2003 – The Manufacturer, “Closing the Gap”

Browning, Colin. “Closing the Gap.” The Manufacturer March 2003:177-179.
- Auburn Hills, March 2003

The last 12 months have not been the best for the automotive industry. Consumer confidence has taken a knock as we wait to see how the global political situation will be played out. Stock market volatility has also had a negative effect, but it is not all bad news. There are signs that the market may be picking up, and this is good news for the entire automotive supply chain. However, the expected benefits might not be evenly spread, and the companies who have prepared themselves for the expected demand will do best. One such organization is Tesco Group Companies, a key supplier of manufacturing equipment to the big car companies.

“In the last year, we have made a great deal of progress in developing a flexible manufacturing system for our customers,” said Tesco Group president and COO, Jim Toeniskoetter. “This will allow the customer to maintain a fixed line but add extras as necessary. This in turn will lead to shorter product start-up times and a significant reduction in costs.”

The importance of these steps becomes clear when one appreciates what the car makers previously had to do with production equipment. All too often, when the time came to replace a particular vehicle, all the lines that had been used in its manufacture had to be scrapped. This is a costly process and adds to the price charges for each car sold. What Tesco has developed is a line that can change with the cars it helps to make. Rather than being thrown away, the line can be updated, becoming a fixed rather than a finite asset.

There are added benefits, too. “The new equipment can handle multiple tasks simultaneously,” Toeniskoetter said. “It can cope with up to 12 different products at once, and this enables the customer to utilize the full capacity of the equipment. It also increases the flexibility they have in the model mix they are producing. A batch, for example, may be anything from as short as an hour to a full shift.” Rather than having a piece of equipment sit idle, the new line works continuously, providing a faster return on the initial investment.

Tesco’s equipment is used to manufacture automotive closures like doors, hood and trunk covers, all of which need to fit perfectly. We may take these closures for granted, but they contribute to a vehicle’s integrity. In addition to keeping the elements out, they have to perform as expected in the event of an accident. For this reason alone, when a car manufacturer or tier-one supplier purchases closure manufacturing equipment, it is placing a great deal of trust in its supply partner.

Tesco, headquartered in Auburn Hills, Mich., was formed in the late 1980s. Within a year it had won a contract to supply The Budd Company, a major tier-one door manufacturer. Since then, Tesco has picked up several other big name customers. It now supplies machinery to General Motors, DaimlerChrysler, and Honda. Servicing customers across the entire NAFTA region, Tesco employs around 400 staff and generates annual sales revenues of $100 million.

Although Tesco may be a relative newcomer to the North American automotive scene, it is part of a much larger picture. Its parent company is Hirotec, a global engineering, tooling, and production operation based in Hiroshima, Japan. The backing Hirotec had been able to provide TESCO has helped to establish it relatively quickly.

Not content with providing its customer base with a new, more flexible production option, Tesco has placed its own processes under the microscope. “We wanted to make more use of software solutions to help our efficiency,” Toeniskoetter said. “So we have formed a close working relationship with the application developer Tecnomatix. They have a product called eM Planner we have installed that they describe as being manufacturing-process management software.

“Our initial investment with Tecnomatix is around $1 million,” Toeniskoetter continued. “And while the software is now in place, we are still in the early stages of working with it. What it does allow us to do, however, is bring all of our product conceptual information together. This can then be accessed from around the company, ensuring that everyone is working on the latest designs. Over the next two years, we expect our up-front engineering costs will be reduced significantly.”

The link between Tesco and Tecnomatix is expected to become stronger. The two companies are working closely together to enhance the functionality of eM Planner and add features as they are suggested. When it comes to software implementation, this approach makes sense, as no one is better placed to take a product to the next stage of development than its original designers. 

The next big push at Tesco is the promotion of its electric hemmer. Traditionally, hemmers have been operated hydraulically, and this can make for an unpleasant working environment. The electric version is much cleaner, and as Toeniskoetter said, “We have had a great deal of interest in it from at least one customer.”

The work that Tesco has put into improvements is now being formally recognized. The company received a Supplier of the Year award from General Motors in 2002. This is in addition to the fact that it was chosen by General Motors as its first strategic supplier of closure welding tooling in March 2001.

With new products for the customer and improved internal processes, Tesco has been moving fast. As the market picks up, the company is ready to take full advantage.