Automotive News EuropeBORN, Netherlands - NedCar is developing new parts sourcing strategies. Modules and systems will be incorporated in future-generation cars and a supplier park will be established.
Both innovations should be in place by 2002, said Norbert van Eekeren, purchasing manager. That is when replacements are planned for the Volvo S40/V40 and Mitsubishi Carisma now built at NedCar.
Established six years ago, NedCar has three equal shareholders: Mitsubishi Motors Corp., Volvo Car Corp. and the Dutch state. The plant, located in Born, produces Volvo and Mitsubishi cars on the same line. This year, output is expected to reach 197,000 vehicles.
'We want to move some activities outside of the plant because there is currently no room left to increase production,' said van Eekeren.
With a supplier park in place, deliveries will be made by road directly to the production line. The approach is the same as the one taken by Volvo at its Torslanda, Sweden, and Ghent, Belgium plants.
The first companies are expected to relocate to the supplier park within a year. This is about when NedCar launches production of the new Mitsubishi Space Star. Eventually, about 24 suppliers will be on the site.
Outsourcing will become more frequent, said Arie Kikkert, project manager for production engineering.
Dutch fabricating company Inalfa, located close to the assembly plant, welds small sheet metal parts for the body shop. Stampings are supplied by NedCar.
The move toward complete modules and systems is still in the planning stages. Van Eekeren's goal is to have six complete modules in future NedCar models. He is now seeking suppliers for these modules, which include: hydroformed chassis sub-assemblies; instrument panels; doors; seats; integrated sound insulation and wiring harness; and front end. 'We are having our first discussions with five or six suppliers per module to look at what is possible,' he said. 'What we discuss in 1998, we can launch in 2004, maybe even 2002.'
Van Eekeren said that module suppliers will not necessarily be located in the supplier park, as long as they are nearby. If Johnson Controls is selected to supply the seat module, no relocation will be required. Johnson Controls' Sicar subsidiary already provides just-in-time, in-sequence delivery of seats and headliners from its plant less than a kilometer from NedCar.
'We are looking for companies with proven technology and sufficient r&d resources,' van Eekeren said. Though Mitsubishi is just starting with modules, Volvo is already heavily into the concept. 'Volvo has a vision of being able to build a complete car with a total of 20-24 modules,' said van Eekeren.
NedCar's purchasing department works closely with Volvo and Mitsubishi purchasing. It works with Mitsubishi's purchasing departments in Asia, Japan, Portugal, Italy and the USA. Regular meetings are also held with Volvo's purchasing department in Gothenburg.
'We all help each other find suppliers,' said van Eekeren. 'The goal is to minimize the number of suppliers and to maximize the advantages of economies of scale. With the combined force of Mitsubishi and Volvo, we have a lot of power to negotiate. We also try to use the same suppliers for both Volvo and Mitsubishi models. This has been extremely successful on hidden parts of the car, less so on the visible parts.'
The collaboration with other purchasing departments is very useful, he said.
'If our colleagues in the USA come up with an offer from a supplier which is much cheaper than we are paying, then we can challenge our supplier to explain,' he said. 'If it is the labor cost, that is one reason. Maybe production processes in both places are not the same. In that case, we might consider sourcing everything from the USA.'
Economies of scale can also reduce tooling costs because they can be shared between the three companies. For example, Toyoda Gosai of Japan makes magnesium castings for the lightweight steering wheels on some Mitsubishi cars. The casting is used for about 75,000 Mitsubishis, of which 60,000 are US-built, 10,000 are built in Japan and 5,000 are made by NedCar. Only one investment in tooling is required, and this can be spread across the three plants.