Automakers Need Visible, Flexible Manufacturing to Compete

Sept. 11, 2015
In-car technologies, vehicle customization, and the arrival of electric and autonomous vehicles all add to the complexity of automotive manufacturing. Improving the visibility and flexibility of the manufacturing and supply chain network will help.

Automotive manufacturing is becoming increasingly complex, driven by dynamics such as increasing demand for in-car technologies and vehicle customization, as well as the arrival of electric vehicles (EVs). To compete more effectively in this changing environment, automakers should consider improving the visibility and flexibility of their manufacturing and supply chain network.

The digital revolution has enabled the rise of a major market for in-car technologies, while electric vehicles, although still an evolving market, have become a real part of car buying. Each of these developments, however, requires collaboration with cross-industry partners to support their market entry. This, in turn, is expanding the automotive ecosystem, adding new manufacturing challenges as automakers strive to keep pace with the latest in-car technologies and accommodate EV production. In addition to all of this, autonomous cars could soon take to the roads, prompting the need for another layer of manufacturing competencies.

Continually improving the visibility and flexibility of the entire manufacturing network that is expanding beyond the four walls of plant facilities can help companies succeed in a global market that also is undergoing a technological transformation, and experiencing greater demand for specialized products and services.

Accenture has identified several ways automakers can increase visibility and flexibility throughout their manufacturing and supply chain network to greatly enhance their organizations’ operating model.

Increasing visibility

  • Standardize the maintenance repair and operations (MRO) management of spare parts, including at the MRO nomenclature, MRO taxonomy and inventory management locations across the network to create more visible operations and optimize performance.
  • Leverage automation by integrating the plant-specific data that automated tools generate; and, through the use of advanced analytics, gain greater insights into performance across the manufacturing network. The insight gained also can help teams collaborate more effectively to manage the network, and balance demand capacity and operations costs. Using automation in automotive facilities in this way can significantly increase visibility.
  • Use a control tower to achieve greater visibility of integrated activities across all dimensions of the network, including demand, supplier, manufacturing and distribution capacity, inventory, orders and shipments in transit, and logistics partners’ participation. A control tower also can enable companies to conduct predictive analytics to aid decision-making and monitor supply chain activity, for example, to alert one part of the chain when it will be impacted by another part of the chain.

Stay flexible

  • Infuse greater flexibility across the network to better align supply and demand. For instance, relocate production from one facility to another, or change the product mix at a facility to match demand. Exercising such flexibility is critical to a company’s ability to meet growth goals in today’s market.
  • Evaluate consumer buying behaviors to be prepared to satisfy growing demand for more vehicle customization and automotive accessories. This can be achieved by developing capabilities in the build process that make production more flexible to accommodate such demand. Also, collaborating more closely with suppliers to help match parts availability to customer demand will be critical.
  • Maintain consistency and standardization across all facets of the operating model, including the processes and assets that the model supports to increase flexibility. Such consistency and standardization reduces complexity, streamlines reliability and maintenance, and makes it easier overall to execute key activities, such as vehicle launches.

Be prepared for complexity

A constant stream of technology advances and more specialized demand around the world will continue to add greater complexity to automotive manufacturing. Increasing the visibility and flexibility of the manufacturing and supply chain network can help automakers optimize working capital, reduce costs across the enterprise, maintain product quality, and be better prepared to respond to opportunities in a volatile global market.

>> Andy Howard, [email protected], is managing director of the Automotive Industry Group at Accenture.

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