Management
Issue No. 48 - August/September 2009
Car parts makers can do Defence deals
by Mr Kel Spencer
As opportunities and volumes in the automotive component sector decline the challenge is to gain business in the growth sector: defence.
Is this a realistic goal? Can auto component manufacturers and toolmakers make the transition? Yes they can. A basic analysis of strengths and weaknesses indicates real potential.
I believe the strengths of our component manufacturers would be extremely appealing to buyers in the defence sector.
As an automotive supplier you are local, you are on the doorstep, you can move quickly. You are the agile ant able to change direction almost at the customer’s will. Remote, off-shore suppliers have a great deal of inertia, long lead times and long supply chains. As long as he can avoid being stepped on by the cumbersome elephant the ant has much to offer.
If you have been supplying automotive you also have a quality focus. While Australian-built cars have lost market share it is not because of poor quality. Components makers have contributed to the world-class quality Australian vehicles are known for.
You have the processes in place that ensure quality output. Most likely you are quality accredited to a standard that has international recognition. You also understand safety and the disciplines that come with manufacturing safety critical components.
You know that near enough is not good enough and have structured your manufacturing processes accordingly. It is also likely your company possesses a high degree of ingenuity.
In my dealings with local component suppliers I was always impressed by the way they were able to engineer cost reduction in both product design and manufacturing processes. Often called ‘Value Engineering’, the ability to apply practical skills to sometimes complex designs with a resultant reduction in product cost is a real plus.
And while any new customer may be reluctant to accept your ideas at first they will be most impressed that you have them.
Ongoing...
