In the patented system robots build tyres entirely from raw materials onsite
New Pirelli process slashes costs

[MILAN] Bent on reducing cost and boosting profitability, world No 6 tyre maker Pirelli SpA has turned traditional manufacturing process on its head.

It used be that if a tyre manufacturer were to build a factory, it would have to allow for its projected future sales. Hence several plants became overly huge and inefficient, and had hidden costs associated with overcapacity.

To address this problem, Pirelli launched a new and patented process called modular integrated robotised system (MIRS) which it claims will slash costs and boost efficiency. Production capacity can also be adjusted easily to meet future demand.

MIRS involves several new patented processes, but it basically goes on the principle of a Lego set - where parts and modules can be assembled swiftly and efficiently without interruptions to production.

A series of robots build the tyres entirely from raw materials onsite. This is unlike the traditional manufacturing process where many parts of the tyres are prefabricated at various locations and assembled at the main plant.

The heart of the new technology is a jigsaw of aluminium casts - core drums - that can be disassembled and reassembled. These drums are the internal profiles of each tyre size. The robots sequentially layer these with rayon, steel or nylon as it spins round. When assembly is completed, the tyres are lifted to the final heat-curing press, where they are "pressure cooked" and the tread pattern is embossed.

Company executives say the new process saves up to 50 per cent in upfront investment. More impressively, it requires 80 per cent less floor space. An MIRS 2,800 sq m factory with a capacity for one million tyres a year would cost 50 million euros (S$81 million). A traditional eight-million-a-year plant occupying 210,000 sq m in Turkey cost US$225 million in 1999. An added advantage is that it can be scaled in "blocks" of 125,000-tyres-per-year (at 6.25 million euros each), hence avoiding huge upfront investments.

Typically, the MIRS operates at 92 per cent efficiency, compared with 75 per cent for the old method. Moreover, the lead time for a tyre model or mould change is just 72 minutes - from six days or more previously. Under this new method, economy of scale is available from just 375 tyres per day, compared with 3,200 tyres before. These smaller factories also consume less power and are less labour intensive.

The modular format also allows Pirelli the option to place the plants closer to their OEM car plants. These model-specific plants reduce transport time and costs, and can be scaled up to match the car manufacturers' needs.

So far, the only commercial MIRS plant for Pirelli is here in Milan, which opened this year. Four more will be built over three years in Germany, the UK, the US and somewhere in East Asia. The investment allocated so far is 500 million euros, which does not take into account the acquisition of premises and administrative services.

When all five are up and running, they will add 10 million tyres a year to Pirelli's output, raising its current capacity by 25 per cent.

The MIRS is protected by 26 patents, with 23 filed in 1998 and effective for 25 years. This means Pirelli will be free from direct competition in this field for some time. Although it has not been announced, its new P6 and P7 tyres will be among the first international products to roll out from its MIRS plant here.