Becoming Rich with Daily Scavenging APP-Chapter 657: Parallel Manufacturing Process for Automobiles

"Mr. Chen."

Recently, Liu Xiaoyue, who has been in charge of Yiyang Automobile, found Chen Yiyang in his office.

"Have a seat."

Chen Yiyang knew this old subordinate came to see him; presumably, Yiyang Automobile was encountering some troubles recently.

The reality was pretty much as Chen Yiyang expected.

Liu Xiaoyue came mainly to report the issues Yiyang Automobile is currently facing to Chen Yiyang.

Yiyang Automobile initially focused on cost-effectiveness.

By reasonably controlling costs, Yiyang Automobile primarily relies on profits from overseas markets to subsidize the domestic market.

This benefited Yiyang Automobile as it built factories, saving a lot on tariffs compared to peers.

But now, this model is becoming untenable.

Because major car companies have also successively established and started running factories overseas.

Yiyang Automobile has faced significant challenges in the overseas market.

Thus, if Yiyang Automobile wishes to maintain its overseas market, it also has to conduct promotions and lower prices.

However, doing so would drastically reduce overseas market profits, leaving domestic market funding unaddressed.

"It's too competitive." Chen Yiyang said, sitting down after hearing Liu Xiaoyue's report.

The field of electric vehicles is now extremely competitive.

The various government regulations have accelerated the elimination of a batch of electric vehicle companies.

But the remaining major car companies have also received a signal.

That is, the war among electric vehicle companies has entered the Warring States Period.

In this era, the downfall of any manufacturer will vacate a large market to be supplemented by others.

The entire market will ultimately have only two or three major players to devour all profits.

And before this final consolidation era arrives, the singular aim of all car companies is just to survive.

Yiyang Automobile, which follows the cost-effective route, is evidently in the hardest surviving category.

Because in the same niche as Yiyang Automobile, there is a terrifying player—Biya Mansion.

Since Biya Mansion controls many crucial links in the automotive industry, the cost of its cars is very low.

Yiyang Automobile's cost control is already good, but still one or two levels higher than Biya Mansion's.

Biya Mansion can still make money after a price reduction, while Yiyang Automobile can't earn anything further.

"There's no way to further optimize our costs, right?" Chen Yiyang asked Liu Xiaoyue.

"That's right." Liu Xiaoyue nodded, saying, "To optimize further, we would need to control some key raw material supplies ourselves.

But the upfront investment is another big issue. Moreover, even if invested, without the appropriate management experience, managing production of raw materials ourselves would cost significantly more than purchasing directly."

"Alright, I'll think of something later." Chen Yiyang sent Liu Xiaoyue away.

Sitting alone in the office, he began reviewing materials.

The automotive industry is not a new one.

Since the industrial era, the automotive industry has undergone various transformations, with new manufacturers arising each time.

Chen Yiyang wanted to see if there were any lessons worth learning from past history.

Soon, he found what he was looking for.

That is, Ford Motor, which pioneered the assembly line production model.

Back then, Ford Motor also faced competitive dilemmas from peers.

But Henry Ford, the boss of Ford Motor, employed and perfected the assembly line production method, significantly boosting vehicle production speed.

Speed equates to cost.

While others spend time building one car, you build two.

Thus, you can compete using the profits from two cars against others' profits from one car.

This is the power of assembly line technology.

The same amount of time with the same labor costs.

You earn ten thousand per car.

I earn five thousand per car, making two cars.

In the same timeframe, my earnings equal yours, but my car is five thousand cheaper per unit.

Moreover, speeding up car production allows for faster market capture, eventually defeating competitors.

Of course, to date, any car company uses the assembly line technology, making it hard to distinguish.

But when raw material costs can't be further lowered, shortening production time is the only way to increase profits without reducing cost-effectiveness.

Current car production follows one sequential step after another.

This model's advantage lies in simplicity; merely by assembling cars step-by-step as planned.

However, Chen Yiyang thought of a faster method.

That is, everyone assembling together like building blocks.

Simply saying, a car is a whole and doesn't have to be assembled step-by-step; multiple modules can be assembled simultaneously.

This is a parallel assembly model.

Chen Yiyang felt that the car could be divided into several large modules, independently assembled, and joined.

Once each module is assembled and painted, they can directly be combined into one vehicle.

The front seats and floor can be assembled first and directly installed from the ground up.

Within this process, doors only need a single round of assembly.

The advantages of this assembly method are extremely apparent.

First is the reduction of space occupation.

Traditional auto assembly lines are designed according to the vehicle size, occupying vast space.

Utilizing this parallel process allows most automobile production lines to shrink to half-car size, only integrating into a whole during final assembly, saving space.

This way, on the same area, while other factories can only produce one car at a time, Yiyang Automobile can produce two.

Additionally, this assembly method can reduce costs.

Since assembly turns into modular, segmented methods, auto parts become smaller, large equipment on the entire production line also decreases, saving enormous costs.

Chen Yiyang estimates that using parallel production, Yiyang Factory's overall automotive production costs can drop by about forty percent.

Of course, while this method looks promising, actual implementation faces significant challenges.

First is the coordination issue across modules.

Previous sequential models, albeit slow, could pause whenever an issue arose and resume post-resolution.

Switching to a parallel model means avoiding problems across assembly lines, as any issue in one line prevents the completion of the final assembly step even if other parts are ready.

The difficulty here could be said to rise exponentially.

After all, the previous production method involved a line of people taking turns inserting parts like building blocks.

Now it's a circle with everyone inserting parts into the centerpiece together.

The coordination challenge significantly increases.

Simultaneously, with tens of thousands of parts in a car, provided by hundreds of suppliers,

this method requires all suppliers to guarantee timely supply of raw materials.