Extending Consumer Choice in Automotive Manufacturing

In 1913, Henry Ford finished implementing the assembly line at the Highland Park, Michigan assembly plant for the Model T Ford. This line revolutionised production as the concept of moving a chassis along a track comprising 84 assembly stations with a specific task performed at each, reduced throughput time from days to just 2½ hrs.

Ford’s approach was perfect given that he was producing a car with no options and no accessories and which famously was available “in any colour so long as it is black”. Moreover, this was a time when there were few competitors (Ford had 50% market share) and where the aim was to grow the market by selling a car for less than $500.

Nowadays, things are not so simple. Competition among automotive manufacturers is intense and consumers more discerning, expecting many options and accessories. The age of “mass customisation” is upon us.

And yet, many automotive manufacturing plants still use the assembly techniques that Henry Ford would recognize, even though circumstances have changed. Visit any assembly plant and you will see a track, typically with 120-150 stations (cars are more complex hence more componentry) each performing a specific task. The difference is that with so many options, each station has to hold a much larger range of parts to the point where there is insufficient space and stock spills out into the aisles, hindering productivity, making operator errors more likely and impacting health & safety.

A new approach is being trialed in some plants involving kitting but take-up has hitherto been limited. This is because three fundamental questions have not been answered:

  • What is the relative cost of kitting versus traditional line feed? How can cost parity or better be achieved?
  • What are the marketing benefits of customisation in volume or margin terms?
  • What level of investment is needed to implement a kitting approach?