Like other automakers, Nissan is making changes across its operations. One is the construction of a $200 million supplier park on the doorstep of its large assembly plant in Smyrna, Tennessee.
A decade ago, Nissan's plants were already routinely launching models in just 12 weeks -- from the first model of a redesigned car coming off the assembly line until the plant was producing it at full volume.
Nissan's global target is now six weeks.
For Toyota, the shape of things to come is hinted at in the blueprints for a new billion-dollar Corolla factory in Guanajuato, Mexico. That assembly plant, scheduled to come on line in 2019, will be the first to embrace the Toyota New Global Architecture mission. The plan is to make assembly lines, factory tools, vehicle platforms and auto parts significantly more flexible and interchangeable. A key motive: Speeding up vehicle changes and getting fresh product to customers faster.
As product changes occur, Toyota team members will be able to roll around the work stations where they install seats, lay carpeting on floorboards and seal windshields.
"By increasing standardization, factory tools won't have to change every time you have a new model," says Mike Bafan, president of the Guanajuato project. "It will mean we won't need that long to go from concept to production."
Robinet, who has monitored and predicted auto manufacturing and supply chain trends since the 1980s, calls the acceleration "the new cadence."
Model cycles have been shortened in some cases. General Motors' T1XX platform -- the massive program that yields full-size light trucks such as the Chevrolet Silverado -- was recently moved up by a year to come to market in 2018. The last time GM's truck platform was made over was 2013 -- meaning only five years will pass between generations.
Faster product changes alter the investment routine for suppliers. Companies accustomed to having six or seven years to amortize plants and equipment will have to do it in five years.
And because there is more emphasis on getting the launch to full line speed faster, those companies must expedite equipment installation and training programs, says Julie Fream, CEO of the Original Equipment Suppliers Association, which represents 450 suppliers.
"There are challenges to this new pace," Fream says. "Suppliers will have a shorter period to make back their investments."
In response, parts companies are beginning to ask for multigeneration contracts to make sure their contracts are not re-sourced after a shorter product cycle. Fream believes that multigeneration term contracts will become more common in North America in the next few years as suppliers absorb the new reality of shorter cycles.
Nissan's Martin says his organization is now considering them.
"Suppliers want long-term security," he says, "and we want them to have that so they can make the necessary investments in technology."
Focus on Mexico
The heightened focus on accelerated product launches also might prompt suppliers to rethink where future factory lines will be needed.
"Thirty-five percent of vehicle launches will come out of Mexico next year," Robinet says. "That's a new reality. Most suppliers are staffed up in the Great Lakes area, and they have some capacity in Mexico -- but do they have 35 percent of their resources in Mexico to support launches there? I doubt it.
"The dynamics of a supplier being Detroit 3-focused won't cut any longer," he warns. "The D3 are going to be less than 50 percent of the production of North America. Those suppliers are going to need to expand their boundaries to other customers."
Robinet's research indicates that there will be 193 model launches in Canada, the United States and Mexico over the next five years, compared with 148 in the five previous years.
But 59 of those upcoming launches will take place in Mexico, almost twice the 31 that occurred there in the past five years.
German automakers in particular represent a change to the status quo, Robinet says. Mercedes-Benz, BMW, Volkswagen and Audi are all investing in new or expanded plants in the United States or Mexico. According to Robinet, almost half of the expected growth in North American production volume for 2014 through 2021 will come from German automakers.
Mexico is exerting a stronger pull on suppliers.
"It's clear the automakers are piling up investments in Mexico -- the North American as well as the Asian and European ones," observes Yann Delabriere, CEO of Faurecia S.A. "It's an opportunity."
But to be where the action is invariably means making new investments or in some cases moving production from one location to another. Delabriere notes that Faurecia had to close a seat plant in Bradford, Ontario, last year. The company moved production to several other locations.
New supplier competition
Suppliers that aren't keen on investing to keep up with the changing launch outlook may find themselves crowded by newcomers that are.
Over the past 24 months, Georgia has welcomed 14 German automotive companies to local production sites, at a combined investment of $191 million. In January, for instance, a German family-owned supplier of structural steel systems, Linde + Wiemann GmbH, said it will spend $35 million to open its first U.S. plant in North Georgia with 200 employees. That site is convenient to both BMW's expanding auto plant in Greenville, South Carolina, and Volkswagen's U.S. assembly plant in Chattanooga, Tennessee.
Volkswagen last year revealed that it will create an engineering group dedicated to developing and launching models at the Chattanooga factory. The group has 75 employees assigned to it.
Robinet's forecast at IHS anticipates that by 2020, assembly plants in the Southeast U.S. will produce 4.8 million vehicles a year, up from 2.7 million in 2000. That will have big implications for companies that support model launches.
Technology is another X-factor. The more rapid uptake of new technologies -- compounded by federal regulations on vehicle emissions and fuel efficiency -- makes it difficult for automakers or suppliers to know what content new models will have in five or eight years.
"They really don't know what's coming to the model after this one," Robinet says of automaker planners. "More aluminum content? Carbon fiber? An electric powertrain? They don't know yet. So how can the supply chain prepare for it?
"If the industry had its druthers, they'd build the same model for 10 years without any changes. But those long gestation periods of technology acceptance are a thing of the past."