Saving at Line Speed

General Motors Corp. expects to reach its stretch target of a 30% cost reduction in future conveyor business by buying systems for its plants in bulk as part of its drive for manufacturing commonality and volume purchasing.

The auto maker is changing how it buys, integrates and installs conveyors, Phillip Disch, GM executive director-controls, conveyor, robotics and welding, explains at the recent AutoMan conference in Dearborn, MI. Automotive Manufacturing Solutions of the U.K. organized the event.

Disch oversees the group that covers machines, controls, systems, robots, welding and conveyor functions in GM North America metal fabrication and assembly plants. The group's involvement stretches from planning through launch, until targeted line rates are reached.

The job of the team is to drive “common” across GM, with open standards and using volume to leverage cost.

“I think we will get 30% savings initially,” Disch says, noting the year got off to a good start with a 42% savings on a conveyor contract.

The drive for common processes had led to heated engineering debates over the years, such as round vs. square connectors, or the decision in the late 1980s between 120-volt and 480-volt control circuits to run plant machinery.

In the case of conveyor systems, GM wants a 3-year contract, with a potential 2-year extension, with a single conveyor supplier per technology type, to meet its needs for all plants worldwide.

Once the systems are bought in bulk, GM taps regional integrators to adapt them to specific plant needs and regional installation and validation services.

Historically, GM went to integrators that went to contractors that went to subcontractors and back up the line again, Disch explains. Now, the auto maker is bundling components to supply them directly to the integrator.

“We will source early, in volume,” he says. Instead of buying 100-200 power roll beds for a plant, GM will buy 1,925. It will buy 3,350 skids, 742 eccentric lift tables, 96 vertical belt lifts and 150 accumulating conveyors.

“So we save cost and (the equipment) is identical in all plants,” Disch says. “It covers GM in all regions, including expansion in China.”

There is more work up front, but common hardware and software make it possible to copy work already completed. “Eighty percent of designs are auto-generated so we're not doing it anymore, we're using legacy work already done in designing equipment,” Disch says.

It dovetails with an overarching goal to reduce structural cost and increase productivity during a period of negative price retention in the industry.

OEMs need low-cost, reliable equipment that is easy to recover, maintain, operate, upgrade and integrate, Disch says. Confronted with the additional challenges of legacy costs and the relentless march of technology, GM must leverage its strengths — such as its ability to pay about $20,000 less, per robot, than some of its competitors because of its size.

Huge savings in up-front costs make it possible for GM to put $3,000-$5,000 in incentives on the hood of its new vehicles.

“It's free enterprise at its best,” Disch says.