Biden Signals Sanction: Auto Suppliers Are Worried

Biden Admin Signals Tough Sanction on China

The manufacturing industry getting entangled in a political feud between countries is not uncommon — in fact, it happens frequently enough that most companies expect some sort of complication whenever there is a major shift in global politics, like a United States administrative transition. But bracing for impact and being prepared with a solid solution are two different things.

In his first several weeks in the White House, Joe Biden not only maintained his stance on keeping China on the sanction but signaled a potential strengthening of the trade sanctions. Global auto part suppliers who are already engaged in large-scale operations or have future procurement plans in China have multiple reasons to consider this possibility a serious threat.

The automotive industry in general went through a similar experience last time, where they had a glimpse of how catastrophic these kinds of disruption can be. The 2018 trade war between China and the former administration entailed tariffs on steel and aluminum, the two critical raw materials in automotive part production. This led to a steep increase in the automotive part production cost, which in many cases translated into higher pressure for suppliers. In total, 70,000 US jobs were expected to be lost, alongside with 770 billion dollar sales loss and 0.3% of US GDP drop. The auto industry was heavily hit, and more so for the auto suppliers; now, they have to brace themselves for another disruption.

Adding on to this already grim prospect are the other complications taking place globally. The shortage of semiconductor chips for automotive production continues, diminishing any hopes of a comeback for the automotive industry. Now, the persisting shortage is causing price inflation in the market and coupled with the fact that global OEMs are pressuring suppliers with production delay penalty, this puts automotive suppliers in a very tough spot. Making part production delay issues even worse, an unprecedented winter storm heavily hit the southern parts of the U.S., where automotive part plants are concentrated.

"Be Careful" is Not Enough: Then How?

The recurring external threats towards suppliers throughout the years and the lack of a clear solution to mitigate or prevent these complications reveal the need for better visibility regarding production data and process. In this case, simply putting the letter "let's be careful" up on the wall is not enough: the firm needs a solution to the problem. What is the part production capacity of the troubled region and what is the expected level of compromise for the supply chain? Are there other plants where the unmet production capacity can be handled? Are the tooling assets of the said substitute plants sustainable for the increased production time within the set time period? The answers to these questions will allow automotive suppliers to make strategic decisions to navigate through the current and future challenges. However, according to Deloitte’s 2018 global chief procurement officer (CPO) survey, 65% of top procurement leaders reported having little or no visibility over their supply chains.

Without a clear, real data on tooling, auto suppliers can never track, pinpoint, and rectify the source of the problem, and can never convince OEMs and themselves that they have a proper risk management and alternative plan ready.

"The ability to get real-time data of different process parameters for part quality is now possible. By building AI machine learning models with this data, we'll be able to make predictive analysis on part quality and enable accurate risk management."

(Dr. Jason Kim, Head of R&D at eMoldino)

eMoldino provide manufacturers with a two-part solution: wireless IoT devices and analytic software. The wireless IoT sensors are installed on manufacturers' various tooling, automatically transmitting crucial data of shot count, cycle time, temperature, pressure, and location to the server with encryption. Then, the stored data is processed through the company's original software, providing client managers with tailored reports.

The solution stands out with high emphasis on data visibility and easy-to-use analytics software. Data precision and advanced analytics are sourced through the company's software — customized for each client — and allows the manufacturers to improve their strategic sourcing, part quality assurance, asset management, and risk management.

Furthermore, the new generation model is able to measure and store a more comprehensive set of process parameters. This means that crucial data regarding injection time, holding time, cooling time, and injection speed will now be incorporated into the eMoldino solution. Advanced data reports aforementioned will be achievable through this groundwork, on top of the currently provided reports of cycle time compliance, capacity utilization, and production pattern analysis. And with upcoming AI and machine learning technology implemented for tooling data analyzation, eMoldino's solution is a perfect solution for various problems reoccurring throughout the supply chain, including possible disruption on part production and delivery derived from political war.

Client Feedback on Our Solution: Delivering Parts On Time

One of our clients tells us of an incident where one of their Brazilian suppliers could not deliver their parts on time. In order to solve the problem, the client first needed to know how many parts had already been made, and how fast their other suppliers could pick up the slack.

However, without any form of real-time tracking and monitoring, the client found it extremely difficult to access this information. With no data, the client had no visibility; could not oversee their external production, let alone mitigate the damage done by the disruption in their supply chain.

That is why they reached out to eMoldino: they were in dire need of a comprehensive solution on getting visibility on their tooling. After the implementation of eMoldino solution, they saw a success in getting a clear data on late part delivery forecast, utilization rate, and scrap rate. More detailed version of their success story is available at eMoldino's website along with other clients.

Industry giants like Samsung Electronics have applied eMoldino's solution in their supply chain of mold and die, and have already seen the tremendous benefits of cost reduction and risk management, especially during these times when an urgent supply chain checkup is required.

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