Electrical/electronic component suppliers ranked last among the six automotive segments – exterior, powertrain, interior, electrical, body and chassis – reviewed in PwC's North American Automotive Supplier Supply Chain study.
While electrical/electronic component suppliers ranked first in gross profit margins, which suggests low raw material component costs, low-cost labor and lower-than-average total landed costs, said PwC, this segment had the lowest performance in cash-to-cash and inventory turns. Inventory turns ranked low when compared across segments and these suppliers had the lowest year-over-year (YoY) improvements.This translates into some opportunities for improvement in working capital and inventory management.
The electrical components sector also experienced below average revenue growth, and days of sales outstanding (DSO) performance is among the lowest of all segments. However, the study finds that cost of goods sold (COGS) growth relative to revenue growth “appears favorable,” which suggests to analysts that component suppliers have focused on COGS control and cost reductions.
PwC assessed supply chain performance based on 17 metrics segmented into planning, sourcing, and delivery performance. Rankings were developed based on the weighting of these key metrics to derive an efficiency and effectiveness score. The combined score determined the overall segment level ranking.
