Henry Ford’s concept of assembly line manufacturing is a century-old process and it has a potential replacement.
Automobile Manufacturing as it is done today is the masterpiece process introduced by Henry Ford. When Henry Ford came up with the idea of assembly line production, the world was already on the verge of the first world war. Automobiles were as hot as Metaverse today. They were the future of transportation.
Ford rightly said that if he asked people what they needed, people would have said “faster horses”. He was a pure genius with such a powerful mind that he did not let even a single hole for getting his master plan for building wealth leak out. Ford noticed that if a worker had to move 4-5 times from one part of the factory to other, there was a time loss. He came up with the concept of letting one people”specialize” in one kind of task. So a person responsible for tightening the nut and bolts had the only job of tightening nut and bolts. He maximized the time efficiency of the production.
Ford saw that training of workers is a very big issue and if a worker left after training it was unhealthy for the growth. He came up with the idea of getting trained at your own expense and that’s how skill-based education flourished for the masses. So earlier, you used to learn about IC Engines while working on them, now you have to learn it from somewhere i.e a college at your own expense and the apply for the job.
As electronic and computational engineering showed advancement in the world, a huge chunk of workers got replaced by mechatronically operated robots. Manufacturing methods became more efficient yet the idea of mass production stayed. It is still staying.
While mass production makes production cheap at a larger scale, but there is one huge flaw in mass production and the flaw is: TO achieve the breakeven on your investment, you got to sell a lot of cars, maybe around 3000 units to 4000 units and this makes the economic cycle very lengthy. It takes around 5-7 years to roll out a new car and there is a huge Opex and Capex happening in these 5-7 years.
The entry barrier in building an automobile company is so huge that no new player dares to enter the market. Beside the entry barrier, it is darn difficult to build a brand, service chain, dealership, spare part availability for 30,000+ parts. Although, just as many new players emerge in nearly every new sector and only a handful survive, in automotive industry also, only a handful survived, rest all winded up their factories.
There is a new wave of automobile innovation now and those who will fail to adapt, will lose.
Think of Nokia. The giant that ruled the mobile handset market for years so dominantly that there was no other player close to Nokia for a decade.
Nokia dominated the basic mobile phone market operating on Java platforms for years and later introduced a smart phone software platform called “symbian”. It was a closed-innovation platform and only Nokia could use it. It was Nokia who would decide which app or games to be installed, it was nokia who would decide if real player needs to be there or VLC media player. It was a huge success. Having a Nokia N-95 was a big thing in 2007.
BlackBerry came up with their own software platform, then came apple.
Apple changed the definition of smartphones. Apple’s counterpart was Samsung that adopted android. Now the smart phones had no qwerty keypads or the number pads that would occupy 40-50% of the device area. Apple had a responsive touch, so had the Samsung Android.
Nokia had the market for both, premium smart phones and general smart phones.
Nokia 5233, Nokia 6600 and other such phones having Symbian OS had a mass market. The N-series had an elite market.
Apple and Samsung changed the game with their iOS and Android. Android got acquired by Goolge and chose to be an open-innovation platform, while iOS chose to stay a closed platform at the core. It means that source code for Android is available but not for Apple. Still, Apple has substantial amount of it’s code exposed in the public domain, giving people a room for software development.
Apple and Samsung had such a revolutionary software that it disrupted the market somewhere in 2008. In 3 years, the sales of nokia drastically dropped. Nokia failed with symbian software. Nokia adapted windows in Nokia Lumia and failed again because those days Microsoft itself was not performing well, moreover it was again, a closed system while the market needed the flexibility of android or the product design level of Apple.
Automobile sector is showing a similar shift as the Mobile phone sector showed in 2007-08
What software is to mobile is what engine and transmission to automobile and what hardware is to mobile is what the chassis and the body to automobile. Software shift in mobile made hardware more lean with lesser mechanical components. Engine shift from ICE to electric is making cars more leaner.
You can say a car is now a mobile phone on wheels. A lot of things that were mechanical or mechatronical is becoming electronical. A car needs not to have a big engine bay when there is a simple BLDC motor propelling the wheels. A car needs not to have a huge transmission box and that means a huge chunk of space is not required. The shape needs to be changed and so on.
Apart from this, cars are going to have lesser components, apparently lesser servicing requirements and lesser maintenance cost. Battery replacement is going to be the only major cost involved.
A new supply chain is going to disrupt the way auto industry will operate. This transition will see an accelerated growth with a logarithmic graph, instead of a linear graph.
Understanding the paradigm shift and its impact on the automotive industry.
Why did people shift from horses to cars? Because they were faster means of Personal Transportation.
Why did people use to travel? Because they needed to go to work, do trade, go to the hospital, visit someone, tour etc. Rails, seaways, airways, and roadways were the medium of travel.
Why would 10 people go to a shop for buying 10 clothes in 10 cars when 1 person can deliver 10 clothes to 10 people on 1 electric bike?
A lot of breakthrough innovation such as E-commerce, online education, online banking systems, food delivery systems, etc have reduced the need to travel and has become so efficient that it not only saves time and money but also energy.
Why would people go to work every day when a huge chunk of their work can be done from home?
The need for movement is getting reduced and NEOM, a city being constructed in Saudi Arabia is changing this status quo of personal mobility, especially cars!
Why mass manufacture an automobile, or even a toothbrush and get into the market when 3D printing can produce hyper-customized products for everyone in one click?
That’s the plum question Industry 4.0 is solving!
It is said that there will be a time when people will be printing their cars in their backyards and there are several automotive manufacturers who are doing this!
Microfactories+3D printing+local manufacturing with global standards is challenging mega factories+tooling and maching+globalized manufacturing with globalized standards.
The first startup that ever tried to break the mass manufacturing status quo was Local Motors. Local Motors not only challenged the manufacturing status quo but also challenged the closed system innovation through its platform, Launchforth where a car would be developed using collective open-source ideas. It was like the GitHub of automotive innovation. Local Motors printed the world’s first 3D-printed car, Strati, and then started focusing on Olli, an autonomous micro-shuttle.
LM lost to investors, and a vague direction and got closed on the evening of 13th January 2022.
Divergent Microfactories were more focused than Local Motors and they survived, built a 3D-printed electric hypercar, Czinger, and rocked the world. Arrival, another commercial EV manufacturer is building low-volume modular buses and trucks using thermoplastic composites.
Arrival’s microfactories are IoT based and require the least human intervention. Local Motors paved a path and got exhausted. Arrival is making it through.