Is the automotive industry equipped to handle varying consumer demands?

Henry Ford once said that “any customer can get a car painted any color that they want so long as it is black.”

Today car’s color is the least of the things a customer can customize. Just look at Tesla; it offers customization to an extent where the customer can change the interiors and the wheel rims as per their convenience.

Conveyor belts and all the other traditional mass-production technologies were well suited until the 20th century, but with the increase in consumer demand, competition, complexities, and customizations have increased significantly. Thus, the need of the hour is to make the operations more flexible to accommodate the rapid changes happening in the industry.

A century ago, Ford Motor Co’s factory in Michigan was the epicenter for the auto industry. It was a one of its kind and the first facility where the engineers were working on moving assembly lines which would soon become the norm. Today, not very far from the old factory lies a new plant representing the auto industry’s future. Ford invested a sum of $550 million in transforming a 60-year-old facility into a state-of-the-art factory capable of producing a full lineup of vehicles on the same line. If that wasn’t enough, this plant is also producing three electric vehicles alongside the traditional gas-powered vehicle.

“Our flexible manufacturing system has given this plant the opportunity to increase production by 30 percent while handling a 300 percent increase in complexity,” claims Anthony Hoskins, Ford’s director of manufacturing.

Decreasing Product Lifecycle

One of the biggest reasons for adopting flexible manufacturing is the rapidly decreasing product lifecycle over the past decade. Even before the industry 4.0 era, the product life cycle was continuously decreasing. In the 80’s the average product lifecycle for the automotive industry was around 8.6, which has come down to approximately 6.7. A 2017 survey by JABIL shows that about 68% of auto manufacturers reported that their product life cycle is well under two years. In the 2018 survey, the number rose to 71%. The most significant jump was in the 12-to-18-month range, which rose from 23% to 27%, bringing the automotive product development cycle closer to consumer electronics.

Electrification of Automotive Industry

Electric Vehicles and Hybrids growth is climbing, and by 2025, they are estimated to account for around 30% of the total vehicles on sale, which is a steep rise from 2015, where only about 1% of the total cars on sale were electric. This trend clearly shows the companies are slowly adopting and phasing out combustion vehicles and revamping their operations to manufacture EVs and HEVs. [source]

Global sales growth of light vehicles is decreasing every year. With the increase in sales of around 3.1% for 2019, It is still less than 4.7% of 2013. [source]

The complexities have been increasing every year. In 2010 an OEM, on average, offered around 18 models, which grew to 24 models in 2015. There has been an increase of around 33% in just a half-decade. This increase in complexities resulted in the production plants, thus decreasing the throughput. [source]

The Way Forward

The solution could be introducing methodologies and technologies that can be changed and repurposed with minimal cost. For example, today’s EV industry is changing so rapidly that today’s production system might not be relevant ten years down the line. To cope with this increase in speed, Volkswagen is looking to avoid refitting its factories and introducing flexibility in their operations. They have introduced modularity to reduce the manual handling of parts.

Collaborative Robots can provide a way forward by deploying solutions in existing infrastructure. People on the shop floor can easily configure these robots based on their requirements, thus eliminating any overhead of having specialized engineers for the robots on production lines.

To learn more about how Peer Robotics empowers automobile industries to implement and adapt flexible operations, reach out to us at www.peerrobotics.ai.