The One and Only New Energy based Lighthouse Factory in the world. Challenges in EV “Smart” Manufacturing and Why is it so hard?

Only 10% of Lighthouse Factories are Automotive Plants

Out of all the lighthouse factories in 2023, only one is in automotive manugfacturing. Only 16 out of the 153 factories selected as lighthouse factories over the years is related to automotive manufacturing, building parts & electronics, a mere 10% out of all smart factories.

This relatively small proportion indicates that automotive manufacturers still have significant room for improvement in innovating their factories and adopting advanced technologies.

“Because the automotive industry has the longest supply chain and the most complex production cycle […] the investment in digitalization is relatively large, and its accumulation goes a lot deeper, so it is normal for it to be a bit slower.”

——Xi Zhongmin, Deputy General Manager of GAC Aion

As the only automotive manufacturer selected as a lighthouse factory in 2023, Xi Zhongmin, Deputy General Manager of GAC Aion, explains why there are few automotive plants on the list.

An Extreme Target of 25 PPM Defect Rate

The inherent complexity of automotive manufacturing hides a critical factor that makes digitalization in the automotive industry more challenging: the stringent quality requirements. Achieving smarter and more efficient production while maintaining consistently high-quality standards means any new technology or tool must undergo rigorous scrutiny, increasing both cost and time investments.

Compared to consumer goods, such as electronics devices, the tolerance for defects in automotive products is much lower. Industry standard for defect rate is less than 0.0025%, or 25 PPM, meaning that out of 1,000,000 products, there should be no more than 25 defect units. Automotive manufacturers strive to meet this extreme target.

What is PPM? 
PPM (Parts Per Million) represents the number of defective products per million produced. PPM is suitable for large-scale production management, as it reflects very slight quality changes, making it an important evaluation standard for manufacturers who need to closely monitor quality.

GAC Aion’s Lighthouse Factory

Maintaining quality while achieving smarter and more efficient production has been an ongoing progression for engineers at GAC Aion’s smart factory. Shaving off the average production time by one second can involves hundreds of devices working harmoniously. A senior manager in the workshop said, “460 workers and 220 workstations have all been adjusted.” The seven seconds now saved compared to previous production time result from collective adjustments by hundreds of workers. Improving a single component project typically involves eight engineers surrounding a management board, marking causes and discussing countermeasures.

GAC Aion’s factory has deployed over 40 advanced IR4 applications. It uses a mixed production mode of stock production and order production to meet the increasing demand for customization. The customization production line is paperless, with screens at each workstation reminding operators of the correct parts to assemble, such as seat or colors trimming and whether to install ETC. Additionally, the conveyor belt adjusts its height according to the operator’s height, reducing labor intensity. These smart features enhance operational accuracy and assembly efficiency.

Paradigm Shift, Pursuing Overseas Factory Launch Speed

Now, the technical value of the lighthouse factory will be transferred to GAC Aion’s smart factory in Thailand.

廣汽埃安的泰國智能生態工廠

“Setting an example in Thailand, Aion will continue to advance globalization, accelerating layouts in Asia-Pacific, Europe, the Middle East, and other regions.”

——Ma Haiyang, General Manager of GAC Aion Southeast Asia Center

GAC Aion’s factory in Thailand is its first overseas production base, with a projected annual capacity of 50,000 cars. The total investment in the project is 2.3 billion Thai baht. The technology from the Guangzhou lighthouse factory will be replicated in the Thailand factory. Besides the Thailand factory, an overseas manufacturing base in Indonesia is also under construction. Aion’s strategy of “Thailand + Indonesia” aims to “continuously radiate Southeast Asia” and progress towards covering the global automotive market.

The success in Guangzhou provides a glimpse of a standardized model for replicating proven technologies into new grounds. Potentially resolving many issues often arising in new production bases, and using digital tools to faster onboarding & lessen management costs. Ma Haiyang, General Manager of GAC Aion Southeast Asia Center, emphasizes the need to quickly cultivate an international team during the expansion process. A keen eye in strategy requires compliment from a tightly thought out organization of operation to ensure efficiencies in management and operation.

“I believe this is a very important foundation for Gogoro’s future overseas market expansion.”

— Charlie Huang, Director of Smart Manufacturing Systems and Solutions, Gogoro

The most challenging experience to transfer during the production process is “human” – the production actions of people, which are intangible assets difficult to replicate and transmit through traditional methods. In contrast to automated equipment, robotic arms, and screen prompts at workstations are relatively easy to replicate when expanding overseas.

However, AI vision can help overcome this challenge.

AI vision can accurately record and analyze the actions and steps of operators, digitizing the analog data from real world. These data include operation time, sequence and accuracy. By integrating these actionable data, factories can dynamically adapt into operational processes, ensuring each operator follows best practices for production assembly.

Additionally, AI vision can promptly identify and alert abnormalities, thoroughly inspecting the production process of new lines, providing on-site operators with reminders, reducing training time, and ensuring product quality consistency. The system’s connectivity also facilitates remote management by local managers, ensuring the smooth operation of overseas new plants. By digitizing personnel operational behaviors, AI vision aids in the seamless transfer of technology and management, helping factories establish and replicate golden production lines, enabling companies to achieve global operations.

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