MILADA BOLESLAV, Czech Republic - Skoda claims that its new Mlada Boleslav plant is the most integrated in the world. Five suppliers are integrated into the production process.
In addition, Skoda says it helped to put together 50 joint ventures for Czech firms and foreign partners.
Each shift at Mlada Boleslav has 420 Skoda workers and 80 employees of supplier companies.
Rockwell staff prepare the doors in one area. In another area a Siemens- Allibert joint venture assembles complete cockpit modules. The front-end module is pre-assembled by the German company Expert. Seats are made by Johnson Controls Inc., which set up a manufacturing facility on the site four years ago to supply the Felicia. Seating foam is supplied by Gumotex.
Czech labor costs are a tenth of German labor costs. Skoda wants more suppliers to come into the country, to lower their costs.
'For Skoda, the major item is materials,' says spokesman Milan Smutny. 'It represents 65 percent of our total costs.'
Sixty percent of Skoda's material inputs are supplied from companies in the Czech Republic. Twenty western companies have built greenfield plants nearby to supply Skoda.
The joint ventures encouraged by Skoda include Peguform Bohemia, which makes bumper moldings. It was formed by Germany's Peguform and the Czech company Plastimat.
When the painted body arrives at the assembly line, doors are removed for Rockwell to assemble nearby. The body can be raised and lowered as it moves along the assembly line. Skoda claims it was the first carmaker to end all over-head operations.
How it works
Mlada Boleslav uses a kanban automatic replacement system to ensure that parts bins by the assembly line are automatically refilled as parts are used. The kanban system is one of the lean manufacturing techniques introduced to Skoda by Rolf Zimmermann, board member for production and logistics.
'We also use the andon system and team working methods,' he says. The andon system of color-coded status boards ensures that faults are dealt with quickly. 'In Felicia assembly, where we have also introduced the techniques, a saving of 100 operators has been possible.'
The first module to be fitted to the body is the cockpit. It is followed by the powertrain and front end. Each module is delivered to the assembly line on a specially designed carrier.
When modules are delivered they become the responsibility of Skoda employees, who fit them to the body. The empty carrier returns to the first pre-assembly station of its module supplier company.
Modules are built on the carriers as they move through each stage of pre-assembly.
Suppliers must deliver the right module to the line at the right moment. Last-minute changes in the production mix are rare, says Milan Stanek, Zimmermann's second in command.
Between the paint shop and the start of the final assembly line is an automated store that can hold up to 190 cars. The original production sequence can be maintained even if defects are found in one body.
Skoda does not trust outsiders to assemble all modules. 'The rear axle and the engine are very critical modules so we decided to handle them ourselves,' says Stanek.
Volkswagen supplies the engines. Skoda finishes those that are not supplied complete. It assembles them with the front axle and the transmission to create the powertrain module.
When the powertrain module is fitted to the body, the car is automatically raised above head height. An operator on a raised platform, and another at floor level, maneouver the module into position and fix it. Few processes are automated other than parts handling.
Quality a concern
Quality is a major concern in Octavia production.
'We are implementing Volkswagen quality control systems and we are achieving VW quality standards,' says Zimmermann.
Every day at 7.30am, the supervisors of each segment of the assembly line meet with the managers of the body shop, the paint shop and the final assembly and trim line. They review quality problems from the previous day.
Supervisors of each of the five segments of the final assembly line and trim meet briefly every two hours. They discuss any stoppages and try to solve any problems.
The Octavia cost DM500 million ($295 million) to introduce. The major investments were in the assembly shop and paint shop. The DM130 million paint shop serves both the Felicia and the Octavia. It uses water-based paints. Skoda offers a three-year paint warranty and a 10-year corrosion warranty.
The body shop has been reorganized and extended. The Felicia and Octavia are built in the same plant but on separate lines.
The Octavia line is 15 percent automated, and the Felicia line is 80 percent automated. 'Our strategy is to use a manual solution wherever possible unless quality or productivity factors dictate otherwise,' says Zimmermann.
Skoda has imported 1,200 workers from Poland and Slovakia on short-term contracts, because the Czech Republic has a labor shortage.
Octavia production started last September. Between startup and the end of 1996, 1,200 cars were built. This year the plant has moved from two- to three-shift operation, and output is increasing to 400 cars a day. It is currently 300 units a day.
Demand for the new model is high. 'Delivery times on the Octavia run at four to seven months at the moment. As long as we can increase our output, the future is looking very good,' says Smutny.
In 1996 Skoda produced 263,193 vehicles, most of them Felicias. Skoda aims for 340,000 units this year, and for 500,000 in 2000.