Problem: BMW and other luxury makes would like to put high-end Pirelli-brand tires on some of the vehicles they sell in North America. But no one likes to import tires, and Pirelli, of Italy, doesn't have the U.S. volumes to warrant the huge investment of a North American factory.
Solution: A new Pirelli factory concept that makes low production volumes economical.
Pirelli North America appeared to have burned the tire supplier rule book last year when it opened its first U.S. factory in Rome, Ga. Pirelli's $100 million investment yielded a plant that will produce a mere 200,000 performance tires in its first full year of operation.
Typically, new tire factories cost four to five times Pirelli's investment and produce millions of tires a year. They have to: Tires are a commodity business, and profitability depends on high factory productivity.
But Pirelli's U.S. gamble is anything but typical.
The company has devised a modular production system that, according to Pirelli North America CEO Gaetano Mannino, can operate profitably on volumes of as little as 350 tires daily.
"We've thrown out the ideas of economies of scale," Mannino says while showing off his colorful red and gray factory nestled in the hills of north Georgia.
The secret behind the plant is Pirelli's trademarked production process, called MIRS, or the modular integrated robotized system. It works like this:
Pirelli outsources the mixing and production of its many rubber compounds and materials to a subsupplier in Dyersburg, Tenn. The Tennessee company delivers to Pirelli commonized components that can be interchanged on several tires, regardless of their size or market segment.
The subcomponents are fed into the small MIRS manufacturing cells, where six robots handle the tires under production. Little human handling is involved once the material is fed to the robots. Most of the production is overseen by a handful of software engineers who ensure the system doesn't break down.
Each cell is a 100-foot-long self-contained production unit, taking the tire from naked carcass through production and to a cured, sellable tire.
One MIRS cell can build 350 tires daily. And because of the interchangeable subcomponents, the cell can switch from one tire to another with little more than the changing of its software program.
That low-volume flexibility has the attention of auto industry customers. BMW is considering putting Georgia-made run-flats on its Z4 roadsters built in Spartanburg, S.C. DaimlerChrysler's high-performance Dodge Ram SRT 10 will use tires from the plant this year.
"Each MIRS module is its own factory," says Andrew Kearton, director of manufacturing. "We can add more modules as the market demand grows."
The Rome plant started with only one MIRS production cell last year. Today, it has three and plans to add two more next year. Kearton says those five will be doubled to 10 in the near future, and the 10 will then be doubled to 20 cells.
"After that, we have the available land to add 20 more," Kearton says, "and then another 20 after that."