Since 2013, the global tanning industry has experienced a strong increase in demand for finished leather for automotive interiors. Automotive has long been a valuable segment for leather producers, but its importance has grown substantially, partly because of a decline in demand from other segments, most notably mainstream footwear, in the course of this decade.
Automotive original equipment manufacturers (OEMs) have the reputation of being demanding customers, insisting that all suppliers make important progress in operational efficiency year after year, passing a proportion of the savings on. They encourage lean thinking and supply chain excellence and insist that suppliers, including tanners, capture and share important data. All suppliers have to work hard to keep these customers happy.
Automotive companies, especially in the premium and luxury segments, are consumers of a high volume of the best-quality cattle hides in the market and have played an increasingly important role in keeping the leather pipeline flowing. Automotive uses up a share of between 15% and 18% of the total number of cattle hides being processed at the moment, but this is expected to rise to at least 25% by 2020. Just as their demand for cattle hides seems likely to go up, automotive OEMs are certain to demand more efficiency and more information surrounding the production of automotive leather.
Advanced technology, including automated cutting systems, can help tanners achieve the necessary operational improvements and generate the necessary data at the same time. However, this requires not just an investment in the technology, but often quite profound changes to the way the whole company works. Change is always difficult, but many of the technology companies now appreciate the transition businesses need to make to gain full benefit from the solutions they offer; the technology companies also want to provide value for money and pledge to help tanners make the changes in organisation and in culture required to use the technology well. There is an invitation to tanners to become more fully players in the twenty-first-century, digital economy.
Click here to learn more.