south africa’s component manufacturing landscape: challenging the past to improve the future
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South Africa’s Component Manufacturing Landscape: Challenging the Past to improve the future . The OEM Perspective. Theunis Rootman Chairman : OEM Council 2014-10-14. Agenda. Reflection – What has history shown us Our Focus: Create the Base Seek Opportunities Make it Happen Conclusion. - PowerPoint PPT PresentationTRANSCRIPT
South Africa’s Component Manufacturing Landscape:
Challenging the Past to improve the future.
The OEM Perspective
Theunis RootmanChairman: OEM Council
2014-10-14
Agenda
• Reflection – What has history shown us
• Our Focus: – Create the Base– Seek Opportunities– Make it Happen
• Conclusion
A) Reflection
Delivery instability Poor
Quality High Cost
Current Performance level eroding base for future model sourcing
Ideal Performance
PE
RF
OR
MA
NC
E
Time
Reduce RiskImprove Stability
Manufacturing cost up to 40% higher than Competing Countries
• Industrial Development
• High Inflation linked with Unstable and Depreciating Rand
• Low levels of Deep Localisation
Australia vs South Africa
Competitiveness
Localisation – Economies of Scale
Collaboration
A) Reflection
Many Similarities
B) Our Focus
Create the Base
CollaborationSeek Opportunities
CompetitivenessMake it Happen
Localisation
1) Create the Base: Collaboration
• OEM Collaboration • Commodity Rationalization/Clustering
Analysis of Industry Capacity Review of commodity outlook
Group/Cluster Commodities
Define & Align Strategies with APDP and Economical
viability
Industrial Policy Support
4
Study potential projects/Commodities
Agreement with “Parents”
1
3
2
1. Resource Development• Skill
Development
• Skill Retention
• Mindset
2. Supply Chain
• Visualisation
• Risk Identification
• CSR
3. Commonisation
• Process• Tools• Jigs
4. Localisation• Engineeri
ng Changes
• Level2, Materials, Cons
• Benefit, Evaluation, Risk
Mind-set Change
2) Seek Opportunities: Competitiveness
3) Make it Happen: LocalizationC
ost M
erit
Development Lead-time
High
LowHigh
Risk
Bus
ines
s C
ase
Development
Risk
1. High Forex Exposure
2. Evaluation
Deeper Localisation
Sub-tiers - Suppliers Drive
Level 1 Parts – OEM Drive
Electrical / Electronic
Chassis and Drive-train
Body
19%
15%
23%
10%
• Axles• Differentials• Drive shafts• Brakes
• Harnesses• Starter motors• Alternators• Wiper systems• HVAC
• Cockpit• Seats• Door panels• Carpets
• Bonnets• Bootlids• Side frames• Doors 6%
5%
3%
7%
XX%: % of total material cost YY%: True local material plus value add as % of total material costNote: %’s indicative only
• Glass• Paint• Bumpers• Mirrors
Exterior
Interior
33% 14%
3) Make it Happen: Localization
Opportunities - especially lower levels
C) Conclusion
Why should we do it?
Unemployment: National Average = 24.9%33.2%
29.8% 29.4%28.4%
23.9% 23.7% 23.3% 22.5%
19.6%
0%
5%
10%
15%
20%
25%
30%
35%
SA Population by Age: 2012
Sustainable Business
Sustainable Future
Competitors 1
3
2
SAThai
India