The Automotive Factory of the Future: Mercedes, Microsoft Cloud, and the MO360 Production Platform

The Mercedes Factory 56 plant in Sindelfingen is the epicenter of innovation for the luxury automaker. The facility employs more than 35,000 people across 3 square kilometers of floorspace and has been in operation since 2020. The plant combines a wide variety of functions, from Research and Development (R&D) and supply chain management to production planning, quality, and finance/controlling. Super premium models are produced at Factory 56, including the S-class, Maybach, and new EQS Electric Vehicle (EV), with a goal of standardizing successful new solutions across Mercedes’ other main production and assembly plants globally. Even though the rest of the Mercedes vehicles are produced elsewhere, Sindelfingen is where design and production planning take place, so it is fair to say that, in some way, all vehicles on the road are influenced by Sindelfingen.

When Mercedes began its transformation in 2015, It was only producing Internal Combustion Engine (ICE) vehicles and production wasn’t centralized. Factory 56 was the company’s first concerted effort to create a greenfield site centered on the customer, Operational Technology (OT) professionals, and the frontline environment. This site serves as a test bed and template for innovation to standardize and scale across the company’s manufacturing base.

The facility itself has hundreds of Automated Guided Vehicles (AGVs) for not only the regular delivery of parts, but also to fix inline production issues. Mercedes also prioritized ergonomics for people; for example, using robotics to orient vehicle chassis on their side so technicians can perform tasks standing up, and a slow-moving conveyer system moves in unison with the production assembly line for shopfloor employees.

Factory 56’s roof area is 40% green and 30% of its electricity demand is generated by solar. It also uses an energy storage system consisting of automotive EV batteries to store and deploy electricity generated by renewables and saves about 10 tons of paper per year as result of switching to completely paperless processes.

The Mercedes MO360 Data Platform connects the automaker’s roughly 30 passenger car plants worldwide to the Microsoft Cloud to enhance transparency and predictability across production and supply chain operations. MO360 is the evolution of Mercedes’ digital production ecosystem and allows teams to identify potential supply chain bottlenecks faster and balance production accordingly.

Driving the Mercedes/Microsoft alliance is the need for more sustainable and resilient operations to thwart increased geopolitical and macroeconomic uncertainty. The ability to predict and prevent production and logistics problems before they arise is a key competitive advantage, particularly amid major paradigm shifts, including but not limited to the shift to electric and autonomous vehicles.

Where Mercedes and Microsoft completely miss the mark is the improper and obtuse tie-in to the industrial metaverse in their joint Press Release (PR), which states “Mercedes-Benz’ partnership with Microsoft is a testament to the power of the industrial metaverse.” They should completely stay away from this topic, for now, instead focusing on applications and use cases that drive immediate business value. This isn’t to say that the two companies won’t benefit from the industrial metaverse at some future state; however, the current focus ought to be on the immediate benefits of new solutions to employees and their employers, i.e., is it time saved, easier communication, or fewer errors and headaches?

The notion of a 100% digital enterprise is more resonant. This concept means giving shop floor professionals access to production and management-related real-time data to do their job more effectively. The MO360 Data Platform combines insights from assembly, production planning, shop floor logistics, supply chain, and quality management creating a virtual replica of the vehicle manufacturing process—surely, there is a value-based approach in here. ABI Research recommends that clients supporting manufacturers position solutions based on the value they provide to both the business and the people using those solutions. Going a step further would be to measure and operationalize customer value in a closed loop system that improves over time.