Navigating the New World Order: Embracing Agility and Innovation in the Automotive Industry
This article is dedicated to all car manufacturers contemplating reshaping themselves in the new world order.
I would love to hear your perspectives on this issue, especially from managers at 福特 , Stellantis , 宝马 , Mercedes-Benz AG , American Honda Motor Company, Inc. , Toyota Motor Corporation , and 通用汽车 .
You all aim to build your own gigaplants, either in partnership with existing battery companies or by creating your own from scratch.
Let's start this article with a light-hearted joke:
Why did the car manufacturer call the persistent bug a feature? Because if you can't fix it in every model, you might as well advertise it!
But then why doesn't 苹果 advertise its two-year-old smartphones, or why don't tech companies like 台积公司 stop upgrading their technology annually and remain at a 10nm topology?
Because the market demands cheaper, faster, and better products, and the automotive industry is no exception.
I believe the future of automotive manufacturing will resemble the lifecycle of an iPhone.
I suppose, we will see approximately a three-year cycle for refreshing the vehicle's body and an annual update for internal components such as batteries and software, with IT and software updates occurring even more frequently.
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The Current Market Landscape
The automotive industry is experiencing rapid and unprecedented changes, especially in battery technology. The upcoming decade promises to be tumultuous, akin to a stormy ocean, as car companies navigate these shifts.
Battery technology is evolving at a breakneck pace, with major players working diligently to stay ahead.
For example, 比亚迪 is set to launch its second-generation Blade Battery, the LFP Blade Battery 2.0, in August 2024. This follows the introduction of the first generation in 2020 .
New entrants in the market, like Rivian , are also making significant strides. Rivian has changed its battery type just two years into production and updates its electronic components even more frequently.
However, Tesla remains the leader in continuous innovation.
The Tesla Model 3 has undergone numerous updates over the years, including major structural and cosmetic changes. These updates are part of Tesla's strategy to improve efficiency and reduce production costs by integrating larger and fewer parts through advanced casting techniques.
On average, Tesla upgrades its models every two months, making it no joke. If you compare two cars produced within six months of each other, you'll notice different plastic details, connections, hardware, and many small improvements.
Moreover, numerous startups have completed their R&D phases and are rolling out A-samples, further reshaping the battery field and accelerating the pace of innovation.
This dynamic environment highlights the need for car manufacturers to adopt agile and lean methodologies to remain competitive and responsive to rapid technological advancements.
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Differences Between Advanced Technology and Classic Car Manufacturing
One of the most significant differences between the world of advanced technology, particularly IT, and classic car manufacturing lies in their operational dynamics and workforce requirements.
For perspective, according to 麦肯锡 , the average gigafactory (producing 40 GWh) requires over 2,000 full-time skilled employees to operate at full capacity. This workforce demand highlights a major challenge for traditional car manufacturing managers, who may not be adequately prepared for such a shift, posing a substantial risk for companies.
Why is this a problem?
The fundamental difference between classic car manufacturing plants and battery plants is at the core of this issue.
Historically, Toyota was the most efficient car manufacturer in the world, thanks to its long-term strategy.
Toyota's winning plan for decades has been its commitment to LEAN manufacturing, which became the gold standard for efficiency and production excellence.
Many other car manufacturers adopted this winning mindset, which has now become their biggest weakness in the face of new challenges.
Because right now we are in the AGILE era.
Previously, car manufacturing plant managers focused on tracking and maintaining a well-designed production system. They operated in a stable environment where the work, while substantial, was predictable and plannable.
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In contrast, advanced technology sectors, especially battery plants, thrive on constant improvement. The launch phase of a new factory requires a completely different pace of work and a different management approach.
This mismatch is one of the biggest slowing factors for car manufacturers now and in the coming years.
Reducing costs and waste while responding quickly to changes are two fundamentally different worlds.
I firmly believe that car manufacturers must undergo a significant transformation to avoid bankruptcy in the future.
This transformation is not something that can happen overnight; it requires a strategic shift in mindset and operations.
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Next Steps in the Journey
To successfully navigate the transition to advanced technology and agile methodologies, car manufacturers must take decisive steps.
Here are some recommended strategies:
1. Hire Middle Management from Advanced Technology Industries:
One of the quickest ways to infuse new thinking into traditional car manufacturing is by hiring middle management from advanced technology industries. A particularly promising source of talent is the pharmaceutical sector. Pharmacy companies, especially those focused on generic and biosimilar drugs, excel in designing new products and renovating production lines within months or years, rather than decades. Companies like Teva Pharmaceuticals already have an environment conducive to growth and constant improvement.
So best way is to buy this experience.
Additionally, leaders from companies like Tesla or consulting firms such as McKinsey are invaluable. Interacting with these highly motivated individuals reveals their potential to reshape any industry or company.
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2. Retrain Existing Management:
Retraining the current management team is another solution, albeit more challenging.
This approach requires substantial time and mental energy. The goal is to completely reshape existing habits and mindsets before managers transition to new roles in battery or advanced car plants. However, if managers are not agile and flexible in their current roles, it is unlikely they will adapt well to new environments.
Traditional combustion engine car manufacturing environments require managers rather than innovators. Therefore, companies should create special buffer times for their existing managers or establish dedicated schools with extensive training and real-world showcases. Encouraging agile collaboration across company borders, from customer-to-supplier and partner-to-partner, is also an effective strategy for improving agile methods.
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Conclusion
The automotive industry is at a critical juncture, facing rapid technological advancements and shifting market demands. The traditional approach to car manufacturing, exemplified by LEAN methodologies, is no longer sufficient in the era of AGILE and advanced technology. The current landscape requires car manufacturers to be more flexible, innovative, and responsive.
The fundamental difference between classic car manufacturing and advanced battery technology necessitates a significant transformation. Companies must either hire skilled managers from advanced technology industries, such as pharmaceuticals, or retrain their existing management to adapt to this new paradigm. Leaders from companies like Tesla and consulting firms like McKinsey can provide invaluable insights and drive the necessary change.
Retraining existing management is a complex but crucial step. It involves reshaping mindsets and habits in a stable environment before transitioning to new roles in advanced plants. Creating specialized training programs and fostering agile collaboration across company borders will support this transformation.
To remain competitive, car manufacturers must embrace agility, continuous improvement, and rapid innovation. By adopting these strategies, traditional car manufacturers can successfully navigate the stormy seas of technological change and emerge stronger in the new world order. This is not an overnight change but a strategic shift that will determine the future success of the industry.
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This is the end of this article.
Certainly, this is just a small part of the journey on how to pivot the existing automotive industry.
I would love to hear your thoughts and ideas because it is only through discussion that we can find the truth.
Thank you for reading.
Quality Launch Team Manager @ ACC | Production Management, Business Strategy
5 个月Interesting ??