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October 20, 2004

UK: Delphi’s Don Runkle looks outside autos for innovation ideas

Don Runkle, vice chairman of Delphi and responsible for enterprise technologies at the North American supplier giant, says that he would like to “figure out how to double the size” of the company’s research and development effort, but “without increasing the overall engineering budget”.

By bcusack

Don Runkle, vice chairman of Delphi and responsible for enterprise technologies at the North American supplier giant, says that he would like to “figure out how to double the size” of the company’s research and development effort, but “without increasing the overall engineering budget”.

Delphi sees a flow of innovations as critical for building a premium position in the marketplace, and particularly important for maintaining the company’s 13-15% growth in its non-GM business, says Runkle.

Delphi is looking at getting more innovations into its pipeline and getting them to market faster through “ventures with other people or through the supply base”.

Delphi is aiming to use the strategic supplier network to provide more innovation partnerships.

“We don’t have to do everything ourselves from a research and development and engineering standpoint”, says Runkle.

The company is focusing on more clearly articulating the areas that it doesn’t know about and is looking to universities and research houses to help to fill the gaps.

The company has worked with a partner to search for solutions that are in the marketplace, looking for patents and other ideas that might be relevant to the company.

Runkle says that a benchmark in this area is Procter & Gamble.

“They have been very open on how they handle innovations.”

Transferring some of P&G’s ideas to the automotive sector is one way of increasing the number of ideas going into the pipeline.

At the same time Runkle says that it is important that Delphi gets more efficient at managing the innovation process internally to reduce the cost of development.

One area of cost reduction is relocation of development.

Delphi has a very large technical centre in Mexico and has been doing more work in Krakow in Poland.

The company is also looking to Korea as an efficient development centre, and “hopefully Shanghai when we get it up and running”, says Runkle.

Delphi is looking to move more of the development effort to lower cost engineering efforts with “more sophisticated research done in some of our higher cost centres”, says Runkle.

Runkle does not see carmakers retreating from the growing application of new technologies in future car developments, despite recent concern about the problems of the high number of electrical and electronic failures.

He sees the challenge for all manufacturers, but in particular for technology leaders, as being to better partition electronic systems so that they can be tested in a modular way.

“I think we will have to simply work hard to keep the faults out and reliability up”, says Runkle.

He says that particularly in the electronics area there are so many interactions in the vehicle and complexity levels are so high that it is very important that the supplier has good control of how to develop software to minimise any faults.

He says that it is very important for an OEM “to have the right partner who has got quite a bit of experience in this”.

He sees the problem as partly due to simply the growing number of electronic and software components in a vehicle, and the permutations in the way that they can interact.

Delphi’s two significant advance budgets are in the chassis and engine area, and in electronics and safety, said Runkle.

“We have high demand [for innovation] in the electronics area in general with sensors in the areas related to safety”, says Runkle.

He says one surprisingly strong area of demand has been satellite radios, “starting with Delphi’s SKYfi and Roady products”.

Runkle points to developments in its products and service solutions division, which focus on the aftermarket and consumer electronics side, as a model of how open innovation can work.

“We invented many of the thing s in there, but a lot we didn’t invent”, says Runkle.

“But we’ve got the right sort of partnership with some people to bring the product to market quickly – nice features, good price points and so forth”.

Part of the focus on Delphi’s core strengths involves the supplier functioning as a tier 2 technology provider for other suppliers.

Delphi has recently developed the electronic control for the variable boost turbo on a truck application for Holset, the turbocharger manufacturer, for example.

Runkle says that other similar arrangements based on Delphi’s component strengths in particular areas are possible.

Runkle says that Delphi is putting effort in growing its share in the global diesel market, and is cautiously optimistic about the prospects for second-generation gasoline direct injection.

“The power is better and the fuel economy seems to provide some gain”, says Runkle.

“My feeling is that we will gain some significant acceptance”, but “it comes down to the whole value proposition”, says Runkle, once the costs of after-treatment to deal with the NOx issues and the cost of direct injection are factored in.

Delphi is also investing to stay in front of the curve on research and development on new CO2 and other advanced refrigerant systems, says Runkle.

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