In automotive manufacturing, key performance indicators (KPIs) can provide a vital boost for efficiency and productivity.
OEMs and tier-one suppliers must set KPIs to establish how their factories are performing and address any areas for improvement. KPIs can apply to areas such as production management, quality metrics, supply chain efficiency, financial performance indicators, cost per unit, and sustainability metrics.
When factory planners are evaluating performance, high on the list are cost, quality, and delivery, according to Nate McCall, Senior Solution Manager at reality capture and digital factory specialists, NavVis.
“Quality and delivery KPIs can be defined in terms of costs. Factories aim to produce at the lowest cost possible” says McCall. “Warranty claims and internal defects can be given a value and prioritized accordingly.”
Paul Hänchen, Senior Solutions Strategy Manager at NavVis, notes that with the need for sustainable manufacturing, factories are also measuring their performance in this area. ”Sustainability KPIs are key to measuring energy costs across the factory and can help planners make decisions around how to make the factory more environmentally friendly.”
In a sign of how sustainability has become a KPI in the automotive industry, GlobalData’s Job Analytics database recorded a global total of 3,136 sector jobs referencing sustainability in February 2024. In a sign of changing priorities, just 293 automotive jobs were posted in November 2019, pre-Covid-19, that were related to sustainability. The 2024 figure marks a 98.9% increase from 2019.
The importance of cost-per-unit
Two core priorities for OEMs and tier-one suppliers when measuring performance are how their products are manufactured and what costs are associated with that. “While there are several KPIs that can be used to measure how an automotive production network is performing, the key factors manufacturers need to understand are how goods are produced and the costs to produce them,” says Hänchen.
McCall explains for manufacturers, having cost-per-unit as a KPI means they can prioritize focus areas for improvement. “The intent of having a KPI like cost-per-unit is that plant leaders can compare and prioritize top issues among themselves. In this way they know that they’re deploying their resources in a logical, efficient way. The key is knowing the interdependencies and understanding how the KPIs are related to one another,” he says.
The KPI challenges for OEMs and tier-one suppliers in the automotive sector
KPIs across all industries are usually complex due to the various calculations that need to be made by finance teams to obtain values.
“In automotive manufacturing, tying an event back to a cost can be a bit of a challenge. It can involve quantifying time or material in terms of a specific currency. And then there’s further complexity: the interdependency of the various KPIs,” says McCall. “As each KPI is not a standalone value and is influenced by the others . Being able to understand that systematically and operate in that way takes a lot of insight and understanding of the production system.”
One key challenge for manufacturers is competitiveness. This can either be competition between different manufacturers, or plants within the same production network. “There is competitiveness between plants in the production network as they are ranked high or low depending on performance,” explains Hänchen. “When there is a production network of 35 plants, the plant manager wants to ensure they’re ranked highly in terms of performance. This can potentially give them access to more products, more people, and other benefits.”
Furthermore, Hänchen adds that there are challenges facing plant managers on a macro-level, such as the aftermath of the Covid-19 pandemic, the semi-conductor crisis, and climate change. “All these factors impact how effectively a plant is performing, because if there is no availability of parts you cannot produce goods,” he says. “If there are higher restrictions on energy costs or emissions, factory processes will need to adapt.”
Yet on a micro-level, OEMs and tier-one suppliers must consider several factors. These include decisions on where they should purchase materials and components and at what price. Businesses should also factor in employee numbers, and whether they have received the necessary training. In addition, OEMs and tier-one suppliers need to assess the quality of products being made, the material used, and how goods are delivered to customers.
The importance of digitalization and data in meeting automotive KPIs
As auto manufacturers seek to improve production efficiency through KPIs, the use of digital technologies and captured data can help achieve goals and monitor performance over the long term.
“There is this idea that digitalization is the enabler for enhancing factory performance. There are two key elements plant managers should understand,” says Hänchen. “First is the level of digitalization needed and what systems need to be installed. The second factor is how manufacturers are using the data captured by digital tools.
“Digitalization is also a key enabler to deliver predictive maintenance, and this can help optimize factory KPIs.”
With the use of digital technologies, the data collected can help quantify some of the challenges facing manufacturers and quantify some of the potential return on investment.
“In terms of the overhead cost of floor space, there’s usually shared standards for defining ownership and cost among the various stakeholders. Manufacturers can use digital technologies to capture data so they can quantify what their floor space utilization is, and what their options are for making sure that they utilize their floor space,” says McCall. “This enables them to better understand the challenges they’re facing, the projects they’re going to undertake, and how they can resolve any problems they face.”
Digitally measuring movements across lines with multiple segments in a factory offers insights to processes where there is significant human interaction. For example, workers receive parts, bring them back to the production site, and incorporate them into operations.
“At NavVis, we are in the process of releasing features that will give manufacturers a better way to undertake a manual process called spaghetti diagramming,” explains McCall.
“Mapping out the movements of employees, and quantifying the time needed to execute certain tasks is an invaluable way to identify waste. Manufacturers can use that feature and the data to ensure employees are working in the most efficient manner.”
Delivering KPIs with mobile mapping tech
Automotive manufacturers are turning to technology to help hit KPIs. For example, by 2030, BMW has set a target to deliver a 40% decrease in carbon emissions per vehicle throughout the full value chain from 2019 figures. To contribute to this reduction, BMW has been using NavVis technology to build complete digital representations of its manufacturing facilities across its entire production network.
NavVis VLX is a scanning system that provides a fully immersive, 3D digital capture of interior and exterior spaces, recording point cloud data and 360° panoramic images. NavVis IVION is a cloud- and web-based reality capture platform that enables users to manage and visualize captured point cloud data remotely.
“With NavVis’ solutions, plant managers can get transparency about their plant. Customers can use NavVis IVION to leverage their KPIs, since having access to data can improve accuracy during the early stages of planning avoiding any potential problems,” says Hänchen. “Additionally, NavVis IVION can be used as a tool to understand the workflow design of the operators who are working on the factory floor.”
OEMs and tier-one suppliers can use mobile mapping solutions and point cloud data to help meet their KPIs and improve production planning, reduce costs, and optimize operations.
To learn more about the efficiencies enabled by digital factory solutions in automotive manufacturing, download the white paper below.
