The Upward Strategic Migration of an Automotive Manufacturing Plant A Case Study of “Volvo Bus de México” and the impact of becoming a Chassis Part Number Factory

Abstract

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Sir Winston Churchill

Markets have evolved rapidly over the decades. Low cost, low skill manufacturing plants have been able to take on new roles, allowing companies in various countries to reinforce their competitive priorities. The manufacturing strategy by which these plants operate influences their ability to respond to its internal and external environment.

One industry taking advantage of these global opportunities is the Automotive Manufacturing Industry. Volvo Bus de México is within this industry operating as a Completely Knocked Down Chassis Assembly Plant and wishes to upgrade to a Part Number Factory.

Several operational issues and concerns will arise when undertaking this upgrade, and these will require substantial focus and efforts to resolve. In particular cost, systems, supplier, process, BOM, DCN, and HR needs are issues that need to be addressed. In order to resolve these, a manufacturing plant will need to improve its cost understanding, undertake a systems upgrade, increase the flow of information, develop its processes, improve its supplier relationships and increase knowledge.

This will furthermore have implications for the competitiveness of the plant with regards to costs, quality, delivery, flexibility, capability development, and independability. In particular it becomes evident that the impact on flexibility, capability development and independability will be positive whereas the effect on the other three will neither be positive or negative in the short run.