MLADA BOLESLAV - More European Volkswagen Group plants may invite suppliers inside. The factory producing the Skoda Octavia could be the blueprint for them, said Frank Farsky, director of communications for Skoda Auto.
Four major suppliers rent space alongside the Mlada Boleslav production line and produce sub-assemblies for direct installation in passing cars. Some use sub-contractors as well.
'The fractal factory is giving us a competitive advantage and is helping us plan a number of aspects, from space rental to personnel management,' Farsky said.
'It is providing a fascinating lesson. We will put it all to good use for Skoda and other group facilities in the future.'
He said Volkswagen Group sent delegates to Mlada Boleslav this year to see the plant in action.
'We know they were impressed by the quality, the cleanliness, the efficiency,' he said, 'and we have union and non-union people working in the same place.'
Farsky said the union welcomes improved productivity, 'and if something improves productivity the unions have more arguments to present to management when the time comes to renegotiate.'
Skoda said having suppliers in the plant building subassemblies would not suit every location, or every manufacturer.
'Each factory has to look at its own logistics,' Farsky said. 'It is not the way forward, not a commandment, for everyone.
But the principle has efficiency benefits which are worth looking at, especially for any greenfield project.
'The fractal concept is simple. Implementation, day to day, is what it is all about, and we have made no secret of what we have done. We have shown it to other manufacturers.
'The head of Toyota, Mr. Soichiro Toyoda himself, has been to see the Octavia production line.'
Production this year will pass the 400,000 mark, and Skoda expects to achieve 500,000 in 2001, Farsky said.
While Europe would remain the company's core market, Russia will be the prime market for expansion.
The Middle East would be an important secondary target.
'We are talking to a number of potential partners in Russia and are getting partnership offers from a variety of countries in the Middle East,' Farsky said.
'But we have a set of priorities. The Russian market has major potential for us.
'There is great potential in the Middle East but we are going to Russia before anywhere else. To avoid conflicts of interest and inefficient resource allocation, VW Group knows what we are doing, and we know what they are doing.'