TRAVERSE CITY, MI – United we stand; divided we fall is more than a credo. It represents an attitudinal sea change and a new business model emerging in today's auto industry, says William L. Kozyra, president- Teves North America.
When his father was an independent supplier, the industry was stable; simpler; predictable; and knowable. Today, it is global; technology's impact can be disruptive; and the pace is relentless, Kozyra says.
Survival now entails “new ways of structuring our relationships, new ways of interacting with one another and new ways of solving business problems,” he says.
Kozyra talks about his new model for collaboration today at the 2005 Management Briefing Seminars here.
Bill Kozyra, president-Teves North America
The goal is a collective wisdom, derived from a network potentially of millions that can be tapped by participants for innovation and expertise that can be pulled through the supply chain.
The benefits: faster speed to market; the ability to assimilate new technologies into products; less bureaucracy; manufacturing flexibility and cost reductions – all culminating in enhanced customer satisfaction, improved margins and higher return on investment.
Kozyra advocates the model as a way to meet today's customer demands for safety, quality, reliability, value and infotainment. It also helps deal with new technologies such as complex but low-volume hybrids, active safety and the increasing use of electronics in today's vehicles.
A collaborative approach also would help the industry deal with fewer players due to consolidation and automotive newcomers, especially from China and India.
He goes so far as to say this kind of approach would have prevented some of the recent, high-profile bankruptcies in the supply community.
“What's evolving is a group of 'super suppliers' who are fast, smart, rich and global,” Kozyra says, including Continental, that are competing in a world where vehicle prices are decreasing and cost pressures are increasing.
From this turbulent period is emerging a business model based on “multi-enterprise collaboration,” he says.
Auto maker is pairing with auto maker and supplier with supplier to pursue common goals. Problem solving occurs, when the “right people are being brought together at the right time to crack new technologies and to resolve industry challenges,” he says.
It could even prove a panacea to strained relationships between suppliers and the Big Three, compared with what Kozyra sees as a more constructive relationship withMotor Corp.
Already numerous examples abound:
- (See related story: GM, DC Reach Hybrid Pact) Corp. and DaimlerChrysler AG are developing a hybrid-electric powertrain system for use in GM, and Mercedes brand vehicles beginning in 2007.
- GM, DC and the U.S. Dept. of Energy have a pact to develop fuel-cell vehicles over the next 15 years, and other partners are involved in evaluation and development of a hydrogen infrastructure.
- (See related story: GM, Ford Earmark Three Plants for New 6-Speed) Motor Co. and GM are investing $1 billion to engineer and build a jointly developed 6-speed automatic transmission for front- and all-wheel drive vehicles due to hit the market in 2006 and beyond.
- DC, Hyundai Motor Co. Ltd. and Mitsubishi Motors Corp. came together to engineer and build a family of 4-cyl. engines for use in each auto maker's vehicles. (See related story: Historic Engine Program Under Way)
- In the supply industry, tool-and-die consortia are forming to better meet global challenges, sharing best practices and researching collaborations with offshore companies, such as engineering firms in India.
- The Autosar alliance of OEMs and Tier 1 suppliers that is working to develop an open industry standard for automotive electrical architectures so software modules can communicate, is making progress and will pay dividends years from now, Kozyra says. (See related story: GM to Join Autosar)
- OEMs and suppliers are mixing it up as well, as is the case with DC's new Jeep plant in Toledo, OH, that is partnered with the Kuka Group, Durr Industries and Hyundai Mobis to own and operate portions of the assembly operation. (See related story: Jeep Toledo Plant on Track)
- Internal collaboration, such as Continental's involvement of its employees when it recently needed to change its pension program and implement a new shift model, with longer work days and blocks of time off.
Continental started down this collaborative path about five years ago, Kozyra says. Emboldened by its success, it is reaching out to others to follow suit.
So committed is the supplier to the concept, that its Systems Group is helping determine multi-enterprise collaborations in which to participate and developing strategies to integrate resources internally as well as externally.
The supplier is drafting a formal process for collaboration it calls its Industry Round Table Program. It chooses a challenge; identifies other organizations affected; hires a convener and assembles participants; creates a vision, mission and objectives; provides resources; establishes a structure, processes and ground rules; measures performance and progress; and, finally, shares the rewards.
“I believe the round table process will help us to bring organizations together to work collaboratively as one brain to solve critical industry challenges we cannot address on our own,” Kozyra says.
One proposal being shopped around is for a round table on active safety systems, he says, in a bid to speed their development and market penetration by adopting standard settings and testing.
Other topics the industry collaboratively can tackle are health care and the need for better education and skilled workers as the world becomes more dependent on technology, and its transfer to developing regions.
Kozyra says the Internet's ability to connect people around the world makes it possible to manage 10 round tables, if warranted.
“There is a lot of intelligence in this industry and the ability to share it is becoming easier and easier,” he says. There also is a growing perception it is okay to share, to reap economies of scale where it does not impede competitive advantage.
Kozyra anticipates support for the concept, based on the reaction of those approached to date.