Using Lean in Car Manufacturing to Cut the CO2 Footprint

By Jason Turgeon:

Edie.net, which bills itself as “Europe’s largest environmental website,” for what it’s worth, has a good article today on something it’s calling a “5-day-car.” The focus of the article is purportedly green, talking about waste reduction and a reduced CO2 footprint through this exciting new 5-day method. But look under the hood (sorry, couldn’t resist) and you’ll find that this is a story that’s really all about Lean.

An EU research project has concluded that it is possible to build cars to order within five days – dramatically cutting waste and emissions from transporting the goods. The Intelligent Logistics for Innovative Product Technologies (ILIPT) project involved 29 partners including BMW and the UK’s University of Bath.

Sounds great, doesn’t it? What’s this wonderful new building method developed by this collaboration of auto manufacturers? Let’s dig in

Traditionally, the body of a car is manufactured in a single steel shell, and set numbers are produced in a range of specifications. The ILIPT is examining how to build the car body from a number of standard, pre-formed modules that can be put together as soon as an order is placed.

Hmmm, standardized work? Sounds familiar to me. But the similarities to Lean don’t stop there, as this next quote shows:

It has also developed a model that will allow the software systems of the dealership, manufacturer and part suppliers to work together seamlessly.

Wait, isn’t that just one of the basic principles of Lean, the one about optimizing across organizations? Surely there’s something that distinguishes this from Lean…

“Dr Glenn Parry, senior fellow at the University of Bath’s School of Management and a core team leader at the ILIPT project, told edie the system would have many benefits. “To do it in five days, it has got to be local. We have got to start building the cars closers to the customer. It gives you an environmental benefit because you are not shipping large quantities of vehicles all over the world.”

Huh, a shorter supply line. Never heard that anywhere else. But yes, waste is bad for the environment, and there is a tremendous carbon footprint in shipping boats full of cars halfway around the world, so it’s nice to see them mention the environmental benefits of this new Lean in sheep’s clothing. Let’s continue.

[Parry] said many manufacturers have billions tied up in stock awaiting sale that could instead be invested in clean technology. Dr Parry added: “If you are building to order, not holding vehicles in stock, you are also more inclined to change quickly.”

Better inventory management and flexible work methods also sound pretty Lean to me. So what’s the catch? Well, for one thing, pretty much anyone can pick up the essential Lean techniques by doing some basic research online and reading some books, and while a more formal program of study might be recommended for someone who is really interested or who works with Lean for a living, I certainly don’t think it’s a prerequisite. On the other hand, the University can’t go around telling people that a couple of years of formal education isn’t entirely necessary to succeed in business, can it? It turns out the University is now offering something called an MSc in Innovation and Technology Management to teach people this wonderful new method.

My initial suspicion was that the consortium wanted to steer away from calling this new method “Lean” because of the strong ties to Toyota. It wouldn’t look very good for BMW and its suppliers to broadcast to the world that they are going to be taking a lesson from their competition, would it? But according to the article, the “ILIPT’s findings will shortly be published in a book entitled Build to Order – The Road to the Five-Day Car.” I have to wonder if we need another book about car manufacturing and Lean, especially if it doesn’t sound like it will be crediting Lean as its inspiration.

Anyway, it’s good to see that the environmental is picking up on some of the benefits of Lean, and if BMW starts manufacturing using Lean and cuts back on waste and unnecessary shipping, that would be a very good thing.

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5 Comments on "Using Lean in Car Manufacturing to Cut the CO2 Footprint"

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  1. Mark Graban says:

    Interesting stuff. The 5-day car and fast build-to-order cars was a hot topic in 1999. I helped tour some GM management and union leaders through a Dell factory I worked in back in that era.

    Still no closer to a 5-day car — even for Toyota. You still typically wait months for a custom Prius (of course, that has to do with demand exceeding capacity, also).

  2. Andy Wagner says:

    Interesting, but I’m skeptical. The modularity described makes it sound like they’ll be building modules in the same centralized big factory and “snapping” them together locally into a “customized” finished product.
    Where’s the benefit? Ultimately, unless most of the value stream is local, you’re not actually reducing CO2, or at least not that much.
    Perhaps the current methods can be better optimized, (few container ship rides across the Pacific, for example), but I few like we’re missing something here.

    -Andy

  3. Ralf Lippold says:

    Hi Mark,

    great post:-))

    Looks like there is more under way (concerning lean) in another cover (CO2 footprint).

    Lean Thinking is all about resources savings – step out of your organization as the value stream is not local anymore (business + strategy has an interesting article on that last year, more in coming post as I have to recheck first (hm, is the muda, or what?)).

    By the way, the Five-Day-Car is possible (!). Only you have to fill production line (at least to present standards) as the want to have a high productivity. The result is that the line is full of cars (perhaps only the dealer ordered -without having an end-customer yet) and your order just doesn’t fit in between as everything is already set with suppliers and vehicle distribution.

    Looks like there is more possible as we do right now. Strive for new solutions for the old problems (a few decades already, to be honest;-)).

    Cheers,

    Ralf

  4. Anonymous says:

    The book does indeed build upon Lean. My co-editor, Andrew Graves, gets a mention in the first chapter of The Machine That Changed the World, as he was part of the team at MIT.
    The 5-day car builds upon the lean work and helps to deliver on the promise of Lean Thinking.
    We define that order must come from the final customer and then integrate the supply chain. We demonstrate feasibility in models and then case study application in a major OEM – details in the book!
    I hope it provides a direction that Lean leaders can critique. Best
    Glenn

  5. Anonymous says:

    Hi
    The work builds upon Lean and actually requires a high degree of lean operations for it to function. Prof Andrew Graves, my co-editor is mentioned in the first chapter of The Machine That Changed The World, as he was part of the MIT team.
    We were looking at how to deliver the lean promise. Final orders must come from paying custoemrs – not dealers – as is currently the case. We did a lot of work with the various compaines then integrate customer to supply base and then model using real data. Having successfully proven the new system worked theoretically, we did case based work in industry with major OEMs to prove it works. One of them now runs a BTO engine plant. Its all in the book. Hopefully we show some new direction and Lean operations managers can critique the findings and apply some of the thinking.
    best
    Glenn

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