Outsourcing in the automotive industry : the elusive goal of tier 0.5

A key aspect of outsourcing is the development of enhanced capabilities by automotive suppliers. An obvious cost benefit is that supplier wage rates are often less than those at the vehicle brand owners (VBO). But time and quality benefits are also expected together with increasingly sophisticated engineering and operational capabilities. This can be seen as a staged development but at each stage, the VBO passes more risk to the supplier. This article addresses the practicalities of becoming a tier 0.5 supplier and some of the pressures that had to be overcome. It focuses on the cockpit module that was developed for the new Micra model that is assembled at the Nissan plant at Washington in the UK.