to life and markets struggle to reopen.
Suppliers will be looking to relocate and consolidate operations to improve profitability and reduce risk.
Ripe for Consolidation
The current situation forces suppliers to take a close look at their footprint. Organizations that match capacity and demand during these times will be positioned for a strong comeback. To successfully execute relocation and consolidation activities, both a proven model and an experienced team are necessary.
A Proven Model
Seraph’s MOVE Methodology has been repeatedly deployed across successful engagements spanning a wide variety of industries. Whether one product line or several, one manufacturing location or multiple, Seraph has the resources, tools, and expertise to develop and execute a plan ensuring your organization’s success.
The process begins with the development of a management plan and alignment around feasibility, model development, process, product, and supplier strategies.
Following alignment, a detailed plan is developed for each workstream. These workstreams include all aspects of the operation, including IT, Human Resources, Logistics, Engineering, Manufacturing, Product and Quality.
With management aligned and a detailed plan in place, Seraph has the necessary resources to successfully execute on those plans working alongside your team.
When your project closes, you will walk away with a complete set of lessons learned and next steps to ensure the ongoing success of your organization and team members.
Successful relocation and consolidation activities must address all aspects of your operation. The MOVE Method does just that.
Ready for the Future
Successful relocation and consolidation activities must address all aspects of your operation. With our MOVE methodology, expert operational resources, and decades of experience, Seraph is the partner for your organization’s success during these critical times.
Seraph's team of operational managers and senior consultants intercede on our client's' behalf to fix a crisis that is putting the business at immediate risk, turnaround a situation that is damaging the bottom line or restructuring to improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph's Industry Expertise Includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.