[Solved] itt automotive

The automation of the manufacturing process for MK20 at ITT created a debate that can be summarized in the following sentence: to what level automation is good in different plants. The cost/flexibility tradeoff is always present when discussing automation. Basically, the implication of automation for cost can be viewed from different perspectives. Automation is utilizing control systems and information technology to reduce human work during production especially for tasks that require physical interventions which will lead to improve the process performance.

This will result in reducing production manufacturing time and increase volume. Automation can improve product quality and simplify QA activities. The increase in quality level will decrease defected products and as a result reduce rework or dismiss of products; that will then reduce or better lead to avoid unnecessary extra cost. The automation will require more skilled operators to run the processes and the control devices.

These skills are more costly to acquire than normal technicians. That’s why ITT decided to keep assembly processes that required high level of skill in high wage countries like Germany. The cost considerations will have impact on the employment. Once processes are automated, there will be no need to retain many employees who used to perform tasks that were previously manual. Despite the fact that automation is reducing the cost; yet it is to some extent on the account of flexibility.

The process will be defined and programmed in the control system where it will be difficult to adjust or change in the process if the situation required change. Any change will need to be done manually. Moreover, having the process controlled by the control system; it might lack certain level of intelligence or error correction. It might also lead to eliminate the capability of define the source of problems in case of quality issues. Another important issue with the automation, customers tends to be different in terms of their preferences.

As explained in the case by comparing US vs. European customers, the US customers like to have their own production lines and that might be difficult with the new automation process. On the other hand, robots used will be flexible enough to route some assembly processes based on the specific requirement of the product as explained about the “flexible route”. With respect to the assertion made by one of the managers that “If you automate, you stagnate”; I think that this is not an accurate statement. Automation will have huge positive impact on he long term manufacturing strategy of ITT. The point here is that it might be a true argument to discuss the implementation of automation when a plant culture is not ready 100% to fully adopt it, then the discussion would be, let’s set a transformation plan. In a cost driven market like this, it is important for the company to be competitive to increase automation and reduce manual tasks that are costly to the company, so automation is one of the most important developments that will keep the company competitive in this fast paced industry.

Standardized process technology across all plants has several advantages including global sourcing and increasing the efficiency of capacity. It also allows plants benefit from each other’s learning. On the other hand, there are differences among customers and suppliers in various geographies that make standardizing the manufacturing process somehow less flexible to adopt to customer/suppliers aspects. My suggestion has two points; the transition to full automation could be planned in different phases.

The other point is to consider specific nature of customers in various geographical areas. These differences should be analyzed so that process enhancements might be added to the standard process to accommodate the differences with US customers and suppliers. These proposed enhancements should be integrated without affecting the essence of the standardized process. For example, the issue of quality if US suppliers of ITT (50,000 out of 1 million) can be considered as amended part of the standardized process where defected parts can be redirected to a special process.

The customer requirements and preferences of having special production line by introducing a justification policy that separate a production line for each customer based on the volume. The motives behind this proposal are that differences among different geographical markets are important to be considered and should be implemented to reach customer satisfaction and at the same time implement the company manufacturing strategy. This is a highly competitive market that requires high responses to customers. Jurgen Geissinger is responsible for the success of ML20.

This implies that he might be in a situation where he should take sharp decisions especially when it come to automation and standardizing the process where the impact is not only affecting the cost or flexibility, but affecting also the culture of the plants and its whole environment. It is true that usually, when employees are used to certain routine, they tend to be reluctant to change not only because it might encounter layoffs, but also because of the fear of taking the risk of change. Despite of that, the plant managers know well the long term advantages of the automation and they sure that it will be implemented.

That’s why the Ashville plant manager already stopped any new hiring and asked current employees to acquire more skills that are necessary for the automated process and they invested on that by payments and reimbursements for employees. A gradual approach is the best way to handle this case. For automation, it seems clearly that resistance of automation is coming mostly form Ashville plant compared to Morganton plant. If I were in Geissinger shoe, the starting target will be Morganton plant because the workforce there are comfortable with automation as MK4-Gi employed high level of automation.

A transformation plan can be defined in Morganton plant to setup the equipments for MK20 based on the specified dates of setup. This part will be easier at Morganton; then the standardization process will be implemented by default as the manufacturing process has been designed at the beginning of the product development. Phase by phase; various issues or problems related to US customers or suppliers can then be identified and resolved as the implementation is going on. Once the transformation process starts in Morganton, Ashville should be addressed to follow the transformation.

The two plants should take advantage of being closed to each other in order to make Ashville transformation successful. The experience gained in Morganton can be transferred to Ashville when required. Again, the approach with Ashville should go gradual and in phases in order to avoid creating gaps in the processes and in what people are used to do. Also, it they need more time to learn new skills that are needed for the new automated processes. Lederer is the head of ITT Automotive/Teves and his responsibility is to keep the competitive advantage of the company high and achieve the market leader position.

For manufacturing industry like the one ITT Automotive is in, the low-cost strategy is a key for sustainable competitive advantage, by applying target-costing principle. This is to address cost issues without compromising product quality or manufacturing functionality. As the industry is taking new generation of products to become more sophisticated and less costly, a business strategy should be developed to address being a leader in term of cost. The idea of categorizing various assembly processes based on its complexity would be ppropriate, by performing unsophisticated subassembly tasks to low wages countries. In terms of flexibility, standardization of process and equipment will allow serving clients more efficiently and unforeseen problems can be eliminated by sort of collaboration, when needed, between plants. Moreover, automation will enhance the product quality and suppliers should be warned and encouraged to reduce defect rates in their product in order to reduce related cost. Also, modular design can help in increase customization for customers while maintain automation and process standardization.

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