Flexibility in supplier and assembly plants will be key to the success of build-to-order initiatives.
But once the industry achieves build-to-order, don't expect every customer to embrace it. Not everyone will care about custom ordering his or her new vehicle. That will require a mixture of build-to-order and dealer inventory, according to an industry panel at the Automotive News Europe e-Business conference in Strasbourg, France.
The flexibility around build-to-order is critical in making it work right, especially from a supplier standpoint, said Daron Gifford, a partner in the Deloitte Consulting automotive practice.
'I think we will see some massive changes in the way that cars come together,' Gifford said. 'The whole issue is around speed. To be able to provide groups of components into a sub-assembly, module or system will make the final assembly process much faster and easier.'
Gifford was one of six panelists who addressed build-to-order here.
Successful build-to-order req-uires re-engineering the way your manufacturing system operates - to build in flexibility to use manpower, facilities, and tooling around short notice, said Rob Johnson, general manager of the purchasing division at Toyota Motor Europe Manufacturing SA/NV.
'The real issue is how capable are suppliers and are we in flexing our manufacturing systems,' Johnson said.
Not all customers are going to take advantage of build-to-order, which might reduce the time of order to delivery to 10 days.
'I personally feel build-to-order will never be 100 per cent,' said Rainer Feurer, project director of BMW AG's order-to-delivery initiative.
Gifford agreed, saying there always will be a mix of people who want to buy cars immediately from dealer stock and those who will wait to get exactly what they want.
'Today it might take four weeks,' he said. 'But once you start offering that capability, we, as consumers, always get more demanding. So we'll want it faster and faster.'
Flip de Jager, process manager of order-to-delivery at Volvo Car Corp., said he is convinced that in certain countries, customers are aware of what the Internet can do and are putting pressure on the dealers to get what they want. Internet usage is high in northern parts of Europe but low in Italy and Spain, he said.
Build-to-order does not mean the end of the franchised dealers, Gifford said. Dealers always will have an opportunity forservice business, and only a small percentage of build-to-order customers will opt for home delivery of a new vehicle. Most will continue to buy from a dealer for the service element.