Disruptions in the automotive manufacturing ecosystem

University essay from KTH/Skolan för industriell teknik och management (ITM); KTH/Skolan för industriell teknik och management (ITM)

Author: Wilhelm Löwen; Louise Törnsten; [2019]

Keywords: ;

Abstract: Because Industry 4.0 is bringing connectivity the automotive manufacturing industry is meeting more disruption coming years than usual. As more manufacturing equipment is becoming connected the focus in the development of products and business strategies is changing from products and their isolated functionalities to the product’s contribution to an overall system. The automotive manufacturers are expressing uncertainty on how the manufacturing ecosystem is changing and how to handle the change. The purpose of this study is to find a business strategy for a manufacturing equipment supplier in a disrupted automotive manufacturing ecosystem. In order to fulfill the purpose of this study, data was gathered using three different methods; a pre-study, a literature review and an empirical study. The pre-study was necessary to understand the focal case study company’s current situation and challenges. The literature review identified previously known research in the automotive manufacturing ecosystem as well as a theoretical framework; business strategies. An empirical study was conducted, where 16 interviews were performed at nine of the largest customers and suppliers in the automotive manufacturing industry in Sweden in order to investigate the possible future structures of the ecosystem. There are two possible future structures of the automotive manufacturing ecosystem, but one is more probable and more beneficial for a manufacturing equipment supplier. The business strategy for a manufacturing equipment supplier would be to take a larger role and responsibility in the ecosystem, becoming a total solutions provider. The most important implication is that the relationship between the supplier and customer must become closer allowing the supplier to understand how their products contribute to the ecosystem and how they can apply knowledge of their own processes to improve it. Manufacturing equipment suppliers should start working towards this strategy already today to ensure that they influence the development of the ecosystem into the most beneficial structure for them.

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