DETROIT - Even after years of relentless cost-cutting efforts, most suppliers still believe cost remains the biggest challenge facing the auto industry.
In its annual DuPont Automotive/SAE survey of automotive engineers and designers attending the SAE 2000 World Congress here, DuPont found that 51 percent of respondents identified cost as a top concern for suppliers.
Although many respondents cited several key concerns, more cited cost than any other issue. (See box on this page.)
Surprisingly, even though cost has been an emotional issue for most of the past decade, the DuPont/SAE survey saw a large increase in the percentage of respondents who cited cost this year - 19 percent more than in DuPont's 1999 survey responses.
The same number of people also said cost is the single greatest attribute a supplier can bring to a relationship with a customer, and is also the No. 1 complaint in supplier-OEM relationships.
In reporting the survey findings, Walter Fields, vice president of DuPont Automotive Engineering Materials, called the attitude 'precariously skewed.' He warned that while cost reduction can help the industry progress, allowing it to rule the industry would cause the industry to stagnate.
'If we continue this way,' he said, 'we risk the long-term health of the players in this industry for the short-term reward. Only through changing our behaviors, and the way we do and transact business, can we truly deliver more for less.'
Fields called the current push by the automakers to use Internet bidding to determine low-cost suppliers 'a step backwards' in supply chain management.
'What we really need to be doing is sitting across the table with the automakers, the material suppliers and the component suppliers to decide on the front end which way we need to go,' Fields said. 'We need to be developing a value chain, in which each member of the chain is an investment. We're doing a little of that now, and we've been going that way.'
But he said, focusing on low-cost bidding through the online exchanges 'appears to be decoupling the development process we've been trying to create.'
The DuPont survey also saw a large number of SAE attendees - 31 percent - cite emissions regulations as a key issue. That number is probably as large as it is because so many firms currently are working on projects to meet the 2004 California Air Resources Board 'near-zero' evaporative fuel emission performance deadline, Fields said.
The No. 3 and No. 4 concerns cited (a tie) were safety regulations and ease of design.