GM Reaps Hugh Savings From Flexible Manufacturing - Brief Article - Company Profile

Autoparts Report, Jan 3, 2003

The changeover to flexible manufacturing has saved General Motors $1.5 billion a year after converting more than half its North American factories.

Gary Cowger, president of GM North America, said the savings would continue as new model lines were launched because "flexible" design meant factories had to close for less time to change from one model to another. Now one production line can produce multiple models with only minor changes. In the past most of the tooling had to be replaced to change models.

Cowger, who has overseen conversion of 17 of the group's 29 North American plants to flexible production using GM's new Global Manufacturing System, said a model changeover in a plant now took three days, down from six weeks.

"We have seen huge savings over the past four to five years on implementation of our GMS and our flexibility by having shorter turnovers at model change," he said. "We have been saving $1.5 billion a year over the last several years by being able to improve throughput." On top of that, an extra $120 million can be saved from the cost of introducing a new model as GM equips body shops with "C-Flex" flexible robots, although so far only three plants have the system.

The level of savings is far higher than that planned at Ford Motor, GM's rival, which is hoping to save $1.5 billion-$2 billion over the next decade from its belated move to flexible production. Ford said the cost of changing from one model to another would fall by half, as most machinery could be reused. Its flexible systems will also cost 10-15 per cent less than tooling previously cost it because of economies of scale generated by using the same designs for every factory.

Chrysler has also cut the cost of introducing new models by using machinery suppliers to its Mercedes-Benz sister brand and by using equipment for longer.