Tool and Die Futures Initiative

Background

The US automotive industry has been competitive for many decades and it has relied on many small tool and die companies in close proximity to their operations as a part of their value chain. These small companies, often run by small manufacturing entrepreneurs, have become the back bone of innovation and job creation in SE Michigan for decades. However, global markets and competitiveness issues have lead to a major transformation of the automotive industry over the last three decades, resulting in US automotive OEMs moving to off-shore tool and die work to reduce their cost of acquiring the tooling needed to make parts. This shift in focus has added to the over-capacity problem, adding to pressures to shrink the number of tool & die companies needed to support the US manufacturing base of SE Michigan. The economic pressures facing the domestic tool and die industry today make its situation non-sustainable. At risk is the US OEM’s ability to have a competent, agile and high quality tool and die manufacturing base in close proximity to them and their suppliers manufacturing and assembly plants to support the US automotive industry.

In an increasingly energy conscious and customer service focused world, OEMs need to consider the total cost of the solutions a tool and die manufacturer can provide over the life of the part – that is considering more than just acquisition costs, to consider the cost of quality, time to market, logistical costs, maintenance, and timely response to engineering change orders. Looking at costs from a total cost perspective places into question the real advantage of off-shoring tool and die sourcing aimed at supporting the US market. Rather than off-shoring, OEMs should be moving to establish a true partnership between the OEMs, major tier 1 suppliers, and the tool & die and stamping companies aimed at addressing this issue of total cost and competitiveness.

Recognizing the need for such close partnership between tool and die companies and its customers, the Center for Integrated Business Research and Education (CIBRE: www.cibre-ou.org or www.sba.oakland.edu/cibre ) in the School of Business Administration at Oakland University has used its CIBRE Conversation sessions to bring together several tool and die companies to understand the challenges they are facing. These discussions lead to additional interactions with their customers, an OEM (Ford) and a tier 1 supplier (Takata). Based on these interactions, a dialog on Tool & Die Industry Future was organized, which brought over 35 tool and die companies to find out what they needed to do become competitive in the future. Representatives from Ford, Takata and CAR have provided their views on what makes T&D industry competitive and based on these discussions, the observations that surfaced are shown under Summary of TD Industry Futures Dialog.