CHINA FAST TRACKS ROBOTIC CAR ASSEMBLY
GM is setting an example at its Liuzhou plant, where routine labour is outsourced to allow a focus on efficiency and quality
Inside General Motors’ vehicle assembly plant in the southern China city of Liuzhou, many workers wear the red-and-yellow uniforms of DHL, the logistics company.
The DHL employees work side-byside with GM workers handling the flow of parts within the plant, which builds about 400,000 Baojun brand vehicles a year and is owned jointly by GM, Chinese partner Saic Motor and Guangxi Automobile Group.
DHL assembles thousands of kits of parts daily in a strategy to avoid assembly errors, and reduce costs. At some GM-run final assembly plants in China, seats are unloaded from delivery trucks, put on a conveyor system that runs underneath an assembly line, and are delivered to the assembly line operator untouched by human hands.
Some parts are delivered by small self-guided robots that would be at home on the set of a Star Wars movie.
GM is now deploying thirdparty logistics contractors inside all 17 of its joint-venture general assembly plants in China to transport materials, and manage parts warehousing outside the plant and delivery to the plant, a senior GM executive told Reuters.
Outsourcing in-plant material handling jobs, traditionally done by GM workers, allows the car maker’s workforce to focus on the more critical work of improving quality and efficiency, GM China’s manufacturing chief Paul Buetow said.
GM has not previously shared details of its strategy for using DHL and other contractors in its Chinese joint-venture factories. Early on in developing its Chinese manufacturing, GM used relatively simple manufacturing systems, relying more on cheap labour than advanced technology.
Now GM’s Chinese operations are deploying advanced manufacturing systems ahead of many factories in mature markets, and leading the way in many aspects of factory floor innovation.
GM’s increasing use of contractors in China points towards a future where much more of the work involved in producing vehicles, or even all of it, could be handed over to third-party specialists, as Apple does by outsourcing production of its devices.
Established car makers have used contract assemblers, such as Magna International, to build small numbers of niche models.
But union agreements have limited the use of outside contractors within many plants run by global car makers in Europe and the United States. Some electric-car start-ups, including NIO, formally known as NextEV, are already experimenting with handing over the bulk of production work to third parties.
NIO’s founder and chief executive William Li has been lobbying China’s industrial policymakers to allow existing motor makers to subcontract for electric car ventures such as his, so that start-ups can channel limited resources into technology and product development.
EV start-ups in China are required to have their own manufacturing capacity. Mr Buetow said he has “thought about” the possibility of fully outsourcing production, but has concluded the car maker should still control manufacturing.
“The building and assembling of vehicles is still a core competency for General Motors,” Mr Buetow said in Liuzhou. “I am not sure we would ever contract that out.”
It is critical, he said, to have the “technical control” necessary to build vehicle bodies with precision to assure crashworthiness.
GM and Saic, and Guangxi Automobile have about 6,000 employees at the Liuzhou manufacturing complex. To support them, DHL says it has has deployed 1,500 of its own workers.
Away from the major international manufacturers, the rise of electric and autonomous vehicle start-ups in China has been rapid and is on the way to rivalling Silicon Valley, with an impressive line-up at this year’s Consumer Electronics Show in Las Vegas, according to Bloomberg.
Of the 4,500 exhibitors at the annual event – a global stage to showcase the latest developments in consumer electronics – more than a third were from China, according to statistics provided by the organiser. That is more than any other nation except the US.
The event has become a key stomping ground for Chinese start-ups, especially makers of autonomous and electric vehicles, as they seek to disrupt the global passenger-car industry with new technology and woo investors. The nation’s Tesla wannabes are not yet household names, but they are aspiring to make significant inroads in the race to grab a slice of the world’s biggest vehicle market – and beyond.
China is seeking to move away from being the world’s factory floor for sneakers, apparel and toys to become a maker of robots, bullet trains and commercial planes under president Xi Jinping’s “Made in China 2025” master plan. Mr Xi wants to accelerate the modernisation of the world’s second-biggest economy to one that resembles that of Japan or Germany – two automotive heavyweights.
“China is moving very fast in the areas of artificial intelligence and connectivity, much faster than Europe and even a bit faster than US,” said Carsten Breitfeld, the chief executive of Byton, based in Nanjing, which unveiled a US$45,000 4x4 at the event. “In some years from now, the hot spot to showcase those technologies will not be in Las Vegas, but in Shanghai.’’
The vehicle introduced by Byton, which it calls a Smart Intuitive Vehicle, features facial recognition to unlock doors, gesture control and a 49-inch dashboard screen, promising increased productivity during commutes.
The strong attendance by Chinese firms – which included 482 exhibitors from Shenzhen alone – is also the result of the Chinese government’s huge push to develop self-driving technologies to help reduce traffic accidents and ease congestion. Authorities have laid out a strategic vision for half of the new cars in the market to have different levels of autonomy by 2020. Among the Chinese exhibitors was Horizon Robotics, backed by funds from Intel, which showcased an autonomous GM Yukon XL that uses the start-up’s chip and software.
Modern cars have 20,000 to 30,000 parts, and today’s auto factories often produce multiple models on the same assembly line. Back in the GM facility in Liuzhou, the parts kits, delivered in the proper order according to computerised schedules, help to reduce errors.
Assembly line workers, for example, do not have to decide what colour sun visor to use in a car. That choice is made by the people assembling the
kit. Parts kits put together by DHL are delivered by DHL workers just in time for a given vehicle coming down the assembly line. DHL uses a system for creating kits of parts that was pioneered by Toyota and later shared with GM.
According to GM, most of these DHL workers are doing warehousing and parts delivery to the plants. DHL workers who handle parts-kitting and just-in-time delivery to the assembly line are much fewer in number than those working outside the assembly plants and they do not engage in vehicle assembly work, the company said.
Similar outsourcing arrangements are being carried out on a small scale in GM’s North American manufacturing facilities and elsewhere, but “what we have done in China is more [evolved],” Mr Buetow told Reuters.
GM declined to provide detailed information on the presence of third-party logistics service providers inside its Chinese plants, saying that is competitive information.
GM China manufacturing facilities also have adopted technologies such as “zero-downtime” welding and other robots, as well as collaborative robots which work side-by-side with human operators on the assembly line, Mr Buetow said.
As a result, GM’s Chinese production facilities have enjoyed a big jump in efficiency, Mr Buetow said. He said the number of vehicles assembled with the wrong components has fallen to a quarter of the level a decade or two ago.
“You rarely see any vehicles that are mis-built at the end of the line these days.”