Smartville: Extras (5)
Lead Times and Customizability
At full capacity, the MCC plant can complete a Smart Car every 96 seconds, taking less than five hours to assemble the vehicle (Open University[1], 2010).
MCC has completely rethought conventional car supply chain and logistics processes as typified by General Motors (Rubenstein, 2008), and advanced the concept of design-for-assembly further than any other company, principally through supplier involvement, modularity, and plant layout.
MCC was developed through collaboration with supplier-stakeholders, many of whom co-invested in the project. The main suppliers/stakeholders are fully integrated onsite at MCC’s Smartville plant in Hambach, France. The car is assembled in a modular fashion using fewer than 50 engineered component modules supplied directly from integrated onsite suppliers. The plant is arranged in a cross pattern to maximize efficiency.
Smartville is served by a radical distribution network concept, with dispatched cars going to five cross-regional European distribution centres (consolidation hubs) before delivery to individual Smart Centres. This point-to-point system eliminates the multiple intermediary levels of traditional automobile distribution (Rubenstein, 2008). However, there is evidence that MCC may be finding it difficult to maintain their industry-beating lead times of 2-3 weeks.[2]
One of MCC’s main methods of restricting the Smart Car’s design options is by offering most features (such as air-conditioning and electric windows) as standard. This tactic enhances the desirability and finish levels of the car whilst generating economies of scale, because the per-unit cost of installing standard features is reduced.
The online configuration by customers creates a bill of materials that launches production upon its arrival at Smartville. Along with MCC’s practice of assembly point (main) and customer end (minor) postponement, assembly of the car is scheduled only when an order is placed. Such processes strongly imply the MCC system is built around kanban or pull principles. However, worth noting is that MCC’s three-month planning projection, cell and batch-like process flow, and usage of low inventory indicate push system elements are present in the MCC system.
[1] Source: http://podcast.open.ac.uk/oulearn/business-and-management/podcast-t882-supply-chains-smart-cars
[2] Phone calls made by the authors of this paper to various UK Smart Centres indicate this. See Appendix A.13.