Networked factories key to Daimler's productivity drive

Wed Jun 17, 2015 11:33am EDT
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By Ilona Wissenbach and Edward Taylor

SINDELFINGEN, Germany (Reuters) - Having standardized the layout of its factories and connected them to a shared computer network, Daimler (DAIGn.DE: Quote) is now crunching data from them to identify the most efficient way of making a car, its head of production told Reuters.

Markus Schaefer said in an interview the analysis was at the heart of the luxury carmaker's drive to improve productivity, and in turn boost profit margins in its battle with German rivals BMW (BMWG.DE: Quote) and Audi (VOWG_p.DE: Quote).

By using data from factories as far apart as Beijing in China and Tuscaloosa in the United States, and comparing it with German plants including Sindelfingen, Rastatt and Bremen, Daimler is introducing common standards and procedures in a bid to become more efficient.

"If a certain production step takes 40 seconds, and data analysis finds a way to shave four seconds from the process, output can be increased by up to 10 percent," said Schaefer, head of production at Daimler's Mercedes-Benz cars division.

"And it doesn't cost us anything."

After several years of underperformance, Daimler has already come a long way in closing its profitability gap to rivals. In the first quarter of 2015, it made a return on sales (including its smart, AMG and Maybach sub-brands) of 9.2 percent, only just below the 9.5 and 9.7 percent at BMW and Audi, respectively.

It is aiming to lift the operating margin to 10 percent.

Schaefer took office in January 2014, and spent the next months standardizing the way the company's 26 production plants operated. Large factories are all being adjusted to have an average output of 300,000 cars with the same production methods.   Continued...

Workers assemble Mercedes-Benz S-class models at their plant in Sindelfingen near Stuttgart January 28, 2015. Daimler AG with its Mercedes-Benz car group, will hold their annual new conference on February 5, 2015. Picture taken January 28, 2015.  REUTERS/Michael Dalder (GERMANY  - Tags: BUSINESS TRANSPORT SPORT MOTORSPORT)   - RTR4O0CH