Production capacity adjustment: the engine plant case study

Abstract

The automotive industry eagerly pursues high capacity utilization on vehicle assembly plants and engine plants. Engine plants rely heavily on the mass production of prime engine parts and their respective assembly. If the needed volumes of particular engine types vary significantly excess production capacity will largely occur. In spite of this, a faster pace of engine innovation will likely require more engine variants over shortened timeframes. This challenges the feasibility of economic operations within engine plants. The quest towards fuel efficient and low emission vehicles has again launched an intensive competition program among automotive OEMs. This is targeted at improving vehicle propulsion systems, mainly by improving and downsizing the internal combustion engine and by introducing alternative propulsion technologies, such as hybrid, electric and fuel cells. In the long run EVs and FCVs may largely make the ICE obsolete, but at the short to medium term the automotive industry will have to largely rely on improved ICEs. This study researched the rationale for deploying more flexible manufacturing technology targeting automotive engine plants and fine-tuned an agile manufacturing approach targeting improved engine plants capacity utilization and enhanced operations effectiveness. Application of a case study using some data from industry, and some author estimates, exhibited some promising results. The DTL was clearly underutilized, while Q’@gile alternative solutions were successively proposed and accessed. One of such solutions reached about 90% utilization rate while requiring just below 100 cell-years. The paper also explores alternative strategies, such as those of: a) engines strategic alliances; b) rationalization of the design of engine families, enabling production of a mix of engine models at the same shop floor.