Honda rethinks Henry Ford's assembly line

[Biker16]

http://www.autonews.com/article/20160523/OEM01/305239980/honda-rethinks-henry-fords-assembly-line

 

 

 

Honda rethinks Henry Ford's assembly line

New approach has 4-member worker teams moving along with the vehicles

Hans Greimel Twitter RSS feed

Automotive News | May 23, 2016 - 12:01 am EST

Honda's new vehicle-assembly approach breaks with ideas that go back to Henry Ford. Instead of standing still as cars pass down the factory line, Honda associates in its newest plant work in teams that ride down the assembly line with the car.

TOKYO -- When Henry Ford pioneered the assembly line more than a century ago, a key innovation was dividing the work of building a Model T into one or two tasks per worker.

His reasoning? Assemblers could work faster if they didn't have to keep track of multiple tasks and the correct order of installation. Training workers to install one or two parts was faster and easier than training them to build entire sections of a car. It made it easier for Ford to recruit and train a work force.

Now Honda Motor Co. is challenging those time-tested assumptions as it reinvents mass production for its own signature nameplate, the Civic.

In March, Honda introduced the novel assembly approach at its just-opened car plant in Prachinburi, Thailand. The line requires each worker to handle as many jobs as five workers would handle on a traditional Honda line.

But the change results in an unfamiliar production design that is likely to begin showing up at other Honda plants.

Workers now follow the car down the assembly line, instead of staying in one place and working briefly on every car that passes through their station and handing it off to the next worker.

Honda dubs its new approach an "assembly revolution cell," or ARC. Honda says such a line is cheaper to install, requires less manpower and operates more efficiently than a conventional line. In Thailand, teams of four people doing final assembly work travel with a vehicle as it snakes around a U-shaped line.

Edited May 23, 2016 by Biker16

[J-150]

Resurrecting the Saturn assembly method of the 80s. Nothing innovative here.

[twintornados]

Smells like fail...

[Biker16]

Smells like fail...

or hate

[fuzzymoomoo]

or hate

Maybe it's because I don't fully understand just how in the blue hell it works, but it seems like its not the best of ideas. I'm all for innovation, but this seems like a case of fixing something that isn't broken.

[twintornados]

or hate

.

You would know....

[mettech]

It appears to me that it could reduce personnel.

[grbeck]

If I recall correctly, Volvo instituted a similar process in the early 1970s. I remember Volvo ads touting this new method of building vehicles. Volvo's claim was that it improved workmanship (sloppy workmanship was an increasing complaint of American car buyers in the late 1960s and early 1970s), because the workers stayed with one vehicle while it was being built.

[Biker16]

Maybe it's because I don't fully understand just how in the blue hell it works, but it seems like its not the best of ideas. I'm all for innovation, but this seems like a case of fixing something that isn't broken.

 

I don't fully understand it either, but it seems like Its a less capital intensive way to build vehicles. instead of one or two long lines to build 300,000 vehicles you have 100 lines to build the same amount but at a much lower up front costs.

 

The modern assembly line has been broken for some time, in most cases, product decision are limited by the ability to produce the product in enough volume to be cost effective on long capital intensive lines.

[akirby]

It appears to me that it could reduce personnel.

 

Yes but it also requires a lot more training and probably moves a bit slower. There are advantages and disadvantages.

[akirby]

 

I don't fully understand it either, but it seems like Its a less capital intensive way to build vehicles. instead of one or two long lines to build 300,000 vehicles you have 100 lines to build the same amount but at a much lower up front costs.

 

 

 

For smaller volumes it requires less capital. For 300K units the cost of one large line is probably less than 100 smaller lines.

[rmc523]

How do the workers remember every step that needs to be done if they're with the vehicle the whole time?

[RichardJensen]

 

I don't fully understand it either, but it seems like Its a less capital intensive

 

Plants are not the only capital intensive aspect of vehicle production.

 

 

Arguing that high production volumes are necessary only because plants are optimized for high volume ignores the significant first unit costs that exist entirely independent of the vehicle itself, the high first unit costs of supplier components, etc., coupled with resistance to higher priced vehicles.

 

If small assembly teams could profitably assemble a wide variety of vehicles at entry-level prices, there would be dozens of small manufacturers, not a handful of monolithic ones.

[akirby]

How do the workers remember every step that needs to be done if they're with the vehicle the whole time?

Each one learns a corner of the car start to finish.

 

Not sure who does the dash or carpet though.

[Biker16]

Plants are not the only capital intensive aspect of vehicle production.

This is true, just look how Ford's ratio of white collar worker to blue collar workers has grown over time to where they emply more white collar workers than Blue only a few years ago.

 

 

Arguing that high production volumes are necessary only because plants are optimized for high volume ignores the significant first unit costs that exist entirely independent of the vehicle itself, the high first unit costs of supplier components, etc., coupled with resistance to higher priced vehicles.

 

I would Ague that it is you manufacturing that in many ways limits the products you develop, because the upfront cost for tooling and machinery are so high.

 

that high first unit cost is determined by the cost to develop that product, your flexibility is limited by long lines with extensive tooling even if that tooling is flexible it becomes impractical at a certain point because of the logistics and line speed, it provides a disincentive to have that vary too much on the same line.

 

Ford understands this and this is why Ford's most flexible plant in Spain uses 2 lines (Chassis, final and Body) shared paint to produce 450,000 units not 1 line to produce 450,000 units.

 

If small assembly teams could profitably assemble a wide variety of vehicles at entry-level prices, there would be dozens of small manufacturers, not a handful of monolithic ones.

 

That ignores the fact that the barrier to entry isn't only manufacturing but the cost to develop competitive products that meet regulatory standards is very high. If it were easier you would see more products from Chinese and Indian companies in the US and Europe, but you don't. Manufacturing cost are easy to reduce that Development s cost.

 

As time goes on we are seeing PD cost grow much faster than Tooling costs, and manufacturing costs. Which explains why automakers are moving towards industry consolidation, and towards modular architectures to spread the rising costs of R&D and PD over more units.

 

 

 

[atomcat68]

This way of assembling cars seems a great idea for a company like Aston Martin or Bentley, Im not so sure about Honda who has to have a plant cough up cars a lot faster. Maybe this would have been great for their NSX to new S2000.

 

But for every idea, someone has to test it.

[RichardJensen]

the cost to develop competitive products that meet regulatory standards is very high.

 

 

 

 

Exactly, hence the need to produce as many cars of a certain style as the market will bear as cheaply as possible.

 

You cannot convince me, based on a press release from a single company touting a single project at a single plant in a country where labor is extremely cheap, that this is the future of manufacturing.

[akirby]

You still need a large facility regardless of the size of the production lines and that has an inherent up front capital cost no matter what you do.

 

You don't gain anything from a parts standpoint including stamping - every model still requires unique sheetmetal and other parts.

 

You can't escape those 2 capital expenses no matter the final assembly method.

 

It all comes down to how much excess capacity you are willing to carry to allow for new models and increased volumes. The more you carry (like GM) the higher your fixed costs and the worse it affects you in a downturn. The less you carry the safer you are and more profitable but it takes longer and requires more investment for new models/expanded volumes (like Ford's Mexico situation). The answer is somewhere in between.

[Biker16]

Exactly, hence the need to produce as many cars of a certain style as the market will bear as cheaply as possible.

 

That ignores the fact that (excluding US truck.) ultra high Volume models don't deliver high margins, and are more susceptible to Variability in the Market place.

 

Remember 10 years Ago when Ford Announced it was done trying to build home run ultra high-volume vehicles and wanted to Focus on making solid Singles like the Egde where you are not selling > 300,000 units but higher margin.

 

Here is the thing, you are seeing now that it is very difficult to afford to maintain an acceptable product cadence with <300k annual units on an Non-modular architecture, it too expensive to do.

 

The Flaw with Ford IMO is they have too many platforms, to maintain, these platforms are older, and due to the Quality of platforms, they are not being Refreshed As often, and Platform refreshes are how you reduce production costs at Scale.

 

ford plants are too complex and are not able to React to changes in the marketplace, Ford's solution in the past is to run plants harder, to reduce the need for new investment. which side steps the issue of having a structural mismatch between production and Demand. you cannot respond fast enough to the changes in the marketplace.

 

You cannot convince me, based on a press release from a single company touting a single project at a single plant in a country where labor is extremely cheap, that this is the future of manufacturing.

 

No one said that. and as you know change never happens from doing the same thing, trying something new isn't a bad thing.

[Biker16]

You still need a large facility regardless of the size of the production lines and that has an inherent up front capital cost no matter what you do.

Building themselves are not expensive it is the tooling, conveyors, fixture and trenches built to accomodate that tooling..

 

Empty large buildings are Extremely flexible, they can be used for anything.

 

Because the location and Arrangement of the equipment in the facility is so important, automakers will spend years just planning them, where something Like what Honda is trying, makes that planning so much simpler.

 

You don't gain anything from a parts standpoint including stamping - every model still requires unique sheet metal and other parts.

 

This is True, but Modern transfer presses are extremely flexible, and unlike Assembly plants a stamping facility can make parts for any type of product, one press can supply parts to products as diverse as the Ka to the F750. and change between products in minutes.

 

You can't escape those 2 capital expenses no matter the final assembly method.

 

If you understand those are not really 2 capital expenses, but far more complex.

 

It all comes down to how much excess capacity you are willing to carry to allow for new models and increased volumes. The more you carry (like GM) the higher your fixed costs and the worse it affects you in a downturn. The less you carry the safer you are and more profitable but it takes longer and requires more investment for new models/expanded volumes (like Ford's Mexico situation). The answer is somewhere in between.

 

Not that simple.

#1 GM sources a sizable amount of its production for all over the world, including China, Europe, mexico and Canada reducing their exposure to a downfall.

 

The analogy is you can have 4 lines to build 1.2 million units or 8 lines to build 1.2 million units. the difference is is you have to cut production to by 15% it is easier to do it with lower volume lines than with higher volume lines. To make it worse when change over products you remove 25% of your capacity at a time, instead of a more manageable 12.5% plus you reduce your risks of issues during that changeover. If Ford had critical issues with the launch of the F-150 they would have been scewed. At least with GM You don't see quality tank as much as You do with Ford during model changeovers.

 

 

 

[akirby]

I think you're underestimating real estate costs including power and the fixed overhead of each plant.

 

It's much easier and cheaper to add or remove a shift than it is to add or remove a factory.

 

More plants give you more flexibility - no question. It also adds complexity and fixed costs.

 

I've recently been doing 8 figure cost comparisons on new IT locations. The business cases are exactly the same. Sometimes you need more locations due to logistics, sometimes you need more locations to have more flexibility and resiliency and sometimes you need more locations due to capacity constraints. More locations always costs more - the question is how much benefit you get. The goal is to have the minimum number of locations that still meet your capacity, resiliency and logistical requirements. Anything more than that is wasted money.

 

1 plant building 2M vehicles is not feasible. 100 plants building 20K vehicles each is also not feasible.

[RichardJensen]

you are seeing now that it is very difficult to afford to maintain an acceptable product cadence with.

 

I am seeing none of that. I'm seeing none of what you are positing at all.

[fuzzymoomoo]

 

I am seeing none of that. I'm seeing none of what you are positing at all.

You might want to turn your screen on then

[RichardJensen]

You might want to turn your screen on then

 

None of what he's positing, not what he's posting.

[Biker16]

I think you're underestimating real estate costs including power and the fixed overhead of each plant.

 

Lets step back.

 

I didn't say plants I said, Lines.

 

You can have multiple lines in a single plant.

 

You can have multiples Line under the same roof.

 

Honda's concept doesn't add plant but add "lines"

 

It's much easier and cheaper to add or remove a shift than it is to add or remove a factory.

 

Not factory but lines. you can still remove shifts with short lines

 

More plants give you more flexibility - no question. It also adds complexity and fixed costs.

 

It doesn't add complexity it actually makes the process of assembly simpler, and easier to manage. There is some duplication but because you have fewer stations you reduce the tooling you have to purchase.

 

If what you say is true why is Toyota's new Mexican Plant 40% cheaper than ford's new Mexican plant?

 

Why can the Toyota plant cost $5000 per Annual unit of production vs Ford's Plant at $5334 per Annual unit of production

 

http://www.usatoday.com/story/money/cars/2015/04/15/toyota-mexico-corolla-factory/25811997/

 

http://www.cbc.ca/news/canada/windsor/new-ford-plant-mexico-1.3521894

 

I've recently been doing 8 figure cost comparisons on new IT locations. The business cases are exactly the same. Sometimes you need more locations due to logistics, sometimes you need more locations to have more flexibility and resiliency and sometimes you need more locations due to capacity constraints. More locations always costs more - the question is how much benefit you get. The goal is to have the minimum number of locations that still meet your capacity, resiliency and logistical requirements. Anything more than that is wasted money.

 

Again, lines not plants.

 

1 plant building 2M vehicles is not feasible. 100 plants building 20K vehicles each is also not feasible.

 

in essence what Honda is doing it building 200,000 units on 40 individual lines.