After more than a decade, it appears the neat little boxes used to categorize automotive suppliers are crumbling all around us.
With good reason, the industry has classified suppliers based on their position in the chain that feeds parts to the automaker's assembly plant. "Tier 4" might constitute a producer of raw materials used in components packaged neatly into a module by the "Tier 1" systems integrator.
But supplier executives are growing uncomfortable with the labels because they don't always fit. It doesn't help that the industry seems to place greater value on Tier 1 suppliers than those positioned two or more steps from the automaker.
A few years ago,International Inc. declared itself a cut above as a "Tier 0.5" supplier because of its unique program-management capabilities. And Joseph Day, president and CEO of Freudenberg-NOK General Partnership, coins the "Tier 1.5" designation for companies slightly below Tier 1 (see WAW - Sept.'99, p.77).
Enough already. Any more tiers and we'll need a scorecard.
Recently, Ward's editors met with executives from opposite ends of the supply chain who have a whole new view. They see the current structure becoming outdated as all suppliers subscribe to the "value added" philosophy, which requires them to push the envelope with new technology.
When the tier concept first surfaced, suppliers often built products to meet an automaker's specifications. Today, automakers realize that suppliers have valuable suggestions for making the same product better.
Larry Denton, president of Dow Automotive, foresees a time when tiers are replaced by a "peer" structure, where companies at all levels are exchanging ideas in search of solutions. "You are partners in technology," Mr. Denton says. "I think the structures will blend to the point that you won't be able to tell who's who as far as tiers go."
He points to the structural instrument panel as a result of the "peer" concept. A modular instrument panel, complete with wiring and gauges, takes on structural qualities if the air ducts are produced of reinforced plastic and designed in such a way as to function as the cross-car beam.
Dow provides plastics expertise for a structural IP and Textron Automotive handles project management. Neither could do the job without the other. The arrangement yields more than mere weight savings. "The structural IP makes for a quieter ride because air goes through larger ducts," Mr. Denton says. "Plus, windows defrost faster than with other IPs."
Likewise, Johnson Controls Inc. is saying the same thing. At this month's North American International Auto Show in Detroit, the megasupplier will announce a new business model that calls for close (but non-exclusive) partnering with several electronics suppliers whose expertise will be integrated in future automotive interiors.
is linking up with Gentex Corp. (mirrors), Jabil Circuit Inc. (circuit boards), Microchip Technology Inc. (semiconductors), Nokia (wireless connectivity), Philips (consumer electronics), (signal distribution) and Tokai Rika (switches). All of them want more automotive business, and they will have a better chance being allied with a company that has considerable "interior influence."
gets expertise it needs without having to make a costly acquisition. Plus, it's an answer to competitor Corp.'s acquisition of UT Automotive.
Surely there are issues of greater significance to the auto industry than the classification of its suppliers. But is it too much for suppliers to know where they stand in relation to their customers, their competitors and their own suppliers? Sounds reasonable to me.
Gentex Shines With LED Gentex Corp. introduces a new light-emitting diode (LED) that is 10 times brighter than LEDs used now. For the first time, the high-intensity LED produces white light. That means incandescent bulbs now used in headliners, door panels, pickup beds and for license plates can be replaced with these more compact and sturdy lighting sources. The technology could show up on '02 models. Johnson Controls Inc. insiders hint they could offer the devices as part of their future interior packages (see story at left).
Kinetic Suspensions Aside from completing the separation from its sibling in the packaging business,Automotive's Monroe unit unveils a simple, cost-efficient, passive vehicle stability system utilizing kinetic energy. The kinetic suspension system (KSS) can be applied to on- or off-road vehicles to reduce the risk of rollovers and to improve passenger comfort. The system - two dual-action actuators fixed to the torsion bars - wins the top prize for OEM technical innovation at the Equip Auto '99 exposition in Paris. KSS will appear on a 2002 model, retailing at about $1,000. A simpler aftermarket version arrives this spring.Siemens Loses PerrySiemens Au tomotive President George Perry announces his unexpected retirement effective Jan. 1, when he will be replaced by Franz Wressnigg, group president of Siemens AG's worldwide Automotive Systems Group. Mr. Perry, 55, wants more time for family. Siemens also acquires the automotive operations of Germany's Mannesmann Rexroth AG, which produces pumps for high-pressure fuel injectors. The deal runs counter to recent speculation that Siemens Automotive could be for sale. The Rexroth pump is used in diesel injection systems featuring second-generation common rail technology, a major focus for Siemens.