At American Axle & Manufacturing (AAM), headquartered in Detroit, Michigan, computers run a highly sophisticated production process that churns out 30,000 forgings and more than 9000 axles a day.

In seven of AAM’s plants in the Michigan area, associates on the line get their instructions from the computer, not the boss. Computers tell them when to reject a bad axle or component, the right amount of torque to apply, and when to allow the piece to move down the automated line with a ‘pass’ check mark.


The company produces axles, drive-shafts and chassis components for its major automotive customers. General Motors Corporation (GM) owned the axle group until 1994, when AAM chief executive Dick Dauch, then a former GM plant manager and Chrysler executive, took it private. About 76% of AAM’s custom still comes from GM; but the $3.2bn supplier group is diversifying by adding Chrysler and Ford to its list of customers. It is also expanding globally: it now has 27 manufacturing-related facilities located in countries such as Mexico, Brazil, China, Poland and, of late, Thailand.

At AAM, both assembly and white-collar workers are called ‘associates’. Little differentiates workers from supervisors, who work in teams. After all, the computer is in charge. Overhead monitors flash green, yellow or red signals and visually display the number of rejected and good certified parts. It all happens instantly. At the same time, executives can monitor the data real-time on their computers anywhere, and at any time, in the world.

Every little detail

The plants are about 70% automated and every part and component is traced from their beginning to shipping and delivery, “from cradle to grave”, says Abdallah Shanti, vice-president, information technology and electronic product integration, and chief information officer. The processes assure repeatability and consistency of lean processes globally. “This is system engineering at its best,” says Mr Shanti, highlighting AAM Plant 6, where front axles are assembled in a 100% lean operation.

The real-time production data that Mr Shanti and authorised AAM associates can view on their computers or mobile devices includes performance capability versus actual, first-time quality, operation efficiency and other performance assembly line information.

The AAM Factory Information Systems tracker report, along with AAM’s traceability software, communicates with one of the most sophisticated quality information systems and intelligent incident reporting software tools available, says Mr Shanti. The digital tools make it possible to achieve the firm’s Six Sigma quality goals and deliver world-class products to its customers, he adds. CEO Mr Dauch monitors the reports daily.

“The best thing about the technology is how you can leverage it for traceability. It gives us laser focus,” says Mr Shanti. That means if a customer complains of a quality problem, AAM can check its database – overhead cameras and sensors record every action at every station on the parts line.

Manufacturing muscle

AAM is one example of top-tier suppliers that are innovating and flexing their manufacturing muscles to be globally competitive in a fierce automotive climate. But the digital process tends to be underutilised on most US plant floors, consultants say. There are cultural barriers to getting wide acceptance for digital processes in many manufacturing enterprises. Some view computerisation as a threat to US jobs.

Digital manufacturing is a $525m industry, according to 2006 data from the ARC Research Advisory Group near Boston, Massachusetts. That is about 7% of the overall $7.5bn product lifecycle management (PLM) and related digital manufacturing process management (MPM) sectors, says Dick Slansky, senior analyst at ARC. He forecasts 15% to 20% growth in the next four years.

Many original equipment manufacturers (OEMs) are pushing to get digital processes closer to the factory floor. Costs from legacy systems, high labour wages and health care costs in developed countries are forcing changes in the way work is done.

Ed Miller, president of consultancy CIMdata notes that OEMs in Germany have been prominent in making investments in digital manufacturing, and the US has been quite aggressive in pursuing it. “In Europe, most investment has come from high-end companies such as BMW, Daimler, Audi-VW and others. They have invested in processes and achieved terrific returns,” says Mr Miller.

But the high-end tech solutions providers must now sell to manufacturing firms and not to the engineering firms that traditionally have been their customers – a change that Mr Miller notes. “Dassault Systèmes, Siemens PLM software and other tech companies are wrestling with it. It has not been easy. There’s a need to introduce it further down the supply chain.”

Its supporters say that digital operations such as CAD-CAM and CATIA make running plants more efficient, safe, and tend to improve product quality and lessen warranty costs. At AAM, tasks that could hurt worker safety, product quality and labour costs are now largely done by robots, says John Bellanti, vice-president, manufacturing services at AAM. “We’re trying to standardise automation across our global sites. Because of higher costs, in North America you see a higher degree of automation,” he says.

Digital modelling

GM has hopped aboard the automation and digital train, rolling it out to its global manufacturing sites. It uses digital manufacturing – what it calls ‘digital math modelling’ – to make operations more lean, flexible and straightforward.

Joe Kaczmarek, GM’s director of manufacturing technology in Detroit, says the company shares designs, processes and work tools across its hundreds of far-flung locations, from Detroit to China. “The pipeline has moved past vehicle design into manufacturing engineering and plants themselves. We use the digital pipeline to tie us all together,” he said.

Digital modelling has seeped into the GM work culture to force “a global transformation”, says Mr Kaczmarek. “I think we’re leaders in moving this out.”

The Lansing Delta Assembly Center in Lansing, Michigan, is one example of an almost wholly digital GM operation. The plant produces the in-demand Saturn Outlooks, GMC Acadias and Buick Enclaves. These were GM’s first vehicles built on a virtual-production architectural platform, GM officials say.

A digital pipeline started in earnest at GM about 12 years ago and it now connects all the pieces and players globally, GM production chiefs say.

John Moll is GM’s global director of plant operations. He oversees vehicle integration, safety and virtual vehicle development for GM plants and facilities. GM is committed to the high-tech processes, he says. “Without digital processes, we couldn’t develop the products we do globally today. We may work on a program in one continent and build it in a second, and even a third continent.

“It’s been part of our journey; since we began it, we have been able to reduce costs. We have noticed a tremendous difference” since using digital processes, he says.

Virtual build to the rescue

Across town, rival Ford Motor Company has been hungry for good news ever since headlines boldly announced its declining market share and sales in the past two years. Virtual build has come to its aid. Ford, often slipping behind Toyota Motor Corporation for number two sales leader, is now getting positive traction from its mid-size sedans: the Ford Fusion, Mercury Milan and Lincoln MKZ (formerly called Zephyr).

The trio of vehicles picked up best quality awards, as rated by JD Power and Associates’ Initial Quality Study, a consumer survey in June 2007. That marked the best record of any first-year vehicles in Ford Motor’s history. Then in October 2007, Consumer Reports magazine rated the trio as top buys, beating Toyota and Honda, in its annual consumer survey. That survey of nearly five million owners assesses reliability, performance, owner satisfaction and safety, all of which are important factors when consumers decide to shop or purchase a brand.

Ford officials credit its successto virtual digital build processes. Virtual build is integrated into a global product development system, similar to GM’s strategy.

“One of the things that we have always struggled with in manufacturing has been our ability to predict feasibility issues early on in a computer or virtual manufacturing phase,” says Bruce Hettle, director of Ford’s vehicle operations manufacturing engineering. “We are making great strides in that area now.”

Lean model and teamwork

For Chrysler, the Chrysler Truck and Activity Vehicle Assembly Center in Toledo, Ohio, operated by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) represents a $2.1bn investment in its Toledo operations. The plant builds Chrysler’s Jeep Wrangler and Jeep Wrangler Ltd, producing about 130,000 units annually, compared with 84,486 in 2004 before the new deal, Chrysler officials say.

Chrysler’s UAW workforce teamed up with the plant suppliers to build 2007 Jeep Wrangler models in the third quarter of 2006 at the plant, which was launched in 2006 as a supplier park. The park is a study in automation and Chrysler’s overall flexible manufacturing strategy, but it is also a model for global teamwork between a major automaker, three key supplier groups and a Chrysler UAW workforce.

The three suppliers have been on board from the start. Kuka Toledo Production Center operates body assembly, with a high degree of robotics. Magna Steyr North America runs the paint shop. And Ohio Module Manufacturing Corporation, owned by Hyundai Mobis, assembles chassis components.

The lean model and digital manufacturing process is based on DaimlerChrysler’s SMART car operations in Europe, which Chrysler studied before launching the Toledo park for Jeep.



  • At seven of American Axle & Manufacturing’s plants, computers give instructions, monitor and check processes and provide management with real-time production data


  • General Motors’ Lansing Delta Assembly Center in Lansing, Michigan, is an almost wholly digital operation


  • Ford Motor Company uses virtual digital build processes in the production of its successful range of mid-sized sedans
  • Chrysler’s Truck and Activity Vehicle Assembly Center in Toledo, Ohio, uses a lean model and digital manufacturing process to produce its Jeep Wranglers