The automotive industry is going through a period of massive transformation. Radical changes and innovation around electric vehicles, autonomous driving, vehicle connectivity and digital business models have a lasting effect on all market participants. Successfully mastering this period as an automotive OEM requires a new mindset and different approaches to familiar challenges.
As such also the manufacturing of vehicles is affected by fundamental changes in the eco-system and industrial environment. Frequent changes in demand, regulation and technological progress put pressure on their exisitng value proposition (cost, quality, time). Further, uncertainties in global supply chains and an increasing push towards local production yield investment and cost risks. Ultimately, an ever growing pressure from customers and legislation to produce sustainably requires automotive producers to redesign their operations. The combination of developments creates a tremendous investment need into manufacturing assets with uncertain demand forecasting.
Considering, that the automotive industry is already going through a period of technological transformation, existing OEMs have to balance their existing budgets carefully. For this reason, we believe it is time to reconsider the approach to manufacturing as a core enabler for future growth. Instead of taking the full cost and risk of ownership on the own shoulders, Production as a Service is the solution to access production capacities when needed solely paying for the actual output. If applicable this production capacity can be shared with other automotive manufacturers - from the own group as well as fully external corporations.
Next to incumbent OEMs, the FlexFactory solution is also addressing the fundamentally different situation of automotive start-up OEMs. Building an automotive production from scratch involves operational and financial challenges. It can be a small gap between being the step towards mass market acceptance and being a deal-breaker for companies with innovative products. Therefore, Production as a Service is the solution to kick-start production in an open greenfield approach while maintaining flexibility and speed. FlexFactory's heavy focus on flexible production and automation guarantees that the company can grow together with its manufacturing set-up.
Possible uses cases for automotive manufacturers include: