Executive Briefings

Automakers Are Bound to Design, Build and Sell Anywhere

Analyst Insight: Car ownership in developing economies is on the rise. By 2020, annual world vehicle production could reach 85 to 90 million units. That will mean another 75 to 100 plants, each producing around 300,000 cars a year, will be needed, essentially in or close to the world's fastest-developing countries. Automakers have to create new global production strategies to serve these multiple diverse markets. – Pierfrancesco Manenti, Vice President, Research, SCM World

Automakers Are Bound to Design, Build and Sell Anywhere

The manufacturing model for the automotive industry today has not fundamentally changed over the last 100 years when Henry Ford introduced the assembly line. This traditional manufacturing process has to be changed dramatically in order to meet the economic and technology challenges of 21st Century global markets.

The impact of globalization, growing operational complexity and diverse markets and consumers, demand that manufacturing strategies should now be focusing on global flexible manufacturing capabilities. The production environment will need to be highly adaptable and quickly reconfigurable to respond to rapid changes in market demand, technology innovation and regulation. This marks more than just an evolutionary change. It demands revolutionary new approaches.

In the last decade many automakers have begun to progressively adopt approaches that allow a single factory to build a range of vehicles instead of one model per line. This allows better use of manufacturing resources, reduces production costs, and increases flexibility to meet variable demand in volume and mix. This has demanded an increasing use of standard platforms: a set of common designs and components that are shared by various models. It is estimated that platforming can offer consumers the same number of models while reducing the number of unique architectures by 50 percent. Going forward, manufacturers will drive further efforts to reach a higher degree of standardization and modularization and achieve a working platform strategy.

The future opportunity for carmakers will be to design anywhere, build anywhere and sell anywhere. This means building vehicles based on the same platform in multiple plants across the globe. An emerging challenge will be to design vehicles that can be manufactured and benefit from high levels of automation in Western plants, yet are still capable of being manufactured with high quality in labor-intensive factories in low-cost countries. This requirement will drive increasingly sophisticated manufacturing engineering practices, demanding detailed simulation of very different plants.

Leveraging 3-D plant visualization and simulation technologies or “digital manufacturing” applications that are available in several PLM suites, automakers will be able to design, test and manufacture engineering platform-based vehicles against very different production environments. It is estimated that – as a higher proportion of the vehicle is designed right the first time – digital manufacturing typically eliminates 60 percent of engineering changes associated with a vehicle development program. 

                                                 The Outlook

The automotive industry is set for a revolution over the next few years, as the way that tomorrow’s cars will have to be designed, built and delivered has to change fundamentally from today. Complexity reduction efforts will be essential, helping to achieve higher levels of standardization in product structures and higher degrees of flexibility in production environments.

The manufacturing model for the automotive industry today has not fundamentally changed over the last 100 years when Henry Ford introduced the assembly line. This traditional manufacturing process has to be changed dramatically in order to meet the economic and technology challenges of 21st Century global markets.

The impact of globalization, growing operational complexity and diverse markets and consumers, demand that manufacturing strategies should now be focusing on global flexible manufacturing capabilities. The production environment will need to be highly adaptable and quickly reconfigurable to respond to rapid changes in market demand, technology innovation and regulation. This marks more than just an evolutionary change. It demands revolutionary new approaches.

In the last decade many automakers have begun to progressively adopt approaches that allow a single factory to build a range of vehicles instead of one model per line. This allows better use of manufacturing resources, reduces production costs, and increases flexibility to meet variable demand in volume and mix. This has demanded an increasing use of standard platforms: a set of common designs and components that are shared by various models. It is estimated that platforming can offer consumers the same number of models while reducing the number of unique architectures by 50 percent. Going forward, manufacturers will drive further efforts to reach a higher degree of standardization and modularization and achieve a working platform strategy.

The future opportunity for carmakers will be to design anywhere, build anywhere and sell anywhere. This means building vehicles based on the same platform in multiple plants across the globe. An emerging challenge will be to design vehicles that can be manufactured and benefit from high levels of automation in Western plants, yet are still capable of being manufactured with high quality in labor-intensive factories in low-cost countries. This requirement will drive increasingly sophisticated manufacturing engineering practices, demanding detailed simulation of very different plants.

Leveraging 3-D plant visualization and simulation technologies or “digital manufacturing” applications that are available in several PLM suites, automakers will be able to design, test and manufacture engineering platform-based vehicles against very different production environments. It is estimated that – as a higher proportion of the vehicle is designed right the first time – digital manufacturing typically eliminates 60 percent of engineering changes associated with a vehicle development program. 

                                                 The Outlook

The automotive industry is set for a revolution over the next few years, as the way that tomorrow’s cars will have to be designed, built and delivered has to change fundamentally from today. Complexity reduction efforts will be essential, helping to achieve higher levels of standardization in product structures and higher degrees of flexibility in production environments.

Automakers Are Bound to Design, Build and Sell Anywhere