Global platform sharing has become a core competitive strategy for several automotive manufacturers. The advantages are significant. But so too are the challenges. Executing on this strategy for maximum benefit requires the right processes and tools enabling comparison of several cost and time-to-market scenarios.
Critical Factors for Success
- Coordinating product development and manufacturing efforts across geographies, cultures, time zones and languages
- Balancing opportunities for low cost manufacturing in developing countries with increased productivity and technology know how in developed countries – even as these dynamics shift
- Considering regulatory and compliance requirements in different regions and markets
- Conducting feature/value tradeoffs of various product variants for different global markets
- Understanding logistics and time-to-market impacts
- Assessing the current supply base ability to respond to increased demand for variation
Collaboration is Key
Product design, sourcing, manufacturing, assembly and cost engineering all have to collaborate for global platform sharing to succeed. These groups need a cross-functional view of product cost to ensure that all parties impacting product cost access the same cost information and know how changes in design, sourcing or manufacturing will impact product cost. For example:
- Product Development Teams need to understand the short and long term cost implications of any design decisions they make.
- Strategic Sourcing Managers need visibility into current product design and cost so that they can conduct effective Make vs. Buy decisions earlier in the product lifecycle.
- Manufacturing Engineers need to evaluate designs for manufacturability within available facilities, equipment, and partners. They also need visibility to the impact of material and process changes that could affect cost and time-to market.
- Cost Engineers need access to more cost information earlier in the product lifecycle to improve the economic impact on the company and scale their efforts.
Unfortunately, for most automotive OEMs and large Tier 1 suppliers, the ability to collaborate can be difficult because product cost data is scattered across the organization. Different departments and product groups may each have their own, often conflicting, cost information.
Various pieces of information live in different enterprise systems; e.g., PLM, ERP, SCM and MES. This makes it difficult to get a consistent view of product cost and effectively collaborate on critical cost tradeoff decisions – especially for groups distributed across the world.
Best Practices to Maximize Benefits
The cost management challenges created by global vehicle platforms can be complex. With the right processes and tools, automotive manufacturers can implement the following best practices to maximize the benefits of their global platform sharing strategy.
- Get early visibility to the cost impact of design alternatives
- Generate “should cost” estimates for outsourced products and parts
- Cost entire Bills of Materials (BOMs) and complete product assemblies
- Calculate and manage weight values with your cost estimates
- Design for Supply
- Track on-going product cost across the entire product team
Enterprise-class product cost management platforms enable users to integrate the various cost data that is scattered across different systems into a single collaborative platform. Everyone in the product development team, design, engineering, sourcing, cost engineering and manufacturing, can quickly and accurately generate cost estimates, identify potential cost issues early on and significantly improve collaboration on cost and product profitability in the design of complete vehicles and complex vehicle systems.
Though engineering, sourcing and manufacturing team members may worry the activities listed above will slow them down, in fact, most fit naturally into existing activities and complement processes that are already in place. Deployed properly, effective product cost management can drive significant time efficiencies – especially when dealing with complex manufacturing environments like those required for global vehicle platforms. Forward thinking companies are already implementing these practices across their global product development and delivery teams and reaping the substantial benefits they have to offer.
Want to learn more?
Download our whitepaper, Global Vehicle Platforms – Optimizing Cost and Design Across the Enterprise, for more details.