Automobile Development


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Presented to Rady student body as part of Students Teach Students on 10/19/11.

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  • Track test:
  • Ford Model T Roadster (represents an old crafted car; google searchFord 1913 plant: Ford assembly line, 1913. The magneto assembly line was the first. WikipediaTundra 2 cabs, 2 drives, 2 lengths, 3 engines = 24 types;
  • Source: MANAGING COMPLEXITY IN AUTOMOTIVE PRODUCTION, H. Schleich, J. Schaffer, L. F. Scavarda, 19th International Conference on Production Research
  • Notes: Team size=Internal (peak) + external (peak), cost=development cost + production investmentSource: Ulrich, Eppinger: Product Design and Development
  • Ontario: 0:51 to 4:49
  • Focus
  • IQS results show Lexus at top
  • 3:57 to 4:14
  • Mercedes SLS AMG 2009
  • See MTS documentLink to CamryStory=aichitoyota the lamp changed
  • Adding plastic grainSrouce:
  • Ferrari video: 1:10 create slolwy, limit production, wait 20 months; 2:15 1 tech 1 engine; 3:11 slow line…Kaikain: stamping, weld, paint, assy; 3:55 hand check qualityOntario: 0:51 to 4:49
  • Description Notes: This is a combination of several indices. Data from 1720 through 1747 are taken from Anne Bezanson, Wholesale prices in Philadelphia, A series of relative monthly prices. Philadelphia: University of Pennsylvania Press, 1936-1937 and 1954. From 1748 until 1912, the index of U.S. Commodity Prices collected by George F. Warren and Frank A. Pearson, Prices, New York: John Wiley & Sons, 1933, pp. 11-13 is used. This index used eleven groups of commodities including farm products (25-35 items), foods (25-27 items, hides and leather (4-5 items), textiles (8-10 items), fuel and lighting (.5 to 1), house furnishings (1), spirits (3-5), miscellaneous (1.5-3 items). The full index is available in CMWPCPIM. Beginning in 1913, the Bureau of Labor Statistics' all-commodity price index is used and is continued through 1947. For 1926 and later years the index was based on 784 commodities. See United States Department of Labor, Bureau of Labor Statistics mimeograph release No. 4313, January 1932. The current index has a base of 1982 = 100 and uses the All commodities Producer Commodity Price Index. The All-Industrial Producer Price Index, which begins in 1913, can be found in WPUSAICM. The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser's perspective. Sellers' and purchasers' prices may differ due to government subsidies, sales and excise taxes, and distribution costs. There are three main PPI publication structures: Industry-based. The PPI publishes over 500 industry price indexes in combination with over 10,000 specific product line and product category sub-indexes. Commodity-based. The PPI publishes over 3,200 commodity price indexes organized by type of product and end use. Stage-of-processing based. The PPI publishes aggregate price indexes organized by commodity-based processing stage. The three stages of processing include Finished Goods; Intermediate Materials, Supplies, and Components; and Crude Materials for Further Processing.Source: Federal Reserve Bank of St. Louis. The data is collected from the FRED database. The FRED database uses data from the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of Philadelphia, the Federal Reserve Bank of St. Louis, the Office of Federal Housing Enterprise Oversight, The White House Council of Economic Advisors and Office of Management and Budget, the Congressional Budget Office, the U.S. Department of Commerce, the U.S. Department of Housing and Urban Development, the Bureau of Labor Statistics and the U.S. Department of the Treasury.
  • Automobile Development

    1. 1. Automobile Development October 19, 2011 Eric Norman MBA 2012
    2. 2. Why don’t cars look like the beautiful car show models?Source: Toyota Europe (YouTube)
    3. 3. Historical Context Mass Mass Hand crafted Produced customizationImage source:, Ford
    4. 4. …Modern variations can be in the millions Variations offered on Ford Fusion:Image source: MANAGING COMPLEXITY IN AUTOMOTIVE PRODUCTION
    5. 5. …and they must be made thousands of times per monthProduct Stanley HP DeskJet VW (new) Boeing 777 screwdriver BeetleAnnual 15,000 4 million 100,000 50ProductionvolumeSales lifetime 40 years 2 years 6 years 30 yearsSales price $6 $130 $20,000 $200 millionParts 3 parts 200 parts 10,000 parts 130,000 partsTeam size 6 people 175 people 1,600 people 16,800 peopleDevelopment 1 year 1.5 years 3.5 years 4.5 yearstimeTotal cost $300,000 $75 million $900 million $6 billionSource: Ulrich, Eppinger Product Design and Development
    6. 6. If you want one beautiful car, have a craftsman make everything by hand • CT Heritage
    7. 7. Ferrari makes more profit than Fiat does in revenue (per vehicle) Profit margin Company Units Sold Rev (M Eur) Proft (M Eur) (%) Fiat 2,081,800 27,860 515 2% Ferrari 6,573 1,919 302 16% Per Vehicle: Company Rev Profit Fiat 13,383 247 Ferrari 291,952 45,946Source: Fiat Group 2010 Annual Report
    8. 8. But if you want high quality at a fair price, design bysatisfying constraints quickly Design Sales Engineering Production
    9. 9. First develop the car that you want (engineering prototype)youtube
    10. 10. Then prepare to build it thousands of times (mass production)youtube
    11. 11. Advanced version: do both simultaneously and iterate (目的) N-36 (month) N-24 (month) N-12 (month) Engineering N simultaneously CE (CE構想)Development Styling - Design Concept Proposal (開発提案) Approval (デザイン審査) - Production Engineering ▽ ▽ ▽ - Production (Plant) Prototype Drawing (試作図面) - Supplier Prototype Production (試作) Vehicle SE Development Prototype Evaluation (試作評価) (車両開発) Regular Drawing (正式図) Tooling & Equipment making Production (型・設備製作) Preparation (生産準備) Production Trial (号口試作)Source: Toyota presentation 2004
    12. 12. An example of iterative flow in the Design Process Paper Digital 3D Clay modelDesign: Sketches Drawings Rendering (full size) 3D Engineering: CAD Doughboy Drawings Image source:
    13. 13. When designers make the show car, they may not be satisfying constraints for manufacturing and durabilityImage source: Bloomberg
    14. 14. The ultimate goal is customer satisfaction (leads to sustainable profits)Image source:,
    15. 15. KEY CONCEPTS
    16. 16. Clay models are used for design human ability to “feel proper design”Image source: BMW
    17. 17. Mules are a quick/cheap way to test ideas
    18. 18. Weld and paint quality checks are done by humans doto incredible sensitivity of human hand•
    19. 19. Simulations speed up design process…Image source:
    20. 20. … but live testing is required for confirmationImage source: google image search
    21. 21. Previous evaluation ⑤ Re-try ① Put paint on inside of outer panel ② Set inner panel to outer panel Repair → Re-design ③ Fitting confirmation ④ Modify part & re-design by checking paint stuck porti onSource: Toyota presentation 2004
    22. 22. Latest evaluation + - Inner panel - + Outer panel Digital Assembly InterferenceSource: Toyota presentation 2004
    23. 23. Buy a new car 6-12 months after a major/minor model change Major Major 6 years 6 years Minor Minor 3 years 3 yearsAnnual Annual Annual Annual Annual Annual Annual Annual1 year 1 year 1 year 1 year 1 year 1 year 1 year 1 year• Minor problems sometimes cannot be addressed until the next fix cycle• Long-term testing takes time to completeCamry life cycles (link)
    24. 24. Final cosmetic touches
    25. 25. Platform/Underbody is the heart of a car • Like Windows 7 • Shared among vehices • Defines major driving characteristics • Engineering typically done at HQ • See also: latformsCamry platform (link)
    26. 26. APPENDIX
    27. 27. • (Ford Escape Mule on road)• (FT 86 pretty body)• (FT86 track test)• (Kaikain factory process)• (Ontario factory)• ated (Ferrari hand made)• (IS wood)• (RORO)• (RORO 2)• (sudoku mind)
    28. 28. US PPI
    29. 29. Hand craftsmanship can have high variability In January 1801 he went to Washington where he made an unforgettable demonstration before government officials. He spread out on a table many parts of gunlocks, then randomly picked up pieces to assemble a lock. He then disassembled it and invited his astonished observers to emulate him. In 1812 he was awarded a contract to manufacture 15,000 musketsSource: CT Heritage