What is the highly optimized manufacturing process?

Management had agreed on a basic imperative that company would use highly optimized manufacturing process. Intent Higher volume, Lower Cost manufacturing ITT-Teves was the Worlds leading supplier of four wheel passenger car ABS and TCS. ITT-Teves Market Leader ABS & TCS

ITT acquisition Strategy Bosch introduced and Alfred Teves following in 1985. Till 1988 Alfred had MK2, in 1990 they launched

ITT-Automotive manufacturing is driven by Market Opening up plants in Ashville and Morganton. Shorter Product Life Cycles MK2 6Years MK4G - <4Years Market Demand Large Market Vehicles 400K/Year Small Market Vehicles 50K/Year Margins eroded as OEMs gained leverage Average Margins on ABS systems < 10 15% Buyer Bargaining power More ITT was a supplier for 30 Automotive companies world wide, produced ABD for 60 to 75 different vehicles models. 4 varients 60 to 75 different vehicles models Europe Customer relations Informal Vol req 2000 to 400000

US They go and check the contract Vol req 50000 to 400000

Japan Target pricing approach 90% of this project was about getting costs down. Worry about volumes and passing Bosch Not enough time to optimize all manufacturing equipment in advance of installation in the plant

Concept of Simultaneous Engineering Have they considered voice from US during Simultaneous Engineering? Was EU manufacturing team in touch with US team during development? Unfortunately, not all the members took the opportunity to participate DFM Self Clinching required a perfect fit High quality inspection needed? Increased complexity of design To meet future challenges more improvements are necessary mean MK20 higher versions expected? Modular Design Very good R&D Team FSR & EBD Proprietary technology Does this

Modularity & Standardization -> great deal of Manufacturability and Low cost -> trade-offs in reduced product variety and customization Manufacturing Strategy for the MK20 To cut labor costs in response to customer demands for lower cost products Transfering manufacturing of highly labor-intensive or relatively unsophisticated products outside Germany

Frankfurt plant focus on supplying customer in Europe. Morganton and Asheville Plant would primarily supply customers in North America Production Capacity Frankfurt Mechelen Morganton Asheville 2Mn/Y 1Mn/Y 1Mn/Y 3Mn/Y

Standardized Process Technology Use the same assembly process in all the plants Company to source Globally Earlier Frankfurt plant had sourced to Morganton Plant for Chrysler

Global Sourcing could allow ITT to run preproduction series for customers Didnt have to invest in production capacity in advance How flexibility is needed? High degree of flexibility

First time yields

- 98%

Second time yields 99.7% 25% of the Capital equip costs for MK 4 were related to QA.