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Suppliers perform better on effectiveness than efficiency
DETROIT, Feb. 28, 2013 /PRNewswire/ -- North American automotive suppliers are poised for growth and profitability as a result of restructuring efforts, according to North American Automotive Supplier Supply Chain Performance Study, a new report released today by PwC. Among the six supplier segments studied (exterior, interior, body, powertrain, electrical and chassis), automotive body suppliers ranked the highest in overall efficiency. Overall body suppliers ranked first in revenue growth, realizing 23 percent revenue growth from 2010 to 2011.
The majority of the suppliers evaluated performed better on effectiveness (revenue) over efficiency (cost).
While body suppliers ranked highest in overall efficiency, there is opportunity for all segments to improve (size of bubble is average 2011 North America sales by each segment [$B]).
"Automotive suppliers who swallowed a bitter pill by restructuring operations during the downturn following the financial crisis are seeing the payoff today," said Rajiv Jetli, principal, PwC automotive consulting practice. "North American automotive suppliers still have room for performance improvement within their supply chain, specifically in the areas of more cost-cutting, inventory management, customer responsiveness and supply chain flexibility."
Automotive suppliers with an efficient and effective supply chain will be better positioned to meet PwC's Autofacts global automotive production forecast of more than 100 million units by 2017. As the automotive industry continues to stabilize, suppliers have the opportunity for growth, specifically around the ability to generate revenue and their ability to minimize costs.
According to the report, there are six key findings that speak to leading supplier categories:
About the Study
This year's North American Automotive Supplier Supply Chain Performance Study examines the top 60 North American suppliers' ability to generate revenue/cash (effectiveness), and their capacity to minimize cost (efficiency). The full report on the survey can be found at www.pwc.com/auto.
About PwC's Automotive Practice
PwC's global automotive practice leverages its extensive experience in the industry to help companies solve complex business challenges with efficiency and quality. One of PwC's global automotive practice's key competitive advantages is Autofacts®, a team of automotive industry specialists dedicated to ongoing analysis of sector trends. Autofacts provides our team of more than 4,800 automotive professionals and our clients with data and analysis to assess implications, make recommendations and support decisions to compete in the global marketplace.
About PwC's Global Automotive Management Consulting Practice
PwC's automotive management consulting practice is helping create a competitive advantage for its clients by changing the way companies operate. PwC's management consultants work with senior automotive executives to help develop and implement innovative operational strategies that deliver breakthrough results. The practice is a leader in operational strategy, supply chain, product development, strategic sourcing, and manufacturing. PwC has automotive resources in every automotive market around the world. For more information, visit www.pwc.com/auto.
About the PwC Network
PwC firms help organizations and individuals create the value they're looking for. We're a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
© 2013 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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