Industry Trends

New models in less than 18 months
Back in the day, auto consumers were content with owning a mass-produced, make-to-stock vehicle. Today, consumers feed of the latest trends and look to manufacturers to churn out new and exciting vehicles. As a result, OEMs are under pressure to introduce products that are more appealing, reliable and inexpensive. With earnings down, OEMs are striving to take new models from concept to production in less than 18 months to appease the fashion-conscious consumer. System integrators and suppliers must keep up or risk being replaced.

From push to pull: The 5-day car-to-order business model
Automakers are beginning to envision a 5-day car model and are taking the steps to realize their future vision: eliminating paper and disjointed legacy systems, establishing mixed-model production lines to handle multiple models, and implementing lean manufacturing for continuous lead-time, quality, waste and cost improvements. This model shift — where actual demand now pulls replenishment out of the supply channel — enables OEMs to better respond to changing market conditions while reducing costs associated with inventory, marketing and lost sales.

What does it mean?
System integrators and component suppliers need to keep in step with OEM changes and specifications. It is essential that successful operations comply with higher expectations in on-time delivery, flexible replenishment, cost reductions and zero defects.