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The Components Conundrum

Suhas Kini

Auto Components India, December 2022

The New Product Development (NPD) comes with its share of challenges. This complexity can be attributed to factors like many parts developed by different auto component manufacturers that must not only come together in the final vehicle, but also function together flawlessly as a system. It is equally important to deliver them through a process that is robust, precise, and repeatable at scale. Thus, while the end customer gets to see a stylish high-performance automobile, what they don’t see is the black end where numerous auto component manufacturers toil to achieve this complex and audacious goal.

A saga of skips & misses

The automotive landscape is changing. Electric Vehicles (EVs) are predicted to take over the industry- IC engines will eventually become extinct. The advent of EVs and the elimination of the IC engine, the most complex part of erstwhile vehicle design, has democratized the industry. With entry barriers being razed to the ground and new EV players entering with advanced technologies, the existing auto OEMs are feeling the heat like never before, to be the first to market in the EV segment! As a result, there is an urgency to move in the OEMs from the drawing board to market, at a faster rate than before.

There is a pressure from the top management to move the project to the tooling development phase. This often prompts OEMs to persuade vendors to concurrently start development with final tooling, even as the prototype is being finalized. The assumption is that this will help save time. This wishful thinking, however, never materializes. The components manufacturers proceed to hard tooling only to realize later that there are glaring gaps in design and or cost estimations. Any changes made to the hard tools are expensive and consume a lot of time. This leads to a series of actions in the advanced stages of development to minimize changes in design or even trying to get some leeway from OEMs to accommodate whatever best can be achieved.

The juggernaut rolls …

The situation is aggravated by the fact that any change made in an auto component can have a big impact on other interfacing components in a vehicle. One small late change in a component can therefore create urgencies for many auto-component vendors for the same OEM. Invariably, the auto component manufacturers’ engineering teams find themselves juggling urgencies in the development work of different OEMs that they cater to. The Result – elapsed time in part development increases by leaps and bounds.

Also, each component may have multiple child parts coming from different (tier2) vendors – electrical, mechanical or electronics. The adhoc urgencies and escalations experienced by the component vendors trickle down to their tier2 vendors in turn supplying the child parts. This leads to de-synchronisation in the arrival of child parts and consequently leads to delayed testing. But since they have to meet the timeline expectations of OEMs, components are often mass-produced prior to completion of testing and full production stabilisation. Not only does this lead to a loss of production capacity, but many issues continue to remain unresolved since both the design and development teams are now forced to shift their attention to other new development projects.

What managers think!

This perpetual struggle of balancing the coordination issues and frequent delays makes the managers yearn for more detailed planning and scheduling. They also tend to believe that design mistakes are due to a lack of skill and or experience of designers. Frustratingly, however robust the plans are, and however skilled the designers are, neither of these helps the stakeholders in sticking to their plans or preventing re-work in design. This is because a large proportion of the planned timelines are under the ambit of OEMs. Variability in the timeline of a single task tends to have a cascading effect on all the subsequent tasks of the auto-component NPD team. Even a highly skilled designer will tend to have skips and misses in an environment of expediting citing urgencies. Under these circumstances, there must be a way out!

Four simple rules to increase NPD productivity

The best an auto component manufacturer can do is to ensure that they provide the fastest response to OEMs from their end. This will help make them a “Preferred Supplier”. In order to achieve this, they are required to take full control of the flow within their NPD organisations, irrespective of what is happening externally. The solution for faster lead times is to follow these four simple rules:

  • Respect Full kits/Design Gates – Do not start the development phase of a project until the full kit of interacting designs has been completed and verified (“gating” rules). This way, there will be minimal interruptions (and iterations) during development. Managers are aware of the benefits of gate control, but they break this rule owing to time pressure. However, if the design phase for an auto component can be completed quickly, it would be easier to abide by the gating rules.
  • Limit WIP with clear priority – The time taken to complete the design phase can be reduced if multi-tasking can be avoided, and the designers are able to work uninterrupted to the best extent possible. And this is possible if Work in Progress (WIP) is limited, and clear priority is assigned to all the tasks. This can bring the focus back to the closure of projects in the desired sequence and quicker issue resolution. The outcome as a result would be a reduction in lead times as well as higher capacity in design!
  • Follow high-frequency management – To speed up the process further, the management must observe the workflow at a pre-defined frequency (daily at the execution level, weekly at the department and or section level, etc.), and proactively intervene to address any interruption to the flow. Take needed decisions, provide help, and resolve any collaboration issues.
  • Buffer the project and not the tasks – Traditional project planning, with its emphasis on task deadlines, hides buffers in each task. These buffers usually get wasted during the execution phase. A changed planning approach would be where the tasks are first stripped of their buffers to get an aggressive estimate of project completion. Then the information about the buffers is used intelligently to predict the most likely completion date and Expected Time of Completion (ETC). This visibility into the ETC at any given time can give out periodic signals that will help auto component manufacturing companies’ top management understand where their intervention may be needed.

Conclusion

Adopt these four simple rules of having a design full kit before development, control WIP, performing high-frequency management, and monitoring projects ETC. In this manner, one can experience the lead time for NPD going down drastically (50 per cent improvement, at the least) while also leading to significantly better output (more than 100 per cent) in your organisation!

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