Volume 16 | Issue 8 | Year 2013

While a two-bedroom condominium might give you the basics of a comfortable home, a custom-built house with four-bedrooms, three baths and the basement theater room caters much better to your individual needs in terms of exclusivity. And, consequently, is more enjoyable to live in.
Which is the thinking behind the built-to-order electrical wire harnesses made by DAA Draexlmaier Automotive of America LLC.

“Today’s cars, particularly in the luxury segment, increasingly rely on sophisticated technologies. Everything from opening and closing the sun roof to asking the GPS for directions to integrating your iPod into the entertainment system requires equally sophisticated and intricate electrical wiring harness systems,” says Stefan Bude, the company’s president and CFO. “BMW, one of our major customers, moreover, allows customers to order their cars in almost endless equipment configurations. That requires individualized wiring to meet the specifications of that individual car.”

However, general industry practice is to install standardized wiring harness systems. If a particular component isn’t in the vehicle, the wiring in what would normally be connected is literally left hanging. This, said Manfred Kasprzok, director of sales, project and program management at Dräxlmaier’s plant site in Duncan, S.C., is a potentially troublesome practice. “A major cause of problems in electronic systems is open ended wiring lying around not connected to anything,” he says.

As Dee-Ann Durbin of the Associated Press reports, “Car buyers increasingly want high-tech features like voice recognition and navigation. But they’re not very forgiving of the car company when those systems fail.” So if one cause of these problems, and resulting customer dissatisfaction, can be traced to wiring harnesses that aren’t optimally configured, why isn’t more of the industry moving to customization?

One is that it costs more to make a custom harness. But, as Bude points out, the more expensive custom harness actually ends up saving money. “A custom harness generally weighs less than a standard harness because it uses less wiring,” he explains. “All car makers are looking to reduce weight to improve fuel economy. A more immediate cost savings is that less wiring also means less copper, currently a very expensive commodity.”

If it were just a matter of saving money and fuel, this might be more of no-brainer. But, to really make it work, an automaker must be willing to partner with its supplier from the ground up, beginning with R&D and throughout the supply chain, to benefit from a customized harness that truly integrates into the car’s design and manufacturing process.

Which is the niche where Dräxlmaier excels.

Partnering with BMW
How the affiliate of the Germany-based Dräxlmaier Group came to dominate this niche in North America relates to BMW’s move to manufacture in South Carolina. “In 1976, Dräxlmaier established a production site in Niagara Falls, Ontario, Canada,” Bude recounts. “We were initially a small operation, making wiring harnesses and interior components for the VW Golf. By the 1990s, we’d enjoyed exceptional growth. When BMW opened its Spartanburg manufacturing plant in 1995, we moved to South Carolina to be close to our customer. BMW was building the new Z3 series and three years later the X5. We won the contracts to design the harnesses and interior components for these models and then to manufacture them.”

That became the business model for Dräxlmaier customized wire harnesses. “We win the contract to do the initial design, and customarily that leads to the contract to manufacture the harness,” Bude says. “The advantage for our customers is that we are uniquely positioned to apply in-depth understanding of the wiring harness system as we designed it for the vehicle’s specific equipment to the manufacturing process.”

Bude emphasizes that efficient production process extends throughout the supply chain. “It’s a complex process requiring highly sophisticated logistics when you’re doing just-in-time, build-to-order manufacturing. You have to be a complete partner with the OEM, from R&D to manufacture to supply and delivery. When you manufacture as we do in Mexico and you’re supplying a global OEM, your processes must be very deeply integrated into your customer’s processes. That’s the kind of relationship that’s vital for us to have with any of our customers.”

The mark of a true partnership, Bude notes, is where the customer not only invites, but expects proactive problem-solving and innovative thinking. “We’re not a ‘give us the blueprint and we’ll make it’ kind of supplier. What makes us somewhat unique is that we are an integral part of the customer’s team supplying a customized solution perfectly tailored to their needs, and the needs of their customers.”

Luxury Defined
Such customization usually defines a luxury good, and Bude notes that focusing on the luxury auto segment has its advantage. “The luxury segment used to be more stable in the past regardless of the economy. While it is true that even luxury buyers tend to hold off purchases when the economy is uncertain, during the recession there was increasing demand for luxury vehicles in Asia, so growth in one market helps cancel out decline in the other. An additional advantage for us is that we’re partnering with global enterprises; that makes cars for worldwide distribution, not just domestic markets.”

He adds, “We see a lot of opportunities like providing electrical harnesses to the mid-premium market VW Passat. The extent of our knowledge and experience with that type of harness makes Dräxlmaier the leading choice for custom electrical wiring harnesses.”

It’s a luxury many automakers may find they can’t not afford.

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