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Many conference attendees recently filled the Suburban Showplace in Novi, MI to gain new insights and collaborate with fellow subject matter experts on the evolving landscape that has become the new automotive marketplace. The Original Equipment Suppliers Association (OESA) held its Supplier Conference “The Future of Automotive Is Calling. How Will You Answer?” and it lived up to its expectations.
The theme of this year’s conference was innovation and Julie Fream, President and CEO, put out a call to action at the conference opener. She challenged everyone to use the day to put together three to four ways that they could supercharge innovation to strengthen business, start discussions, and inspire colleagues. With this, we launched into our day of discovery, discussion, and some face-to-face networking.
We’ve wanted to hear Josh Linkner speak live for quite a while and finally got the chance at the OESA Supplier Conference. Two-time Entrepreneur of the Year Award Winner, NY Times best-selling author, motivational speaker, accomplished jazz musician, and now a speaker on being innovative during one of the most epic moments in automotive history! It was well worth the wait and the presentation left audience members with an action-oriented outline and clear examples of how lower-case “innovations” can achieve BIG Little Breakthroughs (shameless book plug for Mr. Linkner).
The mindsets as detailed were great insights that could be put into everyday practices from home to work to society. “The best asset that we can cultivate is human creativity,” Linkner said.
Participants walked away with some action items to commence their innovation efforts:
With inspiration abounding, it was time to hear some industry facts about where new advancements are needed and what remains to be seen as the future unfolds for battery electric vehicles (BEV), internal combustion engine vehicles (ICE), and supplier challenges.
Semi-conductor chip availability has improved but continues to lag by approximately 10% as reported by Boston Consulting Group (BCG), with lead times extending to up to 1 year when capacity constraints increase over supply. Currently, the automotive industry makes up approximately 10% of overall chip demand however this will increase by an additional 6.9% with the onboarding of BEVs in the future. BCG cited some interesting practices with social listening using a web crawler for early detection of supply chain shortages. Manufacturers can utilize these practices to identify patterns in social media dialogues to track shortages in materials before they hit a crisis level. Now that’s an innovative thought suppliers could put into practice!
The environment and manufacturing approaches to achieve a carbon neutral process was a main topic across all the presenting manufacturers. The historical practice of focusing on emission levels coming out of the tailpipe has been flipped upside down to evaluate the carbon imprint that makes up manufacturing the new BEV. Current carbon-conscious components such as environmentally friendly steel are running 5 million tons short in supply. Understanding the percentage of this “green steel” and looking toward an alternative material or supply chain now would benefit all manufacturers from a future supply crisis.
The most awaited presentations came from manufacturers including Honda, General Motors, and Ford Motor Company. All the manufacturers had similar messages of sunsetting current ICE product portfolios while increasing BEV development and infrastructure. Honda called on supplier conference attendees to think proactively on ways to combine ICE production lines to remain competitive with current vehicle pricing as balancing existing ICE production with new BEV production is new muscle for everyone.
Skilled labor shortage was a prominent concern across all the manufacturers. Additionally, constructing and running complex manufacturing lines in battery and vehicle production facilities continues to dominate discussions. The OESA Automotive Supplier Barometer for Q4 2022 RSM Commentary cited compensation as a significant part of the workforce equation independent of what happens with inflation. Suppliers and manufacturers must be innovative with hiring and retention practices to mitigate churn and look at contract and a part-time/supplemental workforce where appropriate.
This year’s event was a full day of innovative presentations, questions, discussions, and hopefully some innovative thoughts that will continue to surface. The automotive industry started with innovation as Henry Ford said, “If I asked people what they wanted, they would have said faster horses.” Innovation starts before you’re ready, so why not answer the call and get going?