Moving Forward Without Letting Go: How Flexible Manufacturing Advances the Mobility Revolution

FLEXIBLE MANUFACTURING IN THE AUTOMOTIVE INDUSTRY VIA MULTI-OEM CONTRACT MANUFACTURING

The demand for individuality continues unabated. As a result, the automotive industry must increasingly focus on smaller quantities, a higher number of body variants, and shorter model cycles. At the same time, the pace of innovation is increasing, particularly in the areas of alternative drive technology, connectivity, and ADAS systems.

Mobility is changing in different ways. Not only the products themselves are subject to change, as shown by the increasing market share of vehicles with alternative drive systems, but society's attitude towards mobility is shifting too, for example due to increasing awareness for sustainability. All of this is leading to a change in requirements and expectations among car buyers. The latest driving assistance and infotainment features are now competing strongly with classic vehicle attributes such as performance and handling. The automotive industry must therefore adapt its product range to meet the challenges of the future while also innovating production processes. Flexible manufacturing programs offered by experienced manufacturing partners can help to solve these challenges.

Necessary changes in automotive manufacturing

Many new entrants, particularly from Asia, are currently pushing into the European market with battery-electric cars, while established OEMs are also working under high pressure to transform their model range. Some may also have underestimated the speed of change, which has even increased due to the disruptions of recent years, from COVID-19 to the recent geopolitical events and the resulting supply bottlenecks.

The trend towards smaller production volumes

Overall, the trends point towards lower production numbers per vehicle segment, which are also more difficult to predict. Given the many new market entrants, sales figures see shorter times of stability after the launch of a new vehicle because a new model becomes technologically obsolete more quickly. Volumes flatten out faster and the familiar seven-year model cycle is no longer the standard. In addition, the automotive market is becoming increasingly fragmented. On the one hand, more and more different body variants are being developed on a single platform to satisfy the customers' desire for individuality. On the other hand, more niche models and special series are also being developed and launched to counter the declining buyer interest after just a few years.

All these additional versions, with their usually rather small quantities, can disrupt the production process in the OEMs' plants, which are geared towards large series production. Niche models are difficult to integrate into an existing line, which is generally designed for higher production volumes of a certain model. In addition, it is often difficult to estimate whether the new vehicle will be well received by customers - or whether uncontrollable external influences will lead to an overall weakening of the market. Production must therefore be scalable, which is not always easy to achieve in the OEMs' main plants.

Many new entrants also start with relatively small quantities in the automotive market. For them, scalable, flexible manufacturing is particularly important to avoid having to build unnecessarily high capacities. However, they must still be able to meet unexpectedly high demand quickly.

The electrification megatrend – and how to best respond to it

One of the most important global megatrends in the automotive industry is the current effort towards sustainability and CO2 reduction. As a result, market requirements are increasingly shifting from the traditional combustion engine to alternative drive systems and battery electric vehicles (BEVs).

Established OEMs are choosing different ways to tackle this challenge, though. The development of new, electrically powered vehicles is only the first step that most traditional manufacturers have already taken. The challenge now is to integrate the new electric vehicles into their existing production processes. Some OEMs are building completely new production lines for these models, while the combustion engine vehicles continue to run on existing production lines and continue serving this traditional market segment. This way, manufacturers keep earning money with conventionally powered vehicles and are therefore able to invest in the development and production of battery electric vehicles.

Other OEMs are converting existing plants so that only BEVs can be built and stop the production of combustion engine vehicles completely at these sites. This approach is not without risk, as purchasing behavior shows that the registration figures for electric cars appear to be more volatile and that the combustion engine is still in demand. Depending on the market segment and markets, the combustion engine vehicle is still the preferred mode of driving for many customers. Consequently, there is a trend toward developing universal platforms which can accommodate the vehicle architecture for both a conventional and an alternative drive system. However, this approach requires compromises, as the different drive types with their specific requirements call for different packaging. In addition, profound changes and adjustments to processes, production facilities and supply chains are necessary to ensure successful integration into the existing production and thus provide flexibility in manufacturing.

Contract manufacturers as problem solvers

An external production partner with flexible manufacturing facilities can provide the OEM with a solution for the current challenges in the automotive industry. Due to their high degree of flexibility, contract manufacturers are also able to efficiently produce smaller quantities while still maintaining high quality. Magna, for example, has decades of experience in producing different vehicles on one line. Different programs with smaller quantities can utilize the capacity of a line and still be produced more economically. To a certain extent, it is also possible to balance the production capacity between different products to take full advantage of the production line, even if the expected number of units is not met.

For a multi-OEM manufacturer like Magna, the ability to achieve this constant balance is part of business success. Declining and fluctuating volumes can quickly lead to capacity underutilization for an OEM and make the production of models inefficient and cost intensive. The strategy of some OEMs to remove models with low margins from their portfolio also leads to lower utilization of plant capacities. It could therefore make sense for an OEM to outsource the phase-out production of a model that is still profitable, for example. Outsourcing production can also be just as viable if the OEM wants to test the acceptance of vehicle concepts or segments without having to allocate its production capacities.

Flexible manufacturing as ideal conditions for new entrants

Production with an external partner can be particularly rewarding for new players in the automotive industry. With a contract manufacturer, the new entrant has access to a production facility that is already set up for operation, including the workforce and comes with well-established processes and an existing supply chain. For larger projects, a manufacturing partner experienced in flexible automotive production also manages the complete industrialization: planning and setting up the factory, establishing the processes, setting up the infrastructure and defining suitable quality standards. As a result, new entrants not only face less risk in areas in which they have little experience but can also enter the market more quickly. Furthermore, they can focus on core tasks such as branding, advertising, the development of sales and service networks, and the acquisition of investors. This strategy eliminates some of the risk factors that repeatedly lead to the failure of start-ups in the automotive sector. (link to 5+1 Reasons why startups fail)

For many decades, Magna has been manufacturing several vehicle projects from various manufacturers with different requirements and quantities under one roof, as flexibility is the supplier's greatest strength. The workforce, infrastructure, and processes are already specialized in cross-OEM production. Depending on the degree of automation of the respective model series, the employees in production work in shorter or longer cycles with different workloads. Swift integration into customer systems and processes is also no challenge for the workforce. There is also a well-tried system of in-house processes and standards if Magna needs to work as independently as possible – which can help newcomers in particular to enter the market faster.

Multi-OEM projects with quantities ranging from 10,000 to over 100,000 vehicles per year have already been realized. With the production plant in Graz, Magna has also become the world's first contract manufacturer to produce a range of different propulsion technologies from different manufacturers on the same production line. Magna’s flexibility is also demonstrated in the paint shop, which successfully covers the most diverse requirements of a wide array of customers in a single facility.

Under the name "Flexible Manufacturing Solutions,” Magna has initiated an internal transformation to make production at the plant in Graz even more flexible and future-proof. Magna aims to produce up to four platforms and eight derivatives on one single line, regardless of drive type and quantity fluctuations. The company aims to be the fastest and most efficient partner in Europe for programs with medium (15,000 - 50,000 vehicles per year) and low production volumes (< 15,000 vehicles per year).

Body construction: more platform variants per line

With a series of measures, flexibility in the body shop will continue to increase. By integrating flexible joining stations, several models can be produced on a single line without the need to set up a separate body shop for each model. A first step was the introduction of "Modular Flex Framing." In the future, this system will make it possible to frame up to six different body variants in a single station.

The centerpiece of this system is a flexible framer that holds up to three model-specific adapters in rotating storages, positioning them according to the next vehicle on the production line. For example, if a sedan enters the line, the corresponding adapters are automatically used to manufacture the sedan. If an SUV follows, the adapters change automatically to produce the SUV.

In addition, a geometry-forming "Modular Flex Geoskid" will enable the fully automated exchange of the geometry-forming devices. Instead of model-specific transport carriages, flexible and modular systems will be used. A universal frame is automatically fitted with specific adapters, enabling a quick changeover between different models. In sum, these measures will increase the number of body variants per line from two to five - or (if extended) even six.

Innovation is key

It takes innovative solutions to ensure consistent product quality – for example the "Automated Body in White Fixture Control." The geometry-forming transport carriages are one of the most important elements in creating the geometry of the entire vehicle body. Geometric deviations in the carriages lead to deviations in the produced vehicle bodies, which can interfere with the further assembly process of the entire vehicle. To prevent this, the transport carriages must be checked periodically. However, they are usually not accessible during operation and must therefore be inspected off the production line.

Instead of this time-consuming periodic inspection, Magna now measures each vehicle body in a measuring station. A smart algorithm extrapolates from the measurement data whether the transport carriages are within fixed tolerances. This significantly more close-meshed inspection ensures that deviations are recognized and remedied instantly. Thus, rework on vehicle bodies that do not meet the tolerances can be greatly reduced.

Flexible manufacturing options in the paint shop

For years, Magna has already been coating all vehicles manufactured in Graz in a shared paint shop, regardless of manufacturer or exact platform. In this process, a high degree of customization is possible - from tailor-made paint designs to special paint effects (e.g. pearl shine effect, clear coat, matt coat), contrasting colors for roofs and doors to special colors. Low-temperature painting for things like special effect paintwork or the painting of attaching parts (like for special series) is also possible. In terms of a number of units, the paint shop can cover any volume from individual items (also known as lot size 1) to large-scale production, all in compliance with the quality standards of the respective automotive manufacturer.

Optimization of logistics through proximity to the assembly line

At the Magna plant in Graz, logistics facilities are also moving closer to the assembly line to optimize the handling of the increasing variety of models and parts. Current industry-standard solutions are often not efficient enough and occupy too much space. The newly designed automated storage and retrieval system for sequencing provides employees with the vehicle parts right at the assembly line – in the right order and with the right equipment variants. This reduces both walking distances for logistics staff and the required space for sequencing. These measures make it possible for previously external sequencing volumes to now be sequenced close to the assembly line on the factory premises, which decreases transport requirements as well as cost per vehicle unit.

The optimized internal transportation processes also support sustainability efforts at the Graz site. The plant has already been carbon-neutral since 2022, and the improved logistics contribute to a further reduction of emissions.

Increased means of flexible manufacturing at the assembly line

In the assembly, a flexible conveyor belt, a flexible marriage station, and extended test capacities allow the production of up to four instead of the previous two platforms on one assembly line. Interchangeable, product-specific adapters cover the differences in drive types, platform dimensions and body design. The increased load-bearing capacity of the conveyor belt further enables the production of larger and heavier vehicles in the future, already accounting for the increasing share of battery-electric vehicles in automotive production. The additional test rigs at the end of the production line ensure that the reliability of extended vehicle functions can be guaranteed.

By increasing flexibility in the various areas of manufacturing, Magna and its site in Graz continue to provide an ideal business partnership for both traditional and new car manufacturers. Customers in the automotive industry benefit not only from many years of experience in (flexible) manufacturing but also from shorter integration times.

SPECIFIC KNOW-HOW AND GEO SKID: HOW A MULTI-OEM CONTRACT MANUFACTURER ENSURES PEAK QUALITY AND FLEXIBILITY FROM BODY-IN-WHITE ONWARD

Conventional body-in-white production is designed for high volumes per vehicle model and only offers limited options for integrating different underbodies and body variants into the manufacturing process. However, a flexible body-in-white production offers innovative solutions to meet the challenge of a wide range of variants.

The automotive industry is shifting. The transition to alternative propulsion systems is one reason, but another key development concerns the far more differentiated customer demands and the subsequent reduction of average production volumes per vehicle model. The big question for manufacturers: How can automotive production of small-scale series be implemented cost-efficiently and at high quality in large-volume production facilities?

High production line flexibility for a Multi-OEM manufacturer

The key to this question lies in consolidating several smaller series in one large-volume facility. To enable such a merger, the site itself requires a high level of flexibility. It must be possible in the first place, to switch to other models from cycle to cycle – or from production step to production step – within the production/conveying time.

For a passenger car’s Body-in-White (BiW), the issue is less that of box dimensions (body size and volume), as is the case with its paint shop, but rather one of its base. In BiW the main task consists of providing a reliable mount of the car’s body base which must be adaptable for every vehicle type to be manufactured on the line.

A special transport carrier allows adaptation of the underbody's docking points

The main challenge of consolidating multiple different vehicle types onto the same BiW line lies in the different docking points of each vehicle’s underbody. These are not defined by the contract manufacturer but determined by each car’s architecture.

Whether by screwing, plug-in, or locking, the method of integrating the underbody differs from manufacturer to manufacturer. Multi-OEM manufacturers need adaptability to manage each of these approaches. As such, using model-specific holding fixtures, such as floor-clamping systems which are used within manufacturer-owned large-scale manufacturing facilities, cannot be implemented if multiple BiW from different vehicle models are requested.

To circumvent this limitation, a special kind of modular and flexible adaptable integration system was developed at Magna: The Flexible Geo Skid.

Magna’s patented Flexible Geo Skid arose from the intention of increasing manufacturing precision. It is a further developed version of an existing transport carrier (Geo Skid) which has been in use at Magna for over 20 years. The Flexible Geo Skid dispenses with the use of an underbody clamping system that would need reconfiguration at each station, which would subsequently increase the likelihood of inaccuracies. Instead, the underbody is fixated at the beginning of the BiW assembly process within the Geo Skid. The Geo Skid is then placed on the respective stations.

The model-specific adaptable flexible Geo Skid enables unrestricted model mix-up on the BiW assembly line

Although manufacturers also integrate different vehicle bodies on one line – e.g. sedans, station wagons, hatchbacks or SUVs – they still build upon uniform underbodies. Multi-OEM manufacturers, on the other hand, need to be able to manage different underbodies. In other words: Their assembly processes must be able to manufacture different vehicles on one line that have nothing in common – neither in their base architecture nor in their docking points.

Subsequently, an integration system such as the Flexible Geo Skid is needed that can handle all car bodies of each line. The Flexible Geo Skid constitutes a uniform base frame on which model-specific mounts are attached backlash-free using zero-point clamping systems, ensuring geometric precision right from the get-go. Unlike with one-directionally variable carriers that are also used by some manufacturers, the Flexible Geo Skid ensures complete adjustability of all docking points for each individual vehicle.

Magna has become a pioneer in such concepts since the Flexible Geo Skid’s inception in 2022 – although some notable OEMs are already working on similar concepts. For example, to integrate the production of different vehicles with different propulsion concepts on one line in new sites.

Comprehensive automatization enables flexible BiW production

For each vehicle type produced on the line, a certain quantity of fully adapted Geo Skids is in circulation, depending on the quantities to be produced. This is only possible with comprehensively integrated virtual planning systems and simulations – if only to ensure the return flow of skids from the end of the line back to the beginning. Such a complex production process would not be possible with manual concepts.

It's therefore necessary for each manufacturing step to be regarded in the automatization – from bringing the required sheet metal parts to the line, to the tool changing systems and the respective joining and connection technology (e.g., spot welding, gluing, riveting, or laser processes). It should further be possible to remove individual skids from the production process and feed them back in – for example, to retool the skids and adapt them to a changed model mix or to carry out maintenance work without interrupting production.

Indirect tolerance monitoring allows for peak manufacturing precision and interruption-free production

The precise adherence of manufacturing tolerances from the BiW onwards is of particular importance for high-quality end products. Magna ensures this via a smart system of continuously monitoring manufacturing precision. During production, the manufacturing carriers and their holding devices are inaccessible, thus denying measurement and controlling. They had to be removed from the process at regularly timed intervals and then inspected and potentially serviced in the measuring room; a time-consuming and cost-intensive process.

Magna’s Indirect Automated Body-In-White Fixture Controller not only eliminates this process entirely, but also increases manufacturing precision even further. Instead of removing and controlling the frames in fixed intervals, the produced BiWs are measured with an intelligent system directly during production uptime.

This way, tendencies to deviations of the geometric norm can be predicted before any serious inaccuracies occur. Every deviation tendency can be traced back to the exact Geo Skid responsible – which can then be extracted, serviced, and recalibrated.

This way the manufacturing carriers are monitored not just on fixed dates but de facto all the time. This benefits manufacturers with a constantly high manufacturing precision needed for the kind of premium-segment end products that are manufactured at Magna. At the same time, time and cost expenses during the inspection process is reduced and the potential need for reworking is mitigated.

Spatial proximity of all manufacturing site functionalities enables fast integration of new product series

Another strength that manufacturing at Magna brings is the concentration of planning, development, maintenance, and production at one location. A very tight internal organization combined with short organizational and spatial distances grants high-accuracy communication and enables a fast and flexible implementation. Since January 1, 2024, the site concept itself is available as a distinct service. Planning and servicing are grouped into one joint development process that follows the principle of “production proximity.”

The short organizational distances further ease the integration of new products into the manufacturing line, reducing the time-to-market needed for a new product to enter a market – a decisive competitive advantage for OEMs, especially if the market is as dynamic and fast-changing as it is right now.

Balanced & Scalable: The benefits of a flexible Multi-OEM contract manufacturer

Yet another advantage of a flexible manufacturing process is the fact that it can be adapted more easily in the face of changing volume scopes, e.g., due to changes in market demand. Theoretically, every volume demand greater than 0 is possible – although it is not economically viable to produce in very minuscule quantities. The upper volume cap is solely restricted by the technical capabilities of the manufacturing site (represented as units/hour) and the number of production shifts.

Magna’s BiW is designed for three-shift operations. Compared to two-shift operations, this benefits manufacturer as it lowers their investment requirements. The car body manufacturing can be balanced and re-balanced in a relatively short time in the face of shifts in the market or customer demand – of course, this is also possible in subsequent production units. The BiW does not have to be run exactly in line with the production sequence on the assembly line but can be decoupled to a certain extent. This is because the bodyshells are buffered before the paint shop and assembly, anyway.

Regardless, a flexible adaptability starting with the BiW (due to Flexible Geo Skids, for example) is an essential component of flexible contract manufacturing – which in turn may provide a solution to the challenges that automotive manufacturers face due to increased variant numbers and shorter model lead times.

SEPARATE BUT SHARED – CHALLENGES AND SOLUTIONS IN A MULTI-OEM AUTOMOTIVE PAINT SHOP

A high surface quality is essential for a positive first visual impression of the finished vehicle. The paint shop of a multi-OEM manufacturer must be able to handle a large number of vehicle types with multi-material bodies and offer the necessary flexibility. In addition to being able to handle larger volumes, the painting process must also be able to produce special series down to batch size 1 in perfect quality.

Vehicle painting plays a central role in the production quality of a car. As such, the automotive paint shop is one of the core stations in the production line. For a multi-OEM automotive manufacturer, a paint shop has specific challenges in all its stages – starting with pre-treatment up to the final top coat.

This is because numerous different vehicle series need to run on one painting line – which means flexibility, scalability, and versatility play important roles. However, the overall efficiency and quality control must not be overlooked.

A flexible basic concept of the automotive paint shop is a must-have

For a paint shop to be suitable for as many product series as possible, it first needs to possess a sufficiently high box dimension.

Magna’s painting line in Graz offers ideal conditions for this. Its stations are set out in a way that it can also cover vehicles with above-average body heights and lengths. This way, offroad vehicles can be painted as efficiently as SUVs and minivans at the Magna painting line.

To handle and move such a broad range of car bodies, so-called skids are used in Graz – transport carriages that are fitted with different holders. Pre-assembled mounting brackets are fitted with plug-in or screw-on adapters, which are vehicle-specific and are oriented to the respective mounting points.

In addition, these adapters also even out different body dimensions to set the top-edge of the roof or the parapet height of the bodies from different vehicles onto one uniform level – and not just for purely work-ergonomic reasons.

Different scopes of work for different products

The differing conditions set by the different vehicle manufacturers that Magna produces for all may require different workflows – especially if additional work steps must be carried out for different vehicle projects.

For this reason, the paint shop must be designed in a way that allows the flexible addition and removal of individual workstations. This is the only way that the specific demands of each and every automotive production line can be matched.

Consequently, a modular design of the workstation is highly advantageous. It makes it easier to adapt certain sections of the system specifically for the requirements of individual manufacturers. This way, additional operations or specific processes for specific product lines can be integrated without affecting overall operations.

Careful planning as premise for efficiency and quality

Efficiency-oriented planning and coordination of production processes is key in preventing expensive and inefficient set-up times. The singular work steps in the automotive paint shop need to be executed in correct order and timing for the production to run smoothly – despite different production volumes.

To ensure that the different demands of the manufacturers are met without compromising on the quality of the end result, careful coordination between production plan, material flow and resources is needed.

Strict control process for maximum painting quality

A multi-OEM factory has to meet high quality standards, given how it works for many different automotive manufacturers. For every OEM and every project, different paint shop guidelines and specifications need to be fulfilled.

Strict quality controls are an integral and indispensable component of Magna’s paint shop process landscape. To ensure that all specified quality standards are met throughout all operations, regular inspections and continuous testing are firmly integrated into the production process. Likewise, the traceability of any deviations is also ensured at any time.

An in-house certified laboratory for development an controlling of materials

Ensuring adequate quality of each manufacturer’s end product starts with ensuring the quality and composition of the material used – and Magna is also able to ensure this important aspect of a high-quality end result.

In our own certified quality laboratory, tailor-made materials that meet the individual customer’s requirements can be developed in cooperation with the respective suppliers. All essential tests are also carried out there.

This is not just about the paint material itself; for example, Magna can also test the adhesives used for body assembly in the laboratory. This option is attractive for many new entrants, among others, because they may not yet have their own laboratories and would otherwise have to purchase this service externally.

Different processes for different car bodies in the same paint shop

Magna’s paint shop coats many different types of car bodies. This even includes bodies of mixed construction in addition to 100% sheet steel bodies and 100% aluminum bodies.

Future challenges in this field are found with BEV architecture in particular. The sill area is designed to be especially rigid in battery-powered vehicles, and cast parts are increasingly being integrated into this area to optimally protect both the occupants and the underfloor batteries in the event of a crash. The mixed construction of different materials thus becomes even more complex.

As a result, the requirements are changing for pre-treatment, CDP painting (Cathodic dip painting), and for the dryer because heating and cooling ramps need to be precisely coordinated and controlled for the thermal expansion of the different metals – aluminum and steel. The bodywork connections and adhesives must also be regarded.

Magna's paint shop is suited for volumes from 1 to 280,000

Magna’s multi-OEM paint shop can do more than coat large-volume products efficiently and of utmost quality. Its process flexibility also ensures a high level of scalability in the case of highly fluctuating production volumes. The ability to cover small volumes and special series down to batch size 1 (for painting prototypes, for example) distinguishes the paint shop at Graz from the OEM’s in-house systems which are geared purely towards serial production.

For these demands, several bypass lines and special workstations are implemented within the flexible paint shop. Here, specific tasks can be executed without impairing serial production.

Flex top coat concept for special and small series

In the top coat station, the option of feeding in special colors ensures that even small batch sizes and individual items can be painted with the same quality as large volume products. In addition to the 25 ring lines, in which the top coats in the standard colors are kept ready from the usual 300-liter containers, there is also a feed of special colors in 25-liter containers, the so-called hobbocks.

Thanks to the hobbocks, up to eight different special colors can be painted per hour without disrupting the series production process. Movable cleaning pistons in the lines - called the newt system - help to minimize paint consumption and rinsing losses.

An upstream masking station also enables a high degree of flexibility for partial surface and contrast coatings that require customized preparation. There are also variation options for finalization: three different clear coats can be applied. In addition to the standard clear coat, a more scratch-resistant coating and a matt clear coat (which is increasingly in demand) are also possible.

Best color fidelity also for add-on parts for special editions

Magna’s paint shop is not restricted to car bodies and sheet metal parts, either. For special editions, plastic add-on parts can be painted in the same paint shop. Car body and add-on parts can be coated consecutively with the same color system from the same hobbock. This way, a perfect match in quality and coloring between car body and add-on parts is ensured. To prevent overstraining of the material, the plastic add-on parts are then brought into an 80-degree drying oven.

This method produces exceptional results in color uniformity and harmony. This is especially true for small- and special-volume series that add-on parts undergoing a separate painting process can hardly match – and particularly for small- and special-volume series where such a quality level is normally unachievable.

Magna as a complete vehicle One-Stop-Shop - everything from a single source

Magna's paint business unit has a very broad, overall vehicle knowledge base – thus, new product lines can be integrated very quickly, conveniently, and cost-effectively for the customer. The paint shop team can draw on experts and focus groups for simultaneous engineering, plant and process planning, vehicle control, equipment design and production, application experts and, of course, a very experienced production team, which simplifies and shortens the integration process significantly.

The wide-ranging and comprehensive in-house expertise covers the entire product development process from concept development and series development to ramp-up and series production.

Ready for the future - with Magna's NET-ZERO program

During the production of a complete vehicle, around 70% of energy costs incur in the paint shop. It is therefore a major challenge to combine this production area with the Magna NET ZERO program. Magna is committed to the goal of making its entire production process 100% sustainable by 2050.

A transformation process called Paint Strategy 2.0 has already been launched to achieve this goal in the Painted Body division. The process involves creating energy transparency, promoting energy efficiency in the plants, and gradually switching to renewable energies. This will make the paint shop, which has been in operation for 30 years, fit for the future – with the vision of achieving flexibility, competitiveness and sustainability in equal measure.

FLEXIBILITY IS KEY – CHALLENGES AND SOLUTIONS OF VEHICLE ASSEMBLING IN A MULTI-OEM PRODUCTION

Of course, a vehicle is only completed during final assembly. The trend towards individualization requires increasing flexibility, even in OEM plants themselves. At a multi-OEM contract manufacturer, which produces different vehicle types from different manufacturers on the same assembly line, the variety of possible options expands even further.

The automotive market is changing and segmenting. Annual volumes per vehicle are shrinking – and so do model runtimes due to shorter innovation intervals. By assembling multiple models on one joint production line, vehicles with low volume expectations may be produced more cost- and time-efficiently. Magna is one of the pioneers in the field of multi-OEM assembly.

Different platforms on one production line

The term “platform” is also undergoing a major shift. Traditionally, a platform describes the common technical underbody on which various body-in-white derivates could be realized. However, in contemporary automotive development, a platform is further distinguished between a geometric platform – which encompasses the car body’s common structure and pick-up points, among other things – and the Electric/Electronic (E/E) platform – which possesses several commonalities in EOL (End-of-Line) testing.

In terms of integrating different vehicle models, the geometric platform constitutes the central starting point.  The so-called box dimension is essential; It is defined by the vehicle’s length, width, height, and weight, as well as its underbody’s pick-up points. If vehicles fit into this “box” after an initial assessment, they can also be integrated into an assembly line.

Magna has optimized its production sites in a way that allows for flexibly adopting new vehicles and thereby coordinating the assembly process. The testing technology used in the two multi-OEM assembly lines in Graz covers a wide range of customer and system requirements in a similar fashion. This way, different E/E platforms can be processed, and new platforms can be integrated with comparatively little effort.

Limits of Integration: Not every technological possibility is economically feasible

The box dimensions set the limits in terms of which vehicles can be integrated in one line. Vehicles that possess significant differences in dimensions and pick-up points can only be integrated into one assembly line with high expenditures. For this reason, the two multi-OEM assembly lines at Magna in Graz differ in their flexibility specifications regarding conveyor technology, marriage and EOL (end-of-line) testing.

However, not everything that seems technologically possible is economically feasible, which consequently poses some limits regarding flexibility. If two vehicles differ too much in their production content, their production times will differ greatly – this is referred to as spreading. This spread further increases with the necessary assembly sequence – for example, if the same production scopes must be installed at completely different stations due to the concept. 

Component supply – aka logistics – also plays a role in the limits of integration. Different vehicles require different components at the same station. The installation area is limited to station length, though. This usually requires complex pre-sequencing. However, Magna was able to find a solution for this issue as well – thanks to the integration of the automated sequencing storage system.

Finally, the changes in both current and future vehicle generations in terms of their E/E makeup should not be left out. E/E features need to be programmed, (re-)calibrated and tested throughout the entire assembly process – here, different OEM specifications need to be considered, too.

Separated and connected: The marriage of Body and powertrain

One core process in automotive assembly is marriage – between powertrain and car body, that is. Depending on the type of powertrain, this production step is performed differently; and depending on the manufacturer, there are different philosophies that need to be brought together.

In multi-OEM manufacturing, the principle of “sharing what’s possible – separating what’s necessary” is applied. To be as flexible as possible, the pre-assembled axle for each type of drive, for example, is carried out directly upstream of the marriage. Core processes, such as joining the drivetrain and car body, and bolting are carried out in the automated marriage. Depending on the battery concept, the vehicle battery is also joined during marriage – or on a different station, if needed.

In principle, assembling vehicles with different base architecture would even be possible on one line – for example body-on-frame vehicles or vehicles with self-supporting bodies. Naturally, there are some limitations as defined by the box dimensions, which determine the compatibility of length, width, height, weight, and pick-up points. However, with this combination specifically, the economic aspect needs even more consideration.

Modularity enables joint assembling despite different production depths

If the different vehicles on one assembly line possess different production depths, spreading can occur. The different assembly dimensions cause different required work times – and the economic feasibility sinks.

But this challenge can be resolved, too. The solution is a modular assembly process. The assembly halls of Magna in Graz allow for different pre-assembly options close to the line for all vehicle types with higher production depth. This way, the extra operations don’t disrupt the workflow at the assembly line.

Conversely, it is also logistically possible to deliver pre-assembled modules to the line. Depending on economic feasibility and customer specifications, both options can be displayed on the same line to reduce work time spreading as much as possible.

Ensuring capacity utilization of the production line despite fluctuations in the number of units

It is of course entirely within the scope of possibilities that sales for a specific vehicle model develop differently from the prediction – and that production needs to the adapted. Depending on the constellation for volume development, a joint assembly of different vehicle models on one line can also provide benefits. If a new model performs better on the market than planned, volume flexibility is a decisive advantage in scaling.

Such volume changes may provide a challenge for workforce and machinery – but it is possible to adapt the production program flexibly and short-term regardless, and subsequently even out volume fluctuations of individual models. If the volumes fluctuations affect the entire industry branch, however, they are amplified for several products on one line – in both a positive and negative sense.

Magna’s multi-OEM assembly does, however, grant one major advantage in such a case, since it is possible to integrate additional products into the line at short notice and with reduced investment during normal production downtimes (such as plant vacations). Thus, achieving additional volume and better capacity utilization can be achieved.

A Qualified workforce is required for flexible Multi-OEM-production

Multi-OEM assembly of different vehicle types on one line requires that more diverse and complex working steps are executed for each vehicle, as different cars need different materials and processes and thereby different working steps. In addition, multiple requirements and quality demands need to be considered.

As such, the qualification of the workforce is a particularly important asset for multi-OEM assembly. Therefore, Magna puts great emphasis on providing adequate training and instructions.

Entry of new employees is facilitated by educating them on basic working techniques before they are deployed on the line. The aim is to slowly introduce them to the products and gradually entrust them with further tasks.

The digital vehicle: flashing and EOL-testing of different E/E platforms

From a purely mechanical standpoint, assembling different vehicle types – or different vehicle derivates at least – is by now a solved issue. It has become increasingly common in OEM production sites as well, although Magna still possesses a leading position due to its decades-long experience as a multi-OEM manufacturer.

With increasing integration of new, digital, software-based vehicle functions, in-car flashing of data storage – i.e., installing the latest software versions grows ever more relevant. Programming of control units starts very early in the assembly process and continues right until the EOL stage.

Here, Magna works hand in hand with the OEM and their process requirements. Thanks to our flexible and expandable testing technology, different E/E systems of different customers can be realized on one line. It is also possible to develop and offer complete vehicle software solutions for customers without prerequisites – so-called new entrants.

These core competencies give Magna a unique position as a contract manufacturer. Whether shorter model cycles, higher derivative numbers, smaller vehicle volumes, or the continually rising importance of software-defined vehicles – in Graz, we are looking forward to the challenges of the future.

GOING DIGITAL IN THE NAME OF RESILIENCE AND SUSTAINABILITY – MULTI-OEM LOGISTICS OF CONTRACT MANUFACTURERS IN THE AUTOMOTIVE INDUSTRY

A contract manufacturer that produces for different manufacturers not only has to overcome specific challenges in production itself, but also in logistics. They work with a larger number of suppliers and must provide a larger number of different components.

Parts and production logistics is always a challenging aspect in a complex production environment such as the automotive industry. This is particularly true for a contract manufacturer that works for several different vehicle manufacturers. In comparison to a vehicle manufacturer producing in its own plant, working with a much larger number of suppliers can pose particular challenges for the management of multi-OEM logistics.

Multi-OEM logistics: Multiple external structures

In the automotive industry, the framework conditions in a multi-OEM production facility are different to those in a typical manufacturer's factory. All the different products come with their own respective structures and sourcing strategies, according to the manufacturer’s agreements. Different suppliers often use different systems for parts numbering, packaging and load carriers.

All these differences create a far more complex situation than with a smaller number of suppliers working with standardized systems and processes. One particular challenge of multi-OEM logistics is to optimize with as much standardization as possible despite the different customer requirements.

Intralogistics is also more complex. For example, if different assembly stations are required for the same modules or components for different vehicles due to their design. This, in turn, increases the demands on internal sequencing so that the components can be brought to the production line on time for the respective vehicle. This requires particularly precise control of all different supply chains. For production at Magna in Graz, supplier parts and modules currently come from around 1700 different external pick-up points which need to be managed in the logistics network.

Different sourcing depending on the project

Who determines the suppliers varies from project to project and is based on how the sourcing is agreed upon. There is a wide range of possibilities, starting with the manufacturer being responsible for sourcing and commissioning either singular parts or complete modules. At the other end of the spectrum is the complete transfer of sourcing to the contract manufacturer. This approach can be especially attractive for new entrants in the automotive industry who cannot or do not want to handle these aspects themselves – and therefore gladly outsource them to a reliable partner.

In any case, the contract manufacturer must take care of the entire logistics - from inbound logistics (the delivery of materials) to intralogistics (the transportation processes within the plant) and outbound logistics, the delivery of the finished vehicles. That being said, the client can choose whichever solution best suits his needs.

Transparent supply chains for greater resilience

Global disruptions of recent years – the Covid pandemic, the Suez Canal blockade and various armed conflicts – were not the first to show how vulnerable the usual global system of trade deliveries truly is. Due to a lack of materials, entire industries were effectively at a standstill for prolonged periods of time. Of course, a contract manufacturer in the automotive industry has little influence over these types of issues. Nevertheless, to achieve greater resilience in the event of such disruptions, certain tools have been developed.

To at least minimize the consequences of said disruptions, an important strategy is to establish a transparent supply chain. For over 20 years, Magna has been working consistently to make its transport logistics transparent. Even before the pandemic, there were repeated global crises that made the supply chains’ susceptibility to disruption painfully apparent, such as the global financial crisis in 2007 or the Fukushima disaster in 2011.

In 2003, a comprehensive transport management system was introduced at Magna and has been further developed since to bring transparency to the supply chains. In fact, the last update to this system was rolled out exactly one day before the Covid shutdown was implemented at the Graz location, so that it was possible to abruptly shut down the supply chains from one moment to the next.

Of course, this does not eliminate the problem of delayed material deliveries. But the earlier potential disruptions are detected, the more time the manufacturer has to react and take countermeasures to minimize the impact of delivery interruptions on the production process.

Digitization as a prerequisite for transprarency

Digitalizing the logistics is inevitable if the goal is to make the material flow visible – from the supplier through the entire transport and logistics chain to the installation station on the production line. But digitalization is not just a buzzword or an end in itself. It enables tracking the location of every delivery at any given time. This makes it possible to determine whether disruptions will occur on the way to the plant or assembly line and how long they are likely to be in effect.

If necessary, appropriate measures can be taken to avoid a production standstill. This way, the expediter is provided with the status and expected arrival of any part at the part number level at an early stage.

The first precondition for this involves integrated IT systems. A well-functioning ERP system calculates material requirements in the plant, including call-off orders from suppliers. The transport management system also integrates suppliers and service providers into the processes on a collaborative level. This way, real-time transport visibility can be achieved – and has been in use in multi-OEM logistics at Magna for several years.

Countermeasures to interrupted supply chains

For highly critical transports, Magna has been using real-time tracking since 2016. This provides automated notification if a transport fails to arrive on schedule. This is particularly important as possible countermeasures or alternative measures can be implemented more easily and ultimately more cost-effectively the earlier a deviation from the delivery schedule is known.

It can provide benefits for a multi-OEM manufacturer such as Magna if several different vehicles are manufactured on one line – and specific material deliveries for one of the manufactured products are not available. For example, if two or three different model series are built on one line, at least in principle it is possible to temporarily maintain the operation and capacity utilization of the line by producing more of the other series’ vehicles there.

Of course, this option is only profitable if there is a foreseeably longer disruption, since the change of production plans also requires complex logistics reorganizations that require a certain lead time. Additionally, the order situation must also allow such a shift.

Digital supply chain optimization

The digital optimization of the supply chain offers a fundamentally new approach. At Magna, this comprehensive analysis of material logistics is known as DiSCO - an abbreviation for digital supply chain optimization. This system, which was recognized with an award by the Association of Materials Management, Purchasing and Logistics of Austria, holistically records all relevant procurement processes and areas to increase efficiency.

Instead of minimizing individual cost factors in isolation, logistics costs – and therefore manufacturing costs – are considered as a whole. This is because individual optimizations can sometimes contradict each other. For example, reducing stock cuts storage costs but requires more frequent transportation, or the cheapest transport route can increase ordering costs or necessitate higher commission costs. In collaboration with an external partner, a mathematical model and a method to find a holistic optimum has been developed for DiSCO.

The supply chain costs are therefore optimized in terms of total costs, starting with the ordering costs, transport, load carrier costs, reception in the plant, internal transport, warehousing and sequencing to the amount of capital tied to the products inside the plant and on the transport route. By analyzing this data, an intelligent algorithm determines the optimum delivery frequency for each component, which has also shown that, for example, a slightly higher stock level can be economical if this can save on transport and thus reduce overall costs.

Real time tracking as a basis for long distance JIS

For relatively large-format parts with large variance, sequencing directly at the supplier and performing a JIS (Just In Sequence) feed directly on the production line is the optimal and now industry-standard method. However, this only used to work for suppliers located in closer proximity to the plant. Nowadays, JIS parts supply also works over longer distances and longer periods of time.

The idea behind long-distance JIS is to build up a metaphorical pearl chain as a supply chain. The sequence of vehicle orders is fixed for seven or more days. This makes it possible to very precisely determine in advance which part must be installed when, even for deliveries over longer distances. This provides the supplier with a longer lead time for the respective vehicle part. Therefore, they can utilize their own production capacity more flexibly and are no longer tied to proximity to the manufacturer.

To implement the long-distance JIS in a fail-safe manner at Magna, a real-time tracking system down to the level of the individual trailer truck was introduced. This is why the system known as MIATT – the abbreviation stands for Magna Intelligent Arrival Trailer Tracking – was used first for long-distance JIS deliveries. To ensure a flawless JIS parts feed, each truck trailer must also maintain its sequence and therefore be able to be registered and identified in the system individually.

Paperless flow of products cuts down relabeling

The introduction of paperless goods reception was an important step towards optimizing internal logistics, while also saving costs and reducing resource consumption. The unloading lists can be accessed via tablet and are available to employees in a standardized format. In addition, the delivered goods are recorded using a standardized label that has already been applied by the supplier. This eliminates the need for time-consuming relabeling or attaching additional internal information to the delivered parts.

Intelligent logistics also serves sustainability

The comprehensive view of multi-OEM logistics not only optimizes costs for the contract manufacturer and therefore also for the manufacturer. It also improves sustainability throughout the supply chain because transportation that can be completely avoided consumes no energy and therefore causes no emissions.

Digital supply chain optimization serves the same purpose. Some transports can be completely avoided, while necessary ones can be better optimized for higher efficiency. DiSCO is therefore an important tool for Magna's efforts to become CO2-neutral overall and to adapt production to the aspects of sustainability and responsible resource management.

Other measures on this path that affect logistics include

• shifting transportation towards the more environmentally friendly rail,
• carrying out unavoidable shuttle transports with alternative drive systems and
• avoiding packaging by using reusable load carriers and packaging or at least
• recycling all used materials.

Many larger and smaller measures combine with similar policies in other areas of production to create a viable path towards emission-free production in the automotive industry.