Question for people who know manufacturing

[SoCal Rob]

I've worked in a lot of different roles over the years related to manufacturing engineering, from electrical design to PLC programming to MES (Manufacturing Execution System) data discovery, architecture design, SAP interfaces (argghh ?), programming and startup/go-live on the plant floor. I've worked hands on planning/designing with people from the C Suite to training operators on the plant floor using the MES. Much of it was/is food manufacturing related, but also some specialty steel work. Many of the concepts, challenges and issues are quite similar.

Stick with me here for a bit, I will get to my thoughts about Rivian, but some context helps. From my perspective there's two distinct layers at the manufacturing level. MRP (Material Requirements Planning) and MES. In general, the data flow is Customer Order Entry --> MRP --> MES. SAP does MRP quite well - at a co$t. But they really don't have strong ability to interface to plant floor equipment (they will tell you otherwise, lol). MRP can determine what you need when and where in a big picture. But it's a bigger challenge for something like SAP to connect all the pieces on the plant floor at the time of assembly, send work instructions to the operators AND machines, and ensure that everything is coordinated. If you ordered FG interior, the 3rd row seats in your R1S better not stage as OC when your vehicle is on the line being built!

Having seen MRP/MES in operation at the BMW Mini factory about 10 - 12 years ago, I imagine it's what Rivian has in mind. At Mini, the customer orders can be changed up to 2-4 weeks before build, as I recall. Once it is scheduled, you are locked in. As an example, the dashboard assembly is manufactured 7-10 days before vehicle assembly at a 3rd party OEM nearby. They ship the dash assemblies for each day's production in racks, staged in the order of VIN assembly. When your Mini comes down the line, they scan a barcode to ensure it's YOUR dashbard and it is installed in about 2 minutes. That sounds easy to accomplish, trust me, it's not. There is a ton of workflow programming, OEM coordination, etc. etc. going on to make this happen. Now multiply that by dozens or hundreds of options. Think about the behind the scenes programming required to coordinate your paint color, interior color, wheel options, etc. and manage the plant floor work cells in real time so that it is all staged properly in real time on your build day. It's quite complex. GM, Ford, BMW had decades to incrementally develop this capability. Rivian is trying to do it in a year or two. You can't just buy this stuff off the shelf ready to use like Microsoft Office. I have a close friend who works in the MES integration business. His company was in discussions with Rivian about providing developers for this type of work a few months ago, so there's a bit of a clue as to what's going on.

My guess is that Rivian was/is trying to develop this level of JIT production, but is finding out how incredibly difficult it is. So the easiest solution is limit the vehicle options and build batches of identical vehicles, instead of building to each customer order specification. Right now, it seems like the primary variables they are working with are body and interior color, and wheels.

So, it's mostly conjecture on my part, but I don't think the current delivery situation is dictated primarily by supply chain lead time or customers changing options multiple times months ahead. My guess is that it is more related to the inability to sequentially manage/stage the required components for specific customer orders in real time on build day.

Thank you for the detailed insight! I’m a curious person by nature so I’m always questioning how things work and why things happen. I think that Rivian has at least a couple problems to solve to address the issue of customer satisfaction with matching configs by reservation date. It isn’t just manufacturing because some of the issues are after the vehicles are produced.

Based upon what I’ve read in this thread and elsewhere, when it comes to JIT manufacturing in the COVID age, the concept can range from business as usual at best to optimistic and all the way to outright broken at worst. Hopefully I didn’t misunderstand or draw a bad conclusion from what the manufacturing folks have patiently explained.

I know there are economic advantages to JIT so I’ll be curious to see if manufacturers stay committed to the concept or if they rethink things.

I truly appreciate the discussion.

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[EarlyAdptr]

A key factor that we don't know - what is Rivian's production scheduling cadence. At some facilities, I've worked with / visited, they lock the production schedule weekly (based on customer demand, and parts/components availability). At other places, they try to schedule out a month (that's hard - always changes). And still some, look to do it daily. I suspect Rivian, given the high fluctuations of parts availability is shorter time frame (weekly??). This "locking" of a plan is supported by further-out plans that aren't locked - so say a preliminary production plan for all of June, but the week of 6/5 would be locked a week before.

Also, in my experience it's a mistake to confuse JIT inventory positions with an overall operational philosophy of JIT and Quality. With parts shortages, JIT gets a lot of understandable blame for holding up production. But in reality, that was just a miss on having enough 'safety stock' to handle the fluke event that disrupts reliable parts flow. Just because there may be a parts shortage, doesn't mean the entire small batch, mixed-model production system should be thrown out the window. Think of all the quality defects that would pile up if companies like Rivian decided to make everything in big batches station to station. Uggg.

Lastly, just because Production Control is scheduling specific model configurations (paint, interior, skid plate, model, wheels) doesn't necessarily mean those unique configurations are assigned to one of us reservation holders. That can happen after the schedule has been set. In fact, it can help smooth out any issues if there's a small amount of finished goods inventory that can be used as a buffer between manufacturing and the customer. If it were me, I'd use the general demand patterns to set my production schedule and then assign actual customers based on priority, locked config, SC, etc from the finished goods inventory we've seen from the drone footage. That way, what gets sent to the SC's is for sure for an actual customer. The only thing that can go wrong (which seems to be happening a fair amount) is damage during shipment or some type of QC issue that wasn't picked up at the end of manufacturing (that's a BIG problem).

Just my 2 cents.

 

[Rivian_Hugh_III]

I’m just an IT guy who likes to improve systems which interact with people and I know a little about cars, except for vehicle production about which I know effectively zero.

Right now I see a LOT of people getting frustrated because they haven’t had so much as a guide contact and they are seeing people who ordered long after they did getting deliveries. It seems to me that the delivery of vehicles to people seemingly at random could possibly be fixed or at least improved by tweaks to the ordering process.

I suspect that part of the problem may be of Rivian’s own making because they allowed and encouraged people to revise their configurations. From my perspective, I don’t see how they can effectively plan production with people constantly changing the components involved in their build.

If that’s the case, I wonder if Rivian would be better off telling people that when they reserve their order it is effectively locked until they’re assigned a guide. If folks want to experiment with their configuration after they reserve and before they are assigned a guide then they are free to do it online, but there is no ability to modify your reserved config. They can play, ”What if?” to their heart’s content but they can’t affect their reservation… yet.

My thought is that once a guide is assigned shortly before production, a buyer can commit to their initial config via the PBA and work with their guide to complete their purchase and delivery. However, if they want to make changes then the guide can assist them and (hopefully) give them accurate information about how changes will impact their production timeline so the buyer can make an informed decision.

As part of this process change I think that Rivian would benefit from allowing customers placing a reservation to choose up to three configurations when placing their reservation. Another option would be to let people choose multiple options for their single config so, as an example, people could indicate that they’d be happy with any of several exterior colors. Either of these would allow Rivian to have a better chance of matching vehicles to reservation holders in chronological order via filtering whenever a vehicle is suddenly available for some reason: sort by reservation date and then by people who would consider that config acceptable. Right now it seems as if a guide will contact a seemingly random person to offer them a chance at an already built vehicle. This seems to be bugging people… a lot.

I’m sure the issues are even more complex than what we see as outsiders. So, manufacturing folks, am I envisioning the constant config change variable as a significant problem when in reality it isn’t? Legacy manufacturers seem to limit the time you can make changes when ordering a vehicle and I suspect that this is why. While it is clearly possible to let people modify their reserved config whenever they want, I can’t help but think that doing so makes procurement and production planning harder than it needs to be.

I think you want people to fall in love with their configuration. The tweaking, choosing, owning, changing, being your configuration locks people in on an emotional level that surely translates to more sales.
‘
‘It‘s probably better to do what they recently announced. Asking people to lock in their config when they’re ready to enter the queue.

 

[Longreach]

Most auto companies seem to be moving on from JIT to the new JTL system…… Just Too Late

 

[SoCal Rob]

I think you want people to fall in love with their configuration.

Not really. I was wrong in thinking that calming the reconfigurations would help with manufacturing issues. However, I knew that some (many?) people want to tweak their config a lot. That’s why in my initial proposal I wrote that, “If folks want to experiment with their configuration after they reserve and before they are assigned a guide then they are free to do it online, but there is no ability to modify your reserved config. They can play, ‘What if?’ to their heart’s content but they can’t affect their reservation… yet.”

I suggested it because that’s exactly what I’ve been doing all along. After I made my reservation with the config we wanted, any time I went in to look at options, examples, or changes I just went to Rivian.com and messed with different builds without logging in to my account. I had concerns that I’d change something while messing around, forget to change back to what I actually wanted and then get a guide contact for the build I wouldn’t actually want in real life.

In hindsight, maybe I should’ve built an R1T in RB with BM, 20” AT, off-road, and spare then waited for a guide contact and said, “LOL, j/k! I’ll take an R1S in GW with FE, 20” AT, off-road, and spare, please.” Given what I see going on it could’ve gotten me a Rivian sooner, not that it should or that I would go that route to do it,

I’m content to wait for my original config… though I did find the Forest Edge interior really tempting when I saw it at the Venice Hub.

 

[crashmtb]

Not really. I was wrong in thinking that calming the reconfigurations would help with manufacturing issues. However, I knew that some (many?) people want to tweak their config a lot. That’s why in my initial proposal I wrote that, “If folks want to experiment with their configuration after they reserve and before they are assigned a guide then they are free to do it online, but there is no ability to modify your reserved config. They can play, ‘What if?’ to their heart’s content but they can’t affect their reservation… yet.”

I suggested it because that’s exactly what I’ve been doing all along. After I made my reservation with the config we wanted, any time I went in to look at options, examples, or changes I just went to Rivian.com and messed with different builds without logging in to my account. I had concerns that I’d change something while messing around, forget to change back to what I actually wanted and then get a guide contact for the build I wouldn’t actually want in real life.

In hindsight, maybe I should’ve built an R1T in RB with BM, 20” AT, off-road, and spare then waited for a guide contact and said, “LOL, j/k! I’ll take an R1S in GW with FE, 20” AT, off-road, and spare, please.” Given what I see going on it could’ve gotten me a Rivian sooner, not that it should or that I would go that route to do it,

I’m content to wait for my original config… though I did find the Forest Edge interior really tempting when I saw it at the Venice Hub.

I think the “you” in that reply was Rivian

 

[KiloV]

Putting my serious hat back on... I am actually curious about this too. Presumably the opposite of JIT is "plan for a rainy day".

Since right now auto manufacturers are likely losing billions in sales, I wonder if they are calculating if JIT really saved them money in the end. My understanding of the idea behind JIT is to save money on storage, save on wasted/unused parts at the end of a run, and generally be nimble and able to adapt. But despite the current situation where they are losing billions, it seems like it hasnt ever rained quite like this before.

(I ask this as like @SoCal Rob I dont know anything about manufacturing.)

JIT manufacturing is all about being as efficient as possible. Don't spend cash on stuff till you need it. Don't store it. Have the part show up when it's time to bolt it onto the truck. This is very cost-effective. However, the more efficient a supply chain is, the more fragile it is. We haven't seen a supply chain disruption like the one we're experiencing now since JIT manufacturing became a thing. So, yeah, it's causing problems and costing billions. Companies will likely overreact and stockpile more than they should over the next couple of years. Walmart recently complained about this, actually. They stuffed their warehouses full of stuff in response to the pandemic shortages, and now it's biting them in the butt. There's not a real "right" answer. All the crystal balls are on the fritz. The only thing we can say for sure is that strategically important supply chain components (like semi-conductors, batteries, certain minerals) shouldn't be sourced from a single provider. It's worth the investment of tax dollars to prevent a recurrence of this sort of single point of failure that can grind an entire economy to a near halt.

 

[SoCal Rob]

I think the “you” in that reply was Rivian

Doh! That’s what I get for spending too much time on work and quickly glancing at the forum. It’s usually the other way around.

I won’t let that happen again!

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