{ "docId": "019dd923-5ca1-7489-b639-b2190061b746", "docSlug": "a6bfcbdf116a26e3", "documentTitle": "Labor Cost Per Vehicle Report", "authorId": "OliverWyman", "authorName": "Oliver Wyman", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.752, "pageNumber": 8, "pageCount": 12, "prevPage": 7, "nextPage": 9, "slideType": "key_messages", "function": "summarize", "density": "overcrowded", "nDataPoints": 0, "notes": null, "elementsJson": [ "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-5ca1-7489-b639-b2190061b746/8", "deckHref": "/decks/019dd923-5ca1-7489-b639-b2190061b746", "deckJsonHref": "/decks/019dd923-5ca1-7489-b639-b2190061b746.json", "deckAnchorHref": "/decks/019dd923-5ca1-7489-b639-b2190061b746#slide-8", "components": [ { "bbox": null, "kind": "callout", "text": "Offering customers more choices may end up boosting sales, but it can reduce efficiency at assembly plants and boost costs.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd951-d9f0-7525-9c49-f6568a03ccc4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.81, "x": 0.095, "y": 0.44 }, "kind": "paragraph", "text": "Energy costs are not included in calculations of labor costs per vehicle, but they can greatly enhance or detract from accomplishments in lowering labor costs per vehicle. Our research shows significant variations in these additional costs per market. For instance, German and French automakers face different situations when it comes to energy pricing. While natural gas costs in Germany have been rising because of the invasion of Ukraine and adding to German automakers' production costs per vehicle, French car company domestic production is benefiting from lower rates from increased reliance on nuclear power and lower oil prices. Meanwhile, China keeps energy costs down with continued reliance on coal, despite pledges to reduce carbon emissions.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0b9968ff-4343-4cb9-9881-660e7065bce7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.81, "x": 0.095, "y": 0.125 }, "kind": "paragraph", "text": "Offering customers more choices may end up boosting sales, but it can reduce efficiency at assembly plants and boost costs. One place this is being felt is with the increasing number of powertrains — gas, diesel, hybrid, and all-electric— being offered and produced.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5f8d0364-b01e-4fc5-994b-155623de382b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.81, "x": 0.095, "y": 0.295 }, "kind": "paragraph", "text": "Line balancing, complex logistics, and high space requirements contribute to very high costs per vehicle. Unfortunately, the high complexity of the product no longer translates into higher margins in the market, and producers of complex vehicles can no longer compensate for the higher costs of their factories with increased margins.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "880b0df4-3f3a-46fe-914a-5ec46965d592", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.81, "x": 0.095, "y": 0.645 }, "kind": "paragraph", "text": "While also not directly part of labor cost per vehicle, disruption in the supply chain can affect it by cutting productivity as workers wait for parts to arrive. Since the COVID-19 pandemic and the semiconductor chip shortage earlier this decade, restructuring the supply chain has been a major focus of the auto industry. Whether aimed at reducing risks or preventing logistical bottlenecks, automakers are looking to dual-sourcing and near-shoring to bring stability to sourcing parts and raw materials. Recently, the equation also includes determining the impact of threatened tariffs and other geopolitical strains that could interrupt the supply chain.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "945e8b5e-ec17-4ee3-b358-1dbde0967c11", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.81, "x": 0.095, "y": 0.195 }, "kind": "paragraph", "text": "Efficient automakers utilize split lines and dynamic sequences to handle different powertrain variants, but accommodating the added complexity often raises the labor cost per vehicle as well as the overall conversion costs as it often requires a larger manufacturing footprint in the factory, more equipment and higher energy consumption. There is a clear correlation between costs and the number of independent parts per factory, with more parts resulting in higher costs.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d8dc6ca7-bd38-4b3d-8d64-46f32921f41f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.45, "x": 0.095, "y": 0.095 }, "kind": "title", "text": "2. EXPANDING CONSUMER CHOICES DOESN'T COME CHEAP", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2081bf8a-8110-42d1-ab59-ea85b53e4e7c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.015, "w": 0.44, "x": 0.095, "y": 0.045 }, "kind": "title", "text": "Getting Under The Hood Of Automotive Labor Cost Per Vehicle", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "45b09a3f-7aa0-423c-a180-16793a235461", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.3, "x": 0.095, "y": 0.615 }, "kind": "title", "text": "4. SUPPLY CHAIN RESTRUCTURING", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "52f017a0-0688-45f6-8699-50829b1fe4e7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.15, "x": 0.095, "y": 0.41 }, "kind": "title", "text": "3. ENERGY COSTS", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f2adaa1d-d754-41bb-91ac-b8a0175b0973", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Audience Definition", "slug": "audience-definition", "agent": "Storyteller", "layer": "slide", "matchId": "34e253ae-6676-4710-8c83-8900d3d80245", "evidence": "The slide seems to be targeted towards an audience interested in understanding labor costs per vehicle in the automotive industry.", "confidence": 0.7 }, { "name": "Problem Statement Canvas", "slug": "problem-statement-canvas", "agent": "Architect", "layer": "slide", "matchId": "cb84e0c6-8671-4441-87f5-59df53e6b183", "evidence": "The components of the slide outline a problem related to understanding labor costs per vehicle.", "confidence": 0.6 } ], "frameworks": [], "arcBeats": [ { "to": 9, "from": 7, "beatId": "01cfe360-d543-46bb-90b3-4e40a5704098", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "consultants-gambit-impact-next-steps", "beatSlug": "consultants-gambit-impact-next-steps", "evidence": "Industry trends and recommended strategies outline the impact and next steps.", "position": 3, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }