Ontario auto parts suppliers can now receive provincial money to help make their factories more competitive.
The Automotive Supplier Competitiveness Improvement Program allows small- and medium-sized suppliers to receive up to $100,000 dollars for hardware, software and tools to help make their plants run more efficiently.
Small- and medium-sized suppliers are defined as firms with either fewer than 500 employees globally or annual revenues of less than $1 billion.
The program is a partnership among the Automotive Parts Manufacturers’ Association, the Ontario Centres of Excellence and the Ontario Ministry of Economic Development and Growth.
“Smaller suppliers are being asked to carry the burden of improvement and innovation as it gets pushed down the line” from automakers, APMA President Flavio Volpe told Automotive News Canada.
Volpe said that while small suppliers work just as hard as the bigger ones, their operations aren’t as sophisticated or as highly staffed.
Suppliers of automotive molds, for example, can be so focused on a specific customer’s order they sometimes lose sight of production efficiencies, Volpe said.
Another example could be a supplier using a mold with a cycle time of 55 seconds. But to serve a customer better, a supplier may have to shave that time down to 51 seconds.
Volpe continued: “To hang onto them for the next program win, you may have to get it down to 48 seconds. You better have a very sophisticated manufacturing-process management system in place. And, you have to update it all the time.”
Funding from the program will help pay for tool design software and strategies to maximize cost efficiency. The APMA will help implement the new program.
Companies must present their project to the APMA and prove they could pay for it themselves. Once it’s paid for, the Automotive Supplier Competitiveness Improvement Program will reimburse the parts supplier for half the cost. The money comes from the Ontario government.
“It’s designed specifically to make sure the company is financially sound and able to make the investment on its own,” Volpe said. “And then we reimburse, as opposed to someone who says, ‘I’ll make it, if you pay me the money first.’”
The program also allows suppliers to be matched with qualified automotive industry efficiency experts to review production capabilities and identify inefficiencies to make them more competitive.
Suppliers usually hire “lean consultants,” who report to management, Volpe said.
“What we’re saying here is that the program will help you with the tools, hardware and software and we’ll provide a mentor rather than a consultant who will say: ‘This is how you can drive efficiency.’
“It’s about mentoring the plant manager rather than giving a consultant’s report to the executives of the company.”
The first round of application intake is underway and closes Nov. 3. The second round begins Nov. 4 and ends Jan. 17, 2017.