SAARLOUIS, Germany - First came vertical integration, the process of building as many components of a car as possible - and the car itself - under one roof.
That quickly became too expensive as labor costs rose.
Then came the development of an outside supplier base, enabling automakers to lower costs by shopping around for the best price.
But that could put hundreds or thousands of miles between supplier and assembler, requiring automakers to carry expensive parts stockpiles as insurance against supply disruptions.
The next answer: just-in-time delivery, which enabled assemblers to pare inventories to the bone through hair-trigger scheduling.
But just-in-time clogs roads with thousands of trucks. It also requires expensive and painstaking management and makes assemblers vulnerable to supply interruptions.
Now comes what many automakers are calling the ultimate answer to parts sourcing: the next-door supplier park.
Encountering problems
Industry executives say that clustering key suppliers in parks next to the assembly plant cuts production costs by reducing 'insurance-policy' stockpiles, yields faster decision-making and provides immediate quality-control feedback.
And with an automated delivery system feeding modules in sequence direct to the assembly lines, the parks can make major contributions to productivity gains as well.
'Yes, vehicle makers like supplier parks because it gives them more control over delivery and quality,' observed Neil Mullineux of Bowfell Research Associates in London.
'But they are inefficient from the supplier's point of view. Component manufacturers would be happier delivering parts from fewer, larger factories.'
The Valencia model
Based on results at its first supplier park in Valencia, Spain, where it builds the Fiesta and Ka supermini, Ford Motor Co. has decided to install major suppliers in new parks adjacent to all its European plants.
Like Ford, Renault SA also has begun a drive to locate suppliers as close as possible to assembly lines.
The automaker is building a 31,000-square-meter park next to its Sandouville plant in France to house key suppliers. Faurecia, Inoplast, Irausa, Sommer Allibert and United Technologies Automotive are expected to move in by September.
Also, Renault's new Megane Scenic factory in Brazil includes a 15,000-square-meter building to house four Tier 1 suppliers: Faurecia, SAS-Sommer Allibert Siemens, Vallourec and PPG.
Pilot operations integrating suppliers into the manufacturing process already have been carried out at Renault plants at Flins, France, and Curitiba, Brazil. The French company now is planning to extend the concept to all its assembly operations.
Ford sees the difference
In Saarlouis, meanwhile, Ford estimates that it already is saving 1,000 forklift-truck operations a day on Focus production because many modular subassemblies are being assembled by suppliers in the park and fed in sequence directly to the assembly line.
Twelve suppliers, including United Technologies Automotive, Visteon, Benteler, Irausa, Tenneco/Gillet and Sekurit, are up and running in the 50,000-square-meter park. Most are housed in one building.
