Smart Car

Topics: Supply chain management, Supply chain, Customer service Pages: 10 (3239 words) Published: March 18, 2013

This paper will focus and investigate the SMART car sculptured by Micro Compact Car (MCC), a wholly owned subsidiary of Daimler-Benz. Hambach, France was chosen as the production site, where the main suppliers were integrated in a supplier’s park called “Smart Ville”. MCC used such supply chain practices which were never used before such as supplier involvement, outsourcing the main manufacturing and modular production. Complete modules were attached in the rigid body frame called “Tridion”. The lead time is just under 5 hours, which is exceptionally good in automobile industry. However, the management of MCC is facing some issues related to manage and control the supply chain where MCC just contributes 15% of value added. The case study “Smart Car and smart logistics” gained special attention from the academics and automobile professionals.


“Difficult situations inspire ingenious solutions” (English proverb).It is true with Smart car. The scarcity of parking spaces and pressure exerted from the environment friendly pressure groups induce the organisations to think artistically. Daimler-Benz and Swatch are the two companies which came upwith the joint venturetoproduce the idea of Micro Compact Car (MCC) or simply the Smart Car. The thinking was to combine the talents and values of both companies to create a conceptually new car (see appendix). The manufacturers aimed at manufacturing wallet friendly, city friendly and eco-friendly without compromising the individual mobility concept. MCCused innovative practices in the industry such as: customization, waiting time were shorten, suppliers co-invested in the project and final assembly was merely 10% of the production cost price. About 80% of the smart car can be recycled (dirt to dirt). This bears a resemblance to“the functional chain awareness school” indicated by Bechtel and Jayaram (1997).This model is very close to porter’s value chain which explicitly mentions flow of goods. The car is built around a potent body frame also called "Tridion”to which modules are assembled. Smart car comprises of five main modules; the platform, the powertrain, the doors and roof, the electronics and the cockpit. The modules are supplied in a unique arrangement for final assembly. Most of the suppliers are fully incorporated at the production site. Suppliers supply “suppler modules” based on a postponed purchasing approach. Modules are bought by the MCC only when they are required in the assembly process (postponed purchasing). The car is moved along the work stations of the assembly line, which has a lay-out in the form of a plus sign (see appendix). In this way, the “integrated suppliers” are able to supply their modules directly into the final assembly line on the basis of “Just in Time”. Waters (2009) defined the JIT as a concept that “organises all activities to occur at the exactly the same time they are needed”.

The mastermind of the project chose to locate the production site strategically at the heart of logistics of Europe, Hambach. Around 60% of the population of EU can be reached within 24 hours. The length, breadth and height of the smart car are only 2.5, 1.51 and 1.53 metres respectively, thusmakingmost of the parking space. Smart car was first introduced in 9 European countries: Belgium, France, Spain, Italy Austria, Switzerland, Netherlands, Germany and Luxembourg.

MCC introduced a new level of integration in supply chain. They go beyond the existing practices assuppliers’ involvement, outsourcing and modular manufacturing. System partners are deeply involved in planning and designing process of the Smart car.This depicts the characteristics of “The Integration/ Process School”. Cooper, Lambert Pagh (1997, p.2) gave the definition of integration school as “the integration of business process across the supply chain is what we are calling supply chain management”. In all 85% of the total added value in the product come from the...
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