In this interview, Matthew Beecham talked with Richard Bruges, chief executive of Productiv Limited, a new company setting out to industrialise new and emerging green technologies and speed their introduction into the global automotive supply chain. It is supported by some heavyweight players, including the Carbon Trust, Motor Industry Research Association (MIRA) and Welsh Automotive Forum. Productiv has three locations including a head office at the new SMMT building near Westminster in London; an engineering centre at the MIRA Technology Park near Coventry; and a production office at Bridgend, South Wales.
You were previously head of innovation at Unipart. Does this have anything to do with this new business venture?
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One of my roles at Unipart, which is not only a logistics company but also a manufacturer of fuel tanks and exhaust systems, was to discuss challenges with OEM customers. Two years ago, the advanced engineering departments of car makers were telling me of the difficulty of accessing much needed new technologies, particularly for reducing carbon emissions. The problem is that unless vehicle manufacturers can place orders for at least 200,000 units in keeping with the economies of scale of vehicle mass production, then the established automotive supply chain can find it difficult to commit the manufacturing and development investment required. Moreover, a lot of really clever and innovative ideas start out in universities, and from small and medium size businesses, often with their roots in the motorsport industry, none of which are geared to high volume production.
Can’t the vehicle manufacturers simply connect directly with SMEs developing the new technology?
Not easily. The industry frequently uses expressions such as “facing the valley of death” and “catch 22 scenarios” to describe the problem. It’s partly a consequence of introducing the tiered supply system headed up by the major tier 1s; and in terms of supplying components in high volumes the global automotive supply chain is an incredibly efficient system. But it’s still a game of numbers requiring everyone to jump simultaneously to those high volumes when introducing new technology. Car makers and tier 1s do tremendous work in developing new technologies, of course, but even they readily accept they’re not the fount of all knowledge.
So what’s the answer?
A preliminary step is required to introduce new technologies at much lower volumes, but at an affordable price. This can help car makers and tier 1s manage the technology risk by gaining some experience and confidence, before embracing the technology and committing to higher mainstream volumes.
How does it work in practice?
First and foremost our customers are vehicle manufacturers and major tier 1 suppliers seeking out these new technologies. They stand on one side of the divide. Productiv and its partners provide the investment, engineering, manufacturing and commercial development support to the small and medium sized enterprises on the other side of the divide. We connect the two sides, building a bridge between the little guys and the big guys. Already we’re working with 50 SMEs and half a dozen international vehicle manufacturers.
The Productiv approach also reduces the risk for small companies by ensuring they have expert advice and partners working with them to meet the needs of the car makers, and without having to give away their intellectual property and know how.
What sort of technologies are you backing and at what sort of volumes? And how do you decide which ones are the winners?
Productiv is completely agnostic and we don’t aim to pick winners. The market will decide which technologies are the most cost effective at safely reducing carbon emissions. Productiv will enable automotive mass producers to access a wide range of what the Automotive Council has defined as new “sticky technologies” and we’ll focus on credible engineering and low volume production up to 20,000 units annually.
Productiv production partners for example will focus on the precision rotary manufacturing of energy recovery flywheels, turbochargers and electric motors; the fabrication and assembly of battery parts, fuel systems and chassis components; the supply of control electronics including DC/DC converters, engine management systems and power electronics; as well as advanced materials and chemistry including new lightweight alloys, steels and composites.
Tier 1 suppliers each tend to focus on specific areas of the vehicle, whereas Productiv cuts a broad swathe and can help implement the process of bringing multiple new technologies to market. Productiv will pre-screen the feasibility of new technology at the advanced engineering stage, which is defined by the Low Carbon Vehicle Partnership in association with the Automotive Council as a technology readiness level of 5-7 on a scale of 1-10. The involvement of Productiv and its commercial partners will help complete the readiness of the technology for pilot build and low volume production.
What about the executive team for implementing your business plan?
I’m supported by our finance director Nick Rodgers, who is an ex-investment banker and co-founder of IPSO Ventures. Nick has tremendous experience putting investors in touch with exciting new technologies. Our commercial director is Bob Austin, who is well known within the industry. He speaks German fluently, which is an obvious advantage and he worked in Germany for a number of years. Bob has broad experience of international automotive supply chains and led the development of the Welsh Automotive Supplier Network, Midlands Assembly Network and Welsh Low Carbon Vehicle Cluster.
When might we see some of these new technologies in series production?
Some of the technology will come to market fairly quickly and possibly in a year or so. That’s because some of the technology is already well developed, but just needs the commercial support to make it happen. That’s where we come in to help with the investment, engineering, production and commercial partners necessary to industrialise the technology. In other words, Productiv gets involved at the production readiness stage, when emerging technologies can often falter despite extensive research and development and prototype testing.
How does Productiv make its money?
Some income is derived from the car makers buying the technology. We’ll deliver the technology to the same standards they expect of existing suppliers. We understand their requirements and can tick all the boxes in terms of delivering quality, cost and delivery. Our niche is to offer car makers a wide choice of technologies at low volume. It neatly complements the existing supply chain which excels at high volume. Once our technologies have gained a foothold we’re ready to let go and hand over the baton to larger tier 1s, when we expect to share in the commercial gains made by the technology developers.
The challenge has always been to provide an effective route to market for new players, and we believe we now have the solution.
