An analysis of motor vehicle assembly plant complexity : developing a framework to evaluate the existence of a complexity threshold

Abstract

An automotive manufacturer facing decreasing average product volumes as a result of market fragmentation while simultaneously reducing its manufacturing plant footprint must adapt to the difficult challenge of increased product mix within its manufacturing system. The increase in complexity resulting from greater product mix is considered to be a significant driver in increasing plant investment cost and reducing plant operating effectiveness. Thus, the ability to fully understand and more effectively balance the complexity trade-offs associated with different product-to-manufacturing plant allocation scenarios is critically important, as the manufacturer formulates its strategy and analyzes the associated costs and benefits. The ultimate question to be addressed is whether there exists a "complexity threshold" in terms of the maximum number of differentiated body styles (unique vehicle models) to be produced inside a single assembly plant. This thesis analyzes the challenge of manufacturing system and plant complexity by first developing a competitive benchmark study of body-style complexity at the major North American OEMs' plants. Then, manufacturing and operations data is analyzed for evidence of a "complexity threshold" in one manufacturer's operations.

(cont.) Finally, a linear-program based optimization model is developed to enable a Manufacturing Planning group to better understand the company's tolerance for plant complexity by quantifying manufacturing costs associated with various product-to-manufacturing plant allocation scenarios. This tool enables the planner to simultaneously consider thousands of different possible combinations of which products to produce in which plants, by analyzing manufacturing investment and per-vehicle operating cost estimates for each combination. The ability to impose constraints on the maximum number of body styles produced at any one plant yields insight on the value of pursuing a higher-mix (in terms of body styles) manufacturing strategy in particular plants, or across the entire plant footprint.