Pay on production

The OEM might decide not to invest in a wheel assembly line but instead obtain from a supplier or logistics service provider delivery of these items just in sequence as these are needed at the OEM's assembly line: sometimes five with steel rim followed by four with light-alloy rim and a compact spare tire and so on.

This is a longstanding and common methodology where the production and supply of many items and services are outsourced to other providers, typically to obtain better cost, quality and delivery performance than can be achieved in house, and also enable the OEM to better focus on core activities.

However, in the assembly line case the contract is not just for a few days, rather both partners plan to keep the agreement for as long as the product is produced on the equipment, though it can be terminated before this.

This is despite the Cologne factory, because the buildings are 90 years old, is laid out in such a way that many new production developments just can't be introduced.

For the Cologne factory the main assembly lines and some of the cells, for example where engines are fitted to the body, are owned and maintained by several equipment suppliers.

Within the beginning of the 21st century, the Ford Motor Company's goal was to focus and concentrate on designing new cars.