Logistics May Provide Next Great Leap for Auto Industry
By Cliff Banks WardsAuto.com, Aug 7, 2007 3:33 PM

TRAVERSE CITY, MI – Lockheed Martin Corp.’s production of a new joint strike stealth fighter, the F-35 Lightning II, may hint at the future of all manufacturing, says an executive of one automation supplier.

There are about 600 suppliers and 6,500 engineers spread across 30 countries working on the project, Raj Batra, vice president-Automation and Motion Div. for Siemens Energy and Automation Inc., notes in a presentation at the Management Briefing Seminars here.

Siemens AG recently acquired one of the suppliers on the program, UGS, and its product-lifecycle-management (PLM) software for $3.5 billion.

Batra says it currently takes 15 months to build one of the fighter jets. Eventually, Lockheed plans to reduce the gestation to five months and, ultimately, to one day.

“Will they get there? We’ll see,” Batra says.

The goal is to create a worldwide network of suppliers to design and build all of the plane’s parts and ship them to the final assembly plant, where no actual component design or manufacturing is taking place.

If the auto industry follows the same path, experts say, the future will be less about manufacturing and more about logistics.

“No longer is it just about manufacturing,” says National Center for Manufacturing Sciences President and CEO Rich Pearson. “It’s about supply chain management. Manufacturing is what happens when the piece stops moving.”

Production process for new fighter jet template for auto industry?

Creating the technology that ties everything together will be the next great leap for the automotive industry, says John Byrd III, president of the Association for Manufacturing Technology. Currently, too many processes along the supply and manufacturing chain “reside on their own islands,” he says.

One smaller-scale example of how the future might look for automotive is Chrysler LLC’s Toledo (OH) Supplier Park, which officially started producing vehicles last August. Chrysler picked three suppliers – Kuka Flexible Production Systems Corp., Hyundai Mobis Corp. and Magna International Inc. – to manage and operate part of Jeep Wrangler production at the park.

Other auto makers are looking at similar concepts that could take shape in 18-24 months, Kuka President and CEO Larry Drake tells Ward’s.

The question, Batra says, is who will be smart enough to capitalize on the technology available today?

“Manufacturing competency will define the automotive landscape in the near future,” he says.

cbanks@wardsauto.com