Developments on the global automotive markets caused production volumes of several vehicle models to fluctuate at some plants in 2014. We address such fluctuations using a variety of tried-and-tested tools, such as flexible working time models. The technical design of the production network enables us to respond dynamically to changes in demand at the sites. “Turntable concepts” even out capacity utilization between production facilities. At multibrand sites, the number of which is growing in the Group, volatile demand can also be smoothed across brands.
Short-term fluctuations in customer demand for specific equipment features of our products and the decreasing predictability of those fluctuations may lead to supply bottlenecks. We minimize this risk, among other things, using a revolving process in which we compare our available resources against different future demand scenarios. If we identify potential bottlenecks in the supply of materials, we can introduce countermeasures with sufficient lead time.
Because of vehicle projects, capacity is planned several years in advance on the basis of expected sales trends. These are subject to market changes and generally entail a degree of uncertainty. If forecasts are too optimistic, there is a risk that capacity will not be fully utilized. Forecasts that are too pessimistic pose a risk of undercapacity, as a result of which it may not be possible to meet customer demand.
Due to the growing range of models and shorter product life cycles, new vehicle start-ups are an ever more frequent occurrence at our sites worldwide. Because of the complexity of processes and technical systems, there is a possibility that vehicle deliveries may be delayed. We address this by drawing on experience of past start-ups and promptly identifying weaknesses so as to ensure production volumes and quality standards are met during our new vehicle start-ups throughout the Group.
We use the TPM (Total Productive Maintenance) method at our production facilities in order to methodically and permanently prevent downtime, lost output, rejects and reworking. TPM is a continuous process involving the entire workforce. Round-the-clock maintenance of the technical facilities means that they are always operational and guaranteed to function reliably.
Risks arising from long-term production
In the case of large projects, risks may arise that are often only identified in the course of the project. They may result in particular from contract drafting errors, miscosting, post-contract changes in economic and technical conditions, weaknesses in project management, or poor performance by subcontractors. In particular, omissions or errors made at the start of a project are usually difficult to compensate for or correct and often entail a substantial increase in costs.
We endeavor to identify such risks at an even earlier stage and to take appropriate measures to eliminate or minimize them before they occur by constantly optimizing the project control process across all project phases and by using a lessons learned process and regular project reviews. This further reduces risk, particularly during the bidding and planning phase for large upcoming projects.