Let’s leapfrog from BS IV to BS VI in three years, the Indian government decided in 2017.  ‘That’s impossible!’ the auto industry protested. After all, it took Europe nine years to make this same jump! The feat the government was proposing is akin to conquering Mount Everest in one month (most expeditions take at least 2 months), industry experts opined.  <h5>So, what’s prompting such vehement protests?  </h5> To answer this, let’s understand the challenges BS VI poses for an auto company, particularly its Research and Development function.  <h5>Mammoth work content </h5>Context Many Indian auto companies operate across multiple product categories (ex: cars, bikes, SUVs, trucks etc.) and have built an extensive portfolio of engines over time. A regulation such as this one would affect the entire range of their products. This means that converting all these engine models to BS VI before April 2020 is truly a gargantuan task. The sheer work content itself is overwhelming for conversion to BS VI since all engine platforms require independent design, validation and homologation activities. In fact, most companies would not have seen this many engine upgrades in their entire history.  ProblemsMost R&D organisations do not have a clear assessment of their capacities. This is mainly due to the high ‘content variability’ and the non-deterministic nature of R&D projects, where each project is different from the previous one. So, the time and effort required to complete a new project may be siginificantly different from that of the previous one and can’t be predicted. This is in sharp contrast to the highly deterministic and repetitive nature of work in operations, where the time taken to process an individual part is known to the last second, and therefore, the hourly capacity of a machine is known fairly accurately.  When the R&D department is unclear about how much capacity is enough and the workload is huge, it tends to take on many more projects than can be handled at a time. Overloading causes R&D to stretch its capacity across multiple projects and try to do all things simultaneously. The downside of this approach is that while a large number of projects get started, and many move a certain distance, none or only a few of them finish within the regulated deadline. In short, the company gets no return for all the effort invested. <h5> </h5><h5>Steep learning curve</h5>ContextA huge shift in technology is needed to meet the demands placed by BS VI norms. Most Indian companies haven’t faced a technological transformation of this magnitude, and that, too, requires completion within such a short time period. In itself, the adoption of a new technology is a risky proposition. A hard deadline such as the one set by the government aggravates the situation because of the enormous pressure on resources.  ProblemsBut surprisingly, most managers do not see this pressure of time as a problem. In fact, they revel in reviews based on rhetoric around stiff deadlines, believing this factor to be the only driver of speed and the best way to control the many uncertainties in project environments. This couldn’t be further from the truth. It has been seen that in any design and development process, where the achievement of output depends on the completion of a certain scope of activities, and there is pressure to achieve this output fast, the scope or the process itself gets compromised.  Ironically, wherever there is a scope violation to show faster output, the management often overlook it, either due to a lack of visibility or unwillingness to check. But such compromises in the fidelity of the design and development process, when not caught upfront, eventually lead to production issues on the plant and quality issues in the field.  In regulatory projects like BS VI conversion, where time is short, and management is under pressure to meet timelines, the above undesirable consequences are very likely. With so many engines and vehicles being converted to BS VI with such tight deadlines, companies can quickly lose control of the number of issues being generated owing to process non-conformance.  <h5>Integration of the engine with the vehicle</h5>ContextThe story never ends with the conversion of an engine to BS VI. After the Proof of Concept (POC) of a BS VI engine is complete, there is still a mountain of integrations and validations awaiting to be done with other non-engine sub-systems of the vehicle variants into which the modified engine goes. As an entire portfolio of engines has to be converted to BS VI, the physical compatibility of the modified engines with existing vehicle variants/vehicle BOMs (bill of materials) has to be checked. In the commercial vehicles segment, where customisation is common, and vehicle BOMs exist in thousands, this exercise can become overwhelming. Moreover, the functional performance of the overall vehicle with the modified engine cannot be allowed to deteriorate and has to be validated every time an engine is modified.  ProblemsModification of each vehicle variant requires contributions from a large number of teams, often working at different locations on different sub-systems. In this process, there may be iterative changes required in the engine as well as non-engine parts and systems.  However, when the flow of work is not controlled, it is very easy for engine teams to get lost in the multiplicity of activities to be done on newer engines as they are picked up for POC and iterations coming from variants already under integration check with non-engine teams. When different non-engine teams also pick up integration work based on their individual preferences and conveniences, the synchronisation between them suffers, leading to long stoppages in work whenever a team needs help from another. The stoppages cause teams needing help to open up still more work fronts, further worsening the situation. <h5> </h5><h5>Escalation in vehicle cost</h5>ContextThe biggest challenge by far is the change in pricing dynamics that this initiative will bring about. The overall vehicle BOM cost is expected to increase by at least 5%-10% post-BS VI conversion. This sharp spike can wipe off most of the company’s profits if it does not pass on the cost to its consumers. However, increasing vehicle prices can result in a sudden dip in sales volume, especially in the non-commercial segment, where consumers can postpone their buying decisions.  ProblemsMost auto companies are, therefore, apprehensive about the impact of BS VI on sales volumes. A dip is inevitable they say, unless the price increase is ‘justified’ by additional features (and not just by improved emission parameters). But these additional features will not only add incremental costs to the vehicle’s BOM, but they will also take up additional R&D capacity for testing and validation. So, the already stretched R&D capacity would be further burdened, and lead times get longer. Given that there is a full portfolio of engine models and corresponding vehicle variants to be converted to BS VI, this entire process may eventually jeopardise the achievement of BS VI deadlines for many companies.  <h5>Summary of woes</h5>Enormous workload, a highly uncertain environment and dependence on external suppliers of a typical new product development means that the story of most R&D organisations is already one of multiple conflicts playing out at different levels. But these unresolved conflicts are magnified whenever a regulatory tsunami like BS VI hits them with its mammoth work content and aggressive deadlines.  What are these conflicts? Let’s list and describe them, specifically in the context of the challenges mentioned in this article.  Conflict 1Firstly, a conflict manifests when a large body of work has to be quickly completed - like when the government enforced the BS VI conversion regulation for all engine models. <ul style="list-style-type:disc;"><li>On the one hand, there is a need to ensure full capacity utilisation (avoid any starvation in R&D) by loading all resources to the brim.</li><li>On the other hand, there is a need to prevent capacity diversion from important work by carefully controlling the load and identifying work that should not be done. </li></ul> Conflict 2The major shift in technology across numerous engines and models within a restricted timeline creates a conflict between: <ul style="list-style-type:disc;"><li>The need to meet regulatory deadlines by using aggressive timelines to expedite execution and</li><li>The need to prevent compromises in design and development processes from creeping in due to the aggressive timelines (imposed by management through reviews) </li></ul> Conflict 3The coordination required between many teams working on different sub-systems of the same vehicle variant creates a conflict between: <ul style="list-style-type:disc;"><li>Achieving high resource utilisation locally in different R&D teams by letting them take up projects in any manner which suits them best individually and</li><li>Achieving close synchronisation between different teams required on the same projects by defining an organisation-wide rhythm </li></ul> Conflict 4The change in pricing dynamics, and fear of a dip in sales post-BS VI leads to a conflict between: <ul style="list-style-type:disc;"><li>The need to add features in the vehicle to protect sales from dipping post-BS VI, (which in turn can lead to higher lead times and greater risks of not meeting deadlines) and</li><li>The need to protect deadlines by limiting the scope of work to the bare minimum required for BS VI conversion </li></ul> <h5>Criteria for success</h5>If we are to resolve all the conflicts listed above, we need to create a solution that resolves multiple paradoxes. In other words, we need to have a solution which: <ul style="list-style-type:disc;"><li>Minimises starvation in R&D while preventing overloading and its impact (like causing diversion in capacity)</li><li>Removes the pressure of deadlines from the system while ensuring that resources work at maximum speed</li><li>Maximises overall resource utilisation in R&D while improving synchronisation among teams</li><li>Enables the addition of new feature to the project scope as needed , protecting sales while ensuring that deadlines are met despite the expansion of the scope. </li></ul> <h5>Can one approach solve all R&D conflicts?</h5>Do we have a breakthrough approach that can resolve all the above paradoxes simultaneously? Yes — by adopting a systems-driven strategy built around flow and focus. Just like the secret behind any impressive ‘magic trick’ is a shift in attention, this approach transforms R&D performance by focusing on a few critical leverage points in the system — aligning priorities, balancing capacity, and removing hidden bottlenecks. The primary elements of this new approach involve the following: <ul style="list-style-type:disc;"><li>Using a good enough assessment of R&D capacity - for limiting projects being worked upon at a time in the R&D pipeline</li><li>A company-wide priority mechanism covering all teams in R&D, parts development, process engineering, and operations to improve synchronisation between individual projects</li><li>Putting a stage-gate mechanism in place to prevent compromises from creeping into the design and development process and</li><li>Managing timelines through high-frequency flow management –changing the focus from chasing deadlines to achieving speed by managing activity completion </li></ul> The end result is shorter lead times (of delivery), higher output and a more agile response to uncertainties that may creep into individual projects.  Research and development departments that work on these simple principles are very agile and are not only able to manage their regular R&D work smoothly but are also able to respond competently to sudden regulatory requirements like a quick conversion to BS VI.

Key Takeaways

In 2017, India wanted to leapfrog from BS IV to BS VI norms - in only three years. How do companies respond to such sudden changes?

The race from BS IV to BS VI: How to win by solving the woes in auto R&D

Let’s leapfrog from BS IV to BS VI in three years, the Indian government decided in 2017.  ‘That’s impossible!’ the auto industry protested. After all, it took Europe nine years to make this same jump! The feat the government was proposing is akin to conquering Mount Everest in one month (most expeditions take at least 2 months), industry experts opined.  <h5>So, what’s prompting such vehement protests?  </h5> To answer this, let’s understand the challenges BS VI poses for an auto company, particularly its Research and Development function.  <h5>Mammoth work content </h5>Context Many Indian auto companies operate across multiple product categories (ex: cars, bikes, SUVs, trucks etc.) and have built an extensive portfolio of engines over time. A regulation such as this one would affect the entire range of their products. This means that converting all these engine models to BS VI before April 2020 is truly a gargantuan task. The sheer work content itself is overwhelming for conversion to BS VI since all engine platforms require independent design, validation and homologation activities. In fact, most companies would not have seen this many engine upgrades in their entire history.  ProblemsMost R&D organisations do not have a clear assessment of their capacities. This is mainly due to the high ‘content variability’ and the non-deterministic nature of R&D projects, where each project is different from the previous one. So, the time and effort required to complete a new project may be siginificantly different from that of the previous one and can’t be predicted. This is in sharp contrast to the highly deterministic and repetitive nature of work in operations, where the time taken to process an individual part is known to the last second, and therefore, the hourly capacity of a machine is known fairly accurately.  When the R&D department is unclear about how much capacity is enough and the workload is huge, it tends to take on many more projects than can be handled at a time. Overloading causes R&D to stretch its capacity across multiple projects and try to do all things simultaneously. The downside of this approach is that while a large number of projects get started, and many move a certain distance, none or only a few of them finish within the regulated deadline. In short, the company gets no return for all the effort invested. <h5> </h5><h5>Steep learning curve</h5>ContextA huge shift in technology is needed to meet the demands placed by BS VI norms. Most Indian companies haven’t faced a technological transformation of this magnitude, and that, too, requires completion within such a short time period. In itself, the adoption of a new technology is a risky proposition. A hard deadline such as the one set by the government aggravates the situation because of the enormous pressure on resources.  ProblemsBut surprisingly, most managers do not see this pressure of time as a problem. In fact, they revel in reviews based on rhetoric around stiff deadlines, believing this factor to be the only driver of speed and the best way to control the many uncertainties in project environments. This couldn’t be further from the truth. It has been seen that in any design and development process, where the achievement of output depends on the completion of a certain scope of activities, and there is pressure to achieve this output fast, the scope or the process itself gets compromised.  Ironically, wherever there is a scope violation to show faster output, the management often overlook it, either due to a lack of visibility or unwillingness to check. But such compromises in the fidelity of the design and development process, when not caught upfront, eventually lead to production issues on the plant and quality issues in the field.  In regulatory projects like BS VI conversion, where time is short, and management is under pressure to meet timelines, the above undesirable consequences are very likely. With so many engines and vehicles being converted to BS VI with such tight deadlines, companies can quickly lose control of the number of issues being generated owing to process non-conformance.  <h5>Integration of the engine with the vehicle</h5>ContextThe story never ends with the conversion of an engine to BS VI. After the Proof of Concept (POC) of a BS VI engine is complete, there is still a mountain of integrations and validations awaiting to be done with other non-engine sub-systems of the vehicle variants into which the modified engine goes. As an entire portfolio of engines has to be converted to BS VI, the physical compatibility of the modified engines with existing vehicle variants/vehicle BOMs (bill of materials) has to be checked. In the commercial vehicles segment, where customisation is common, and vehicle BOMs exist in thousands, this exercise can become overwhelming. Moreover, the functional performance of the overall vehicle with the modified engine cannot be allowed to deteriorate and has to be validated every time an engine is modified.  ProblemsModification of each vehicle variant requires contributions from a large number of teams, often working at different locations on different sub-systems. In this process, there may be iterative changes required in the engine as well as non-engine parts and systems.  However, when the flow of work is not controlled, it is very easy for engine teams to get lost in the multiplicity of activities to be done on newer engines as they are picked up for POC and iterations coming from variants already under integration check with non-engine teams. When different non-engine teams also pick up integration work based on their individual preferences and conveniences, the synchronisation between them suffers, leading to long stoppages in work whenever a team needs help from another. The stoppages cause teams needing help to open up still more work fronts, further worsening the situation. <h5> </h5><h5>Escalation in vehicle cost</h5>ContextThe biggest challenge by far is the change in pricing dynamics that this initiative will bring about. The overall vehicle BOM cost is expected to increase by at least 5%-10% post-BS VI conversion. This sharp spike can wipe off most of the company’s profits if it does not pass on the cost to its consumers. However, increasing vehicle prices can result in a sudden dip in sales volume, especially in the non-commercial segment, where consumers can postpone their buying decisions.  ProblemsMost auto companies are, therefore, apprehensive about the impact of BS VI on sales volumes. A dip is inevitable they say, unless the price increase is ‘justified’ by additional features (and not just by improved emission parameters). But these additional features will not only add incremental costs to the vehicle’s BOM, but they will also take up additional R&D capacity for testing and validation. So, the already stretched R&D capacity would be further burdened, and lead times get longer. Given that there is a full portfolio of engine models and corresponding vehicle variants to be converted to BS VI, this entire process may eventually jeopardise the achievement of BS VI deadlines for many companies.  <h5>Summary of woes</h5>Enormous workload, a highly uncertain environment and dependence on external suppliers of a typical new product development means that the story of most R&D organisations is already one of multiple conflicts playing out at different levels. But these unresolved conflicts are magnified whenever a regulatory tsunami like BS VI hits them with its mammoth work content and aggressive deadlines.  What are these conflicts? Let’s list and describe them, specifically in the context of the challenges mentioned in this article.  Conflict 1Firstly, a conflict manifests when a large body of work has to be quickly completed - like when the government enforced the BS VI conversion regulation for all engine models. <ul style="list-style-type:disc;"><li>On the one hand, there is a need to ensure full capacity utilisation (avoid any starvation in R&D) by loading all resources to the brim.</li><li>On the other hand, there is a need to prevent capacity diversion from important work by carefully controlling the load and identifying work that should not be done. </li></ul> Conflict 2The major shift in technology across numerous engines and models within a restricted timeline creates a conflict between: <ul style="list-style-type:disc;"><li>The need to meet regulatory deadlines by using aggressive timelines to expedite execution and</li><li>The need to prevent compromises in design and development processes from creeping in due to the aggressive timelines (imposed by management through reviews) </li></ul> Conflict 3The coordination required between many teams working on different sub-systems of the same vehicle variant creates a conflict between: <ul style="list-style-type:disc;"><li>Achieving high resource utilisation locally in different R&D teams by letting them take up projects in any manner which suits them best individually and</li><li>Achieving close synchronisation between different teams required on the same projects by defining an organisation-wide rhythm </li></ul> Conflict 4The change in pricing dynamics, and fear of a dip in sales post-BS VI leads to a conflict between: <ul style="list-style-type:disc;"><li>The need to add features in the vehicle to protect sales from dipping post-BS VI, (which in turn can lead to higher lead times and greater risks of not meeting deadlines) and</li><li>The need to protect deadlines by limiting the scope of work to the bare minimum required for BS VI conversion </li></ul> <h5>Criteria for success</h5>If we are to resolve all the conflicts listed above, we need to create a solution that resolves multiple paradoxes. In other words, we need to have a solution which: <ul style="list-style-type:disc;"><li>Minimises starvation in R&D while preventing overloading and its impact (like causing diversion in capacity)</li><li>Removes the pressure of deadlines from the system while ensuring that resources work at maximum speed</li><li>Maximises overall resource utilisation in R&D while improving synchronisation among teams</li><li>Enables the addition of new feature to the project scope as needed , protecting sales while ensuring that deadlines are met despite the expansion of the scope. </li></ul> <h5>Can one approach solve all R&D conflicts?</h5>Do we have a breakthrough approach that can resolve all the above paradoxes simultaneously? Yes — by adopting a systems-driven strategy built around flow and focus. Just like the secret behind any impressive ‘magic trick’ is a shift in attention, this approach transforms R&D performance by focusing on a few critical leverage points in the system — aligning priorities, balancing capacity, and removing hidden bottlenecks. The primary elements of this new approach involve the following: <ul style="list-style-type:disc;"><li>Using a good enough assessment of R&D capacity - for limiting projects being worked upon at a time in the R&D pipeline</li><li>A company-wide priority mechanism covering all teams in R&D, parts development, process engineering, and operations to improve synchronisation between individual projects</li><li>Putting a stage-gate mechanism in place to prevent compromises from creeping into the design and development process and</li><li>Managing timelines through high-frequency flow management –changing the focus from chasing deadlines to achieving speed by managing activity completion </li></ul> The end result is shorter lead times (of delivery), higher output and a more agile response to uncertainties that may creep into individual projects.  Research and development departments that work on these simple principles are very agile and are not only able to manage their regular R&D work smoothly but are also able to respond competently to sudden regulatory requirements like a quick conversion to BS VI.

<h4>The Race from BS IV to BS VI: How to win by solving the woes in Auto R&D</h4>

Download PDF

Auto R&D can ensure a quick and smooth transition to BSVI in spite of various challenges? Know how.