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Tooling project delays cost industry $1.7 billion, says OESA/HRI
- June 30, 2015
- News Release
- Shop Management
The Original Equipment Suppliers Association (OESA) and Harbour Results Inc. (HRI) have completed the third Automotive Tooling Barometer to better understand the impact and cause of automotive program delays. The Barometer indicates that 66 percent of tool shops had more than half of their projects over the past four months delayed two weeks or more. On an annualized basis, almost 15 percent of business is on hold; based on the size of the tool and die industry, that translates to $1.7 billion, or the equivalent of 80 tool shops, sitting idle at any given time.
The leading drivers of program delays were noted as late changes in design and processes based on manufacturing, mold- or tool-build feasibility, or changes reflecting cost-saving activities. These concessions were driven by design feasibility and formability issues, which could have been avoided with better engineering and upfront work. Additionally, the lack of purchase orders is another cause of program delays; nearly 25 percent of respondents indicated this as the leading cause.
The Barometer also showed a collective Tooling Sentiment Index (TSI) of 56, indicating a positive outlook for the automotive tooling supplier industry. Of the respondents, 35 percent indicated a significantly or somewhat more optimistic view of the 12-month outlook, whereas only 17 percent of respondents indicated some level of pessimism. Pessimism stemmed primarily from the program delays.
“With all the concern over constraints in the tooling industry, the Tooling Barometer’s identification of idle time—its cause and effect—is staggering,” said OESA Senior Vice President, Operations and International Affairs, Margaret Baxter. “We are making strides in identifying and understanding the issue, but it will take the entire value chain working together to address program delays and holds.”
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
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