Automotive production down to the second

Many systems and components in the automotive industry today are delivered just-in-time or even just-in-sequence directly to the assembly line during ongoing assembly at the OEM plant. In view of extremely tight time frames and highly complex systems, this is a task that represents the maximum challenge for globally active system suppliers like thyssenkrupp Automotive Systems. This article explains how the specialist for assembly and logistics services reduces complexity for automotive manufacturers (OEMs).

More and more model variants and a further increasing number of individual equipment options are increasing the complexity of automobile production to an immense degree. It is specialists like thyssenkrupp Automotive Systems that make the continuing trend toward even greater individuality possible in the first place. Whether it be complete rear axle systems for Porsche or the electric drive for the latest Smart Fortwo: thyssenkrupp Automotive Systems handles all supplier management, on-time delivery and assembly for its customers with around 1,600 employees worldwide. In this way, the assembly and logistics experts significantly reduce the workload for their customers within the supply chain and in production.

What individual production actually means is made clear by thyssenkrupp Automotive Systems CEO Steffen Schmidt: "The axle systems we assemble on behalf of our customers are always different. Two identical axle systems are as rare as getting six correct numbers in the lottery. With the bonus number."

Flexible automotive production through just-in-sequence and just-in-time manufacturing

The high degree of individualization of car models requires extremely flexible production. After all, a single assembly line might be handling all variants, some of which are from several series. That is why cars are now more than ever produced according to the just-in-sequence (JIS) principle. This is an advanced variant of just-in-time (JIT) delivery: The right components should not only be available in the right quantity and quality but also at the right time and in the right place. Just-in-sequence delivery makes it possible to deliver the various parts from suppliers already in the correct assembly sequence in which they are needed by the OEM, so they can be processed immediately in the existing production flow. In this way, inventory levels can also be kept as low as possible to minimize the need to maintain stock levels and provide warehouse space.

Both JIT and, even more so, JIS deliveries therefore not only require particularly efficient processes, but often also close proximity to automotive manufacturers. For example, thyssenkrupp Automotive Systems plans and builds plants specially tailored to its customers either directly on the plant site or in the immediate vicinity. "Our expertise lies not only in the fact that we plan and build our plants independently," explains CEO Steffen Schmidt. "We also have the same claim as our customers: our plants always meet the OEM standard."

Interdisciplinary expertise

As a rule, thyssenkrupp Automotive Systems is involved at an early stage in the pre-series development process, which Steffen Schmidt says is another of the company's core competencies. The project teams include experts from all specialist areas, such as quality, logistics, production and procurement.

The thyssenkrupp Automotive Systems Test Center plays a key role in this. Even before automobiles or commercial vehicles are launched on the market, they undergo intensive testing processes to check the operational stability of the installed parts, and to identify weak points in advance. This is often done in the state-of-the-art laboratory in Essen: On 2,500 square meters, the Test Center runs high-end fatigue analyses with individually designed test benches for its demanding automotive customers. With the utmost precision, the 25 fatigue testing specialists working here reliably identify weak points in the tested components and systems. And that 24 hours a day, seven days a week. The ultimate endurance test: components that do not survive the test program must be optimized.

Delivery to the assembly line precisely to the second is standard for thyssenkrupp Automotive Systems

Steffen Schmidt: "From integration into the development process to considering the question of feasibility for assembly at an early stage, from the site concept to the installation of supplier and supply chain management, as well as precisely timed just-in-sequence assembly and delivery: our customers can choose from different concepts or a combination of all of them."

Delivery precisely to the second directly to the manufacturer's assembly line is no longer the exception – it has long since become standard for thyssenkrupp Automotive Systems. A standard that requires a lot of expertise and represents an enormous challenge. "As soon as the body comes out of the paint shop, we get an electronic call-off that specifies exactly how to configure the front and rear axle systems for the vehicle. From this moment on, we have 240 minutes – depending on the customer – to manufacture our modules and systems, and bring them directly to the customer's production line at the right time," explains Steffen Schmidt. Conversely, this means: if the required scope of items fails to hit this target window, the assembly lines will come to a standstill. A major disaster. For the automotive manufacturer and the suppliers.

Complex management of 150 to 200 suppliers per site

In order to meet these challenges for each vehicle to be produced, the plants have to manage a considerable number of variants. "We supply complete, mainly complex systems consisting of a large number of components," says Timo Köhl, responsible for logistics and quality at thyssenkrupp Automotive Systems. "With all the scopes of items, we are talking about bills of materials that include up to 200 individual parts per module, which we have responsibility for." The challenge here is to manage the multitude of different suppliers. "Depending on the location and complexity, there are 150 to 200 suppliers and more than 1,000 part numbers that we control," reports logistics expert Köhl. A number that can only be managed with a high degree of automation. "Supplier management at our company is fully automated via our SAP system, to which all suppliers are connected." Every exchange of information about requirements, delivery capability, delivery status, etc. takes place automatically via this system.

Timo Köhl explains: "Our customers inform us about their needs in a daily data exchange. We then use this as a basis for resource planning. It takes into account the available stocks that we have at the sites and calculates the requirements that we then have to transfer to the suppliers. This also happens fully automatically. Our dispatchers provide our suppliers with the corresponding requirements via the parameters. As soon as the components are ready for collection from the suppliers, our transport processes swing into action. What this means: logistics service providers contracted by us carry out the transport tasks according to our needs, mostly by land and sea freight." Dispatchers not only monitor the status of deliveries very closely, they also continuously optimize shipping spaces, capacity utilization, routes and costs. When the components then arrive at one of thyssenkrupp Automotive Systems' seven locations, they are checked for certain criteria and booked in. "Subsequently, according to our internal processes, they are first allocated to the warehouse and then brought to the assembly line in what is known as the 'line feeding' process."

International logistics: a fine art

"The art," says Steffen Schmidt, "is to source parts from all over the world for the production sites and, after sometimes weeks at sea, assemble them within an extremely tight time window and bring them directly to the line at the right time."

Just how important the human factor remains despite all the digitalization and automation becomes apparent when deviations in internal processes or other exceptional situations occur. "For example, as soon as we get the info that any of our suppliers cannot meet their schedules, we set our special processes in motion," reveals Timo Köhl. "Then, our scheduling teams review why the quantity can't be delivered and what our response options are, while still making sure we have the material on site, at time X, in the right quantity. Our schedule is extremely tight with local suppliers who deliver to us several times a day. We're not talking about days or weeks, but a situation in which the exceptional situation has to be dealt with within a matter of hours. That's the only way we can master the complexity."

A very special challenge here concerns the way in which the global political shocks of recent years have impacted the finely planned global supply chains; first the COVID-19 crisis, then the supply bottlenecks in the semiconductor sector, and later Russia's war against Ukraine. "Since the first COVID-19 lockdown, global logistics have been faced with supreme challenges," admits Steffen Schmidt. "When our logistics machinery falters, we have to check: How much do we still have in the pipeline? How much is still on the way? How far do we expect to get based on customer needs? And where do we need to provide some relief? In some cases, it takes a real talent for improvisation to get the necessary parts, plus a network that has been tried and tested over many years. The human factor takes center stage in such exceptional situations. Because in the end, we sell trust to our customers; trust in our delivery reliability. That is the standard by which we measure ourselves every day," emphasizes Steffen Schmidt.