29 - 30 October 2013, São Paulo, Brazil
Renaissance Hotel, Sao Paulo
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OEMs search for new levels of production efficiency 

To realise the goal of becoming a leading, global automotive manufacturing hub, Brazil still faces on-going challenges in terms of fluctuating markets and economic growth, infrastructure and cost issues. But as this year’s AMS South America conference in São Paulo revealed, investment in this sector continues to grow.

The conference offered OEMs, equipment and Tier suppliers a great opportunity to network
The well-attended event produced lively debate
Delegates enjoyed a wonderful Gala dinner at one of Sao Paulo’s leading restaurants, hosted by KUKA

To meet these demands virtual simulation technology is being heavily employed by GM, according to Perez. This usage ranges from validation of components to simulation of production automation and assembly operation ergonomics. This sudden increase in the use of cutting edge technologies appears to have been triggered by the influx of new OEM manufacturing facilities.A number of new ‘green field’ sites have been developed recently and Brazil is seeing high-tech manufacturing plants being built that not only use the latest production technology but that also are designed to minimise the environmental impact. Perez cited GM’s new Joinville facility as an example of how the company is not only adopting a sustainable strategy to producing vehicles but also in its construction of new plants.

Sustainability and simulation developments in production were subjects touched on by manufacturing manager for Volkswagen do Brasil, Alexander Korb. Highlighting the need to reduce costs Korb focused on VW’s strategy for efficient energy management and materials usage.

GM’s Luiz Carlos Perez highlighted the challenge of increasing production levels

The company is investing heavily in production technologies (introducing production of the Golf to Brazil at its Curitiba plant) and is rolling out its global ‘Think Blue’ programme to facilities in Brazil. This will involve developing better logistics and adding renewable energy sources at plants. Korb described the use of motion capture technology to improve the ergonomics of assembly operations, as part of a programme to increase productivity.

Implementing new technologies and strategies to improve production are not the only challenges faced by OEMs.

Renault has recently taken on perhaps the most difficult (and certainly the most complex) challenges at its plant at Curitiba. According to Luiz Quinalha, the plant director, they had just six weeks in which to redevelop the plant; this essentially meant building a virtually new plant inside the existing facility. Quinalha explained the requirement to increase capacity had seen a number of options explored but this bold plan was viewed as the best option.

VW is investing heavily in sustainable manufacturing technologies according to Alexander Korb


To give some idea of the scale of the task, Quinalha described how the redevelopment required 65 separate, major projects to converge at the correct points in the schedule. Asked if virtual simulation had been employed in the new development, Quinalha replied that it had been used and offered the complete replacement of paintshop as an example. He explained that the project allowed no margin for error, so every detail needed to be worked out prior to commencing construction. Lizandro Mello, of Magius Metalurgica Industrial S/A, questioned how the OEMs had arrived by such optimistic projections for demand given the fluctuations in the Brazilian market.

Luiz Quinalha discussed how Renault had approached the redevelopment of an existing facility to increase capacity

Perez replied that the forecasts took in to account the average market conditions and sale figures over previous years but he stressed that there was an urgent need to increase the speed of product to market to keep up production capacity at the plants. Korb added that new products were essential to compete with the influx of new vehicle-makers coming into Brazil. Renault’s Quinalha noted that the demand came from across South America not just the Brazilian market.
 

Improving the quality and consistency of the supply chain is vital explained Ford’s Silvio Illi

Asked about the impact of the new Inovar Auto programme (see report in AMS Nov-Dec) both Perez and Korb felt it would have a big influence on future investment but as to whether it would favour OEMs new to Brazil (building new plants) over those long established (with older manufacturing infrastructure and technology already in place) in the country, Perez felt the advantage of established infrastructure and supply chains would balance out the levels of investment to be made. Increased costs (wages etc) had not been matched with an increase in productivity stated the director of SINDIPECAS, Gábor Deák. This posed a serious challenge to the future competitiveness of Brazil’s automotive industry he added. Ford’s regional director for suppliers & technical assistance, Silvio Illi described how the company’s ONE FORD global programme encompassed its suppliers. He raised what has become a recurrent theme among OEMs with global production networks, that it is vital to raise and maintain the quality and consistency of suppliers. This was a challenge in South America which Illi described as one of the most complex regions for manufacturing and supply.

JAC’s Tarcisio Telles discussed the Chinese OEM’s project for a new manufacturing facility

No matter how complex the region may be there is no shortage of new manufacturers establishing plants in Brazil. Notable amongst the newcomers are Chinese vehicle-maker JAC. Tarcisio Telles, vice-president, JAC Motors Brasil, outlined the company’s plans for manufacturing in the region. JAC will invest one billion reais in developing its production footprint in Brazil, constructing a compact, modern, high-tech facility in the Bahia state. Telles said the plant will use the latest lean manufacturing processes and will integrate localised manufacturing resources. He added that the company would be developing models for the Brazilian market. The plant will provide full facilities for production with the exception of powertrain, which will be introduced at a later date.

The wrong mind-set and missed opportunities were the issues raised by Miguel Peinador, president, Institute of Lean Brazil & Argentina (ILBA).

ILBA president, Miguel Peinador noted that adoption of lean manufacturing principles in the region was still very low


He noted that although lean manufacturing principles were being adopted in the region, participation was still very low. Those that had implemented lean manufacturing processes were not developing them to meet the needs of their businesses, believing that the processes in place didn’t need developing. Having the right mind-set was also something Eduardo Rachid, executive director of Ceine, believed in strongly. He argued that developing the right sort of culture was important to ensure that procedures learnt during training on complex equipment (in the field of metrology) where properly followed. His suggestion was for companies to adopt a more people-centric approach to their structures and operations.

The question of how much local content OEMs were using or planning to use in their manufacturing operations focused on an on-going issue, as labour and material costs have risen, along with taxes and tariffs on imported parts and equipment.

There is no clear answer but Ford’s Roberto Biaggi stated that Brazil had good availability of products and materials to support manufacturing operations.

Plant tour: General Motors – São Caetano do Sul

AMS delegates toured all the production operations at GM’s São Caetano do Sul

As part of the conference agenda delegates were given the opportunity to visit GM’s plant at São Caetano do Sul. Welcomed by plant manager, Sônia Campos, the AMS delegation was given a full, in-depth tour of the facility.

The visit was well timed, offering a great insight into the on-going development of the site. Campos explained that this redevelopment, which would see a new press line being installed and the creation of a new materials assembly and sequencing warehouse, had presented the team at São Caetano with some serious challenges, not least of which was not to lose production capacity on the current models.

The plant itself is 83 years old and its location is now surrounded by the urban development of the city. This has created a problem that is common for ‘historic’ plants; there is no room to expand the site. Campos described the project as a ‘phase-out, phase-in’ operation requiring the co-ordination of eight separate projects to reach completion. With the need to maintain production levels at the same time the operation was likened to ‘building an aircraft in the air’. Asked about the biggest challenge she and her team faced during this project, Campos replied: “This was having to implement every aspect of the project at the same time without affecting production”.

First stop was the press shop where we could witness not just the replacement of the old presses (which still used manual loading of the steel blanks) but also a complete redesign of the layout. The new fully automated presses will be positioned centrally in the building, allowing for easier tooling changeover. This reflects the trend for lower volumes but great variety of parts in production and the need for flexibility. Component storage and delivery are also being upgraded in a three-phase process to improve material flow at the plant.

The current paintshop is 27 years old and will also see new development being introduced. What was interesting to observe was that, despite the age of some of the systems and equipment (the old presses, still perfectly usable, have been sold rather than scrapped) production capacity is at a healthy level, but probably at its maximum. The need to increase productivity is driving the changes at the plant.

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