Business Tour of Transport Engineering 2014 – Assembly

downloadAssembly process: a comparison between Mercedes-benz Vietnam and DSME in South Korea.

Mercedes-benz ltd. has been assembling automobiles in Vietnam for almost 20 years. They are currently producing about 2000 vehicles every year, with a yearly growing market share – currently 65%. These automobiles are only meant for the local Vietnamese market, therefore there is no export to neighboring countries. The production is structured with a typical production line approach.


The car subassembly flows along the workstations whereby a predefined set of parts is integrated at each station. However, unlike in some other car manufacturing companies, the flow is discontinuous. To move the subassembly to the next workstation, lifting equipment for internal transport has to be engaged and disengaged every time. This is mostly done by securing overhead cranes to the frame with hooks and belts. All the different models produced by the plant are traveling along the same production line. This makes it easy and cheap to change between different models. This provides Mercedes-benz Vietnam with great flexibility. The prefabs used during the assembly are mostly made in Germany, ensuring a constant quality and delivery. The experience and standards from the German assembly plants are used to train the local workers and to structure the process.
Daewoo Shipbuilding and Maritime Engineering (DSME) is situated in South Korea near Busan. At this wharf multiple types of ships and offshore equipment are built. The assembly process of these products is done according to a Job Shop model, the ship does not move whilst being built. Most of the completed ships are one-off versions or are made in small runs. DSME can be seen as a company that delivers custom-built objects, made to the clients’ wishes and demands. The sections of the ship are prefabricated at the DSME location. Most of the work is done in-house, only the installation of specialized equipment is outsourced. On a yearly basis around 90 (large) cargo vessels, 10 offshore platforms and 5 specialized vessels can be produced at the DSME wharf.
The production process in both companies is structured in a fundamentally different way.
Mercedes Applies a typical production line approach with discontinuous flow, whereas DSME uses a job shop with no flow at all. The demand at Mercedes-benz does not result in a pressure on the production speed, therefore this approach suffices. The tact time at Mercedes-Benz is roughly 45 minutes, which is a lot lower than the tact time of Scania with +/- 7 minutes. There is no real strong drive for improving the facility, since there are a limited number of units to be produced. This is all related to the local market characteristics. For DSME the Job Shop approach simply is the most efficient way.
Another differnce between Mercedes and DSME is that Mercedes Vietnam does not produce any parts but is only involved in using subassemblies to construct a vehicle.
On the other hand, dsme produces the ship sections from scratch. This differnce is caused by the nature of the product, a vehicle is composed of modules with larger production series whereas ships of this kind are custom built or produced in small series.
The country were a company is housed has a great effect on the operations. By visiting Mercedes in Vietnam, it could clearly be seen that the attitude of the workers in this part of the world is different than in Europe. They are generally more proud, work longer days and also work in weekends. No intensive coaching is needed to motivate the workforce like sometimes is the case in the Netherlands. However, when it comes to the quality of key components, despite the loyalty of the native employees, work is often outsourced to European divisions.
In Vietnam it was clear that the government has a lot of impact on the company. They are known to introduce new laws on short notice. Therefore the companies need a great amount of flexibility, which in turn limits the degree of efficiency.

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