Why a new factory needs a risk model before it needs a go-live date
A greenfield plant does not fail on the day a line stops. It fails in the eight weeks before that, in the assumptions nobody wrote down: that the inbound dock will clear at the planned rate, that the putaway logic will hold at peak receipt volume, that the line feed cycle will survive a mixed model schedule, that someone will notice a wrong part at the supermarket before it reaches the station.
Those assumptions are testable. Most organisations test them by going live and finding out.
Hesol Consulting was engaged by Ather Energy to test them in advance.
About Ather Energy
Ather Energy Limited is one of India’s leading electric two-wheeler manufacturers, founded in 2013 and listed on Indian exchanges. The company operates two facilities at Hosur, Tamil Nadu, one for vehicle assembly and one for battery production, with a combined installed capacity of 4.2 lakh scooters a year.
To meet demand growth, Ather is commissioning its third manufacturing facility, Factory 3.0, at Bidkin in AURIC, Chhatrapati Sambhajinagar, Maharashtra. Phase 1 adds 500,000 units of annual capacity. On completion of both phases, Ather’s total installed capacity reaches 1.42 million electric two-wheelers annually. The plant is being built on Industry 4.0 principles, with a digitally instrumented material flow from inbound gate to line side.
That digital ambition is exactly what makes the risk picture harder, not easier. A manual operation fails visibly. An automated one fails silently, at scale, and the failure propagates through every downstream node before anyone reads a screen.
The business case
Factory 3.0 was approaching go-live with a material flow architecture that had never been run. The logistics scope covered inbound receipt, quality gating, putaway, high density storage, replenishment, supermarket operations, line feed, kitting, finished goods handling, dispatch and returns, operating across a system stack that was arriving in phases rather than all at once.
Two conditions shaped the engagement:
Phased system availability. The transport execution platform was scheduled live for outbound flows at go-live. Inbound flows would run on the warehouse management and ERP layer with manual coordination as an interim state. Any risk model that assumed a fully integrated stack on day one would have been describing a plant that did not yet exist.
No incident history. A brownfield site gives you failure data. A greenfield site gives you a drawing. The risk model had to be built from process logic, equivalent plant experience and first principles, not from a defect log.
The requirement was a structured, auditable, pre-go-live risk assessment of the complete logistics value stream, with a mitigation plan the operations team could execute against before the first vehicle was built.
What we did
Methodology: AIAG-VDA PFMEA, applied to logistics
The assessment was built on the AIAG-VDA PFMEA 2019 handbook methodology, applied to logistics processes rather than manufacturing processes. This matters. A logistics FMEA built on the older RPN-only approach produces a ranked list. The AIAG-VDA seven step structure produces a decision framework:
- Planning and preparation, including scope definition and boundary setting
- Structure analysis, decomposing the material flow into process blocks and elements
- Function analysis, defining the intended function of each process element
- Failure analysis, establishing failure mode, failure effect and failure cause at each level
- Risk analysis, scoring Severity, Occurrence and Detection with Action Priority logic
- Optimisation, designing and scoring prevention and detection controls
- Results documentation
Structure analysis: 15 process blocks, 156 failure modes
The logistics value stream was decomposed into 15 process blocks spanning the full inbound to outbound chain. Each block was broken into process elements, and each element into its intended function, before any failure mode was written. Function first, failure second. Skipping that sequence is the single most common reason an FMEA produces a long list of obvious risks and misses the structural ones.
The resulting workbook carried 156 failure modes, each with its failure effect at plant and customer level, its failure cause at the 4M level, and its current prevention and detection controls assessed against the phased system reality rather than the target state architecture.
Risk analysis: Severity, Occurrence, Detection and Action Priority
Every failure mode carried an S, O and D score with a documented rationale. Scoring was anchored to the actual control environment at go-live, not the intended one. Where a control depended on a system module scheduled for a later phase, it was scored as absent, because on go-live day it is absent.
Action Priority was run alongside RPN. The two answer different questions. RPN tells you how big the number is. AP tells you what the organisation is obliged to do about it.
Optimisation: 19 mitigation clusters
Mitigating 156 line items individually produces an action list nobody executes. The failure modes were clustered into 19 mitigation strategies, each addressing a shared root cause across multiple process blocks. Each cluster carried:
- A defined To-Be control design, specifying prevention and detection mechanisms separately
- Revised S, O and D scores against the designed control
- RPN delta and percentage reduction at cluster level
- A qualitative residual risk tag, so the client was never reading a number without a judgment attached to it
- Named implementation owners and sequencing
Severity reduction was applied only where defensible. Severity is a property of the failure effect, not of the control. It was reduced in four clusters only, where a hard gate or an automation control structurally closes the failure pathway for every row in the cluster. Everywhere else, mitigation acted on Occurrence and Detection. This discipline is what separates an FMEA that survives an external audit from one that reports an impressive number.
Documentation and handover
The engagement delivered a complete AIAG-VDA structured workbook with full traceability from process element to action owner, and a 25 slide management pack covering methodology, portfolio risk position, each of the 19 clusters in a standard six box format, the implementation roadmap and the sequenced next steps.
Outcomes
72% reduction in portfolio Sigma RPN across the full logistics value stream, measured as the aggregate change between as-is and designed-state scores.
156 failure modes documented with traceable rationale, giving the operations team a single source of truth that holds up under internal governance and external assessment.
19 executable mitigation strategies, sequenced and owned, replacing an unstructured list with a roadmap the plant could start on immediately.
Risk visibility ahead of go-live, with the phased system reality built into the scoring rather than papered over by target state assumptions.
Engagement extended. Ather Energy subsequently engaged Hesol Consulting on a follow-on facility study at AURIC.
The benefits that do not show up as a number
Controls designed before the first incident, not after. The cost of a detection control designed at the drawing stage and the cost of the same control retrofitted after a line stoppage are not in the same order of magnitude.
A defensible audit position. A structured PFMEA with documented scoring rationale and closed actions is evidence, and it is the kind of evidence customer audits and supply chain assessments ask for directly.
Organisational alignment. The clustering exercise forced a shared view across logistics, quality, IT and production of what actually threatens the ramp. That alignment is usually the most durable output of this work.
Honest residual risk. Under AIAG-VDA logic, high severity failure modes cannot be reasoned down to a low risk category, because the consequence of failure does not change when you get better at preventing it. We report residual risk as it stands. A risk model that tells you everything is now green is not a risk model.
Where this applies
Any greenfield or brownfield facility approaching go-live, any material flow redesign, any warehouse automation deployment, and any operation facing a customer or certification audit on process risk control.
If you are commissioning a plant, expanding a network node, or preparing for an external assessment, the question worth asking is not whether your logistics process has failure modes. It has. The question is whether anyone has written them down.
Hesol Consulting works with manufacturing, automotive, EV, retail and FMCG organisations on supply chain risk, network design and operations transformation across India, EMEA, APAC and the Americas. Contact us to discuss your facility.