While most associate smart manufacturing with improvements in operational efficiencies and faster time to market, the same principles and solutions deliver the flexibility to adapt to market changes.
Flexibility is the name of the game in auto manufacturing these days. It is the only way to keep pace with changing customer demands, new regulations, and economic and political disruptions. Increasingly, smart manufacturing practices are a way to deal with these issues and provide the ability to respond to changes and minimize their impact on the business.
A quick look at some of the things that have occurred over the last few years highlights the scope of the trouble auto manufacturers have faced. They include:
Workforce shortages and rising labor costs: An ABB Robotics and Automotive Manufacturing Solutions survey released earlier this year found labor shortages were among the top three challenges for about a third of manufacturers. And 35% of those surveyed ranked labor as their most concerning area with respect to the rising costs they faced going forward.
Changing customer preferences: There are two general issues here. One is that technology is rapidly changing. Advanced driver assistance systems (ADAS) are leveraging advances in sensors and AI, becoming more sophisticated all the time. In-vehicle infotainment systems keep evolving with more abundant offerings that are tightly integrated with their smartphones. Drivers increasingly want these and other innovative features incorporated into autos.
A second issue is how the power of the purse is forcing auto manufacturers to make faster decisions about the future of entire lines. A good example of this is Subaru’s decision at the end of last year to completely halt production of plug-in-hybrid vehicles as part of its clean-energy product offerings. Subaru, like many other auto manufacturers, produced a mix of plug-in hybrids, hybrids, and electric cars. Industry-wide, the sale of plug-in hybrid cars only had about 2% of the global auto market. To cut production and development costs, Subaru opted to discontinue that line and focus on the other parts of the market.
Persistent supply chain issues: The pandemic significantly impacted supply chains. And some of the problems exposed during that time persist. That is particularly troublesome for auto manufacturers since it is estimated that a typical motor vehicle has between 15,000 and 25,000 components. A problem getting any one of those elements could shut down production.
That was the case recently with processors and chips. As we reported in the past:
In 2021, the automotive industry lost more than $200 billion due to chip shortages. Eleven million fewer vehicles were produced. Manufacturing plants sat idle. In 2022, many automakers decided to ship some of their most popular models without all the chips they were designed to include.
And while pandemic-related problems are disappearing, economic and geopolitical issues have kept the chip shortage problem front and center.
How smart manufacturing helps
Even though these are vastly different issues, they all can be reduced or mitigated when smart manufacturing practices and solutions are in place.
Smart manufacturing helps reduce the worker shortage issue via automation. More work can be done with fewer resources.
When a new product is needed, or changes must be made to an existing line, virtual commissioning gives manufacturers the ability to quickly prototype work cells, production lines, and entire factories. That speeds up any change and keeps the cost of trying different things down since everything is done digitally.
Smart manufacturing increasingly links OT and enterprise systems, helping manufacturers have more visibility into parts and supply chains. Potential parts shortages due to supply chain problems can be identified in advance, allowing the manufacturer to make adjustments, switch vendors, build up inventories in advance, and more.
Bottom line: While most associate smart manufacturing with improvements in operational efficiencies and fast times to market, the same principles and solutions deliver the flexibility to adapt to market changes.