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own procurement with little con-
sideration for global scale. This
began to change during last
decade as several suppliers that
wanted to stay regional in scope
were forced to go global and
follow their customers.
Just when you thought that many
Tier 1 and 2 component suppliers
read the memo about having to
cover several regions to follow
their customers, it seems that a few
were able to fy under the radar
and escape the pressure. Given the
increasing complexity of future
designs, the need for scale econo-
mies, the hesitation for OEMs to
add the burden of working with
multiple suppliers on the same
component, and the need to react
faster to market forces, OEMs
started 'persuading' suppliers to
support build or design outside
their traditional region.
Suppliers have answered the glo-
balization challenge with several
solutions: Options range from read-
ing the tea leaves and selling to a
larger competitor; seeking manu-
facturing or R&D; alliances with
competitors in other regions to
support design occurring elsewhere;
or biting the bullet and carefully
expanding the breadth of the man-
ufacturing and Engineering/R&D;
support to other regions to follow
customers. Increasingly, Tier 2 sup-
pliers are joining the parade of sup-
pliers requiring a global footprint.
How was the pressure for suppliers
to globalize determined? While
each OEM and segment was on a
separate timeline, the pecking
order was frst determined by
those components/systems where
scale economies and technology
and integration demands dictated
substantial savings. Major interior
systems such as seats, instrument
panels, door panels, and overhead
systems led the way. Others included
suspension, electronics, fuel, drive-
line and steering systems, where
close OEM-supplier coordination
is critical. Other systems followed,
leaving relatively few opportuni-
ties to be a true 'regional' supplier.
Intertwined in the increased pen-
etration of global platforms is the
drive to reduce supplier count and
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