As vehicle complexity increases, OEMs are relying more heavily on their suppliers for unique contributions to the vehicle – including more involvement in design, liability and warranty claims. At the same time, suppliers must still meet cost, delivery and quality targets. So, how can suppliers create an environment that fosters innovative ideas and thinking without risking their existing processes and a healthy bottom line?
History shows suppliers that invest in technology to drive innovation have better financial margins as their solutions are not so easily commoditized. A 2013 PWC study, The highway to growth: Strategies for automotive innovation, reports that over a three-year span, the most innovative companies grew at a rate 16% higher than the least innovative.
The Oliver Wyman 2015 Car Innovation study says that approximately EUR 800 billion will be spent on R&D, yet according to this same study, roughly 40 percent of that money will be invested incorrectly. This corroborates with the PWC results which found that less than two thirds of automotive executives have a well-defined innovation strategy, yet 54 percent say innovation is crucial to competitiveness.
So, how can suppliers successfully work innovation into their business model starting right from bid while reducing risk in a volatile market where material prices are constantly changing? Creating an innovation framework does not happen overnight, but unifying people, processes and tools in order to leverage the collective enterprise knowledge and creativity from across the global organization is a key step.
Invest in Digital Capability for Collaboration
The PWC Study, PLM: Enabling Innovation Driven Growth found that companies spent 8 percent of their R&D budgets on digital tools, and more importantly, that companies that were heavy users of these tools were 77 percent more likely to outperform their competitors with only low or moderate usage.
Digital design and manufacturing solutions focused on reducing product development time are a given. And, most corporations have an established process to capture engineering knowledge for re-use. But, for the speed required to innovate effectively in today’s landscape, design software needs to capture and convey more than just geometry; it also needs to capture design drivers, manufacturing and service requirements and other types of needs.
Too often, however, there still remains a lack of strong integration and information sharing across the enterprise. Collaboration is key to innovation and solutions today must address this at multiple levels – across engineering systems, across internal departments, across geographic boundaries and across external partners. To elicit the highest level of innovation, no one group can be functioning within its own silo.
Enable Global Governance
With globalization, the governance of multiple programs across geographies has become increasingly difficult, making it nearly impossible to succeed by solely relying on office applications or isolated data repositories. Risks are also multiplied by the number of languages and cultures involved in collaboration. It’s crucial to have a common understanding across the enterprise of what is being communicated.
A single platform uniting product information across the organization enables collaboration independent of time zones and working hours. This streamlines communication and mitigates risk, ensuring that teams can fulfill local requirements and meet milestones while providing consistency, visibility and traceability throughout the organization.
Expand Digital Reach Beyond Engineering
For effective innovation, there is a need to unify business processes with product development activities on a common IT platform. With this integrated approach, different departments within an organization see how they relate to each other, and any changes – be it design, materials availability, pricing, manufacturing constraints, etc. – are immediately reflected to all stakeholders in real-time. Non-value added effort required to switch between systems can be significantly reduced and adherence to quality standards such as APQP and PPAP become an embedded part of the process, revealing issues much earlier in the lifecycle.
With a single system capturing all development and business processes for re-use, various design and engineering scenarios can be considered along with their associated costs, helping to better manage the innovation process while decreasing the time needed to analyze various solutions.
The way to tame product complexity and enterprise breadth is to simplify the process. The greater the exploitation of common information throughout the supply chain, the higher the likelihood of efficiency and innovation. Basing product development on requirements that can be transparently shared via an integrated single source of the truth across the organization allows each stakeholder insight into how their role affects the process – encouraging collaboration, controlling costs and reducing development time.
Overcome Legacy System Restraints
Today, many companies are evolving faster than their legacy systems can handle. The 2014 Center of Automotive Research study Automotive IT Solutions: Engine of Innovation stated that virtually every automotive company notes the use of in-house legacy systems as a challenge to their business operations. Implementation of a business platform is needed to integrate these legacy IT applications and create a cohesive collaborative environment that leverages the existing know-how and fuels a supplier’s innovation culture to improve their win ratio, productivity and profit margin.
Find out how suppliers can benefit from a centralized ‘single source of the truth’ to synch multi-site projects, development changes, product data, and requirements management with the Bid to Win 3DEXPERIENCE solution. Industry-proven tools and processes analyze opportunities and help win optimal new business while enabling product design, engineering, validation, manufacturing, and delivery on target.