Aspiring For Automotive Excellence: Achieving Continuous Cost Reduction

The Call To Reduce Automotive Lead Times
To compete in increasingly global markets, automotive enterprises must excel in the areas of cost, quality, on-time delivery, and product innovation. Compounding those challenges is an effort by the industry to reduce the lengthy delivery lead times associated with producing a built-to-order vehicle. While the "5-day car" remains an ideal, industry thought leaders believe that reducing traditional lead times from 60 or 70 days to a fraction of that time is a very achievable goal.

Cutting build-to-order lead times benefits both OEMs and consumers. For the OEM, shorter lead times mean increased customer satisfaction, leaner inventories, and a reduced need for incentive-driven sales techniques, which have cost automakers in North American markets US$25 billion annually 1 . Consumers benefit by finding the right car at the right time and having to accept fewer compromises on their vehicle of choice. All involved realize that the ultimate goal requires a transformation of the enterprise's entire foundation—its culture, structure, business processes, and technology. Yet the competitive advantage gained by those who achieve this transformation will be decisive.

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