We go where the competencies end or the problems of an automotive supplier begin

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The automotive industry is currently at a historic moment - we have not dealt with such a huge change as the transition from the production of internal combustion cars to electric or hydrogen cars for over a century. In addition, there are macroeconomic, geopolitical and technological factors that affect the entire life cycle of a product, which is a car. You cannot stand by, not react and sleep through this revolution - says unanimously Paweł Gos, CEO of Exact Systems Group, and Stanislas Bailly, CEO of SNECI Group. Experienced partners who have joined forces in automotive production quality and supplier development tell us what business challenges have entered the production lines and how to meet them.

Henry Ford, who we can confidently call the father of serial automotive production, said "Any customer can buy a car painted in any color, as long as it is black." Do the actions taken in recent years by automotive concerns and national authorities in the field of legislation and the production process aim - to paraphrase the statement of an American entrepreneur from over a century ago - that from 2035 every customer will be able to buy a car, provided that it will be electric?

Paweł Gos, CEO of Exact Systems Group: Not electric, but zero-emission. The topic of moving away from conventional engines - internal combustion - petrol or diesel- has been on the agenda for several years and new proposals appear every now and then, both in terms of CO2 reduction and what engines will be allowed for sale in the coming years. We are talking mainly about EVs, but the topic of internal combustion cars powered by e-fuels has appeared. Everyone unanimously - both automotive companies and governments – has opted for reducing emissions, but in a way that will not impose or exclude specific solutions. Let us note that the complete switch from diesel to electric technology, despite the rapid development of electromobility, still requires billions of investments and time. And we have less and less of that.

And zero-emission is not the only challenge that the automotive industry has to face...

Stanislas Bailly, CEO of SNECI Group: Indeed, such a spectrum scourge of challenges that our industry must face has not existed for a long time, if at all. The COVID-19 pandemic was the first to have a huge impact on supply chain disruptions and semiconductor shortages. And when it seemed that we had learned to live and produce with the coronavirus in the background, the President of Russia delivered a message to the nation, during which he announced the beginning of a military operation in Ukraine. This decision resulted not only in a huge military and social crisis, but also in an economic one. And we smoothly move on to the next challenge we have to face, i.e. the problem of the market of energy resources and metals, which translated into an increase in the purchase prices of goods.

Can we call this group of challenges that we have mentioned "a crisis". However, there are also so-called technological challenges.

P.G.: Yes, the expectations of end customers, i.e. drivers, in terms of vehicle safety or technological advancement have led manufacturers to build the so-called computers on wheels. Artificial intelligence, the Internet of Things, or the metaverse are entering serial production with impact and there is no turning back from that. You once said that we live in a VUCA world, i.e. volatile, uncertain, complex and ambiguous. And only those who adapt to changes and are ready for new solutions will survive. How does this relate to the automotive industry?

P.G.: Since the beginning of serial production of cars, the automotive industry has experienced many serious economic crises, and most of them most often resulted in lower production and sales of cars and their parts. The challenges we face today will also affect these areas, but that's not all. In my opinion, they will bring the end of traditional automotive, which we have known for several decades, and will introduce new processes to which most players have been very resistant until now. And more specifically?

P.G.: I mean basically all areas related to the life cycle of an automotive product. From its design, which must take into account many more needs than 20-30 years ago. Through production - a nod to parts warehouses and a shorter distance between the customer and the supplier. Finally, sale, which is already testing salons in VR technology. As an existing partner who cares about the quality of production processes, we could not stand by and not react.

How does the Exact Systems Group, which is one of the largest companies controlling the quality of production processes in Europe, intend to participate in this revolution?

P.G.: Since the beginning of our activity, i.e. for almost 20 years, we have been focusing on the changing needs and expectations of customers from the automotive industry around the world. To this end, we are not only expanding our reach to new foreign markets - we are present in 13 markets - outside Poland, e.g. in Germany, Slovakia, Spain, Belgium, Turkey, Romania, and China, but we also expand our activities with specialized services. So far, we have specialized mainly in production control services, e.g. parts quality control, residency, warehouses, and HR services such as temporary work, and permanent and international recruitment. Opening up to new business challenges and responding to market needs, together with SNECI we have introduced a new group of expert services to the company's portfolio, becoming an even more comprehensive partner for our clients.

What are these services and what is the role of SNECI in this?

S.B.: SNECI is a French family-owned service and consulting company with 70 years of experience and a strong position in the automotive industry. We operate directly in 3 continents and dozens of countries, including in Slovakia, Morocco, Turkey, India, Malaysia, China and South Korea and working with almost 500 customers in 40 countries. On the one hand, and this is where we started, we focus on the business development of our clients. Being very familiar with the specifics of the automotive industry, we help suppliers in acquisitions, searching for partners, participating in tenders or expanding production. The bulk of our activity is also the so-called industrial performance – cost simulations, routing of logistic processes. And this is the area in which we decided to join forces with Exact Systems and set up a joint venture - SNECI Poland, the main goal is to improve the industrial and commercial efficiency of automotive plants.

So what kind of services are these?

S.B.: We are talking here about supporting suppliers and OEMs in three areas. The first is the so-called industrial projects, i.e. services aimed at supporting production from the stage of implementation to serial production, through checking suppliers in terms of quality, to crisis management. In practice, we help, among others, with the launch of new projects, launching production lines, or solving a problem when the factory cannot start production.

Looking at what is currently happening in the automotive industry, it looks like you will have your hands full?

S.B.: Indeed, to be more concrete during the last two years, our growth was more than 75% per year, each year, despite the automobile production slowdown in Europe. Today most of the factories are entering the world of electromobility. Some start a project completely from scratch, others, based on their previous experience and resources, have to switch from production of combustion cars to electromobile production. In both cases, SNECI globally and now SNECI Poland is able to help start a new chapter. Through our offices in Asia since 2007, we have developed a real expertise in battery and power electronics production, which allows us to support global players in these fields.

The other two areas are...

S.B.: Industrial assessment & quality, i.e. we prepare suppliers for audits in the field of sustainability, logistics, quality and management, or we carry them out ourselves. So that they can partner with different OEMs. We have several dozen certified auditors from all automotive standards - German, French or Chinese. Most of our auditors are certified by the OEMs thanks to the trust they have in our expert teams. The third area is training and coaching. On the one hand, we conduct customer-specific and problem-focused training, e.g. if the customer has communication problems on site that cause disruptions in the production process. On the other hand, having OEM accreditations and local trainers speaking 13 languages, we are able to familiarize the company with the standards of the automotive industry or a specific concern. For example, we teach a given supplier/OEM portal, we also do training on electromobility

Can expert services be used only in Poland, where SNECI Poland has its headquarters?

P.G. and S.B.: Both customers in Poland and automotive plants operating in countries where Exact Systems Group and SNECI are present can benefit from the support of our experienced engineers. That is, in 13 countries, including Germany, France, Belgium, the Netherlands, the Czech Republic, Slovakia and Romania. For example, a Belgian supplier that would like to become a sub-supplier of a French OEM, for example, can prepare to submit an offer with our help. In general, our support comes down to one short rule - "Wherever the supplier's competencies end or their problems begin, we enter."

Every change, crisis, and revolution brings both opportunities and threats. This will probably be the case now. On the one hand, you as experienced partners of automotive concerns, expanding the range of services, want to enter the new era of mobility with them. On the other hand, thanks to you or your support, many can continue to be part of the automotive supply chain or just join it. What one tip do you have for suppliers who would like to be this active participants in the electromobility/technology revolution?

P.G.: Don't stand aside so as not to fall out of the market in 10-15 years. Almost everything is changing these days, not just cars. We have cleaning robots instead of traditional vacuum cleaners, and grass mowing robots instead of lawnmowers, we pay with watches and not payment cards. In addition, practically every area of our professional or private life is increasingly influenced by solutions based on artificial intelligence or new technologies - ChatGPT is widely discussed. You cannot be passive, not learn, not try your hand at something new, which is the future.

S.B.: In order to survive and thrive for the next 10 to 15 years, competencies and training will be key. It is essential that the suppliers stay agile and invest in their people through training programs on these new technologies, in order to follow the market evolutions that will come in the coming years. In addition, suppliers will have to diversify & securize their own supply chain with their Tier 2 to Tier N suppliers, as the world will become more and more complex.

More information about Exact Systems Group and SNECI is available at www.exactsystems.com and www.sneci.com.