Manufacturing Today - July 2017 - 61

Automotive SPECIAL SECTION

SENTIMENT
IS HIGH
there is good and not-as-good news coming from suppliers to
automotive oems, but tool shops are finding ways to succeed

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The Original Equipment Suppliers Association (OESA) and Harbour Results Inc. (HRI) have released the results of their Q2 2017 Automotive Tooling Barometer. The tooling industry is experiencing a slightly slower second quarter compared to quarter one; however, capacity
utilization for both mold and die tool makers is still well above 80 percent. Shops with revenue ranges of $40 million and above are experiencing peak capacity utilization rates of 95 percent.
"There is still a large discrepancy between tool shops who are
very busy, and those who are not," says Laurie Harbour, president and CEO of HRI. "In fact, we're seeing the standard deviation in the market widening as the year progresses, and the
smallest mold shops are struggling to even maintain 60 percent utilization."
The clearly cyclical nature of work-on-hold continues, as it
rises back above 11 percent. The Detroit Three (D3) are driving significant delays for suppliers. Despite increased program
delays, overall sentiment (a tool shop's general outlook for the
next three months) is still at record highs at above 80 points.
The study also addressed differences between supply chains in
the industry. Primary tool shops are generally larger, with better
relationships at the OEM and Tier 1 level, while secondary shops
are more focused on developing niches to fill capacity. Primary
shops have consistently had higher utilization (95 percent) than
secondary shops (78 percent), yet are more exposed to work on
hold, and receive fewer progressive payment terms.
"Each supplier has distinctly different approaches in the
marketplace," says Julie A. Fream, president and CEO of OESA.

"As a result, primary shops typically oversell to maintain revenue size and turn to outsourcing to help level loads during particularly busy periods."
The survey population was comprised of mold shops (72 percent) and die shops (28 percent), both in the United States (68
percent) and Canada (32 percent). Shops with revenue ranges
less than $5 million up to greater than $40 million were represented, with the largest percentage of shops coming from the
$10 million to $20 million (26 percent) range.
The OESA Automotive Tooling Barometer survey series was
created by the OESA Tooling Council in partnership with HRI
to provide an indicator of the current state of the automotive
tooling industry, and the perception of the near-term prospects
for the industry. The OESA Automotive Tooling Barometer captures the sentiment of the major companies in this market.
OESA's mission is to champion the business interests of automotive original equipment (OE) suppliers. Since 1998, the
association has been addressing issues of common concern
and advocating on behalf of the supplier community throughout the supply chain and in Washington, D.C. mt
JULY 2017 manufacturing-today.com

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Table of Contents for the Digital Edition of Manufacturing Today - July 2017

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