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Presented at DUTIV.org September 2004 Canadian Automotive Industry

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* Solely Ontario-Sourced ** New Vehicle Launch Vehicles Key to the North American Market Matrix, Lexus RX 330 Coming- A Pick-up Truck Odyssey, Pilot* Buick Century, Regal * 2004 Grand Prix* F-Series Pickup 2004 Pacifica* Corolla TOYOTA Acura MDX Acura EL* / Civic Hatchback * HONDA Chevrolet Silverado / GMC Sierra Trucks Chevrolet Impala, Monte Carlo * GM Crown Victoria / Grand Marquis / Marauder* Freestar * (formerly Windstar) FORD Dodge Caravan / Chrysler Town & Country Magnum / 300M * ** DAIMLER/CHRYSLER Suzuki Equinox * ** CAMI PRODUCTS ASSEMBLER Canadian Assembly Plants Source: APMA

Canadian Assembly Plants: 

Oshawa (566) Oakville (294) Brampton (250) Alliston (368) Cambridge (211) Windsor (273) St. Thomas (237) Ingersoll (107) Total 550,000 people employed in the industry. 20 assembly plants 550 parts manufacturing plants Capacities (000): Source: APMA Canadian Assembly Plants

Parts Manufacturers: 

Parts Manufacturers Canadian Magna Woodbridge Linamar Wescast ABC Group Dominion AG Simpson Trillium Metal International Dana Delphi Ube Nemak Eaton Textron, Oetiker TRW, Lear Seating Johnson Controls

Vehicle Production 1992-2003: 

Vehicle Production 1992-2003

OEM Supplier Shipments 1991-2003 : 

OEM Supplier Shipments 1991-2003 NAFTA Source: APMA

Canada – US Automotive Trade: 

Canada – US Automotive Trade $67 b cars and trucks $24 b parts, engines $26 b cars and trucks $38 b parts, engines Source: Statistics Canada 2002

Automotive Statistics, Canada: 

Automotive Statistics, Canada Shipments of all vehicles and parts: $100 billion+ 23.2 hours of labor per vehicle (19.9 per light) car assembly Total 550,000 employed by the industry 20 plants, 554 parts manufacturers, 3,600 dealerships 2.6 million units production, 1.7 million units domestic sales Production: 55% cars, 45% light trucks, vans, utility 19 million vehicles in operations, 2.3% of world’s share $82.7 billion vehicles sold at 3,600 dealers in 2002 $17.4 billion parts sold at after market

Automotive Statistics, Canada: 

Automotive Statistics, Canada 12% of GDP comes from the automotive sector 85-90% of production is exported 8th largest vehicle manufacturer in the world $22 billion direct investment over the last decade $7.2 billion trade surplus per year Cost of manufacturing: USA = 100, Canada = 94

Automotive Statistics North America: 

Automotive Statistics North America 2002 Canada US Mexico Population 32 m 290 m 102 m Vehicle Sales 1.7 m 17.1 m 1 m Production units 2.6 m 12.3 m 1.8 m Assembly Employees 51,000 331,100 57,500 Parts Mfg. Employees 98,100 489,400 390,000 Vehicles per Assembler 52 37 31 Light Auto labour hrs. 20-24 21-29 … Production per 1000 84 43 18 Sales per 1000 people 55 59 10

Competitive Applications : 

Competitive Applications Continuous productivity improvement and cost reductions JIT and TQM applications, especially on shop floor Focus on certification of suppliers More modular systems manufactured by Tier 1 suppliers Integrated R&D with OEM using concurrent engineering Integration of supply chain, shop floor control, ERP systems Sequenced delivery, eliminating inventory for expensive items QS9000 and TS16949 standards with process orientations

Trends to watch: 

Trends to watch Supply chain visibility from OEMs into Tier 2 companies Synchronized planning and execution (OEM  Tier 1  Tier 2 ) More ERP, CRM and SRM integration Collaborative Planning Forecasting and Replenishment (CPFR) Six sigma and lean manufacturing applications Tier 0.5 concept is in the works Outsourcing of IT, logistics, HR, and similar services Global optimization of after market supplies Environmentally friendly and fuel-efficient vehicles Hybrid vehicles, fuel cells, solar power

Inventory in Supply Chain: 

Inventory in Supply Chain TRADITIONAL MANUFACTURING COMPANIES Lead times are long, weeks or months SRM Delivery SRM Delivery ADVANCED COMPANIES REPLACE INVENTORY WITH INFORMATION CAPACITY IS REPLACED WITH CAPABILITY TO DELIVER Lead times are very short; hours or minutes planning Manufacturing RM WIP FG Assembly Manufacturing planning planning Tier 1

Just in Time Delivery - Example: 

Demand Pull JIT Warehouse Supplier Supplier delivers bulk shipments to JIT Warehouse based on use and set limits Warehouse breaks the inventory into smaller delivery containers OEM sends Kanban pull request to the warehouse based on consumption Warehouse delivers specific replenishment quantity to OEM Just in Time Delivery - Example

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JIT Synchronization - Example

OEM Satellite Model: 

OEM Satellite Model OEM 1st Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 1st Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier 1st Tier 2nd Tier 2nd Tier 2nd Tier 2nd Tier Tier 0.5

Canadian Investments in Automotive Industry - Turkey: 

Canadian Investments in Automotive Industry - Turkey Dominion Spring and Stamping (Dominyay ve Makina Sanayii) serving Mekaplast, Bosch, Teba, Arcelik, etc. Intier (via Italy) Technology transfers possibilities License agreements possibilities

Canadian Turkish Business Councilwww.ctbc.ca: 

Canadian Turkish Business Council www.ctbc.ca Promotes bilateral trade/investment between Canada and Turkey Volunteer and not-for-profit, run by corporate representatives Establishes a forum for business and investment Provides networking and experience sharing Facilitates access to each market Regular trade missions by senior level business and government, one scheduled Spring 2005 to Turkey Advocacy for Canadian-Turkish business interests Sponsored by Canadian Manufacturers and Exporters, Ontario Investment, International Trade Canada, … Counterpart: DEIK and Turkish Canadian Business Council

ABCO Engineering Ltd.www.abcoeng.com: 

ABCO Engineering Ltd. www.abcoeng.com Consulting in supply chain, operations management, industrial engineering, enterprise resource planning Solutions for manufacturing companies in supplier relationship management (SRM), ERP, JIT, CI Education and training in operations management 25 years of expertise in manufacturing, ERP, JIT, SCM, SRM and integration of business systems Offices in Canada, US and Turkey ABCO