AUBURN HILLS, MI, Dec. 12 -- The 12,000-sq-m injection molding and window encapsulation plant built by Dow Automotive at Ford's new manufacturing facility in Bahia, Brazil, represents what Dow characterizes as part of a new component supply strategy that promises to substantially cut costs through a team approach to design, materials, and production.
Dow Automotive supplies the Ford "project Amazon" complex, which is the car maker's first new plant to be built in over 20 years, with more than 20 components through a Kanban system that it says is "the ultimate in JIT delivery."
"Our plan is not to build injection molding plants worldwide, but to seek out opportunities where our expertise as both a Tier 1 and Tier 2 supplier can result in added value for us and our customers," says Dow Automotive president Larry Denton. "As a result, we continue to seek new ways to apply our unique automotive supply position in developing innovative products and business models without competing directly with our customers." He says that Ford's Brazil complex, which manufactures Fiesta models, represents the first example of one of these approaches designed to explore new ways to maximize profitability for supplier and customer alike.
"In my opinion, the worldwide automotive supply model is now broken," says Denton. He explains that the "broken" constituent is that the industry currently operates solely on the basis of the finished price of a component. "What is needed is a team approach to maximize part design, material choice, tooling, production efficiencies, and other factors that make up the final cost of a component." Unlike existing plastic part supply practices, such as "shoot-and-ship" production, Denton says the Amazon project is expected to provide substantial cost benefits for Dow and Ford because of this teamwork approach to manufacturing.
He explains that a primary reason for the anticipated advantages of this new Dow Automotive business (the Ford plant is still in its "launch" stage) is that the companies tap the same labor pool and infrastructure. While Dow has the responsibility for parts from design to release to the Ford facility, it charges on a per unit basis and is working closely with its customer to minimize the price of each part. Denton says the result is that Dow can cut its costs by conserving raw materials and boosting its molding productivity while Ford receives an optimized component.
Dow operates a compounding facility in Sao Paulo, Brazil, where it can tailor the specific properties of materials used for components on the Fiesta.
In addition, Brazil represents an excellent proving ground for innovative component concepts because of fewer regulatory and other constraints compared to North America and Europe, according to Denton. This environment will allow Dow to prove out new approaches to areas such as noise, vibration, and harshness control; the expanded use of metal bonding adhesives; and the application of its many foam products for energy management and other uses. "We can also bring in additional Dow Automotive plastics technologies, such as the reaction injection molding of polyurethanes, if it is determined that they offer customer benefits," says Denton.
Another Dow spokesperson says that the Amazon concept has been considered for use with markets outside of automotive, but that it is unlikely that any of these will be realized in the next year. Denton said no other automotive projects like Ford's are currently in the pipeline for Dow.