How successful the venture was

When production in the Compas joint venture between Mercedes and Nissan began in Aguascalientes, Mexico, in 2017, expectations were high – after all, the skills of two successful and experienced car manufacturers were brought into the production network. However, the Compass was not it became a definite success, but it had to contend with serious difficulties to begin with.

“It’s really easy for us to say that body shop processes are 90 percent automated. “But that doesn’t make us special,” says Mark Davidson, CFO and Head of Industrial Engineering, explaining the problem. Something special about the German company and The Japanese joining force in the Mexican production site is that three cultures meet. Combining three cultures and two brands in one team and building your company culture was an obstacle that was completely ignored at the beginning.

“Reducing the number of German and Japanese workers was the impetus for us to start the Mexican operation,” Davidson says, explaining the move played a key role in that the factory was named the winner in the ‘Best Change: Location’ category in this year’s Factory of the Year.

“From then on, you could clearly see that Compas is starting to develop itself. However, when the situation calmed down in 2020, Covid came,” reports the CFO about the next challenge, which was faced not only by a change in the management team but also by a change in mindset. It was not only about responding more to Mexican ideas with a more sensitive leadership style.

“It was also important to show more confidence in the 200 Mexicans we had in management and professional positions two years ago, only 20 will remain at the end of the year “For training purposes,” as Davidson insists, because the goal is really for the next generation to take full responsibility for the plant.

The new approach also influenced the company’s strategy. After the company was founded, each department had its own KPIs, which could not meet the company’s goals.

Davidson on risk: “Even though each department was successful on its own, Compas could still fail. That’s why we reduced KPIs at the plant level from 46 to 18 and set targets so that Compas as a whole could achieve them. This approach kept everyone moving in the same direction.”

The same direction was taken in production: to be able to produce both products on the same line, two completely different production systems had to be brought to a common denominator. By taking the Nissan APW (Union Production Method) and extending it with techniques from the Mercedes production process, Compas has combined the best of both worlds.

“We tried both to get the same and to achieve the best quality at the same cost, for example by using a high quality adhesive in the production of the door in the body shop for both products,” Davidson says about increasing efficiency in the production system.

However, different quality standards still have to be considered – from manufacturing tolerances to manufacturing processes, such as joining processes and welding processes. “Training a team on two levels and bringing them together in one production system is very unique,” emphasizes the CFO.

The Jury of the Factory of the Year was impressed by the harmonization of processes between the two brands, as well as the ‘Block and Kit’ method developed for this purpose, on which the material supply using the AGV system is based. The kit not only contains all the parts needed at the respective station.

They are also arranged in the order in which they must be installed in the car. “There after one Mercedes can source Nissan, this ensures that all the parts needed for the respective model arrive on the assembly line at the right time. “It also prevents components from being installed in the wrong vehicle variant,” says Davidson, explaining the principle that increases line flexibility.

The fact that Compas could not sit on the nest, but instead had to build its culture with great dedication and hard work, is evident in many areas. Especially in tool manufacturing, in which many tools are not only made in-house, but the workers can also make improvements and changes independently due to their valuable skills.

And the CEO is proud of this especially because “without the employees, success would not have been possible. They have been able to ensure that Compas no longer lives in the shadow of Nissan and Mercedes. For a long time we were like the middle child who tended to be ignored.

But now recently, all our efforts, including our initial difficulties and challenging operation during Covid, are being recognized. This recognition and pride within the team is more important to us than anything else.”