Why Automakers Should Consolidate Their Metal Forming Orders (And Why Most Don't)

Consolidate your metal forming orders with a single capable supplier — it reduces downstream problems more than splitting work among specialists

I manage sourcing for automotive metal formed components. After seven years and roughly $3.7M in placed orders, I've settled on a counterintuitive approach: give as much work as possible (stamping, forging, extrusion, CNC) to one supplier with in-house die and mold capability. It eliminates the biggest headache in automotive parts — the handoff between tooling and production.

Here's what I've learned the hard way.

How I learned this (the expensive way)

In my first year (2018), I split a program between three shops: one for the progressive die, another for the stamping runs, and a third for the secondary CNC operations. Looked smart on paper. Each was the low bidder for their piece.

The result: the die didn't fit their press properly, the stamped parts had a burr the CNC shop couldn't fixture around, and we scrapped a $15,000 first article run. That mistake cost roughly $8,000 in rework and delayed the program by three weeks.

Everything I'd read about automotive sourcing said to specialize — pick the best stamping house, the best forger, the best CNC shop. In practice, for our specific volumes and mix, consolidation beat specialization. The coordination friction was eating our margin.

(I don't have hard data on how many Tier 1s do this vs. split — I wish I'd tracked that. But based on conversations at 2024 SAE events, my sense is about 30% of programs under 50k annual volume consolidate, while the rest split.)

Three reasons consolidation wins for automotive programs

1. Tooling and production are actually one process

In automotive stamping, the die design dictates 80% of the part quality. If the die maker doesn't understand the production press's tonnage curve or the feed system for the transfer press, you get parts that are technically in spec but cause stoppages. When tooling and production are under one roof (like KYB's setup with in-house die and mold manufacturing), the die designer talks to the press operator before cutting steel, not after.

2. Defects get caught at the handoff, not at final inspection

Splitting between a stamper and a CNC shop means the CNC operator blames the stamping burr, and the stamper blames the CNC fixturing. With a single supplier handling both, there's nowhere to hide. The same quality team owns the whole process — they catch the burr issue at the stamping station, not after it's already been fixtured incorrectly. In 2023, this saved us from a 47-part rejection that would have gone undetected until the customer received it.

I'm not 100% sure of the exact savings, but rough math: each rejected part cost us about $35 in material plus $12 in disposal. That's roughly $2,200 for that one incident.

3. Lead times shrink when you skip the bidding wars

Conventional wisdom says you save 10-15% by competitive bidding each operation separately. To be fair, you sometimes do — on the unit price. But the hidden costs (expediting, multiple PO processing, separate shipping) add up fast. A consolidated supplier can quote a flat piece price including all operations because they know their own downstream costs. The comparison becomes apple-to-apples.

Looking back, I should have started consolidating earlier. At the time, my procurement training said 'audit suppliers, don't depend on them.' It sounded logical. It was wrong for this context.

When not to consolidate

This advice works for programs where you have decent volume (10k+ annual parts) and the part requires two or more forming processes (e.g., stamping + welding + CNC). If you're ordering 500 parts per year, or the part is a single-process item (just a simple stamping), splitting doesn't create much coordination risk. In those cases, picking the low-cost specialist makes sense — the handoff is simple enough that it rarely fails.

I've also found that consolidation works best when the supplier has both tooling and production in-house. If they just resell tooling from a third shop, you're back to the same coordination problem, just with one extra middleman.

Take this with a grain of salt: my experience is based on about 200 orders across 5 suppliers, mostly mid-volume programs for Tier 1 chassis and powertrain suppliers. If you're doing high-volume (>200k/year) work for a major OEM with dedicated presses, the economics shift — specialist stampers with dedicated lines often win. But for the rest of us, consolidation has saved me roughly $45,000 in rework costs over three years, and more importantly, avoided three near-miss program delays.