towards sourcing in emerging markets and … perfection, automotive passion towards sourcing in...

Technical perfection, automotive passion

Towards sourcing in emerging Towards sourcing in emerging markets and challengesmarkets and challenges

Uddeholm Swedish RallyAutomotive Seminar

Sunne, February 5th 2004

Mr. Jean Christophe RozalskiStandardization Leader/Frame Manufacturing

Engineering

2

Agenda:

1. Company Presentation and Vision

2. Challenges:

a. Productivity gains

b. Globalisation

3. General conclusion

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Agenda:

1.1. Company Presentation and VisionCompany Presentation and Vision

2. Challenges:


b. Globalisation


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Faurecia, a world leader in automotive equipment

Expertise in 6 modules

Global player with European leadership

Overall interior capability

2002 sales € 9.9 billion

59,000 employees worldwide

Faurecia focuses on 6 modules

Door Acoustic package

Cockpit Front end

Seat Exhaust

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Global player with European leadership

Worldwide European European market shareranking ranking per product sales

Seat 3 1 25%

Cockpit 2 1 37%

Door 2 1 37%

Acoustic Package 4 2 14%

Total Vehicle Interior 3 1 35%

Front-end 2 2 12%

Exhaust 2 1 23%

Source: Faurecia 2002 estimateon outsourced market

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Faurecia, a world leader in automotive equipment

Sales 2002 with car manufacturers ( Billion US$)Sales 2002 with car manufacturers ( Billion US$)Europe•Bosch 11,8•Faurecia 8,5•Siemens VDO 5,9•Valeo 5,4•JCI 4,8•ZF 4,7•Delphi 4,6•Lear 4,5•TRW 4,1•Magna 3,7

Worldwide•Delphi 25,5•Bosch 19,1•Visteon 16,9•Denso 15,3•Lear 14,4•JCI 13,7•Magna 12,2•Aisin Seiki 10,7•Faurecia 10,0•TRW 9,9

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Overall interior capacity

Vehicle interior represents 76% of sales

Front end

6%

18% 41%Exhaust Seat

Cockpit, door, acousticpackage

35%

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Sales by customer

2002 sales: 9.9 billion €

BMW

DaimlerChrysler

GM Group

Others

Ford Group

Renault Nissan

VW Group

PSAPeugeot Citroën

26%

7%6%

5%

6%

Toyota

1% 23%

16%10%

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Sales by region

2002 sales: 9.9 billion €

North America South America

2%12%Other Countries 1%

FranceOther European countries

Germany

Spain/Portugal

34%

5%9%

14% 23%

United Kingdom

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Global manufacturing capabilities

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51

4 11

12 2 26

40

6 3

24

11

1

1

2237

110

5 41

160 sites in 27 countries

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R&D and Innovation capabilities

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7

10

1

R&D budget: 7% of salesand centers: 22

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Vision Statement

““Our ambition is to generate lasting growth and Our ambition is to generate lasting growth and profitability through a vigorous program of innovation profitability through a vigorous program of innovation and to be recognized by all automakers as the expert and to be recognized by all automakers as the expert in each of our 6 modules. We must diversify our in each of our 6 modules. We must diversify our customers and support each of them to their new customers and support each of them to their new production location with strong involvement towards production location with strong involvement towards North America and Asia.” North America and Asia.”

Pierre Levi.Pierre Levi.

ChairmanChairman and CEO of and CEO of FaureciaFaurecia

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Agenda:


2.2. Challenges:Challenges:


b. Globalisation


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Faurecia has to meet the following challenges:

•Offer on contract basis a yearly cost reductionto the car manufacturers.

•Follow our customer’s globalisation pace without any concession on quality.

How can we achieve this?

•By realising productivity gains !!

•By developing world wide and consistent expertise

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Agenda:


2. Challenges:

a.a. Productivity gainsProductivity gains

b. Globalisation


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Productivity gains…..

Some criteria used to evaluate suppliers:

•Overall Equipment Effectiveness (O.E.E.)

•Maintenance cost

•Number of days without work accidents

•Environmental production (ISO 14000)

•Number of rejected components (PPM)

•Etc.

The first two criteria are directly related to Tooling Performance

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TOOLING FOR AUTOMOTIVE SEATING:

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Tooling for Automotive seating : an example

Tooling investment for a complete set (excluding machines) = +/- € 35 mio.

Average model life cycle: 8 yearsAverage number of seat sets produced: 5.000.000

If a complete set of car seats costs € 500:€ 300 is raw materials and purchased components:

•In these € 300 we find:

• € 7 (2,3%) for tooling where off Tool Steel value is < € 1 (0,14% of the value of a seat set !!!)

• € 30 (10%) maintenance cost

€ 200 is for labour costs, overhead etc.

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Tooling for Automotive seating

By using more performant tool steel, we can halve the maintenance cost.

This means a cost saving of € 15 !!

Or 3% on a complete setOr 3% on a complete set

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Some examples of productivity gains:

Project: metal parts for SAAB 93 convertible

Work material: DP600 (SSAB) , thickness 2,5 mm

Main problem: too high maintenance cost of stamping and forming tools due to wear and chipping.

Objective: Reduce tool maintenance cost •New stamping and forming tool was ordered from local tool shop ECTM with active parts in Vanadis 4 + Balzers TiCN

Result: tool life has increased with factor 2 up to factor 4.

This made a component cost reduction of 5% possible!

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Some examples of productivity gains:

Project: metal parts for SAAB 93

Conclusion:

•We gained 5% on the price of the formed parts

•Uddeholm sold High Performance Tool steel

•Tool user has improved his O.E.E. and reduced his maintenance cost

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TOOLING FOR PLASTIC MOULDING:

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Tooling for plastic moulding: an example

Plastic injection of dashboard console (PSA Group) at Redon plant

Initial cycle time: 60 s

P20 type steel injection mould on a 1000 t injection press

Problems:

•Too long cooling time of plastic part

•Distortion after de-moulding of part

An examination with Infra Red camera showed temperature variations in the part of 80°C, 10 s after de-moulding.

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Plastic injection of dashboard console (PSA Group)

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Plastic injection of dashboard (PSA Group)

•By working in close co-operation with Uddeholm BFR Bernard Taché, we eliminated the distortion problem and we have been able to realise a cycle time reduction of 20 % by increasing the polymerisation speed.

•Saving per component: 5 to 7%

•Comments from Mr. Dallerac, tooling expert at Faurecia:

“Thanks to the thermal investigation, we have been able to clearly identify several hot spots in the mould. By introducing inserts made of high thermal conductivity alloys, we managed to increase the speed of the polymerisation process. The material advised by Uddeholm was Moldmax HH”

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Plastic injection of dashboard (PSA Group)

Conclusions:

•Uddeholm sold tooling material and Faurecia realised important productivity gains (WIN-WIN situation)

•The investment in the new tooling material is irrelevant compared to the component cost reduction

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Agenda:


2. Challenges:


b.b. GlobalisationGlobalisation


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What do we understand by Globalisation?

1. Follow our customers where ever they settle

2. Global tooling and component sourcing

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1.Follow our customers

Customer request:

•To manufacture cars for the local market with the same quality level as in Europe :

•Peugeot 307 in China

•Peugeot 206 in China

•Toyota Corolla in Turkey

•The trend will be to import “oversea” produced cars in Europe :

•Renault Megane Station Wagon from Turkey into Europe

•Ford Transit Connect from Turkey into Europe

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Bear in mind that 60% of component cost is purchase related (excluding overheads).

Global sourcing is a major mean to increase profitability and to strengthen our competitive position .

However, Quality consistency is a prerequisite !

Our purchase strategy is to increase our outsourcing in emerging markets from 15% up to 30% by the end of 2006.Mr. G. Breining, Group Purchase Manager

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Some examples in seating module :•Tooling side cushion member in Korea

•Tooling and components for Renault Espace in Turkey

•Tooling and components for SAAB 93 Convertible in Slovenia

•Tooling and components for Renault Mégane in Slovenia and Turkey

•Tooling and components for Peugeot 807 in Poland

•And more and more…

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Our expectations from Uddeholm/ASSAB :

Put your slogan into practice:

“Where ever tools are made…“Where ever tools are made…

Where ever tools are used.”Where ever tools are used.”

We expect your excellence applied where ever we will be located !

We expect continuous improvements through product innovation and R&D.

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Agenda:


2. Challenges:


b. Globalisation

3.3. General conclusionGeneral conclusion

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General conclusion:

We save money by spending more !!We save money by spending more !!

•When talking about purchase costs, one should not look from a single perspective.

•One does not save money by reducing the purchase cost of tooling.

•At Faurecia, we look at the total cost picture, from the start right down to the real cost per component in the end.

•Working together with world wide committed and reliablepartners helps us to reach our objectives.

Technical perfection, automotive passion

Thank you very much for your attention.

Q&A ?

Mr. Jean Christophe RozalskiStandardization Leader/Frame Manufacturing

Engineering

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