Global Fastener News

2000 FIN – Emhart’s Gustafson: Too Many Fasteners in Cars?

October 16
00:00 2012

April 24, 2000 FIN – Emhart Fastening Teknologies president Paul Gustafson is telling audiences there are too many fasteners in today’s automobile.

In several speeches in the past year Gustafson said it isn’t actually a surprise, because “fastener companies own the assets that produce their products; assets with a specific capacity, controlled by stakeholders focused on return on investment. Provided your fundamentals are correct, optimize your capacity and you’ll optimize the utility of the investment community – a perspective I contend will someday be referred to as ‘the dominant mind-set at the turn of the century.’”
It is time for the industry to change, Gustafson ventured. “This creed of the past millennium is not fundamentally wrong under the old system,” Gustafson noted. “But as the needs of the customer change, so must the relationships that support those expectations.”
Another contributing factor is the fastener industry’s one-dimensional perspective on value, Gustafson added. “Focused on the premise that value is a function of piece price, the slippery slope to lower prices becomes a self-fulfilling prophecy,” he explained. “Compounding this dynamic is the need to preserve results. If your prices are going down and your stakeholders require, at minimum, preservation, the myopic manager will seek the obvious – more volume.”
Another issue is that fastener companies generally aren’t end-users or installers of their products. “If you are not involved in the installation phase directly or through the supply of a complete system, you have no sense of the inefficiency and subsequent costs you are inflicting on your customer,” Gustafson pointed out.
“These factors converge to create an environment geared to put too many fasteners in cars at ever-descending prices,” Gustafson maintained. Gustafson has been president of Emhart since 1990. Emhart, the fastener division of Black & Decker, employs 3,000 people at 22 facilities in 18 countries in North America, Europe and Asia.
Gustafson’s background includes being group vice president for Europe, based in the United Kingdom, and group vice president for the Asia Pacific region, based in Hong Kong.
Gustafson used a riddle, “What weighs more, a pound of steel or a pound of feathers,” to explain his perspective. “Taken in this context, it says that as prices go down and you can buy 4,000 fasteners for what you used to buy 2,000 fasteners, we might as well design in 4,000!”
Focus on the Customer
Gustafson recommended focusing on the customer’s overall situation to “avoid this automotive malaise.”
“This means having the ability to satisfy every aspect of fastening and assembly technology from concept through installation,” Gustafson emphasized. “It means being involved in application development, plant efficiency, production engineering and assembly system integration.”
Fastener suppliers must change from being in the hardware supply business, which is time specific, spatial and asset based, to the service-based software business, he remarked.
That change is “similar to the transition IBM made when it shifted its strategic emphasis from hardware supplier to a complete service provider, or General Electric, which has backed up an extensive manufacturing capability with a global service network that produces higher margins than the OEM equipment portion of its business,” Gustafson pointed out.
He also cited Emhart as an example of the necessary change. In the past six years Emhart “has turned virtually every fastener line we produce into systems that include fasteners, installation devices and line-interface software.”
“To accomplish this you must shift the paradigm from managing assets to managing intellectual property—not management control, or what some might call management force,” he reasoned.
“For a fastening technology company, this means assuming greater responsibility for the assembly value chain,” Gustafson suggested. “It means choosing the right technology, supplying a complete system that is integrated into the customer’s manufacturing environment, taking responsibility for the actual assembly process if requested, having the ability to apply this technology without boundary, anywhere in the world, packaged with the most innovative services available and providing the customer with product consultancy instead of product volume. In other words, fulfill our customers’ vision, not their shelves.”
Emhart averages 200 new products and systems and 60 patents each year.
Technology optimization is having the ability to objectively match the customer’s priorities, applications and manufacturing environment with the most appropriate assembly technology and fastening system.
“The operative word here is objectively,” Gustafson pointed out. “A company must offer the customer the choice and the ability to choose from a variety of alternatives – all of which are offered in an objective way, not constrained by the technologies manufactured in-house. From concept and design to system integration and production, the ability to create, apply and install an assembly solution is critical. This takes application engineering, a spirit of imagination, sound installation technology, system integration know-how and, if needed, the ability to manage the customer’s assets.

Supplying Value vs. Products
“We must become value managers, not plant managers,” Gustafson declared. “You may have the right combination of technology and resources, but if you are unwilling or unable to apply them wherever your customer takes you with a globally coordinated system of communication, then you will never fully own the customer’s total experience.” Emhart’s customers include Maytag, United Technologies, Hitachi, General Electric and Bayliner. Gustafson predicted assembly suppliers “will have to develop, apply and install their processes next to and within their customers’ facilities…on every global engineering platform and at every build site assigned to them.”

Emhart’s Digital Laboratory
Emhart developed its Virtual Innovation Center as a digital laboratory to house multiple technologies and installation methods, fastener wizards and value analysis software that computes in-place cost and capital investment.
“The true intellectually based assembly system provider will have no sense of time or place when it comes to designing, applying or servicing the customers,” Gustafson explained.
Emhart’s virtual ability is backed up by four technical centers in Nagoya, Japan; Frankfurt; Detroit; and New Haven, CT; and three Mobile Innovation Centers that travel throughout North America and Europe. “That’s why our corporate motto at Emhart Fastening Teknologies is ‘Creating the Future Worldwide.’” Gustafson concluded. ©2000/2012 Fastener Industry News
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2000 FIN � How Much Can Automakers Save?
April 24, 2000 FIN – Emhart Fastening Teknologies spent an estimated $10,000 of engineering time to reduce the fasteners in a new model of a pickup truck. The results save 95 cents per truck.
When an automaker is producing 1 million trucks a year the 95 cents add up to $950,000 in savings, Emhart president Paul Gustafson pointed out.
Gustafson offered two examples of savings for a 1998 compact car produced in North America:

Example #1: Saving $180,000
The previous annual cost for producing rear axle plates for the half million vehicles was calculated at $230,000. The new fastening method would be $50,000. The savings is $180,000.
• Previous fastening: “Large metal plates are welded at the point where the trailing axle and the trailing arms meet. Each plate has various components mounted to it. Both plates have one brake line isolator clip, and the passenger side plate has an emergency brake line isolator clip mounted on it.”
• New fastening method: Attach the bracket by drawn arc welding (“Weldfast”) instead of resistance weld. When using this attachment method it is possible to reduce material cost by eliminating the spot welds and reducing the size of the bracket. The Weldfast system can be mounted to the end of a robot for a repeatable pick and place system. The $180,000 investment estimate includes both a Weldfast system and a robot.
Substantial weight savings would also be possible by implementing this proposal. In addition, the elimination of the torque requirement is an ergonomic enhancement.

Example #2: Saving $150,000
The previous annual cost for producing ABS sensor wire routing for the half million vehicles was calculated at $240,000. The new fastening method would be $90,000. The savings is $150,000.
• Previous fastening: ABS wire is held in place and protected by means of a plastic tube that runs the length of the trailing axle. Plastic tube is secured to the trailing axle by means of three push pin retainers.
• New fastening method: T5 type drawn arc weld studs would be welded at the axle source at the routing locations. Plastic clips designed for the stud type would be shipped to the electrical supplier and attached either mechanically or by tape. The electrical conduit assembly would then be simply pushed over the studs at the proper routing locations.
Gustafson told FIN the concept is simple: “Fewer parts generally make it less expensive.” Toyota, which featured the Emhart process in its annual report, “would like to reduce fasteners by 10% per project,” he revealed. “That is not an expressed goal,” he clarified.
So Emhart formed a joint engineering team with design and production engineers, marketing staff and business managers from both sides to study plans for an entirely new vehicle.
They weren’t looking just to cutting the total number of fasteners. Even just reducing the variety of fasteners can cut costs. “Fewer SKUs mean less inventory,” Gustafson pointed out.
DaimlerChrysler approached Emhart because SUV sales were cutting into the minivan market and they wanted to cut production costs to make their vehicle more competitive. Together they did a complete teardown of a minivan. Eliminating some fasteners in minivans with a more efficient production process could yield millions of dollars in savings.
Part of the change is due to increasing modular construction, Gustafson noted.
It is not just automakers. Emhart has formed a joint team with John Deere to streamline the assembly process for a new tractor.
However, any change requires the fasteners still to perform. “None of this supplants good engineering and testing. Labor, time, money saved must be in the context of integrity of the joint,” Gustafson said. Fastening systems must meet or exceed requirements and be able to pass crash testing. ©2000/2012 Fastener Industry News
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