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Automotive industry has lifted its game

Photo: Nicholas Rama

Photo: Nicholas Rama

Published Jan 25, 2017


Pretoria - South Africa’s automotive industry has significantly improved its performance over the last 10 years in a number of key areas, including cost control, quality and some measures of reliability, according to research conducted by the South African Automotive Benchmarking Club (Saabc).

The research report said the focus of the cost control driver was on the industry’s ability to manage inventory and overall total inventory holding stock levels had improved by an impressive 38.2 percent over the past 10 years.

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It said a review of finished goods, work in progress and raw material stock levels for the period from 2006 until 2015 highlighted a similar improvement as for total stock, with finished goods improving by 38 percent, work in progress by 54.8 percent and raw materials by 32.9 percent in this period.

Turning to customer quality, the report said the overall improvement over the 10-year period was “a very impressive” 93.1 percent or 1 124 parts per million (ppm). It said customer return rates were 1 208ppm in 2006, improved to 865ppm in 2007 and further to 788ppm in 2008, an improvement of 34.8 percent in this period.

The report found customer quality improved to 193ppm in 2013, 130ppm in 2014 and 84ppm in 2015, an improvement of 56.5 percent or 109ppm. Supplier rates improved 82.9 percent over the 10-year period.

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Customer delivery performance, measured as on time and in-full (OTIF), deteriorated 27.3 percent to 8.2 percent in 2008 from 6.4 percent in 2006. However, the level improved by 37.3 percent from 2013 to 2015, with the overall improvement in the 10-year period at 70 percent.

The report said that notable improvements were also apparent when reviewing internal reliability measures, including time lost because of tooling and machine breakdowns and to the unavailability of tooling material.

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Supplier delivery performance was one area where the performance deteriorated, with OTIF levels declining 9.8 percent to 10.34 percent in 2015 from 9.4 percent in 2006.

Sean Ellis, who compiled the report for the Saabc, said the country's automotive component industry had definitely improved its performance over the last decade.

The National Association of Automotive Component and Allied Manufacturers of SA (Naacam) said the significant performance improvements showed the industry was enhancing the country’s reputation as a competitive global automotive producer.

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Dave Coffey, the president of Naacam, said there was a need to acknowledge what had been achieved but, most importantly, the report suggested that difficult targets, previously considered unattainable, could and must be reached.

Renai Moothilal, the executive director of Naacam, said the quality improvements statistics were telling.

In a veiled reference to the Ford Kuga fire issue, he said: “In a week where automotive quality and reliability issues have come to the fore, evidence is being brought to bear that South African component producers are making huge strides.”

The capabilities of South Africa’s automotive component manufacturing industry will be showcased at the Naacam Show, being held in conjunction with the National Localisation Indaba, in Durban from April 5 to 7.


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