There is no slowing down in the automotive industry. A customer base with a range of differing priorities for new-vehicle purchases – including safety, fuel efficiency, performance, design and options – means that OEMs are producing more vehicles in more variations than ever before, whilst also undertaking more frequent design refreshes. This is in addition to meeting the latest fuel efficiency regulations, serving emerging global markets and tightening profit margins.
Correspondingly, most manufacturers have transitioned from traditional one-vehicle, one-plant production models to now producing multiple vehicles – in multiple variations – at a single location. Delivering this flexible manufacturing capability while reducing downtime and maximising output is a critical challenge. But OEMs can meet this challenge by improving their manufacturing velocity.
Manufacturing velocity strategies incorporate three key components: infrastructure, information visibility and workforce productivity. By addressing manufacturing velocity, vehicle-makers can respond to customer demands more quickly and get to market faster without hurting the bottom line.
After a global recession that saw some of the world's largest vehicle-makers nearly collapse due to withering sales, the automotive industry is by and large back in the black. According to IHS Automotive, more than 80m light vehicles were produced globally in 2012, marking the first time that total production has exceeded 80m units.
While the fortunes of automakers have greatly improved, the road forward will still have its bumps. Some of the greatest challenges include:
- Continued pressure to remain profitable
- Meeting increasingly stringent fuel efficiency requirements
- Expanding operations into new markets
- Delivering products that satisfy a consumer base with an increasing range of demands.
Profitability: The largest vehicle manufacturers produce anywhere from about 3m to over 10m cars per annum, which means that hundreds of vehicles are driving off production lines around the world every minute. Combine this with fixed profits attached to every vehicle and that puts a tremendous amount of pressure on plant managers to ensure minimal downtime and high productivity.
Improved fuel economy: High fuel prices and increasingly stringent fuel efficiency standards are forcing automakers to deliver better-performing vehicles, hybrid and electric alternatives, and diesel-based vehicles. Additionally, as gas prices fluctuate, so does consumer demand. Operations must be flexible enough to react quickly to these changes.
Consumer demand: Demand goes deeper than the price of fuel. As cars become more advanced, better connected and in general 'smarter', consumers want the latest features and styles. The term 'early adopter' is just as applicable to consumers who want the most high-tech cars as it is to those who want the latest smartphone.
The significance of the global market can be seen in the industry's shifting production numbers, particularly in emerging markets. According to projections from IHS Automotive for 2012 to 2020, light vehicle production will:
- Increase by about 50% in South America
- Significantly increase in China, from about 18m vehicles in 2012 to more than 30m in 2020, and jump from about 8m to more than 13m in South Asia
- North America and Western Europe will see 10-20% increases in production, with most growth coming from Eastern Europe.
The upward shifts in new markets are thanks in large part to emerging middle classes that want the same safe, technologically advanced and fuel-efficient cars that consumers in first-world countries are driving.
Life in the fast lane
Feeling the pressure to launch faster and refresh more often, OEMs must ensure that all these developments can happen regularly, easily and quickly. However, vehicle design changes cannot simply be “thrown over the wall” from the design centre to the manufacturing floor.
Vehicle refreshes, whether midyear or every other year, have an impact on the people, processes and machinery in OEM operations. While vehicle design changes can be relatively small with minimal impacts on equipment, for example an added small crease in the back of a car, new taillights or a new phone dock, they can require tooling changes, supplier revisions, station changes and more.
OEM needs to find ways to sequence all of these elements into their plants while negating or minimising the complexity embedded in their operations. This means initiating manufacturing velocity strategies and solutions that enable them to deliver the right products, at the right time and in the right quality. As noted earlier, manufacturing velocity encompasses three main components:
- The right infrastructure
- Information in the right form, available to the right people, at the right time
- A highly skilled, multi-talented workforce.
With the increase in flexible manufacturing come more parts, more variation, and more interfaces to robots and other devices. Additionally, OEMs must be able to maintain continual operations without reprogramming all of their equipment or reconfiguring their entire control architecture.
An enterprise-wide infrastructure is needed to support these flexible manufacturing needs. That includes integrating equipment and tooling that can quickly and easily adjust for different vehicle variations and sizes on the same production line. Equally as important are the business systems that provide a real-time window into the manufacturing operations and supply chain to keep all parties informed with visibility into the constantly changing production stream.
To support the flow of all of this critical information, achieving a connected enterprise that can get data securely to and from machines and people – at every level, in any location and in the right context – is vital. Using a unified control and networking infrastructure that is IP-centric can help to ensure that all devices in a plant can communicate with one another, creating more scope for agility and innovation.
A system that uses EtherNet/IP can help OEMs to more easily move toward the use of a single network, streamline multiple disciplines and applications into a single package, and enable secure and easy flow of production data. EtherNet/IP allows a company to leverage the availability of hundreds of IP-based devices – including those that were not originally designed for an industrial setting – to increase productivity, quality and safety on the plant floor.
On top of this, a manufacturing execution system (MES) should be integrated into the enterprise to help synchronise manufacturing tasks, quality procedures and inventory movements throughout production. An MES also enables the capture of vehicle production information for regulatory compliance, warranties and continuous improvement analysis.
Incorporating more information into the manufacturing process additionally enables customer feedback to reach the production line faster. Whereas it once took months for enough feedback to make its way to manufacturers, this can now happen within days. Today's vehicles are smart enough that they can be plugged in for a diagnostic check, enabling any issues to be immediately reported back to the plant. That puts the onus on the facility to have a connected enterprise in place to route the information to the necessary workers so that they can quickly address quality issues on the line.
A survey conducted by TechValidate and Rockwell Automation of automotive manufacturing executives from around the world found that nearly two-thirds of respondents said they were “very confident” that their organisation was accurately interpreting the production data generated by their current systems. That is an encouraging statistic, because to operate efficiently OEMs need to understand what is happening across their manufacturing operations and supply chain. Having real-time information visibility can help vehicle-makers to:
- Understand activities across the enterprise (production work flows, OEE, supplier deliveries, production times, parts inventories, etc)
- Predict downtime events before they happen and intervene as needed
- Distribute event data or other information to the appropriate personnel so they can make any necessary adjustments.
It is critical that the information is in the right form, for the right people, and shared across plants and global business systems for better decision-making and competitive advantage. Anything from a quality issue on the production line to a supply shipment being stalled hundreds of miles away can have wide-ranging, chain-reaction effects on an OEM’s operations. Understanding the impact these disruptions can have and then relaying the relevant information across the enterprise to the right people can mean the difference between delayed and on-time production.
This could include notifying a maintenance technician with relevant tooling information or letting scheduling personnel know about supply rerouting options. It could also include notifying outside parties such as suppliers to adjust their operations to ensure that an OEM’s inventories remain well stocked.
Production information can also be compiled and compared, both within a single plant and across the organisation. The use of comparative data has the potential to identify efficiencies, trends and best practices across an OEM’s operations. This can provide answers to questions such as: ‘Why does it take 10% longer to produce the same platform at one plant versus another?’ and ‘Why is quality varying between production runs?’ The answers are there – they simply need to be mined from the operational data.
“The nature of production work is becoming more and more complex as the product – and the technology used to build it – becomes more and more advanced,” stated the Center for Automotive Research report ‘The Big Leave: The Future of U.S. Automotive Human Resources.’ The report continued: “This production complexity necessitates employing workers who may not have higher levels of formal academic preparation beyond high school or a GED [general educational development qualification], but nevertheless can demonstrate higher literacy and numeracy levels and more advanced communication and team skills than were previously required of automotive manufacturing workers.”
Since their responsibilities are greater and their expertise more diverse, auto workers today more than ever need to receive cross training to build their understanding and expertise across multiple areas. For example, maintenance technicians need to receive comprehensive training for the increasingly complicated machines found on the plant floor and the plethora of devices that are being connected to them. These connected technologies continue to advance and the roles of the IT department and the maintenance technicians are beginning to blur.
As technologies allow plant managers to view comparative data across plants, that data needs to be incorporated into training programmes. Operational improvements, after all, are only as good the people who implement them.
Additionally, as automakers launch operations in emerging markets, they are striving to replicate the successful operations they have built in their established markets. That means employing highly skilled employees in countries that may lack the experienced workforce that they are accustomed to being able to access. Delivering comprehensive training to these employees is critical.
Beyond training, productivity can be optimised in a number of other ways. One key area is asset management, where a four-step approach can help to maximise facility assets while also minimising downtime:
- Evaluate: assess existing processes for inventory management and maintenance needs
- Design: identify process efficiencies, as well as areas where inventory and production issues can be improved
- Implement: put into place processes that will improve productivity, reduce costs and enable financial predictability
- Measure and optimise: use analytics and reporting tools to drive continuous improvement.
Automotive manufacturing of tomorrow
Increased globalisation and better-connected operations will likely push vehicle refreshes to occur at an even faster speed than at present, and with even higher production volumes. These factors will put continued pressure on the automotive industry to be more versatile from the manufacturing level down to the supplier level.
Additionally, continued pressure to improve vehicle fuel economy is likely to lead to significant design changes; composite materials, for example, could well be used more than aluminum. This will have a major impact on production operations and will also drive plant operators to rethink their facility layouts and production processes.
For those automotive manufacturers which are not putting in place strategies and solutions that can speed up their manufacturing velocity today, these future challenges will prove all the more difficult to overcome tomorrow.