by Colin Whitbread

The terms “e-business” and “e-commerce” have now found a lasting place in the vocabulary of the auto industry although widespread discrepancies are still evident in their usage. More recently, many technically-minded analysts have sought to dismiss the simplicity of these terms, introducing more sophisticated descriptions such as “web-enabled business and web-enabled commerce”. These introduce the notion that e-business in all its forms should not be viewed in an OEM/supplier-centric way, where each participant in the automotive supply chain undertakes reactive e-investments in an isolated fashion. Islands of e-business capability are built, with only a few rickety bridges connecting each one, over a sea of proprietary acronyms.

The term “c-commerce”, was introduced some time ago and this introduces the word that many see as the key to the automotive industry’s future, collaboration. Unfortunately, use of the word has already been corrupted somewhat, and a few have scorned its use in an industry which has traditionally been dominated by intense inter-peer rivalry at all levels of the supply chain. Humble communications with customers and suppliers by e-mail can be seen as collaboration. Planning, forecasting and replenishment through collaborative B2B trading exchanges is proving harder to implement than forecast, with human resistance slowing progress and fostering the growth of private exchanges. Despite these obstacles, collaboration, however defined, is far from doomed. Aside from practical issues such as how it functions in the real, as opposed to virtual world and how high obstacles to its use really are, the fact is that collaboration is happening in some key areas, most notably product design/development. This may well point to the most significant way forward for the industry.

Amongst all the technical jargon and the sea of acronyms, one clear message appears to shine through-real collaboration can generate products which are as close as possible to customers’ desires/needs and which advance through the design/development process as speedily as possible, leaving higher revenues, lower costs and improved shareholder value in their wake. This may he hard to achieve-domination by one party is both very difficult and unhelpful, decision making should be communal and the information flow has to be open-but it can open up a brave new world of unexplored cost savings in the fuzzy areas of wasted and duplicated time, effort (human and other), and process inefficiencies.

Most independent analysts appear to concur that the auto industry has to yet to pass the start line with regard to c-commerce, with marketing propaganda still triumphing over practical implementation. Scratching the surface of collaboration claims all too often seems to reveal company-centric processes and systems where design software focuses on internal expediency. This may seem a little depressing, especially given the stout efforts of some of the specialist software suppliers outlined below, but it also indicates enormous potential to progress. Real-world examples of c-commerce in the planning, development and support of products are starting to filter through. OEMs and suppliers may be feeling their collective way forward, but a number of leading-edge applications have shown that the Web’s power can be harnessed and the very real challenges associated with data security, project control etc confronted.

C-commerce solution providers have typically divided between those providing collaborative planning applications, targeted towards supply chain integration and visibility, and those offering collaborative product commerce capabilities, although the division has become more blurred as alliances have mushroomed. The former include specialists such as Adexa , (whose purchase by Freemarkets recently fell through), i2 and SupplySolution, (which has a strategic partnership with i2 and which now powers Covisint ‘s Fulfillment supply chain management module). The latter include SDRC (which is currently being acquired by EDS and which also has an alliance with i2, hence the blurring referred to above), Dassault Systemes (whose products are marketed by IBM ), MatrixOne and PTC .

These collaborative product commerce specialists have developed Web-centric or purely Web-based applications which build on the opportunities for open communication among suppliers and OEMs using different standards afforded by the Internet (EDI, XML etc). Legacy system problems are tackled by building software interfaces capable of finding, extracting and translating data from these different systems. These applications pull suppliers into the design/development process at the earliest stages, using them almost as in-house innovation and experience resources and allowing them to input suggestions before costly design errors have crept in. This can be done in real time and speeds time-to-market. Benefits also extend beyond a new product’s introduction, introducing the product life cycle dimension as a further benefit. Customer reactions to new products can be fed through almost from day one, with any necessary design changes/improvements being initiated and completed quickly, a key competitive weapon.

Unsurprisingly, applications vendors foresee a virtual utopia, where frontiers between trading partners start to evaporate and a company’s supply chain becomes part of its product development organisation. According to SDRC, which recently launched what it describes as the industry’s first suite of collaborative product management solutions, TeamCenter, the product is “uniquely product-centric, enabling virtual enterprises-comprised of dispersed knowledge users and diverse application systems-to collaborate on the planning, development and support of products”.

Practical examples of collaborative product development initiatives have been seen in the last two years, and many more are set to follow. Ford’s C3P system, a global integrated computer-based tool box for modelling and information management which embraces all aspects of product development from design to manufacturing was first pioneered by the new Mondeo development team. This is principally powered by SDRC’s Metaphase product data management software and the I-DEAS fully integrated CAD/CAM/CAE software system, which has become the common solid/surface modelling system for Ford designers and suppliers worldwide. These are supplemented by additional applications for specific capabilities from other vendors, including Smart-Chassis, Engine-Roll and Digital Buck. The latter was created by Engineering Animation Inc and is a digital mock-up system on which a “virtual prototype” is built. Use of these collaborative initiatives cut 13 months from the development time, resulting in an appearance-approval to job one time of 24 months and the almost simultaneous launch of three body styles with five powertrain packages. One entire physical prototyping stage was also eliminated, considerably reducing the total time and cost of toolmaking, especially in the body structures and panels area. The key point is that any internal party involved in the programme, at whatever level (design, engineering, testing, factory systems etc) had access to the single master data model as, crucially, did the supplier chain.

C3P was also the foundation of Jaguar ‘s recent X-Type project, where the Ford subsidiary provided suppliers with access to the system and an infrastructure within which to work. Completed design outputs by suppliers had to be in the C3P system.

SDRC (Structural Dynamics Research Corporation) was founded in 1967 and has become a leading developer and global provider of software solutions for collaborative product development, enabling manufacturers to work in a collaborative environment by connecting and empowering humans, products, transactions and processes via the Internet. Connectivity across the extended enterprise, embracing product engineers, marketing and support personnel, suppliers and customers is facilitated by a number of software products and services. These include: I-DEAS, which allows development teams to design, simulate, test and manufacture product concepts more speedily than using stand-alone or partially integrated software tools; and Metaphase, which creates, manages and controls data associated with product information as it evolves through the product life cycle.

As noted above, SDRC recently introduced its TeamCenter product suite which is based on Sun Microsystem’s Java 2 Enterprise Edition and which enables management of the product lifecycle. It claims to be the first CAD-neutral collaborative product management solution in the industry and is a component-based system which allows customers to not only use SDRC’s components, but also their own components, components from other products and components developed by third parties. This state-of-the-art offering almost undoubtedly points the way forward for the leading OEMs and suppliers and could well become the benchmark for competing products.

The alliance with i2 suggests that closer marketing of collaborative product management solutions and supplier relationship management could become the norm in the future. The relationship provides joint customers with the ability to strategically source, collaboratively design, perform Web-based negotiation, and automate the RFQ management process. All value chain members are linked by providing web browser access to a single source product view that includes preferred parts and supplier information, as well as product-specific information, such as product structure and standards for process, production and service.

Although Ford remains SDRC’s key customer, accounting for 14% of the company’s revenues last year, it has a large and diverse customer base which includes Nissan, Mazda , DaimlerChrysler , Land Rover , Ferrari and Hyundai . It also has a high profile in the F1, NASCAR and CART motorsport arenas, with Jordan, Williams, Joe Gibbs Racing, Hendricks Motorsports and Team Green as clients. SDRC recently won a further contract with Nissan, which will deploy both I-DEAS and Metaphase in three global Nissan Technical Centers located in Japan, North America and Europe throughout 2001. SDRC’s impending merger with UGS and the acquisition of the combined entity by EDS should enhance business prospects substantially. UGS is a leading supplier of internet-based product lifecycle collaboration solutions while EDS, which owns the management consulting subsidiary A.T.Kearney, provides strategy, implementation and hosting for clients tackling the complex challenges of the digital age.

SDRC’s key competitor is Dassault Systemes, a French supplier of product lifecycle management solutions such as CATIA (defines the digital product and supports product design and development), DELMIA (defines and simulates digital manufacturing processes) and ENOVIA (manages product lifestyle information, including digital mock-up configuration, processes knowledge and resources information), which are marketed, distributed and supported principally by IBM. Around 35% of Dassault Systeme’s 2000 revenues were generated by automotive customers, with CATIA the main product. OEM customers for CATIA include Bmw , Ferrari, Honda, Mitsubishi , Psa , DaimlerChrysler, Fiat , Porsche, Renault and VW while supplier users, each with several hundred licences, include Behr , Brembo , Brose, Johnson Controls, Magna , Valeo , Autoliv , Bosch , Delphi , Karmann and TRW Automotive. Dassault Systemes’ Version 5 Release 6 (V5R6) of CATIA was launched in March 2001.

PSA committed to using CATIA as its core CAD/CAE/CAM system for the design of all future vehicles in early 1999 and was used for both the latest Citroën C5 and Peugeot 307 models although suppliers did not have access to these models. Current programmes have, since early May 2001, allowed true collaboration, with suppliers having access to digital models through a new project known as Meeting. Access is through the new website, which will continue to function as a portal for suppliers despite PSA’s membership of Covisint. Meeting is part of PSA’s wider digital engineering programme, Ingenum , which has been developed in tandem with Dassault Systemes.

PTC (Parametric Technology Corporation) is a US company, which claims the position of the world’s largest software company. It develops, markets and supports product development software. Although active in many industries outside the automotive sector, PTC’s Windchill collaborative product commerce package and other products are widely in use among OEMs and suppliers including Audi , GM, Ford, PSA, Dana , Hella, ArvinMeritor , Visteon and ZF. In early June 2001 TRW Automotive announced it had selected the Windchill package to implement within its business, commencing with the Occupant Safety Systems operation. Shortly afterwards TRW Inc and PTC announced a strategic alliance to jointly offer collaborative product commerce solutions, based on Windchill, primarily in the automotive, aerospace and defence and semiconductor sectors. The partnership includes technical personnel cross-training, joint marketing and sales programmes.

Despite the undoubted benefits which can be generated by real collaborative product commerce, and the skills of these software providers competing for a slice of what should be a dynamic market, the obstacles to more widespread adoption are genuine. The problem of diverse legacy systems peppered across the OEM and supplier communities has already been noted, although software vendors are working hard to address these infrastructural barriers. Once issues associated with immature standards, security and cultural differences can be similarly addressed, the runway will be cleared for take-off. Unfortunately, even the most enthusiastic proponents of c-commerce admit that this could take some time. Collaborative product commerce allows, for example, a supplier’s engineers to interface directly with their equivalents at customers or lower tier suppliers, bypassing others traditionally involved in the chain such as purchasing staff. Resolving these internal skirmishes might be difficult enough, coming to terms with collaboration with long-standing adversaries is even more challenging.

In summary, c-commerce has proved its value in a number of recent applications, but a more widespread evolution to collaborative product commerce still appears some way off. Software vendors have developed an impressive array of products which promise much in the way of reduced product development cost, shorter time to market etc, and have some sophisticated visions of future virtual corporations and interconnected supply chains. Whether these products will be delivered directly from these vendors to customers, which is largely the case at present, or via collaborative trading exchanges remains to be seen. The major exchanges such as Covisint and SupplyOn are likely to find fewer takers for their product development tools than for others associated with e-procurement and supply chain management. Even exchange sponsors appear unwilling to depart from independent strategies in the product development area. Only conclusion of an exclusive provider agreement between one of the major collaborative product development software vendors and an exchange might transform this. This has recently happened between Covisint and SupplySolution in the supply chain management field and could be a precursor to a similar move in the product development arena.

However, converting the visions of software vendors into reality is proving tough and barriers to introduction are both real and high. Some analysts remain sceptical that true collaboration through supply chains can prove anything other than elusive, as links in the chain have vested interests to camouflage gains in order to retain the benefits. However, in reality, like many of the forecast gains arising from the adoption of e-business processes generally, collaborative product commerce benefits could leak away from suppliers, especially those in the lower tiers. The real winners could, again, be OEMs but, more significantly, consumers. Despite these issues, the real losers could be those who stand aside from web-enabled collaborative product development completely. Collaborate or perish then becomes a crucial strategy issue.

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