Component Localization, Cost Reduction, and Adaptation for Vehicles in ASEAN MarketRAHMAT SEPTRIWAN - DIRECTOR

IntroductionRahmat Septriwan, B.Eng, Grad Cert Bus

Former Director of Engineering & Supplier Quality of a US auto manufacturer

Servicing a Chinese auto manufacturer in vehicle local validation and market analysis

Supporting a local auto group on vehicle localization and manufacturing establishment

Assisting a Korean auto group on leadership development

ObjectiveGood overview on issues in localizing automotive components in ASEAN, and how to complete the task effectively to provide acceptable level of quality and cost to customers

Supply Chain LandscapeHigh level supply chain landscape in Indonesia

BekasiJakarta

CikarangKarawang

Bogor

Tangerang

Cikampek

•- Front & Rear floor Panels

•- Glass,

- Whell• Pilar Garnish A,B,C,D• Door Trim• stamping / press partsAlso Honda &Toyota Assly. plant

• Front and Rear Floor Panels• Seat Suppliers• Whell• Front/Rear facia (Bumper)/ IP/• Garnish,Pilar A,B,C,D, Door trim• Aluminum Casting• wiring harness

•Prop. Shat•Chassis•Rear Axle•Disk brake rotor

• Tire• Plastic Injection / Pillar garnish• Waser Tank• Rubber

Tire , rubber suppliers , stamping, Wiring harness

• Bekasi to Sea Port (T Priok) = 15 KM

• Bekasi to Jakarta = 30 KM • Bekasi to Airport = 80 KM • Cikarang to Bekasi = 35 KM, • Supplier within Bekasi = 10 KM• Karawang to Bekasi = 60 KM• Cikampek to Bekasi = 70 KM

• Bogor to Bekasi = 60 KM

• Head Lining,

• Insulator,• Garnish

Note :Some in SurabayaA few in SemarangAnd Bandung

Supply Chain LandscapeHigh level supply chain landscape in Thailand

Vehicle Manufacturer’s Perspective

One stylingCommon powertrainSimilar features

Global / regional vehicle – One design, one validation

Economies of scale, vehicle development resources, time to market

Global Wants vs Local RealitiesVehicle performance requirements

- Environmental conditions – Good roads and infrastructure vs flood, traffic, bad roads

- Customer usage profile – Socio-cultural difference, loading, driving behaviour

Sub-system performance requirements and specifications

- Minimum requirements - ASTM vs widely understood ISO

- Test methods – ECE vs JIS

Global Wants vs Local Realities

Materials standards

- Material specifications – DIN vs JIS

- Dimensions & thickness – not available in the region’s supply

- Lack of available supply – plastics & sheet metal due to economic of scale

Frt Door Inr RH/LH

OEM Material Spec Thick CoatingYield Strength

(Mpa)

Tensile Strength

(Mpa)

Elongation in

80 mm (% min)

Sample from a Non-Japanese OEM 0.65 Coated max 180 max 330 40

Japanese OEM 1 MPV-B SPC270 0.55 Uncoated 135 - 255 270 37 - 47

Japanese OEM 2 MPV-C SP783BQ 0.65 Coated max 180 270 50

Global Wants vs Local Realities

Manufacturing technology and methods

- Mainly suited to technology that the Principal normally uses and the production volumes the vehicle is originally forecasted for

- Production / assembly of components – automated vs more manual labor

- Technology – laser etching vs in-mold design, vibration welding vs mechanical fixing

Global Wants vs Local Realities

Time and Cost PressuresBest time to introduce changes and adapt designs

Start

Of

Production

First

Integration

Product

SOP

Engineering Development

Manufacturing Tools & Equipment

Engineering Validation

FIP

Launch

Actions to Consider - ActivitiesForeign auto principal must have comprehensive understanding of the local situation

Vehicle engineers to stay for sufficient period of time – Observe, learn, clarify local conditions. Adapt and cost reduce designs

Purchasing to do comprehensive study on supply landscape – Map the supply chain capabilities

Supplier Development to do the dirty work – Upgrade suppliers’ quality and manufacturing system. Consider technical licensing agreement with global suppliers

Actions to Consider - AdaptationDecide what can be modified, cost reduced or adapted, and what can’t. Do proper risk assessment

- Flash flood. Water wading capability to go through water is non negotiable – Move air intake and add extra protection against water ingress

- Heavy traffic. Susceptible components like AC compressor and clutch – Consider upgrading them to be more durable. If not possible, build plan for After Sales to handle in the field like more frequent servicing and/or parts replacements

- Standards & specifications. Map to make comparison of equivalent specs early during sourcing

- Manufacturing methods. Engage suppliers early and expect their flexibility to modify processes

Final WordsCost vs Quality vs Delivery time

Local adaptation is still needed

Front loading and risk management

Engineering resources early in the program

Meet end customer requirements profitably

Balance of global vs local

Thank youPhone: 62-21 2279 2013Email: rahmat.septriwan@rs-servicesglobal.comWeb: www.rs-servicesglobal.com