Mercedes-Benz reorganizes production for modular platforms

German automaker to spend $3.9B to modernize and expand production in 2014.

Mercedes-Benz is set to restructure its production operations, modernizing global plants to build vehicles based on the latest modular platforms.

Expansion and reorganization will be guided by a new internal organization, known as Mercedes-Benz Operations (MO). The new entity diverges from the previous focus on management of individual models on a plant-by-plant basis, instead embracing centralized leadership to manage operations by modular platform.

"Under our previous production structure, the individual plants operated largely autonomously," said Mercedes-Benz production chief Markus Schafer. "Now, manufacturing will be organized according to product architectures, independent of individual locations."

Modular vehicle platforms include rear-wheel-drive (MRA), front-wheel-drive (MFA), SUV (MHA) and sports cars (MSA), along with the powertrain architecture known as MPA.

The plan is expected to cost more than three billion euros (~$3.9 billion USD) in 2014 alone, initially focusing on German production facilities. The company is attempting to ramp up production for 18 different models this year, spreading the assembly tasks across eight global facilities. Another dozen all-new models will also be added to the lineup by the end of the decade.

The new C-Class is the first vehicle to be produced via the new manufacturing principles, with production now spread across four continents. The company claims the buildout has been a success, though it is still working to further centralize supply-chain management.

"Given the expanding range of models, steadily increasing unit figures, and greater complexity than ever before, we have to become significantly more flexible," Schafer added. "It is essential that we achieve continuous improvement in all disciplines and raise our productivity."