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'The Radical 3DayCar'

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‘The Radical 3DayCar’

“The Ultimate Lean Supply”

Geoff Williams


A car built locally for

customers who won’t wait

D3

C

The Radical 3DayCar


Issues

• Logistics of the Supply Chain

• Tension between

Standardisation and Brand Differentiation

• Economies of Scale in Vehicle Assembly

• The Radical 3DayCar

D3

C

The Radical 3DayCar


Logistics of the Supply Chain

D3

C

The Radical 3DayCar


Logistics Objective

Minimum balance of cost

across the total supply chain

for

• Stock

• Transport

• Orders

D3

C

The Radical 3DayCar


Value through the Supply Chain

100

90

80

70

60

50

40

30

20

10

0

Process

Industry

3rd Tier

Supplier

2nd Tier

Supplier

1st tier

supplier

Manuf'r

The cost of stock should mirror this

D3

C

The Radical 3DayCar

LERC

Japanese

UK

Producer


Efficiency of Space Utilisation

in the Supply Chain

12

10

Efficiency

of Space

Utilisation

8

6

4

2

0

Raw

material

Process

Industry

Tier 3 Tier 2 Tier1 Vehicle

The cost of transport should mirror this

D3

C

The Radical 3DayCar

GSW

Assumed


Logistics Conclusions

• Stock held prior to Tier 1 components

• Transport distances minimised

– Vehicle assembly more local to customer

– Tier 1 supplier to vehicle assembly (supplier hubs)

– Raw material to process industry

• Delivery frequency high from

– Tier 1 to vehicle assembler

– Assembler to final customer

dependent on relationship between

cost of stock and transport

D3

C

The Radical 3DayCar


Tension between

Component Standardisation

and

Brand Differential

D3

C

The Radical 3DayCar


Standardisation Trends

• Common platforms / modules/ components

across models and brands

• Common wiring harness (with all options

installed on switch on/off basis)

• Engines with multi-capacity capability

(i.e. 1.3 or 1.8)

• Multi-franchise

– Products

– Components (Driven by Covisint)

– Logistics

D3

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The Radical 3DayCar


Conflict with

Brand Differentiation

To what extent can standardisation take place

without devaluing the ability to justify current

price differentials on brand and mix differential

D3

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The Radical 3DayCar


Two Future Categories of

Vehicle Product

• Commodity - Minimum price/cost

with minimal product differentiation

• Brand - Differential product which

justifies premium price

D3

C

The Radical 3DayCar


Economies of Scale

in Vehicle Assembly

D3

C

The Radical 3DayCar


Current Vehicle Assembly

• Plants located to achieve volume scale

• Increasingly Continental for Volume manufacturers

• Global (Specialist i.e Porsche)

• Increase number of models per factory

• Single model factories

• Multi- model factories

• Multi- model on same assembly track

• Minimum of body/paint/assembly facility

Only assembly facility (i.e Smart)

• Increasing standardisation

• Supplier hubs

• 50 days + for BTO 14 days

D3

C

The Radical 3DayCar


Conditions for local assembly

• Viable and relatively stable volume

– Problem of local seasonality and popularity of

model/brand

• Minimum additional operation above basic

assembly

• Minimum parts to be assembled

• Efficient component inbound logistics

– No transporting “air” with empty bodies

• Customers not prepared to wait

D3

C

The Radical 3DayCar


Standardisation relative to

factory location

Standardisation

Brand

differential

GSW

Assumed

D3

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The Radical 3DayCar

Local National Continental Global

Standardisation minimises component numbers assembled


Standardisation v Differentiation

Implications for

Component Machinery

• Transfer lines : standardised components

• Machine cells : brand differential components

• Robots : Larger factories/stable demand

• Manual : Smaller factories /variable demand

Machinery capable of

– Identifying component

– Individual programming for each component

– Monitoring quality

– Self scheduling of production

D3

C

The Radical 3DayCar


The Radical 3DayCar

A commodity product

built at small local factories

D3

C

The Radical 3DayCar


Alternative types of production

• Late Configuration

– 2 step assembly

• Modular

– 1 step assembly

• Knock Down (KD)

– Kits traditionally put together by VM centrally

– Why not send components direct

D3

C

The Radical 3DayCar


Late Configuration

• Step 1

Centrally Produced

Basic Driveable

Car

• Step 2

Local Finish


Late Configuration

Product and Assembly

• Independent body and painted panels

• Highly standardised including

• Multi- franchise components/modules

• All options present with on/off switch

• Engines with multi-capacity capability

• Core mechanical product built at continental

level around body frame

• Late configuration

• Switch on/off

• Painted panels

• Colour keyed items (i.e internal trim,seats,)

• Wheels, etc

D3

C

The Radical 3DayCar


Modular Assembly

• Totally assembled in local plant


Modular Assembly

• Totally assembled in local plant

• Frame in sections for transport


Modular

Product and Assembly

• Independent body and painted panels

• Highly modularised

• Multi- franchise modules

• Minimum total number of modules/ components

• Body supplied in parts for efficient

transportation (i.e sides)

• Modularised assembly including

body part assembly

D3

C

The Radical 3DayCar


Expanded Role

of Local Assembler

• Multi- franchise

• Recycling

• Refreshment : Change colour, engine capacity,

body during life of vehicle

• Can they take over sales and service

How many local factories in the UK

Unlikely to offer full solution to sales and service

• Operated by

Manufacturer, Dealer Group, Logistics Company or Supply Chain

Integrator (i.e.Dell)

D3

C

The Radical 3DayCar


Does local production have to

be for commodity products

• Modular products could still retain brand

differentiation

But who has the volume to make single

brand/franchise local factories viable

• More likely at national level with :

– Independent body and painted panels

– Multi- product assembly lines

– Supplier hubs

D3

C

The Radical 3DayCar


Other Factors : Retail Format

• Different channels to market

– dealer Brand

– manufacturer direct

– supply chain integrator

– independent internet

– supermarket Commodity

D3

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The Radical 3DayCar

• Increasingly mobility rather than ownership


Conclusions

• No single formula for a Radical 3DayCar

Probably

– Local factories only for commodity products

– Brand differential products at UK level

• Depends on

– Resolution of production scale and system efficiency,

including IBP v Monocoque

– Level of brand differentiation desired

D3

C

The Radical 3DayCar

– Structure of the retail channels

• Need to quantify cost of production scale,

stock and transport across the supply chain

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