Changing Approaches to the Production of Cars
Submitting InstitutionUniversity of Bath
Unit of AssessmentBusiness and Management Studies
Summary Impact TypeEconomic
Research Subject Area(s)
Information and Computing Sciences: Artificial Intelligence and Image Processing
Commerce, Management, Tourism and Services: Business and Management
Summary of the impact
University of Bath research has contributed to a lean, `build-to-order'
(BTO) production strategy for the European automotive industry. The study
of `intelligent logistics' and supply chain configurations led to
recommendations for building new production systems that are helping to
address significant industry problems: global overcapacity, rising stock
levels and low profitability. The research findings have been widely
shared with vehicle manufacturers, suppliers, industry trade associations
and government bodies, original equipment manufacturers (OEMs) and
suppliers. The Bath research has had an impact on: the reduction of waste
that is integral to the former `build to stock' production model; the
development of an environmentally friendly manufacturing approach;
improved profitability through the reduction of `inventory' (new cars
losing value in large distribution parks); and on future innovation and
growth challenges for the automotive industry. The research has influenced
manufacturers and suppliers seeking to implement a more flexible
automotive component supply chain across Europe.
Over the past fifteen years, the `built-to-order' model of car production
has challenged the automotive industry to reduce waste, to be more
environmentally friendly, and to produce benefits for the industry that
can improve profitability. The former production model (build-to-stock)
led to a surplus of `inventory' — new, unsold cars that are parked over
long periods in large distribution sites. University of Bath researchers
have estimated that lead manufacturers may hold approximately €10 billion
of inventory in distribution parks across Europe (reference 1). Research
conducted in the School of Management on innovation in the automotive
industry has focused particularly on the implementation of a BTO
production strategy and generated research insights with high practical
relevance for this industry. The research has been led by Prof. Andrew
Graves (Bath since 1994), Director of the Lean and Agile Research Group
(LARG). It has included the following Bath academics: Howard (Mar 1999 - Sept
2007), Miemczyk (Apr 1999 - Aug 2006), Parry (Jun 2005 - Jan 2007)
and Squire (Bath since Sept 2010, Professor since Nov 2012).
We provide two examples of research projects that have led to commercial
impacts based on the development of new thinking and therefore new
approaches to car production:
(1) The `3DayCar' project (1999 - 2001) was a collaborative research
project with the goal of designing a system wide process within which a
customer's need for a vehicle could be fulfilled within 3 days. The
project was funded by a £1.5 million EPSRC grant with partners at the
University of Cardiff and the International Car Distribution Programme.
Initially, the research mapped the lead time and process of a customer's
order through the system. Using value stream mapping techniques, the
research findings indicated an average delivery time of 39.8 days.
Analysis of the processes responsible for this delay revealed that only
1.4 days was attributable to physical production, compared to 38.4 days of
order processing and distribution. The research showed car manufacturers
the benefits of a focus on reducing order processing and distribution
delays rather than on further attempts to improve factory operations and
production (reference 1). This research therefore set the agenda for the
investigation and development of `intelligent logistics' and the
innovative production technologies needed to implement them.
(2) The `Intelligent Logistics for Innovative Product Technologies'
(ILIPT) project (2004 - 2008) was a four-year, joint European Commission
and industry-funded project (€9 million of funding in total) designed to
investigate the findings of the `3DayCar' project within a European
context. This also became known as the `5DayCar' project (reference 1 and
sources 4 and 7). The project consisted of 31 project partners across
eight EU member states and participants from Russia, Brazil and
Switzerland. ILIPT was divided into three work packages: (WP1) product
configuration and customisation for build-to-order supply chains; (WP2)
new concepts in delivering flexible production networks; and (WP3)
integration of complex processes. The University of Bath led the third
stream and participated directly in the other two.
Research attributable to the University of Bath focused on motivation and
barriers to ICT adoption, innovative product design, logistics design and
the environmental impact of the BTO model (reference 1). More
specifically, published research findings highlighted: (1) the problems
associated with information technology delays in the supply chain, and
particularly the dissonance between the expected and realised benefits of
e-hub technology (reference 2); (2) the benefit and implementation
barriers of supplier parks (reference 3); (3) the implications for inbound
and outbound logistics (reference 4); (4) the global implementation of
supply chain strategies for build-to-order (reference 5); and (5) the
implications of BTO for product design (reference 6).
References to the research
2. Howard, M. (2005). Collaboration and the '3DayCar': a study of
automotive ICT adoption, Journal of Information Technology, 20:
3. Howard, M., Miemczyk, J. and Graves, A. (2006). Automotive Supplier
Parks: An Imperative for Build-to-order? Journal of Purchasing and
Supply Management, 12 (2): 91-104. DOI: 10.1016/j.pursup.2006.05.001
4. Miemczyk, J. and Holweg, M. (2004) Building cars to order: What does
it mean for inbound logistics? Journal of Business Logistics 25 (2):
171-197. DOI: 10.1002/j.2158-1592.2004.tb00186.x
5. Miemczyk, J. and Howard, M. (2008). Supply Chain Strategies for Build
to Order: Managing Global Operations, Supply Chain Management: An
International Journal, 13 (1): 3-8. DOI 10.1108/13598540810850265
6. Howard, M. and Squire, B. (2007) Modularization and the impact on
supply relationships, International Journal of Operations and
Production Management, 27 (11): 1192-1212. DOI:
• EPSRC IMRC (Innovative Manufacturing Research Centre) Grant, 2001-2006,
5-year funding to take forward research on lean manufacturing across the
aerospace/ construction/ automotive industries: £2,245,000.
• EU ILIPT, Bath, (July 2004 - December 2008) €402,215 (£290,408).
• EU ILIPT, Bath, extension funding (July - December 2008) €97,000 (c.
Details of the impact
Since 1999, this research has helped to change the ways in which the
automotive industry thinks about the production of cars. At that time,
built-to-order was a challenge to the conventional wisdom of the
manufacturing process. In the past fifteen years a series of well-funded
UK and European research projects, involving academics from the University
of Bath, have helped this way of thinking to become established as an
industry norm. Bath research has contributed to specific aspects of
intelligent logistics in practice and has informed ongoing developments in
the processes that underpin intelligent logistics. Bath research has
contributed to improved profitability through the dissemination of
insights into lean production strategies. BTO has helped to decrease waste
through processes designed to reduce `inventory'. Research at Bath
continues to support the development of innovation and growth strategies
and to provide recommendations to both industry and government. For
(1) Profitability: As a result of sharing research findings on
intelligent logistics, vehicle manufacturers, suppliers, industry trade
associations and government bodies, original equipment manufacturers
(OEMs) and suppliers have coordinated changes to support a leaner, smarter
BTO production strategy built on an improved and more flexible automotive
component supply chain across Europe and "profoundly affected the car
ordering and manufacturing system" (Member of the European Parliament,
source 1). A specific example of how Bath research has contributed to this
is in the development of `spaceframe' technologies, designed to increase
model variety and reduce delivery times. Manufacturers have used these
technologies to highlight changes to core industry configurations (source
1). Through their application of the BTO approach, manufacturers have been
able to see "improvement in productivity and increased profit margins
which have been reinvested in new technologies, materials, working methods
and outsourcing strategies as defined by Professor Graves' research"
(Strategy Director, Morgan Technologies, source 2).
(2) Disseminating the BTO Approach: Several major manufacturers
have BTO initiatives in place, which underscores the degree to which
industry leaders are committed to implementing the research findings.
These include: BMW, DaimlerChrysler, Siemens, ThyssenKrupp Automotive, TRW
Automotive, Dana Corporation and Hella Autotechnik. BMW's Internal
Consulting Division requested copies of `Build To Order: The Road to the
5DayCar' (reference 1) and continue to develop BTO expertise as a
potential core competency. Bi-Monthly research workshops were hosted by
partnering companies around Europe, such as ThyssenKrupp, CLEPA (European
Association of Automotive Suppliers) and VDI/VDE-IT at which Bath
academics disseminated the research. The CEO of CLEPA has said that that
"the Road to the 5DayCar Bath research provides us with a vision of a
sustainable future" (source 5). The EU's Information, Society and
Technologies (ICT) web pages highlight the 5DayCar as `high impact ICT
research' with `results that lead the way' (source 3). The project's final
public event took place in February 2009 where research findings, posters
and a production line simulation were featured at AutoWorld in Brussels.
The Bath research was covered extensively in the automotive press, both in
Europe and the USA (source 6).
(3) Innovation: In April 2008, the Director of LARG (Prof.
Graves) was invited to become a member of the New Automotive Innovation
and Growth Team (NAIGT). This industry-led project was launched to develop
a collective strategic view from the automotive industry highlighting the
innovation and growth challenges it faces in the years ahead. (Members of
NAIGT include representatives from BMW, BERR, Bosch, GKN, JCB, Nissan,
Jaguar/ Land-Rover, RMSG, Ricardo, SMMT, the Technology Strategy Board,
the Universities of Bath, the University of Cambridge, and automotive
consultants). The NAIGT's report, along with a study examining the
competitive status of the UK automotive industry, has been instrumental in
shaping a vision for the automotive industry and specific recommendations
to Government and industry to achieve this (source 4). In 2009, Professor
Graves was asked to participate in the Gordon Murray Design Ltd. (GMD)
project for a new prototype electric sports car, the TEEWAVE — T27. This
project harnesses innovative production methods, using `iStream
technology' to enable a car's powertrain and all major components to be
fitted directly onto the chassis prior to fitting the body panels and then
being delivered to the end of the line. "The revolutionary manufacturing
system (iStream) totally changes the economies of scale and cost base of
producing cars and was a key finding of the 3/5 Day Car Programme"
(Chairman of GMD, source 5). This project has attracted a £4.5m
development grant from the Technology Strategy Board and demonstrates the
continuing importance of the Bath research in this area (source 5).
Sources to corroborate the impact
- Testimonial letter from the MEP for the West Midlands on the
importance and influence of the 3/5DayCar projects and the BTO research
- Testimonial letter from the Strategy Director, Morgan Technologies,
that Bath research on BTO has helped manufacturers to improve
profitability within the car industry.
- The EU Information, Societies and Technology web page that highlights
the 5Day Car as high impact research
- The NAIGT report and study of competitiveness of the UK industry.
- Testimonial letter from the Chairman of Gordon Murray Design Ltd. to
corroborate the influence of Bath research and involvement of Bath
researchers in future innovation.
- A portfolio of press articles from 2008 highlighting the 5DayCar
project: (a) The Five-Day Car Project, Automotive Logistics
Magazine, November; (b) Europe Considers the 'FiveDayCar', Automotive
Engineering International, October; (c) Innovative 5DayCar, Engineering
Magazine, September; (d) The 5DayCar will feature Lightweight
Materials, Assembly Magazine USA, 13th August; (e) 5DayCar could
cut industry's Carbon Footprint, Environmental Data Interactive
Exchange — edie.net on 1st August and Climatebiz.com
on the 5th August; (f) Build-to-Order — Fast and Eco
Friendly, Materials World, July.