Andersen Consulting launches research into Chinese automotive industry
Andersen Consulting launches research into Chinese automotive industry
Keywords Andersen Consulting, Automotive industry, Benchmarking, China
Andersen Consulting has announced the completion of the third benchmarking study in the Lean Enterprise series commissioned to look at the automotive components industry.
The co-authors Dr Nick Oliver, Professor of Management Science at the University of Cambridge, and Dr Rick Delbridge and Dr James Lowe of Cardiff Business School visited four car assemblers and 14 automotive component plants in China to compile data to be used in their report. They also received assistance from Tsinghua University in Beijing.
The study presents detailed benchmarking data from seven of the component suppliers and addresses the manufacturing performance and management practices of China's automotive component suppliers. The data are compared with international benchmarks gathered from 71 plants across Europe, North America and Japan, the focus of the two previous studies.
Co-author Nick Oliver said: "Increased opportunities in a rapidly expanding market have led to growing interest and an influx of foreign investment in China by the world's automotive industry. This was the catalyst for initiating the research, which we feel addresses many issues affecting the decision of automotive companies when considering future investment in China."
Key analyses of the study include:
the current state of automotive manufacturing operations in China;
problems and opportunities facing foreign companies who are investing in China;
levels of manufacturing performance and practice compared to Western and Japanese benchmarks.
Important findings of the study include:
lagging performance of Chinese plants in productivity and quality compared to international standards due to their relative late entry into the sector
substantial regional variations
evidence of learning on part of longer established joint ventures
competitive unit labour costs despite low labour productivity (due to low cost of labour)
underdeveloped production control and operations management
high inventory levels, low stock turnover ratios and sluggish material flows
lack of co-ordination and integration amongst buyers and suppliers
demand not yet matching expectations.
The study concludes that many automotive companies face a difficult time in the short to medium term with joint venture partners reporting a variety of problems in achieving economic production volumes. However, there is substantial evidence that a greater market orientation is permeating the industry in China and the long-term growth prospects are offsetting these concerns.
Peter Roberts, Global Quality Partner, Automotive and Industrial Equipment, at Andersen Consulting,commented: "There is a wealth of information readily available providing statistics on the Chinese automotive industry. However, we wanted to be in a position to be able to advise our clients on the realities of joint venture operations in China. We believe this study undertaken by the Cambridge and Cardiff team enables us to do just that."
Copies of the report can be obtained from Sally Allday, Andersen Consulting, 2 Arundel Street, London WC2R 3LT. Tel: +44 (0)171 546 9678.
