Auto Components India, December 2022New Product Development (NPD) comes with its share of challenges. This complexity arises from factors such as the development of various parts by different auto component manufacturers, which must not only come together in the final vehicle but also function flawlessly as a system. It is equally important to deliver NPD through a process that is robust, precise, and repeatable on a scale. While the end customer gets to see a stylish high-performance automobile, they don’t see the back 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 and 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 democratised the industry. With entry barriers razed to the ground and new EV players entering with advanced technologies, the existing auto OEMs are feeling the heat like never before. The race to be the first market leader in the EV segment has pushed the OEMs to quickly move from the drawing board to the market, at a faster rate than ever before.    There is 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 finalised. The assumption is that this process will help save time. However, this wishful thinking never materialises. The components manufacturers proceed to hard tooling only to realise later that there are glaring gaps in design and 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 minimise changes in design to get some leeway from OEMs to accommodate whatever best can be achieved.  <figure class="image"><img style="aspect-ratio:16668/7207;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-1-01-01-01-1738074273_1777351799.png" width="16668" height="7207"></figure><img src="https://qclab.app/wp-content/uploads/2023/01/Asset-10-1024x190.png" alt="">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 component development increases by leaps and bounds.  <figure class="image"><img style="aspect-ratio:16668/11598;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-2-01-01-01-1738074285_1777351861.png" width="16668" height="11598"></figure>Also, each component may have multiple child parts coming from different (tier 2) vendors – electrical, mechanical, or electronics. The ad hoc urgencies and escalations experienced by the component vendors trickle down to their tier2 vendors supplying the child parts. This leads to de-synchronisation in the arrival of child parts and consequently leads to delayed testing. But as they need to meet the timeline expectations of OEMs, components are often mass-produced prior to completion of testing and full production stabilisation. This not only leads to a loss of production capacity but also leaves many issues unresolved, as both the design and development teams are forced to shift their attention to other new projects. <figure class="image"><img style="aspect-ratio:16668/12926;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-3-01-01-01-01-1738074293_1777351737.png" width="16668" height="12926"></figure>What do 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, 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 with such urgencies. Under these circumstances, there must be a way out!  Four simple rules to increase productivity during the New Product Development (NPD) process:  The best an auto component manufacturer can do is to ensure that they provide the fastest response to OEMs from their end. This will ensure that they are a “Preferred Supplier”. 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:  <ul><li>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.</li><li>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. It 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 lead to quicker issue resolution. The outcome would be a reduction in lead times as well as higher capacity in design!</li><li>Follow high-frequency management – To speed up the new product development 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.</li><li>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.</li><li>In a revised planning approach, tasks are initially stripped of their buffers to provide a more 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 can give out periodic signals that will help auto component manufacturing companies’ top management understand where their intervention may be needed. </li></ul>ConclusionAdopt these four simple rules of having a design full kit before development, controlling WIP, performing high-frequency management, and monitoring projects ETC. This approach can drastically reduce the lead time for NPD (with a minimum 50% improvement) while also significantly enhancing output (exceeding 100%) within your organisation!

BA Read More

Problem: NPD in the auto industry is plagued by rising competition and pressure for faster development. This makes firms compromise the design stage. This results in costly design changes, delays, inefficiencies, and cascading issues for Tier-2 vendors, causing desynchronisation and setbacks. Solution: Adopt four rules—respect full design gates to minimise rework, limit WIP to reduce multitasking, implement high-frequency management for proactive issue resolution, and buffer projects instead of tasks to enhance predictability. Benefits: These practices can reduce lead times by 50%, double output, improve efficiency, streamline workflows, and help manufacturers achieve preferred supplier status.

Key Takeaways

New Product Development in the auto industry is fairly complex and involves multiple component manufacturers who must collaborate seamlessly. Even a tiny delay can have a cascading effect on timelines and costs. Here are four simple rules to increase productivity in auto NPD.

The components conundrum

Auto Components India, December 2022New Product Development (NPD) comes with its share of challenges. This complexity arises from factors such as the development of various parts by different auto component manufacturers, which must not only come together in the final vehicle but also function flawlessly as a system. It is equally important to deliver NPD through a process that is robust, precise, and repeatable on a scale. While the end customer gets to see a stylish high-performance automobile, they don’t see the back 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 and 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 democratised the industry. With entry barriers razed to the ground and new EV players entering with advanced technologies, the existing auto OEMs are feeling the heat like never before. The race to be the first market leader in the EV segment has pushed the OEMs to quickly move from the drawing board to the market, at a faster rate than ever before.    There is 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 finalised. The assumption is that this process will help save time. However, this wishful thinking never materialises. The components manufacturers proceed to hard tooling only to realise later that there are glaring gaps in design and 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 minimise changes in design to get some leeway from OEMs to accommodate whatever best can be achieved.  <figure class="image"><img style="aspect-ratio:16668/7207;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-1-01-01-01-1738074273_1777351785.png" width="16668" height="7207"></figure><img src="https://qclab.app/wp-content/uploads/2023/01/Asset-10-1024x190.png" alt="">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 component development increases by leaps and bounds.  <figure class="image"><img style="aspect-ratio:16668/11598;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-2-01-01-01-1738074285_1777351846.png" width="16668" height="11598"></figure>Also, each component may have multiple child parts coming from different (tier 2) vendors – electrical, mechanical, or electronics. The ad hoc urgencies and escalations experienced by the component vendors trickle down to their tier2 vendors supplying the child parts. This leads to de-synchronisation in the arrival of child parts and consequently leads to delayed testing. But as they need to meet the timeline expectations of OEMs, components are often mass-produced prior to completion of testing and full production stabilisation. This not only leads to a loss of production capacity but also leaves many issues unresolved, as both the design and development teams are forced to shift their attention to other new projects. <figure class="image"><img style="aspect-ratio:16668/12926;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//cc-blog-2-img-3-01-01-01-01-1738074293_1777351723.png" width="16668" height="12926"></figure>What do 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, 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 with such urgencies. Under these circumstances, there must be a way out!  Four simple rules to increase productivity during the New Product Development (NPD) process:  The best an auto component manufacturer can do is to ensure that they provide the fastest response to OEMs from their end. This will ensure that they are a “Preferred Supplier”. 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:  <ul><li>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.</li><li>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. It 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 lead to quicker issue resolution. The outcome would be a reduction in lead times as well as higher capacity in design!</li><li>Follow high-frequency management – To speed up the new product development 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.</li><li>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.</li><li>In a revised planning approach, tasks are initially stripped of their buffers to provide a more 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 can give out periodic signals that will help auto component manufacturing companies’ top management understand where their intervention may be needed. </li></ul>ConclusionAdopt these four simple rules of having a design full kit before development, controlling WIP, performing high-frequency management, and monitoring projects ETC. This approach can drastically reduce the lead time for NPD (with a minimum 50% improvement) while also significantly enhancing output (exceeding 100%) within your organisation!