Adapting to Automotive's New Production Reality

Speaker A: Foreign. Welcome in to another episode of Automotive Insiders. I'm your host, Jason Stein from Greenville, South Carolina, and the MEMA Original Equipment Suppliers Southern Supplier Summit. Thanks for joining. If there's one thing automotive suppliers have learned over the last several years, it's that certainty is in short supply. Production forecasts continue to move. EV adoption rates have slowed in some markets and accelerated in others. Tariff discussions remain active. Material costs continue to fluctuate, and OEMs are asking suppliers to do more, respond faster and remain profitable while navigating unprecedented complexity. For suppliers across the south and across North America, the challenge is no longer simply building great products. It's building organizations that can adapt quickly when the market changes. During this week's Southern Supplier Summit, we brought together industry leaders to discuss exactly that. And joining me this week is Danielle Momini, Vice President of OE Member Content and Strategy at MEMA Original Equipment Suppliers, and Tim Morris, Chief Commercial Officer at tohum. Together they explore how suppliers are managing shifting production forecasts, improving quoting accuracy and profitability, strengthening OEM relationships, and preparing for, for what could be another highly dynamic second half of 2026. From the stage in Greenville, my conversation on Automotive insiders. Well, let me say the reality of where we are, uh, now, um, Danielle, give us a bit of an overview of how the supplier community is viewing, uh, where we are today and maybe, um, what the biggest challenges might be going forward. Because there's no question that this event even today is dramatically different from where it would have been before. And OEMs are frequently shifting their 24 to 36 month volume forecasts. Where are we on that, Danielle?

Speaker B: So from my perspective, and the reason I'm sitting here with Tim is, um, I did just join MEMA, but I am, um, supply chain 25 years, uh, I've done a variety of commodities, business development, sales, program management, um, a lot of time in our plants, a lot of time with the product. Interior specifically is where I spent my last 15 years. Um, and so Tim asked me to kind of speak on behalf of the supplier community and the challenges that we're facing. And um, from my perspective, especially in business development and really, really relevant to the south is, um, a lot of RFQs, a lot of work, a lot of quick deadlines, a lot of changes in your planning and you know, doing your strategic plan and then redoing your plan and then adjusting your volumes on a monthly basis to the latest, I would say IHS, S&P, whatever you use. Um, you know, it's just, you have to be so nimble and on your toes. And it's a lot to manage. Uh, it's a lot to keep up with. And really simple mistakes can drive really big downstream impact. And that was a big part of our conversation.

Speaker C: Yeah.

Speaker A: Tim, how can tier one and tier two suppliers adapt their planning process. Right. To that new reality that we've discussed now for the last half hour or so, really, without disrupting daily operations?

Speaker C: Sure. Well, as you rightly pointed out, Jason, Auto, uh, suppliers are clearly experiencing a new production reality right now. And one of the things we see companies, uh, struggle with in this new reality is basically managing their long range planning process. Right. And so, um, one of the big issues that you have right now is you have this time delay between how the IHS data comes out and how we manage that information and then process that to be able to, you know, look and see what the forecast and the revenue outlook is going to be.

Speaker B: Yeah, I think one of the biggest struggles from our side was, and um, I'm speaking generically, not from specific company experience maybe, but all of the manual systems we were using, everything was in Excel, uh, whether it was the quote file, the forecast file, the volumes. So everything was updated independently. And the time spent doing those tasks really uh, not. Right. Yeah. And you were so prone to errors. And I know that that's one of the advantages to trying to move in the direction of automating the data. Right?

Speaker C: Yeah. And one of the things that we found is the key to adapting to that reality is basically eliminating those spreadsheets. And um, they're fragmented, Excel based and they're very difficult to manage. Um, it's a model that's not necessarily sustainable. So uh, having that ability to unify your sales and your finance and your manufacturing and your engineering and your, your um, long range plan teams, you know, that's, that's the critical thing that we think, uh, you know, definitely benefits.

Speaker B: Yeah.

Speaker A: So inside the purchasing office, OEMs are, uh, there's no question they're demanding faster turnarounds on our FQs while also simultaneously squeezing supplier margins. With that level of complexity and balancing process, profitable ICE business, questionable EV investments, changing regulations. How can suppliers improve their quoting efficiency and win rates without burning out their teams? Or maybe Tim, sacrificing profitability?

Speaker C: Well, you know, it's a big question. Yeah, it is. It's got a lot to it. Right. Um, you know, at the end of the day you have to have a process to quickly pivot your um, team, uh, especially when you're looking at the challenges of the footprint of these manufacturing groups, um, and ultimately minimize the uh, day to day operational challenges. So we think that operational efficiency and streamlining the RFQ process is critical to the success.

Speaker B: Yeah, I think one of the opportunities, but ended up being one of the biggest challenges from our perspective was trying to grow with some of the uh, supplier or some of the OEs down here. Um, being primarily Detroit based. There was a great opportunity as things are shifting and we're looking at insourcing and the RFQs were coming so rapidly and, and one thing that we struggled with tremendously was yeah, you'd get a, uh, a very generic print of a product, you know, give us a high level quote and uh, try to get your foot in the door. Um, but the turnarounds were so quick and being Excel based we didn't have a great modeling to go into and say, okay, roughly this dimension, we didn't have that point of reference. And when we were talking that was one of the advantages that you mentioned was something that you could have some cost modeling and move a little bit more quickly, uh, through that process because I would say we were losing opportunities because we simply just couldn't turn the quotes around fast enough. Couldn't staff that team large enough to turn the quotes out fast enough.

Speaker C: Uh, yeah, the quoting efficiency is clearly key to success. Right? And you know, now more than ever in, you know, today's economic climate, you know, uh, suppliers have to leverage these predictive analytics and automated workflows to be able to take the guesswork out of their RFQ process so that they can gain those efficiencies.

Speaker A: And Tim, we're only talking about AI all day long here. How is AI and predictive analytics helping you help suppliers?

Speaker C: Well, from our perspective, you know, the key to success here really is to be able to reduce those man hours in that RFQ development process. And so we're leveraging AI and predictive analytics in the process to look at a long range forecast in a way that enables um, this quotation process to be accelerated for our customers.

Speaker A: How can suppliers better manage the commercial issues around sudden production delays, changing environmental regulations, tariff shifts, um, and maintain that strong strategic partner status with OEMs amid what is admittedly constant industry disruption? Tim?

Speaker C: Yeah, that's a good one.

Speaker B: Um, well, I can start. Yeah, sure, yeah, no, I think uh, in our conversations leading up to today, one of the biggest challenges of last year, if you're in business development and sales, was trying to track your money in and money out when it was related to tariffs or where you were on a, um, slide depending uh, on the commodity. And there was so much additional information that had to be tracked. And um, talk about bogging down your sales team. I mean it was just one more thing that you had to worry about while you were trying to grow business. And um, I was impressed with how you guys were helping support that side of things.

Speaker A: I mean Tim, your cross functional alignment's gotta be key here, right?

Speaker C: Yeah, that's really the critical part. Right. And you know those relationships that you have between your sales and your finance and your engineering teams, being able to share that data in a platform that's consistent especially with global operations. Right now you have operations in China and North America, South America, Europe. Um, you know, being able to have a consolidated and concise view of your data is really critical.

Speaker A: And that streamlined approach, correct me if I'm wrong, Tim, but it protects the supplier's bottom line obviously, but also reinforces some reliability and strategic value back to the automaker. Right?

Speaker C: Correct. Yep.

Speaker A: Yeah.

Speaker C: Yeah, I think, I think that's the key. You have to have that perception, um, of reliability to your customer. And that's uh, that's one thing that we feel that uh, the product definitely helps with.

Speaker A: Okay, uh, final thing or two here. Uh, the single biggest blind spot you see in the southern supplier community right now. M. Who wants to take that? And we mean that in a very positive, constructive way.

Speaker B: This is all constructive, right?

Speaker A: Exactly.

Speaker B: We're all learning together.

Speaker A: Yeah.

Speaker C: Well, I don't think it's necessarily, you know, uh, a lack of productivity on the part of a lot of these customers. I mean the look at the facilities and uh, the AI and the robotics and the machine learning and machine vision systems that many of our supplier customers are implementing, it's really more of commercial agility. Their ability to um, navigate these challenges that we're seeing right now. Obviously we went from hey, we're going to sell a million EVs to all of a sudden zero. We're canceling the program. And uh, being able to manage to that complexity is a very difficult thing.

Speaker B: You said it perfectly and that's been the theme. It was mentioned last night, uh, by Plant as well. Investing in that agility and flexibility right now. And I, and I think that for the smaller tier suppliers, um, looking at ways to connect your data so that you have it at your fingertips that agility is so important right now. And as people are trying to determine where to put their money and where that next step should be, um, very small incremental steps forward to bring your data together and kind of pull yourself out of the stone Age has so much value in terms of your staffing and manpower and how you're spending your time and how you're paying your folks. So I 100% agree with Tim's answer.

Speaker A: Final thing, uh, describe the automotive supply chain landscape for the second half of this year. Tim, how would you put it into words? What are your, what are your um, thoughts on that?

Speaker C: I think uh, automotive right now is spending an inordinate amount of time trying to reconfigure their facilities. Right. And we're seeing that, I think in uh, yesterday's presentation, um, Orient assembly went from an EV manufacturing plant, now back to going into these uh, Escalades and other high profit ice engine vehicles. So um, yeah, ah, I think that's really the outlook going forward is tier one suppliers have to kind of manage to this complexity and figure out how to uh, update their production schedules and their outlooks going forward so that they can be effective and profitable going forward. Because after all that's the key to the business. Right.

Speaker B: Danielle, can I be optimistic about it and say I'm hoping for stability in the second half of the year just because we've endured so much and I think that uh, everybody's working right now to kind of pivot again with the tariffs and figure out the recovery piece of that. I think that um, hopefully we'll have some stability in the rest of this year and we can, we can actually focus on investing in building and moving forward because that's what we have to do. You know, that's what we need to do right now.

Speaker A: Wonderful. Well, what a great hour of taking uh, us through where the supplier community is really thinking of things, where Rivian's thinking of things and just generally how, how we're looking at the back half of the year, uh, and all the other challenges. So thank you so much. Thank you to our panel for this. Thanks again to my guests Danielle and Tim and thank you for joining us on another episode of Automotive Insiders. Come back to this platform for more great interviews throughout the year. I'm your host Jason Stein. We'll see you again next time.

Speaker B: It.