Manufacturing Strategies & Operational Excellence
OEMs are shifting their investments “upstream” to improve product creation and "downstream" to directly impact customer behavior, boost return on capital employed, and raise profitability. These trends will exponentially intensify the already strong pressure to take action in development and production. In the future, OEMs will consistently align production competencies (and resources) with their brand positioning, and will therefore focus on areas that affect the brand experience. They will undergo far-reaching changes in the value creation structures of automobile development and production. With more brands and niche models, existing plants that lack flexibility will need to be turned into multi-brand, multi-model plants.
In module fabrication and assembly, current OEM value creation will be cut in half by 2015 as non-brand-driven modules and components are outsourced to suppliers. For example, the current level of OEM value creation in body and exterior will drop almost by half by 2015. A sharp reduction will also be seen in the power train area. Parts manufacturing will be outsourced or spun off to be operated in conjunction with suppliers.
As with the OEMs, some suppliers will see drastic changes in the value creation structures of automobile development and production. At the same time, they will need to make additional cost reductions across all main modules. These trends make it critically important to develop a sophisticated, long-term manufacturing strategy.
