Getting the right model to market at the right time has never been more critical: delays can mean the difference between success and disaster, profit and loss. Yet marketing pressures demand ever more niche derivatives, brought to market faster and faster in order to maximise commercial opportunities. The result is immense strain on product development resources, budgets and schedules. Ricardo has responded to the challenge with a product development template that can save time and money – and help guarantee that all important start-of production date. Tony Lewin reports.
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Though history does not record who first coined that now-universal adage, one thing is for certain: it could have been invented especially for the automotive industry. In the car game, time is more than just money: it’s big-time money and can often mean the difference between profit and loss, success and failure – or even survival and extinction.
Slip up by a few weeks – or, heaven forbid, a couple of months – and a big programme could lose all its meticulously-calculated financial viability; planned connections go out of the window, marketing slots will be missed, other teams and programmes are kept waiting and, worst of all, the final customer will get fed up with the delay and may defect to a competitor. All the time, the dollar-clock is counting the cost – and the fast-disappearing profits.
Nowhere is this more critical than in the launch of a new model. Just as no one is interested in yesterday’s newspapers or last season’s fashions, few are keen on buying last year’s car when the showroom up the street already has next year’s shiny new model in stock. And not only does the innovative new model have the potential to pull in the customer from another marque, it will also earn its manufacturer monopoly profits for that all-important honeymoon period when it is the only contender in a brand new, must-buy, vehicle category.
Renault demonstrated the point perfectly with its first-generation Scenic, launched as a Mégane derivative in autumn 1996. At the time Renault knew it was on to a good thing, but estimated that it had perhaps 18 months to exploit the new niche before competitors got in on the act. In the event, it was well into 1999 before GM began producing substantial numbers of its rival Zafira, and it was longer still before the Citroen Xsara Picasso entered production. Had Opel and PSA been able to respond more quickly and get their designs to market faster, the Scenic would not have been such a profitable model for Renault – and it certainly would not be in the fortunate position it enjoys today when demand is still strong, even though its replacement is imminent.
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By GlobalDataA lot has changed since 1996, of course: consolidation has seen individual producers polarise into large, competitive, multi-brand blocs; vehicle types and configurations have proliferated as manufacturing processes have allowed more flexibility, and in the saturated western markets carmakers must now seize on every design and fashion trend as fast as possible in order to steal crucial competitive advantage over their opponents and keep their plants working at full capacity.
Time to market – the critical measure
Each one of these developments points towards what has now become the single most important measure of an automaker’s ability to survive on the world stage: its capacity to respond to trends and bring new models to market faster than its competitors can.
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Again, Renault provides a graphic illustration of how this allimportant Time to Market (or T2M) measure has accelerated. The 1995/6 Mégane range, encompassing six different body styles, took 47 months from styling freeze to start of production: its 2003 successor, with seven styles, reached the same stage in just 29 months. And once again Renault will be able to boast a potentially profitable market exclusive in the shape of the long-wheelbase derivative, the only one in the C-sector and due early in 2004.
Delays – everyone’s worst nightmare
No matter how ambitious a vehicle programme is in its time-to-market goals, it will fail in its objectives if it falls behind schedule along the way. In fact there is mounting evidence that the more compressed a programme is, the harder it is for programme managers to ensure that the schedule is adhered to. Delays here can be even more financially damaging than those resulting from slow development processes for the vehicle itself.
With the loss in profit and recovery racking up at well in excess of £1.5 million per day for late entry – even more for high volume product leading segments – this substantial sum is only part of the story. Delays to the new model will mean the existing vehicle will have to be given costly extra marketing support to boost its flagging appeal to consumers and prevent the factories having to go on to uneconomic short time. Not only that, but the planned replacement for the new model will itself have to be speeded up if the same downward spiral is not to be repeated for the next model generation.
And to add insult to injury, a model launched late may not sell as well as expected, needing support throughout its life – yet also needing to stay in production longer, with still more support, to amortise the extra cost of its extended development period.
A further risk is that customers will migrate to other brands that are able to offer fresher, newer models. Two major internationally owned brands have been particularly hard hit in Europe, losing market share throughout the 1990s because of their inability to regain lost development time to bring their model replacement cycles back into synch with those of their competitors.
Carmakers are understandably reluctant to admit to delays, let alone quantify the cost of those delays. However, Automotive News Europe recently reported Renault conceding that its 2000 Laguna programme did slip four or five months due to problems with computer tools. Based on Ricardo estimates of the typical cost of delayed SOP, at a notional monthly volume of 25,000 and a showroom price of $20,000, this hold-up could have cost the French firm as much as $1.25 billion in lost revenue and market position on the new car.
Avoiding delays
The enormous penalties of failing to hit start of production dates are plain for all to see. Unfortunately the problem in meeting SOP targets is compounded not only by the need to develop cars more quickly, but also by the fact that there are now far more cars being developed at any given moment. Where five years ago a typical model range used to comprise two or perhaps three body derivatives, three or four engines and a couple of transmissions, today’s equivalents can run to twice as many permutations – each of which has to have its own development programme.
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The proliferation of niche models is placing a major strain on carmakers’ resources – in terms of both time, facilities and cash. The pressure is further intensified by the need to check, double-check and check again every safety-critical system on the vehicle: mistakes here could lead to expensive in-service recalls and damage to brand image.
More than ever, vehicle development is an area where outside specialists can share some of the load – especially when it comes to applying techniques which not only help shorten time to market, but which also ensure those time-scales are adhered to.
Even the most straightforward of development programmes can tie up many hundreds of engineers for long periods of time in order to carry out essential calibration, testing and durability work. This is in addition to development tasks further upstream. Ricardo is partner to many major automakers on a wide variety of programmes, but to give a feel for the scale of the task involved, principal control and electronics engineer Dr Robert Dorey provides an idea of a typical programme. “A typical programme of, say, two to three powertrain variants on a single vehicle body style, might require in the region of 160 weeks of steady state tests and 1200 emissions tests. It might call for a fleet of 50 development vehicles and perhaps 50 more for durability testing. Over a period of three years all of this might keep an inhouse team of between 50 and 100 people busy, together with similar numbers drawn from the customer organisation”.
Yet, says Dr Dorey, the use of the Ricardo VCOT development process – see panel, right – and other advanced development tools allows at least six months to be slashed from the programme time. It also allows big savings to be made in the size of the vehicle fleet: these largely handmade prototypes are notoriously time-consuming and expensive to build, to track and to manage. Industry experts estimate that they cost between 20 and 30 times the price of the eventual production car – so the financial benefit of needing just 65 rather than 100 prototypes can be dramatically quantified at around $15 million for the programme.
The secret of VCOT is not just the fact that it automates many of the tedious but vital testing functions that used to be carried out on the road or track with human drivers. It feeds test data back into the simulation models used in the CAE design processes, speeding up the determination of the key trade-offs between parameters such as fuel consumption and emissions. And by taking engine testing out of the vehicle and into a test cell environment, the engine work can begin at a much earlier stage than it would if it depended on the transmission and chassis having been completed beforehand.
“In essence what we are doing is to simulate the whole vehicle, the drive cycle and the driver,” explains Dorey. “We simulate all the components and test the engine in an environment that it would expect to see, yet without having to have a transmission available, a fleet vehicle available or a driver available. You can also take out all the driver-to-driver variables.”
Outlook
The pressures on carmakers and their development teams have never been greater. More products have to be developed in less time and on a shorter product lifecycle as the next new derivative is primed to grab its momentary market initiative. Yet all this pressure is overlaid by the need also to cut back on costs and resources. As model niches grow ever more numerous it is plain that even the best-placed companies will find it helpful to call on external resources to achieve those all-important start-of production dates.
VCOT – the intelligent template that reduces both the time and the cost of car development Principal control and electronics engineer Dr Robert Dorey is one of the architects behind the system and defines it as follows: “VCOT is all about bringing transient engine and powertrain testing into the test cell. It replaces that part of the development process which has traditionally taken place in the vehicle. “However,” continues Dorey, “in a much broader sense it encompasses all the upfront processes associated with design and development leading into steady-state test bed calibration, automated mapping and automated testing, into transient testing and then the subsequent handoff to vehicle. It needs to be seen in that very broad frame in order to see the true benefits that we talk about.” Stated more simply, what VCOT does is to take care of the final phase of engine development, when the powertrain has to be mapped in order to provide data for the engine management and On Board Diagnostics (OBD) system, and calibrated in order to confirm compliance with legislative standards for emissions, consumption and other parameters. Some of this involves steady state testing; other phases, such as official drive cycles, would normally require a driver and a complete vehicle but are done under VCOT in the test cell using accurately simulated loads for transmission, ancillaries and cooling pack configurations. Again, this might seem relatively straightforward – until it is realised that to get a single engine/transmission/body combination through the requisite European and Federal tests requires around 200 separate tests. “As the market moves towards more niche derivatives and less base powertrains,” explains Dorey, “it becomes increasingly important to be able to do calibrations with different vehicles, even though the concept definition is the same. “It is important to be able to do quick calibrations,” he continues, “to get your product out onto the market. The vehicle type (saloon, cabriolet, people carrier), its features (size, weight, payload, gear ratios, power output) and intended market all impact the calibration and multiply out to make a huge amount of work.” For carmakers the attraction of a programme such as this is that it enables them to bring derivatives – and even main models – to market much faster, at less cost and with less of a drain on resources. Ricardo was able to re-calibrate the Ford Racing Puma within 12 months, for example. More recently, major strides have been made in in-cell development of driveability, a notoriously time-consuming and subjective activity normally carried out by teams of drivers in expensive prototypes on the open road. Climatic testing, another well-known cash burner, can be tackled, too: “Instead of sending the engine – or rather the complete vehicle – to Arizona, we put the engine into our climatic test bed,” Dorey explains. Though companies tend to like climatic trips because they are able to take a whole range of vehicles, the expeditions tend to be awkward hard points in the development calendar, forcing engineers to pull out all the stops to hit the dates; all too often, too, the trips are used for development work that could have been done earlier. “If you could reduce your dependence on these trips it would be very beneficial,” adds Ricardo project director Mark Garret. “Under our system we would use them more for validation [of what we had already developed through simulation] – the one thing you can never get around is validation in the full vehicle.” Again, the virtuous circle is clear. Quicker development, because test results are fed back into the CAE design loop; quicker calibration, because in contrast to the traditional human test operations of two a day, automated tests can take place in parallel and round the clock, achieving as many as 12 per 24 hours. Ricardo even has rapid cool-down techniques so that these tests can be run back-to-back with cold or ambient-temperature starts. Big savings can be made in the number of people, and there are fewer costly prototypes to build and manage. The logical extension of this thinking would be to move to zero prototypes, where the correlation between simulation and reality was so precise that only pre-series validation vehicles would be required. Such a position may be closer than many people think, but for the moment Garret likens the process to that used in crash testing. Body structures are designed in the computer and subject to repeated virtual crash tests to fine-tune their performance. Only when the computer model’s impact performance is satisfactory is a full-size car built and impact-tested – hopefully validating the computer’s predictions. And as powertrains become yet more elaborate, with countless extra degrees of freedom such as variable valve timing and turbo nozzle angle, pre, post and main injection, EGR and lean NOx trap regeneration – not to mention the effects of hybrid operation and regen braking, – calibration, like safety, will cease to be an art. More and more it is becoming a science – and one that demands effective tools if it is not to be the bottleneck preventing urgently-needed new models from reaching the market in time. |
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The Ricardo Quarterly Review, RQ, is a publication prepared by Ricardo in association with TwoToneMedia.
