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New 5-day car: Ordered Monday, ready by Friday

Fraunhofer-Gesellschaft Zur Forderung Der Angewandten Forschung E.V. : 26 May, 2006  (Company News)
The classic series-production paradigm has become obsolete, the future belongs to flexible assembly lines. A European team of researchers is developing a concept for tomorrow's auto manufacturing: fast, made-to-order, and customer-oriented.
Opt for the burgundy leather seats, or stick with the more durable fabric covering? Get the classic metallic paint job, or go with a trendier color? The individual preferences of car buyers are as numerous as the available options themselves. Sure, anyone can get just the car they want, but only after a lengthy waiting period. Conversely, if purchasing the car right off the lot, the customer might get the car right away, but not equipped as desired. 'The business model is utterly outdated and unprofitable,' thinks Prof. Dr.-Ing. Bernd Hellingrath of the Fraunhofer Institute for Material Flow and Logistics IML. According to an estimate released by McKinsey, car manufacturers worldwide squander 80 billion dollars per year building cars that no one wants.

But that is soon to change: Hellingrath and his colleagues from three Fraunhofer Institutes are working with 20 R&D teams from science and industry on an EU project entitled Intelligent Logistics for Innovative Product Technologies, ILIPT. The objective of this European-wide network, coordinated by ThyssenKrupp Automotive, is to create a fast-and-flexible manufacturing concept for the automotive industry. The envisioned 'EU 5-Day Car' will be made to order and delivered within one week of order placement, thereby not only satisfying the needs of dealers and customers, but also improving the European auto industry's competitive position on the global market.

Rigid production processes, inflexible product structures, incomplete logistics chains, and inadequate networking of manufacturers, suppliers and customers have so far prevented the concept of flexible manufacturing from taking hold. By the conclusion of ILIPT in 2008, the researchers aim to develop a concept that makes the product structures in car manufacturing more flexible, enables end-to-end planning and control processes and optimizes networks. The primary objective is to achieve full plant capacity utilization fulfilling orders that have already been placed, a model referred to by engineers as '100-percent build-to-order'. The period of time between order receipt and delivery is to be reduced from around 60 days to no fewer than five days, with a guaranteed delivery date. The pattern for this business model was borrowed from computer maker Dell, all of whose products are made to order: the customer places the order and pays, then the computer is assembled and delivered. While cars are certainly quite a bit more complex than computers, which consist of a few standardized components, they can theoretically be manufactured in accordance with the same principle.
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