Product Development Process Improvement

Many automotive suppliers with major design responsibilities continue to struggle with the complexities of the product development process. To succeed, companies need to embrace new policies and practices to optimize their development capabilities. The question on many suppliers' minds now is, 'where to target limited resources for system-level optimization of product development?
ACG's study, Best Practices in Product Development among Automotive Suppliers, provided an assessment framework for gauging and targeting an individual supplier's product development improvement efforts based on their unique competitive challenges. World-class product development is well understood in the fiercely competitive consumer electronics industry. Only since the late 1990's, however, have automotive suppliers been required to become competitive based on product development capabilities. It is the implementation and integration of the key elements of product development capabilities,identified by ACG, which separates the best-in-class from other firms. The following broad assessment framework, from a case of an automotive supplier doing major design work, aids targeting improvement actions for the greatest performance-based results.

Assessment of Product Development Competencies
in an Automotive Supplier Doing Major Design Work

Product Development
Chaotic Functionally
Driven or
      * * *            
Team Management
      * * *            
Tool Integration
        * * * +        
Continuous Product and
Process Improvement
      * * * +          
Development Process
Improvement Actions
    * * *              
Senior Management 
Focused Phase Reviews
        * * *          
          * * *        
Strategic Management
      * * *            
Technical Team Evaluation and Reward System         * * * +        
Performance Levels
* * *
Improvement Initiatives

The above assessment, for example,indicates that cross-generational strategic management, a key factor that drives performance, is still based on a functionally-driven orientation. For this supplier, designs are re-used only on an ad-hoc, customer specific basis.

Further integration of product management strategies across product platforms and product generations will have a tremendous impact on quality, cost, and timing performance outcomes. In addition, enhancing the early involvement of manufacturing, as well as system suppliers and tooling and equipment suppliers, will significantly boost product development performance.

Significant returns on their current investments in development tool integration will be more likely if product strategies are integrated across product platforms and product generations, and early involvement is improved internal and external to the automotive supplier.

Their existing improvement initiatives to continuous product and process improvement activities and technical team evaluation and reward systems will also impact product development performance. However, they are only addressing individual components of an overall product development system.

A system-level product development capability assessment is quite challenging. A variety of sources need to be approached for information. This includes interviews across all levels and all functions, mapping recently completed development projects, observing ongoing project teams and management meetings, evaluating supplier, partner, and OEM customer relationships, and analyzing development procedures and organizational structures.

An unbiased external assessment, sanctioned to be organization-wide, is necessary to obtain information most appropriate on which to base recommendations. This information will establish a baseline of your organization's current product development competencies, from which improvement and performance impacts can be measured.