Sigmund Huber: Manufacturing Outlook: West Michigan manufacturing could contract in 2020, economists say – MiBiz
Sig Huber was quoted in MiBiz’s article titled “Manufacturing Outlook: West Michigan manufacturing could contract in 2020, economists say.”
This trend will continue to present challenges for suppliers from both operational and cash flow perspectives, according to Sig Huber, senior managing director at Conway MacKenzie. The challenges are even greater when suppliers need to manage multiple launches within a short period of time, or even concurrently, he said.
“When you go through launch activity, it’s always a time of risk for the automaker as well as its suppliers further down in the supply chain,” Huber said. “When there is a large jump in the volume of launches, industry-wide, that creates an environment that will be very challenging for the supply base to deal with.”
Flawed launches can create significant cash flow burdens for suppliers if they have to absorb high part scrap rates, plant overtime and expedited freight charges, according to Huber. These launch pressures exist at all tiers throughout the supply chain and in many cases are felt more strongly at the Tier 2 and Tier 3 levels, he said.