Operations Management in Automotive Industries: From Industrial Strategies to Production Resources Management, Through the Industrialization Process and Supply Chain to Pursue Value Creation PDF
Preview Operations Management in Automotive Industries: From Industrial Strategies to Production Resources Management, Through the Industrialization Process and Supply Chain to Pursue Value Creation
Springer Series in Advanced Manufacturing Marco Gobetto Operations Management in Automotive Industries From Industrial Strategies to P roduction Resources Management, Through the I ndustrialization Process and Supply Chain to Pursue Value Creation Springer Series in Advanced Manufacturing Series Editor Duc Truong Pham For furthervolumes: http://www.springer.com/series/7113 Marco Gobetto Operations Management in Automotive Industries From Industrial Strategies to Production Resources Management, Through the Industrialization Process and Supply Chain to Pursue Value Creation 123 MarcoGobetto AutomotiveEngineering Faculty FIAT SepinS.cp.A.and Politecnicoof Turin Turin Italy ISSN 1860-5168 ISSN 2196-1735 (electronic) ISBN 978-94-007-7592-3 ISBN 978-94-007-7593-0 (eBook) DOI 10.1007/978-94-007-7593-0 SpringerDordrechtHeidelbergNewYorkLondon LibraryofCongressControlNumber:2013947779 (cid:2)SpringerScience+BusinessMediaDordrecht2014 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpartof the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purposeofbeingenteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthe work. Duplication of this publication or parts thereof is permitted only under the provisions of theCopyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the CopyrightClearanceCenter.ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) If you think of standardization as the best that you know today, but which is to be improved tomorrow; you get somewhere Henry Ford Foreword With more than 30 years of experience in the automotive industry, eight of those involved in the development and implementation of World Class Manufacturing, andhaving,overtheyears,experiencedalmostalltheoperationsectorsthroughall economic scenarios, I can state, without a doubt, that a wise Management of Operations is the key to company success. Forthisreason,thetechnicalbackground ofapersonwhoworksin,oraimsto join, the automotive sector, should include Operations Management (OM). We therefore offer this book as an answer to the need for a repository of detailed knowledge of this topic. WritingabookonOMisasambitiousasitiscritical,sinceitisrequiredtodeal with all processes and aspects of the automobile lifecycle management Marco Gobetto was the perfect candidate for this task. Strengthened by working expe- rienceindifferentoperationsectorsoftheFiatGroupandateachingbackgroundat PolitecnicoofTurin,hesucceededinembracingallaspectsofOMingreatdetail. ItisforthesereasonsthatIencouragedandsustainedhiminthisenterpriseand am proud to write this Foreword. Today,companiesarecompetinginamuchmorecomplexenvironmentthanit was the case only a few years ago. Survival rather than growth is the immediate goal.Theymustfocusonquality,time-basedcompetition,efficiency,international perspectives, and customer satisfaction. Competition driven by a global market, e-business, the Internet, and advances in technology all require flexibility and responsiveness. This new focus has placed OM in the limelight of business, because it is the function through which companies can achieve a necessary level of competitiveness. Theautomotiveindustryisandwillremaintobeoneofthekeyindustriesofthe world. If auto manufacturing were a country, it would be the sixth largest econ- omy, with over 66 million cars, vans, trucks, and buses manufactured (data from OICA,in2005).Thesevehiclesareessentialtotheworkingoftheglobaleconomy andtothewellbeingoftheworld’scitizens.Thislevelofoutputisequivalenttoa global turnover (gross revenue) of almost €2 trillion. Traditionally,theautomotiveindustrywasorganizedbyrigidlabordivisionand paced assembly lines were employed to realize low-cost mass production. Now- adays, flexible mixed model assembly lines make it possible to produce a large varietyofcustomizedproducts.Asanexample,MassCustomizationisoneofthe vii viii Foreword answerstoflexibilitychallenge:theabilityofafirmtohighlycustomizeitsgoods andservicestodifferentcustomers.Masscustomizationrequiresdesigningflexible operations and using delayed product differentiation, also called postponement. Thismeanskeepingtheproductingenericformaslongaspossibleandpostponing radical change. This isnotforfree.Increasingflexibilityindesignandmanufacturingimposes new challenges not only for development of the product and manufacturing sys- tem, but also for the logistics coordination within global supply chains, purchas- ing, and marketing operations. In addition, novel planning and scheduling approaches are needed in order to manage the mismatch between increased product variety and the need to improve utilization of capital-intensive resources. In other words an Operations Management, to be successful, has to focus on addingvalueduringthetransformationprocess.Byvalueaddedinthiscontextwe meanthenetincreasebetweenthefinalvalueofaproductandthevalueofallthe inputs. The greater the value added, the more productive a business is. An obvious way to add value is to reduce the cost of activities in the trans- formationprocessbyfindingandeliminatingwasteandlosses.Inadditiontovalue added, operations must be efficient, that is, being able to perform activities well, and at the lowest possible cost. All activities must be analyzed to eliminate those that do not add value, and restructure processes and jobs to achieve greater efficiency. In this way, Operations Management has become the focal point of efforts to increase competitiveness by improving value added and efficiency for the whole company. Achieving these targets requires both strategic and tactical management. Stra- tegicmanagementinvolvesmakingdecisionsaboutwhatbusinesstheorganization willbeinandwhatitsoverallobjectiveswillbe.Strategicmanagement’splanning is long term and considers where the business wants to bein 2–3 years, or longer in some cases. Tactical management involves making decisions about how an organization should go about achieving the overall objectives determined by strategicmanagement.Tacticalmanagementdecideswhatneedstobedonewithin that year to implement the plan of strategic management. Tactical decisions must be aligned with strategic decisions, because they are the key to the company’s effectiveness in the long run. Tactical decisions provide feedback to strategic decisions, which can be modified accordingly. Having a well-coordinated management system focused on adding value and improving efficiency could be enough. Today, businesses must think in terms of competition based on timing and a global marketplace. Thisincludesdevelopingnewproductsandservicesfasterthanthecompetition, reaching the market first, fulfilling customer orders most quickly, meeting cus- tomer needs, and getting the right product to markets as diverse as the Far East, Europe, and Africa. OperationsManagementisresponsibleformostofthesedecisions.OMdecides whether to tailor products to different customer needs, where to locate facilities, how to manage suppliers, and how to meet local government standards. Foreword ix ThisbookcopeswithallaspectsofOperationManagement,reflectingtheideal of Mutually Exclusive, Collectively Exhaustive (MECE), which I consider as the basic requirement to be World Class. In Chap. 1, after an enjoyable overview on automotive history, the reader will discover information onallprocessesandtechnologiesinvolved inanautomotive enterprise and learn why decision making is a key factor of success. The chapter highlightsmethod,tools,criteria,andknowledgewhichsupportadecision-making process guaranteeing a high level of success. Chapters 2 and 3 deal, in a wealth of details, with the development process of product and manufacturing technologies and methods. Flexibility premises are generated in this phase. The theme of producing a large variety of customized products by maintaining a high level of product and process standardization is covered by explaining all the meaningful methodologies, requirements, and parametersmanagedbyEngineeringDepartments.Aspecialhighlightemphasizes Information Technology which, nowadays, allows effective application of Con- current Engineering to coordinate different departments in different parts of the world. From Chaps. 4–8, the reader will find a detailed analysis of the new method- ologiestoimproveproductivityandtosustaincontinuousimprovement.Morethan otherchapters,thisparthasmypersonalappreciation.Marcohasdemonstratedhis capability in having successfully dealt with all the aspects that an Operations Managershouldknowandeasilymanage:thefourpillarsofaProductionSystem, Workplace Organization, Logistics, Professional Maintenance, and Quality. I personally urge you to ponder carefully all the aspects contained in these four chapters, since they contain the essential knowledge of a company needed to survive in the future. The last chapter is about value and how it is generated. As said above, Oper- ationsManagementplaysthemostimportantroleinincreasingcompetitivenessby improving value and efficiency for the whole company, since all activities or initiatives should be in the direction of creating value. For all people who want to participate in or deeply understand the automotive industry, I would foster reading this book to deeply catch the complexity and the continuous challenges of the automotive enterprise. To all Automotive Engi- neering students,mywish isthatyouwillbeguidedbythisbookandwillkeepit in your personal library as a knowledge reference for the future. Luciano Massone Acknowledgments The list of people I would like to thank is quite long because of the extended period required to complete, and finally release, this book with coverage of practically a decade of blended working experiences, a mix of teaching at the University and professional worldwide working in Manufacturing through many different Industrial Businesses in a continuously changing scenario. So I would like first of all to thank Carlo Mangiarino, experienced Manager through most of the companies in FIAT; without him it would not have been possible for me to have the chance to start this exciting experience at the Uni- versity; experience in which I strongly believed from the beginning, while com- bined with my actual professional assignment in FIAT. From Carlo I learned not only the professional side but also a unique human style. A special thanks goes to Domenico Maisano and Luca Mastrogiacomo, both brilliant young engineers and doctors in research at DISPEA Department in Politecnico of Turin; Domenico started the collaboration with Production Man- agement from the beginning and specifically dedicated himself to writing the Appendix for the basics of production management; Luca continued brilliantly to assistmeduringthegrowthoftheinternationalcourseandhasbeeninvaluablein refiningthispartofthetextandimprovingitduringtheselast3 years;tothemmy best wishes for brilliant international careers at the University of Turin. I would like to thank Giancarlo Genta, Professor at Politecnico of Turin and Responsible of Automotive Engineering Course, for his commitment to the internationalization of the courses in this Faculty. A great thank you goes to Luciano Massone, Vice President of World Class Manufacturing in FIAT Group Automobiles and a Member of the Steering Committee for Automotive Engineering, a committee shared between FIAT and PolitecnicoofTurin.ImetLucianoforthefirsttimein2005andhewasa‘‘stand alone’’ man at that time in his new department; he asked me and another few colleaguesofminetohelphimwithaspecialinitiativethataimedtobuildtheNew FIAT Production System. This initiative, only a few years later, contributed sig- nificantly to a great turnaround in FIAT at worldwide level and to the Joint Venture between FIAT and Chrysler. World Class Manufacturing is currently morethansimplyanewproductionsystemforFIATsectorsandplants,butalmost a common language to share best practices and give new opportunities to the companies that want to join this way of business life. Now Luciano leads a xi xii Acknowledgments strategicgroupofpeoplethatpossessesabodyofknowledgeconsideredasoneof the main assets of our company: thank you for offering me this ‘‘fast pass’’ to learning, experiencing, and growing up professionally in such a very short time. Another special thank you goes to Elena Sacerdote, before FIAT Corporate Learning Officer and now FIAT Brand Customer Care Manager. From the beginning of her assignment she gave the right relevance to her Manufacturing Training Role and, with her commitment, contributed significantly in keeping it closetotheManufacturingCentralDepartmentinFIAT,ensuringalwaystheright linkwithcentraltraininglogicsaswell.Dealingwithtrainingdaily,Ihavelearned howdifficultitistomakeotherpeopleunderstandhowstrategicitis;Elena’swork lives in the pages of this book. Last,butnottheleast,adevoted‘‘thankyou’’toallmyFamily,forsupporting meinalltheseintenseworkingyearsandgivingmetheopportunitytonourishthis knowledge:mywifeAriannaforbeingpatientandforhercontinuoussupportyear after year, my daughter Gaia for the motivation she is able to induce in me, my father and my mother for having given me the chance to be here at this point. A final thank you goes to all those readers who will use this knowledge as a starting point, will apply it to their professional life, and will increase their curiosity to learn more on some of the chapters treated in this book. Marco Gobetto
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