It's rare these days to talk to anyone in the industry about systems integration and automaker-supplier relationships without a reference to program management slipping into the conversation. In fact you hear it so often it's tempting to think it's just another one of those buzzwords that infiltrate the industry lexicon every now and then.
By most accounts, however, program management (PM) is more than a buzzword. It's the way automotive components and systems will be developed from now on, picking up where simultaneous and robust engineering leave off.
The PM trend also is spawning a new management specialty, one that requires less engineering knowledge and more organization, communications and people skills.
"Program managers are like orchestra conductors," says Brett Healy, director of sales and marketing at Webasto Sunroofs Inc. "They aren't necessarily experts on any of the instruments, but know how to make beautiful music by bringing people together at the right time."
Automakers discovered PM in the nick of time themselves. In the late '70s and early '80s, they realized that their research and development, design, engineering, manufacturing and marketing types could no longer afford to work in vacuums. Global competition -- particularly from Japan -- caused the industry to look for faster ways to bring vehicles from concept to market.
They found their answer in the construction and aerospace industries, which had been practicing PM since the '50s. Ford Motor Co. "got the religion of project management" with Team Taurus in 1985, realizing that the hand-off or over-the-wall methods were taking longer than necessary, says Bill Moylan, director of training services and senior consultant at Plan Tech Inc., a consulting firm specializing in program management techniques. Later in the '80s Chrysler Corp. re-wrote the book with its platform teams, and General Motors Corp. further refined the text with its VLEs.
Mr. Healy says that suppliers were influential in the development of automaker teams. "Customers used to be very centralized, with one quality person, one manufacturing person and one purchasing person all to be dealt with individually," he recalls. "Suppliers had to bring these people together. Then customers started to generate their own orchestra leaders."
Suppliers are now in the market for maestros: In the last two or three years OEMs began placing more total system engineering and design responsibility on suppliers. They therefore needed to develop program management skills of their own to manage their suppliers and other Tier 1s contributing to the systems.
Developing a strong team structure encompassing quality, research, design, engineering, manufacturing and support functions is vital to the management of system programs. The ultimate goal of program managers is to knock down communications barriers, establish and maintain project directions, resolve problems efficiently, and meet rigid time schedules while meeting all performance and cost objectives.
"Program management on a global program is really getting much more difficult and complex," admits Harold R. Kutner, GM's vice president of worldwide purchasing. "The ability to engineer parts for sourcing in other parts of the world is a big challenge to our suppliers."
Timothy Sennett, director of program management at Inalfa Hollandia Sunroofs Inc., says attention to detail is very important when managing a complicated global system program. After performance, cost and quality parameters have been defined, "We have to figure out what currencies we'll be working with, how we pay our foreign suppliers and how they pay us," says Mr. Sennett. "We also have to decide how team meetings and design reviews will be conducted, either in-person or by teleconference or video conference."
He adds that language and time differences, mail delivery time, computer hardware and software, packaging requirements and freight and duty costs all are on the minds of program managers.
Chrysler Purchasing Vice President Thomas T. Stallkamp points to Becker Group International's management of the Prowler interior as a prime example. "Becker is managing literally everything that goes in the interior," he says. "But he's only making the door panels. UTA (United Technologies Automotive) is making the instrument panel, Lear is making the seats and C&A (Collins & Aikman) is making the carpet."
Becker's PM team includes the program manager and people responsible for design and engineering, tooling, manufacturing, advanced quality, purchasing, styling feasibility and interior coordination. The company uses an eight-phase program management system that includes project definition, product styling and concept selection, design and product development, design validation, production release, validation and readiness, and actual production.
Tier 1 suppliers who bid on systems integration contracts are banking on their ability to manage programs.
"In all our product arrays, we've got to bring some additional expertise," says Timothy D. Leuliette, president of ITT Automotive. "Program management is a real responsibility. It's a real skill set that is more than we ever did before."
He adds that an integrator's program management role is to define system design rules and quality and continuous improvement systems so that ITT's product and the input from the Tier 2 suppliers is consistent globally.
"What we've become are the gurus of the system and module business," says Mr. Leuliette. "Not because we think it's a neat deal, that's the competitive advantage. We're doing it because it's better than coming out and saying we've got a new caliper for you."
As a system integrator and program manager, Mr. Leuliette says it's ITT's responsibility to select the best components available for a system, even if it means using a competitor's product.
Webasto's Mr. Healy, one of the sunroof supplier's first program managers, says he thinks sunroofs are a natural fit for program management techniques. "It's a pretty complicated product, so you have to put a lot of things together to bring it home." He adds that the company has been practicing program management for four years. Webasto's PM teams include project, quality and manufacturing engineers and a sales account manager.
Program management is becoming a discipline unto itself, and many colleges and universities are now offering PM courses. The Upper Darby, PA-based Program Management Institute, founded in 1969, has experienced significant growth in the last several years. In 1984 the group didn't quite have 5,000 members. In 1993, membership reached 9,800, and at the end of last year the rolls hit 16,600. As of April, 288 of PMI's members are in the auto industry, up 22% since the end of 1995.
Mr. Stallkamp says he thinks program managers can someday replace the supplier sales function. "We're asking a lot of our supply base to look at program management rather than sales," he says. "The more you get into the way we're buying, the less you have to sell here. The more you need to manage here."
As the practice grows in the auto industry, a more clear picture of the ideal program manager is developing. "The best program managers I've ever met are those who have common sense and can communicate," says Mr. Healy. "Good program managers can bring a group of people with different focuses and interests and get them to focus on one goal. It's a difficult job, and there aren't many people who do it well."
Says IHI's Mr. Sennett: "The myth is that a program manager has to have an engineering degree or background to manage technical programs. What's critical is not just technical knowledge, but understanding the concepts involved. They need to be great communicators with good people skills, they need to be able to build teams. That characteristic is first and foremost."
Mr. Sennett adds that program managers should have significant experience with at least one of the disciplines that they'll be managing and good across-the-board knowledge of all processes involved.
To be truly effective, program managers need a lot of power and authority and need to be held accountable, says Mr. Healy. And, they need to actually manage the program, not just get the title because it's trendy.
"Part of the problems that all of us in the industry experience today might be what we would call not a close enough program management of the Tier 2 and 3 suppliers, relative to their performance on timing, technology, implementation and quality," says GM's Mr. Kutner.
Mr. Sennett agrees with the GM vice president, but adds that the industry has come a long way in implementing program management. "The inconsistent performance of programs is evidence that our processes aren't maturing. The industry is getting better, but not as good as we could be," he says. "We're still pretty erratic as an industry."
As program management continues to develop at the Tier 1 level, you can bet supplier personnel managers are looking for engineers with experience conducting orchestras.
