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3 of the biggest headaches facing automotive manufacturers in the next 4 years

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08 April 2015

The global automotive manufacturing industry is growing, and with that growth comes the need for evolution and change. By 2019 it is estimated that manufacturers will be producing a staggering 100 million light vehicles per year1, but in order to share in this prosperity companies are being forced to adapt critical processes. In this post we consider the 3 biggest challenges facing today’s automotive manufacturers and how Ubisense Smart Factory can be a difference maker.

1. Complexity and product variation

The number of vehicle models for sale worldwide is sky rocketing! In Europe alone the number of available car types is expected to increase by more than 20% from 2012 to 20192, when approximately 230 different models will be on offer. And given that each of these models is available with multiple customization options, that equates to hundreds of trillions of possibilities. But it doesn’t stop there. Across the US and Europe car companies are strategically consolidating their operations – moving towards producing more vehicle models in the same plant, even on the same production line. Managing this unfathomable level of complexity and product variation presents an enormous array of business-critical challenges.

2. Cost and waste reduction

Vehicle manufacturers are constantly required to demonstrate innovation and add new features, but this has not been matched by the sale price of their products. Buyers are savvier now too and won’t purchase unless the product meets their desired specifications as well as representing good value. Then there’s the increasing number of government-backed mandates, such as the requirement to hit reduced CO2 emission targets. Just meeting the most essential needs for product development increases overheads by around 4% each year, yet vehicle companies are unable to off-set this expense onto customers. The only way to remain profitable in this environment is to cut costs and waste.

3. Accelerating pace of innovation

The percentage of each vehicle’s sale value that comes from its component parts is on the rise, and this is driving a fundamental shift in the market environment. Innovation that occurs on a supplier level is immediately and simultaneously available to all OEMs. No one can afford to fall behind, but the increased up-take of new parts means that costly assembly line re-fits are required more and more frequently.

How Smart Factory can help

Smart Factory is a production-certified system that brings error-proof flexibility to the assembly plant. It combines location data with data from existing plant systems, correlating the real-time process interactions with operational details, to deliver a virtual interpretation of exactly what’s going on in the factory.

By leveraging this knowledge, Smart Factory empowers automation and transforms the factory floor, helping to sustain flow, boost efficiency and reduce errors in manual assembly processes. It enables manufacturers to minimize the cost of complexity throughout their operations, and to harness product variation as a differentiating strength in their marketplace.

Contact us today to find out more about the benefits Ubisense Smart Factory can bring to your business


IHS Sales Forecast through 2021
“How to be No. 1. Facing future challenges in the automotive industry” by PriceWaterhouseCooper 2014

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