You can’t build cars or their components without specialized tooling. But managing those tools is a complicated endeavor. In many cases, automotive manufacturers don’t know where their tools reside, what condition they’re in, or if they even exist. It’s important to ask yourself: Can we provide an accurate inventory location of all of the tooling for all the vehicle lines and components we have in production? Do we know the condition of these tools and where they are in their lifecycle?

If the answer to these questions is “no,” your business may be at risk. Surveys estimate that one minute of stopped automotive production, or downtime, costs an average of $22,000 to possibly as much as $50,000. Few businesses can afford that kind of hit to the bottom line.

Recently, a fire at Meridian Magnesium Products in Michigan caused Ford to suspend all production of its profit-driving F-150 pickup, the nation’s best-selling vehicle. Meridian Magnesium is Ford’s sole supplier of a magnesium radiator support structure, the part that holds radiators on Ford trucks. Ford was working with the supplier to recover 19 tools required to manufacture needed materials, but still expected the shutdown to last several weeks.

A few years back, GM was forced to scramble and file multiple lawsuits to recover crucial tooling when a small, but vital supplier went bankrupt. Clark-Cutler-McDermott Co. of Franklin, Mass., was GM’s sole supplier of certain acoustic damping materials, such as dash insulators, wheelhouse liners, and floor insulators. Since Clark-Cutler-McDermott was a just-in-time vendor, GM had no reserve inventory of components. The tooling was recovered within a matter of weeks, largely because GM had kept careful track of its whereabouts. Still, the company had to contend with a production shutdown while the lawsuits were resolved.

These outcomes could be much, much worse without effective tooling management systems.

Protect Your Investment

There’s no denying that tooling is a major investment for all automotive companies. And that’s not going to change anytime soon. Harbour Results, Inc. (HRI) predicts that in 2018, automotive vendor tooling spending will reach a record high of $11 billion. The key factor driving increased tooling spend is the high level of North American vehicle launches predicted between 2018 and 2020—177 vehicles. More than half of these launches are predicted to be SUVs and truck platforms, which require more tooling to manufacturer than car platforms.

With the explosion in car launches and the tooling required to make production possible, tooling management has become more important than ever. RFID tags have helped many automotive companies take a major step toward using digitization to improve tool management. RFID tags attached to tools provide real-time information on the location of every tool. If you need to move a tool from one production line to another, you’ll have the information you need to do that quickly, preventing costly production delays caused by lost tools. But there’s more you can be doing with the Internet of Things (IoT) and digitization.

LiveSource Automotive is using sensors linked via the IoT to provide information not just on a tool’s whereabouts, but also its utilization and condition. This information feeds into the LiveSource Automotive portal, where you can analyze and act upon it.  You’ll have the real-time data you need to proactively replace tooling at the end of its lifecycle and give your sub-suppliers a heads-up, so they can perform preventive maintenance as needed. This data-driven approach helps you maximize uptime and cut tooling expenses.

Find out more about how LiveSource is revolutionizing tool management.