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Sigmund Huber: Auto Suppliers at a Crossroads – Industry Week

Sigmund Huber was featured in Industry Week’s article titled “Auto Suppliers at a Crossroads.”

Sig Huber, senior managing director at Conway MacKenzie and former global director of purchasing at Fiat Chrysler, calls the lack of a charging infrastructure, “the number one problem” in the shift to electrification, with consumers wary of purchasing vehicles they can’t use like their gas-powered vehicles that they’re able to refuel without a second thought. “There’s not much government or regulatory activity on that front right now, and I don’t think there’s enough private money to independently build that infrastructure,” Huber says. “That’s going to be slowing things down in the U.S.”

With Tier II and Tier III suppliers who don’t have the resources to make innovation strides alone, much of this alignment can happen through engineering teams, says Huber. “The trick for them is, ‘How do they stay close enough to the technology trends that Tier Is are working on, but not break the bank on R&D costs until the actual direction of the design of these systems are firmed up?'”

The smaller suppliers that are in a good place, Huber says, “are the ones that are staying really close to the trends. They’re understanding from a technical standpoint what the path is, but they’re able to manage their investments accordingly. Others are more passive and are working specifically on the parts they have now. And I think those are the ones that could have risks of being passed over when things do start to be more clear.”

Tier II suppliers, he says, need to actively seek out relationships with the Tier Is and “be the value-added player,” collaborating on projects and sharing how product could be “designed differently from a production standpoint in order to produce more efficiently or perform better.”

Any plant upgrades to make way for new technology should also be made with caution. “A lot of these advancements are many years away from being commercialized, and the suppliers can’t be making large capital investments now,” he says. “By staying in a close collaborative relationship from the technical side, they can use that information to identify gaps in their own processes or facilities that will need to be addressed in the right time.”

Many suppliers aren’t maximizing the tech they already have. According to a 2019 survey of 120 automotive firms, 80% of them suppliers, from the Center Automotive Research, fewer than 8% are fully using their existing sensors “to send data to a unified corporate business system that integrates data from operations, HR, finance and sales. … Firms who are adopting [automation] do not seem to be using the equipment to its full capability. Instead, companies tend to use automation to substitute for the shortage of workers they are unable to find at wages they are willing to pay.”

To read the entire article click here.