Saving costs in automotive

Saving costs in the automotive industry is becoming an obligation for the sector. We are living a moment of capital importance in what until now has been an unstoppable development in the production of vehicles, and the current geopolitical situation is affecting the industry to such an extent that the costs of raw materials and energy have shot up to unprecedented levels.

This fact, together with the already alarming fuel situation, so much talked about in recent years, is forcing a forced rearmament of all echelons of the sector.

It is no coincidence that in the last year production costs have exceeded ratios of up to 400% compared to previous periods. This is undoubtedly an alarming figure, which is a serious burden for companies in the sector.

In an increasingly overloaded, competitive and austere market, it is necessary to subject companies to careful economic control in order to maintain a positive balance, optimize costs and maintain quality in order to attract customers.

At MESbook we have been working for years on MES system implementations in automotive plants. Thanks to this experience, we know the most relevant key indicators and we have developed a tool capable of controlling the critical points and acting accordingly.

That is why in this article we are going to talk to you about how to reduce costs in automotive thanks to a tool like ours, which is the only one in Industry 4.0 that helps to identify cost holes in real time.


How to save costs in the automotive industry?

Cost reduction in the automotive industry is a major challenge. We are undoubtedly talking about one of the most complex and powerful industries in the market, which in turn is subject to a mandatory transformation both environmentally and economically. 

In this second point it is essential to be able to monitor point by point all the phases that make up each of the processes of this industry. Thanks to this quality control we will be able to know in detail where we are losing money.

We are talking about something so important that the mere fact of being able to minimize risks in production can mean thousands of euros in savings. But, without a doubt, we need to know what is happening in order to be able to implement an effective solution.

For example, if we have the right factory cost management software, such as MESbook, we can compare purchase prices, including energy, and decide accordingly.

Ideas to reduce production costs in automobile factories

As in most aspects of an industrial process, cost savings in the automotive industry must follow Julius Caesar's well-known quote "divide and conquer. Almost one hundred percent of the time, poor cost management is due to a lack of knowledge of the exact points at which optimization is truncated and excessive investment, whether financial, time or labor, is generated.

Only by knowing the development of the processes that make up the bulk of industrial activity can solutions be found that, when applied, effectively correct these losses. In this sense, controlling the critical variables is fundamental to know where and how to act.

Quality and non-quality costs are another fundamental key to efficient process management and MESbook helps you reduce both cost dimensions by guiding you through the entirepre-transactional, transactional and post-transactional quality assurance process. 

Another important point is to know how to identify the main wastes in order to gain competitiveness in the price of the product. At the same time, it is interesting to maximize the use of the machines to obtain a higher productivity.

This last point is perhaps one of the most sensitive, since we are talking about the heart of industrial processes. The fact that we are able to enhance the performance of machinery can be a major breakthrough in cost savings.

It is also important to highlight the importance of good personnel management, since the human factor is another of the keys that can make a difference both economically and in terms of final results. Being able to analyze its influence can help us to make a difference. 

For this, it is essential to have the right software that allows real-time management of our plant and enhances its performance with the minimum investment.

Systems to control costs in the automotive industry

There is no doubt that the best tool to put all this into practice is MESbook. Its integration will not only save costs in the automotive industry, but will also allow the company to make its way into Industry 4.0, something that brings enormous benefits.

Thanks to MESbook you will be able to control costs in real time and act on hypothetical deviations from the target. You will also be able to identify cost holes, manage the quality system in a simpler and paperless way or control the impact of the price of raw materials and energy consumption on the final product.

The design costs of new products are also another handicap when following the whole process required in IATF 16.949 that requires many human and material resources for its control, MESbook facilitates all this operation with its new APQP Digital 4.0 module.

And finally, it will allow a global analysis to visualize all the KPI's specific to the sector, in a clear way and with a language that can be easily understood and supported with LEANbook, the tool that connects all systems, people, waste and machines to push all improvement plans efficiently towards cost reduction.

Energy costs of a car manufacturing plant

But where should the emphasis be placed when assessing the costs of a car factory? Well, today, energy costs are undoubtedly a fundamental point. Given the current global geopolitical and energy situation, it is the point of balance that is generating most concern.

We are talking about a five-fold increase in the cost of producing a vehicle at some points in 2022. A large part of this expense can be attributed to the furnaces, where the high temperature range represents a significant energy injection.

In numerical terms, it can be estimated that almost three quarters of total consumption goes to the transformation of raw materials and, to a lesser extent, to the assembly of parts and the final vehicle. Be that as it may, it seems that cost optimization is almost mandatory for any industry, as the current situation looks set to continue for at least a few more months.

We invite you to learn more about our MES system for Industry 4.0. In MESbook we will be happy to help you to know all its functions and you can take your company to the innovative world of Industry 4.0.

Arturo Torres

Customer Success Management Director

Arturo Torres

Industrial Engineer with more than 27 years of experience in different sectors as Director of Operations, Supply Chain, Processes and Quality. Lecturer in institutions such as the Chamber of Commerce and the General Council of Industrial Technical Engineering of Spain.

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