E-business: the new game in town
Virtual product development
Though e-business has been used largely for procurement, its potential goes beyond online auctions and catalogs. In fact, its greatest value may be in product development. Jankowski said that Covisint's more sophisticated elements - such as its Virtual Project Workspace, which is a collaborative design area with visualization that allows various product development teams to share project specific data and conduct virtual meetings in real time - may not be used as extensively now because it takes time for customers to learn how to use them and to understand their value. However, he added that those elements "will be significantly more important as we move forward."
In addition, a joint Deutsche Bank/Roland Berger report concluded that vehicles could be developed more cheaply through e-business strategies. According to the report, though original industry estimates of a several-thousand-dollar cost savings per vehicle were overstated, an average total savings of roughly $1200 per vehicle along the North American automotive supply chain would be possible with B2B initiatives ($639 per vehicle for the European auto industry, and $540 for one in the Asian automobile value chain). Within those cost savings for North America, 16.5% was in product development and 10% in manufacturing, which the report attributed to better communication among OEMs, suppliers, dealers, and customers. (In Japan, product development accounted for 19% of the savings and manufacturing 13%, while in Europe, product development and manufacturing were 16 and 13%, respectively.)
 Figure 2. In developing the all-new 2001 Civic - which was the first model to use Honda's computer networking strategy, Digital Manufacturing Circle - the overall development process was shortened by 15%. |
Being able to develop a vehicle more quickly via Internet-based strategies, which can allow efficient management of the supply chain and real-time collaborative efforts in product development, is also a goal of automakers - and has already been proved feasible. For example, Honda of America Manufacturing Inc. used an e-business strategy, called Digital Manufacturing Circle, to increase the speed and efficiency of new model development. With the strategy - started by Honda Motor Japan in 1996 - a computer network links Honda's R&D, manufacturing, and suppliers, said Larry Jutte, Senior Vice President and General Manager at Honda of America Manufacturing, which allows those groups to work simultaneously with the same 3-D drawings. In developing the all-new 2001 Honda Civic (Figure 2), which was the first model to use the strategy, the overall development process was shortened by 15%, according to Honda. The automaker plans to use the strategy on all future models.
On a supply-chain pilot, the Internet enabled DaimlerChrysler to reduce the lead time it used to send production program information to suppliers from 14 days to one - a 92% reduction. "The Internet will raise the response capability of the entire supply chain enormously," Valade said. "Clearly, e-business signals the end of sequential communications. These pilot applications have shown that changes in production program information can be made available to all companies in the supply chain simultaneously,...(which) gives us a tremendous cost advantage."
General Motors is using the Internet and newly designed business processes, including those for vehicle product development and production, to improve business efficiency, said Ralph Szygenda, Group Vice President and Chief Information Officer, GM, in a speech on e-business last August. "We're cutting our product design cycle dramatically. A few years ago, we had a 48-month design cycle. Today, we're approaching 18 months," he said. "We now have Web-based design iteration flexibility lacking a few years ago. Our common digital-based systems permit teams to design vehicles globally linked to production, procurement, and other GM functions." He also noted that GM has "integration centers" around the world that connect designers, engineers, suppliers, and manufacturing.
 Figure 3. Dana Corp.'s Virtual Time Engineering program allows the supplier to provide engineering solutions for its OEM customers at any time around the world. |
Use of innovative technology for product development is not limited to OEMs. ArvinMeritor has implemented a Web-based engineering platform that uses innovative technology for better collaboration and faster cycle times on its projects. "In the last 18 to 24 months, we have come up with initiatives that will allow our engineers to innovate, to collaborate, and to reach beyond our enterprise walls," said Yomi Famurewa, Senior Director of IT Engineering, Quality and Procurement, at ArvinMeritor. The engineering platform includes various design tools that can be accessed like a menu to facilitate the design and development processes. Famurewa also noted that the supplier has a Web page devoted to each project - which includes information such as who the team members are, what they are working on, project status, what questions have been asked, and what has been discovered - that enables worldwide collaboration. "It has been very useful," Famurewa said. "For example, we had a supplier in India we were using for analysis. We put a CAD drawing on the site that needed to be looked at, and they did so while our engineers in the U.S. were sleeping. The results were back the next day. It's a tool that allows us to compress time."
ArvinMeritor also uses outside services to facilitate its engineering processes. One of those services is e-Vis.com, a collaborative online workspace provided by Engineering Animation and enabled by Hewlett-Packard. "We have used e-Vis for design conferences with people from three different companies in three different locations looking at the drawings and marking them up. This is an area where we see a big benefit - to be able to have engineering teams in different locations working together at the same time," Famurewa said, adding, "We are becoming a virtual engineering team."
Similarly, Dana Corp. has implemented a Virtual Time Engineering program, which allows the supplier to provide engineering solutions for its OEM customers at any time around the world (Figure 3). The program consists of 22 global technology centers - located throughout North and South America, Europe, and Asia - that enable a continuous workflow. The company provided the following example to illustrate the process: When engineers in Japan reach the end of their shifts, the project can be forwarded to engineers in Europe, who work on it through their shifts, and then pass it to engineers in North and South America, who do the same. In this way, Dana engineers literally work around the clock to help customers be first to market, according to the company.
Other Internet-based tools are being developed and utilized to improve the product-design and -development processes and to provide OEMs and suppliers with further cost reductions and improved time-to-market. For example, Oculus Technologies Corp. recently developed a peer-to-peer (P2P) computing environment called CO. The software is currently being used by one of the leading U.S. auto manufacturers, according to the company, and has helped one group of users to reduce its product design cycle from three days down to less than a minute. According to the company, the technology speeds time-to-market by connecting function-specific applications and enabling the entire design team, including OEMs and suppliers, to collaborate and integrate data in real time without compromising proprietary information.
 Figure 4. ESI Group's PAM-FLOW, a virtual-engineering technology, simulates the velocity flow fields of General Motors' vehicles. |
Two additional virtual-engineering technologies are ESI Group's virtual Try-Out Space simulation environment and Electro Standards Laboratories' (ESL) Web-based testing platform for electric motor and power systems. ESI Group's simulation environment, according to the company, strengthens the weak link in the industrial chain by providing full and effective virtual engineering for mechanical design automation. The environment includes the company's virtual prototyping and manufacturing products, which can be used by engineers to explore design and process alternatives without building physical prototypes. The company recently announced PAM-FLOW 2000, its new-generation computational fluid dynamics software, which is used to predict vehicle aerodynamics and climate control in the powertrain compartment and aero-acoustics around the vehicle up to 5 kHz (Figure 4). Users of the technology include Alstom, Delphi, GM, and Honda.
ESL's collaborative testing and experimentation platform can be operated in real time as a virtual engineering laboratory (VE-LAB). "In conducting applied research and product development programs for our clients, this system allows geographically distributed team members interactive control of system hardware," said Dr. Raymond Sepe, Jr., Vice President of Research and Development for ESL. "This removes the costly expense of moving equipment and personnel between facilities and allows collaborative development, implementation, testing, and verification based on true experimental results."
