Having worked for Automotive Industry clients for over a decade, not once did I ever have one tell me that they could not make the products they wanted because there was no tooling. However, a recent study by Harbour Results Inc. says that the Automotive Industry better worry about tooling. As reported by Automotive News, the study concluded that there is already a 40 % bottleneck in the ability to make vehicles.  Other concerning statistics: within 5 years, the industry will be $6 billion short of tooling capacity; new models over the next 5 years could need as many as 3,000 new tools; and North America lost one-third of its tooling manufacturers in the most recent recession.

So what does this mean for the industry?   Well, if you have a supplier, you better make sure that they have the capacity to make your products.  You should review your current contracts and consider how they may be impacted by a shortage in tooling.  Who will bear the burden of that economic issue?  Will it excuse performance, or as the buyer, will you be left short of product.

How will it impact your costs?  Will you have to get tooling or product outside of North America that you currently get locally?  The impact on the time to fill orders, on the ability to meet demand and to ensure that your business operates at the capacities necessary could be materially impacted.  Combine these facts with an aging workforce and an ongoing shortage of skilled labor and there really could be a tooling crisis in the Automotive Industry that is acute and sudden, but plainly predicted.

Get ahead of the curve.  Review your contracts.  Forecast your needs.  Be prepared.  No tooling means no parts.  No parts means no product.  No product means no sales.