Have you ever wondered how much of your car-buying dollar is applied to actual vehicle cost and how much is going down the toilet because it?s paying for waste? On one hand, I urge you not to think about it because if you work for an OEM or supplier it will make you tear out your hair in big clumps. On the other hand, if we don?t stare down this beast, things will never change.
Waste is inherent in any manufacturing process and some of it, such as engineered scrap, is calculated and planned. But why do we plan for so much? Engineered scrap in the tractor industry or motorcycle industry is down about 25 to 30 percent according to engineers I?ve spoken with. In the auto industry it?s closer to 50 percent. And yeah, I know an automobile is more complex with different finish requirements, but gee Christmas?50 percent? Is everybody okay with that?
I guess if waste stopped there I could feign indifference, seek professional counseling and get over it, but that?s just the tip of the iceberg. Ergonomic experts say that on the average car, we spend as much on covering worker injuries as we do on steel. What? I feel like I?m losing my mind. Automakers admit that used to be true, but now say that number has come down in recent years. Down? Down to what? It still comes to hundreds of dollars per vehicle and I don?t exactly call that money well spent.
And how much money have we wasted trying to become ?buzzword compliant? with things like ?lean? or ?modular?? As one equally fed-up reader shared with me:
?Lean doesn?t mean they have to starve inventories only to result in air freights and expedites negating all those costs. It also doesn?t mean forcing suppliers to work every Saturday and holiday to make a five-percent cubed trailer shipment when it could have easily fit on the Friday route. That?s wasted cost that gets passed along.?
Hey, those were his words, not mine, and all I can say is the guy is in the business and right on target. I?ve heard that said many times and just as our bodies can get so lean that we die, so too can a supply line.
The modular craze continues to be a double- edged sword that has lopped off the heads of many that have wielded it. In theory, it sounds great to give assembly responsibility to a low-cost, non-UAW supplier and then plug it in when it arrives. But look at the shipping costs. A built-up corner module, for example, means a trailer not only contains parts, it also contains a tremendous amount fresh air.
In addition, corner modules don?t nest like crates full of individual components do. And built up corners are so valuable that you have treat them like fine china when you handle them. Damage one and you don?t service it yourself, you send it back and eat the cost. It doesn?t take long to offset the savings you thought you were getting, so modules aren?t everybody in spite of the fact that they are pitched that way by suppliers.
I couldn?t live with myself if I didn?t drag lawyers into this rant, so let?s look at the complexity of the contracts that we all have to sign. The big suppliers aren?t much better than the OEMs, but then again they all have rooms full of lawyers. In an effort to justify their existence they create documents that only a fool would sign without modifying it.
I submit that any contract that is more than three pages long is asinine. Somehow the Japanese manage to write short, understandable and workable contracts and in the process save money and have suppliers that feel like partners and not prisoners. If we can?t come up with our own versions, let?s fire the attorneys and just copy the Japanese. I won?t even get into warranty costs, administrative inefficiencies or engineers forced to do secretarial duties. I don?t have to. You already know it?s a waste.