Posted By Jeff Moad, December 09, 2013 at 4:09 PM, in Category: Factories of the Future
With unemployment numbers continuing their long, very slow descent, manufacturing output numbers rising, and real estate markets surging, it’s easy to forget the dark economic days of 2008 when the Great Recession was strengthening its grip and there was little light at the end of the tunnel.
No industry was hit harder than the automotive sector where, seemingly overnight, consumer demand plummeted and, one by one , large OEMs (with the exception of Ford) sought bankruptcy protection. Car sales in the U.S. bottomed out in 2009 with just 10 million units sold compared to 16.8 million in 2007. Some experts predicted new car demand would not reach those lofty heights again for many years.
In those days, car makers were mainly worried about what to do with excess capacity and how to wring more concessions out of suppliers while slashing labor costs and driving manufacturing efficiencies.
How times have changed. In November, U.S. car sales rose to an annualized rate of 16.4 million, the fastest pace since the 16.8 million rate reported in February of 2007, before the crash.
And demand for cars is also accelerating in the developing economies of Asia and South America. In Brazil, for example, the car market is expected to grow at a 10.9% annual rate through 2017, reaching a value of $224.8 billion.
With automotive markets recovering strongly, car makers are dramatically rethinking their manufacturing strategies. In fact, auto manufacturers appear to be engaged in a race to revamp manufacturing processes and implement new shop floor technologies. The goal is not just to increase capacity to satisfy projected market growth. Car makers such as Ford, Honda, and Mazda are also aiming to increase agility and flexibility on the shop floor so that, the next time a major, unexpected shift in consumer buying habits or an economic downturn? hits, they will be able to respond.
Honda, for example, says its recently opened Yorii plant in Japan will be a model for other Honda plants around the world. It is Honda’s first new plant in Japan in 23 years, and it features nine fully automated processes compared to one such process at its nearby, 50-year-old Sayama plant. Honda hopes that technology-driven production efficiencies at Sayama will enable it to capture a greater share of growing markets outside of Japan.
The new plant includes high-speed press and high-speed die-swapping machines that have helped cut assembly lead times by 18%. The plant also reportedly uses robots to install instrument panels, seats, and tires, and to mount suspension systems. Also, high-speed welding robots make the car body frames and advanced hemming machines shape doors and hoods.
At the same time, Mazda is also refocusing on engineering more agile and responsive production processes. The Japanese manufacturer, which plays David to larger automotive Goliaths, is said to be aggressively adopting Computer Numeric Control (CNC) machines for the milling and fabrication of its new Skyactiv car engines. Compared to traditional, dedicated milling machines, the programmable machines allow Mazda to build a variety of gasoline and diesel engines using the same process and to do so faster and less expensively. Mazda reportedly plans to expand use of the CNC machines to new assembly and engine plants, including one under construction in Salamanca, Mexico.
And Ford is investing heavily to build new plants aimed at capturing growing demand in developing economies and to roll out common production processes and designs that share more parts. It’s all intended to reduce complexity and increase agility, allowing Ford to meet rising consumer demand in different geographic markets.
John Fleming, Executive Vice President, Global Manufacturing and Labor Affairs, at Ford recently told a group of Manufacturing Leadership Council members touring the company’s Dearborn Truck Plant that the company is now in the process of building nine new production plants in Asia and Russia. In all, Ford plans to spend $16 billion on new plants and expansions over the next 3-4 years, creating 16,000 new jobs.
Ford’s new and existing plants are engineered under Ford’s One Ford strategy, which calls for standard production and process improvement methods. At the same time, the company is significantly optimizing the number of vehicles that are produced from a small number of base platforms. In 2007, Ford built cars on 27 different platforms. By 2016, the company will build 8.5 million cars based on nine core platforms, enabling scale, lower costs, and common production processes.
Ford is also increasing investments in technologies it expects will boost production speed and agility. These include faster free-form fabrication of soft tools, the use of advanced analytics for greater insights into plant equipment--particularly real-time maintenance requirements--and virtual reality tools which will be widely used for many purposes, including modeling, simulating, and refining the ergonomics of production processes.
It’s clear that Ford, Honda, and Mazda are adjusting their thinking and their investment agendas to reflect a post-recession posture. They intend to use high levels of advanced automation, common production processes, and products and processes designed for agility as competitive weapons. Suppliers and competitors in the automotive space as well as manufactures outside of it would do well to emulate their thinking.
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit