New Initiatives Prep Porsche, GM for Digital-Manufacturing Transformation

The long-expected digitization of auto manufacturing is underway.

Installing batteries into a vehicle chassis at Porsche’s increasingly flexible Leipzig, Germany, assembly plant. (Porsche)

The sometimes seemingly mercurial benefits of the Internet of Things (IoT) movement are moving into focus for automotive manufacturing, as automakers large and small begin to detail the pending benefits of digitization efforts. Improved quality is high on the list, but quicker line speeds, more flexibility, enhanced component tracking and even improved worker safety are heralded for “digital” assembly plants either now in operation or soon to be commissioned.

GM said its Factory Zero is the first U.S. auto manufacturing plant to install a dedicated 5G communications network. (GM)

Porsche, for one, is taking a particularly unique and broad view. As a comparatively low-volume manufacturer with a high ratio of customer-individualized vehicle builds, the company said in November 2020 that it’s serving as a founding partner in a joint venture called “FlexFactory” – a consultancy and business enabler that “aims to make the production of small series of all kinds of different products in the manufacturing industry more flexible and cost efficient.” Porsche is calling the joint venture’s goal “digital production as a service.” Joining Porsche in the FlexFactory initiative are the company’s management and IT consulting subsidiary MHP, and the insurance group Munich Re.

Porsche noted in a release announcing FlexFactory that the venture hopes to allow its manufacturing-based customers to “implement innovations or article variants faster and more efficiently than in the traditional production process, and with less capital input. There is great demand for such solutions: Manufacturers from a wide range of variant-rich industries (e.g. the automotive, clothing or packaging industries, etc.) face the challenge of taking into account increasingly individualized customer needs while shortening product life cycles.”

The joint venture combines Porsche’s manufacturing experience and MHP’s knowledge of digital process optimization. The Munich Re insurance group offers “finance and insurance models and a performance guarantee cover for planned production,” while Munich RE subsidiary Relayr brings digital risk analysis via IoT sensor systems.

The cost of retooling of General Motors’ Factory ZERO represents the company’s largest-ever investment in upgrading a manufacturing facility. (GM)

Porsche said the FlexFactory venture intends to “show the way to a more flexible, economically calculable production landscape in cost-efficient structures and, if required, by accompanying its implementation in concrete customer projects.” Ralf Hofmann, founder, shareholder and Chairman of the Board of MHP, added, “It is our aim to create significant added value for our customers and for the entire economy with digital, flexible solutions and technological innovations. By bundling the strengths of Munich Re and Porsche with the depth of our expertise in digital technologies we can now do just that even in micro-scale custom production while simultaneously maintaining high cost-effectiveness.”

Converging electrification, digitalization

Porsche surely intends to leverage learnings from the FlexFactory effort. Like several other automakers, Porsche is seizing upon the intersection of vehicle electrification and IoT manufacturing to commission a new generation of vehicle assembly plants. Its Leipzig assembly plant in Germany is underway with a makeover to enable it to build internal-combustion, hybrid-electric vehices (HEVs) or completely electric vehicles (EVs). The site currently produces conventional and HEV variants of the Panamera sedan and Cayenne and Macan SUVs. And Leipzig soon will add the first fully electric version of the Macan.

“Since the initial ground-breaking ceremony in February 2000, we have invested more than 1.3 billion euro to develop the plant,” said Albrecht Reimold, Porsche AG member of the executive board for production and logistics. “This expansion project to enable production of purely electric vehicles will ensure that the plant is ready for the future.”

The 2022 GMC Hummer EV, projected to be the first production model from GM’s Factory ZERO in Detroit. (GM)

Meanwhile, General Motors is underway with a $2.2-billion retooling of its nearly four-decade-old Detroit-Hamtramck assembly plant to dedicate it exclusively to EV production, renaming the plant Factory ZERO, Detroit-Hamtramck Assembly Center. GM announced in late November that the plant would be the first in the U.S. to install a fixed 5G mobile-communications network – a vital component in equipping the plant for IoT-driven advances. The company said the retooling of Factory ZERO is the largest single manufacturing-plant investment in its history.

“Factory ZERO will be GM’s flagship assembly plant in our journey to an all-electric future,” Phil Kienle, GM vice president of North America manufacturing and labor relations, said in a statement. “Installing 5G at Factory ZERO is an essential step in the transformation of this plant, and signals how important advanced manufacturing is in the ongoing race to an EV future. Our workers rely on fast and reliable communication and need to trust their tools, including digital tools,” he added. “Factory ZERO is an ideal place for this kind of innovation, as it’s being transformed to become our most advanced assembly plant.”

Initial production at Factory Zero begins in late 2021 with the GMC Hummer EV and will be later joined by the Cruise Origin, a planned automated “robotaxi” for the company’s Cruise subsidiary. The company stripped Factory ZERO to the walls to install what has been described as a modular assembly layout. This setup is believed to be highly flexible and even more digitally controlled, analyzed and tracked, an aspect driven by the less-complex design of EVs. Many automakers are expected to emulate these methods to hasten the transition to IoT-influenced manufacturing.

Factory Zero will sprawl over 4 million square feet in when it resumes operation, making it among GM’s largest assembly plants. At its stated full capacity of 270,000 vehicles annually, it is expected to employ about 2,200.