We’ve been talking about accelerating New Product Introduction (NPI) in the automotive industry for years. But if you think the trend has reached its limit, you might want to think again.
A recent article in Automotive News says the speed of NPI is still accelerating, and will keep doing so for the foreseeable future. In other words, manufacturers that are having trouble keeping up with today’s pace are likely to face an even bumpier road ahead.
How Fast? It’s Complicated.
According to the article, Nissan, which has been launching some new models in just 12 weeks, is now aiming for 6-week product launches! Further, manufacturers are not only bringing cars to market faster, but they’re doing it in a more complex environment. The number of launches is increasing, more models and variations are being introduced and production continues to expand across more regions and supply chains.
As another example, German manufacturers plan to increase the number of products they launch in North America. And virtually every auto maker and supplier is looking for ways to expand its manufacturing footprint.
By itself, either one of these trends—accelerated launches or expanding supply chain complexity—would pose a serious challenge. Put them together, and you are looking at a major hurdle that manufacturers must face in order to stay competitive.
What Will it Take?
There’s no doubt major investments will be needed from auto makers and their suppliers. An executive at Toyota talks about creating “more nimble processes that can be moved and modified much faster than ever before.” Another executive stresses the need for greater standardization so factory tools won’t have to change every time you have a new model.
I think both execs are right: Nimbleness is a requirement in order to retool factory floors in short time frames and reasonable costs, and standardization is essential so that widespread product launches can be managed.
The good news is that the technologies for enabling these goals exist today. Enterprise MOM platforms are increasingly being used to provide centralized yet nimble creation and deployment of processes. As digital factories evolve, collaboration is increasing across product design, production planning and process engineering. This trend both supports smoother launches and increases the ability to be nimble and responsive.
It’s worth expanding on the idea of standardization in this context. The executive quoted above was likely talking about standardizing product components and processes across car models, resulting in less complexity to manage.
This is a well-known strategy in automotive manufacturing. But it’s also true that standardization is important in the underlying IT systems that support manufacturing—and for the same reasons. Standardized manufacturing platforms make it easier to change and deploy new processes, regardless of the plant or region involved. Manufacturers with enterprise ERP, design, logistics and production platforms are much better positioned to handle the pressures of today’s fast-paced automotive industry.
The Time to Act is Now
The bottom line is that companies still using legacy, disparate systems across their facilities will be increasingly challenged to continue their reliance on these systems – especially if they expect to remain competitive. The digital factory is coming. It’s being driven by, and is helping to drive, faster and more nimble product launches. So far, the results are promising.
Just like NASCAR drivers heading for the finish line, car manufacturers are in a race to get to market faster with better vehicles. But unlike NASCAR, there is no finish line in the automotive industry. As soon as you get to market with the latest models, it’s time to figure out how to get there with the next models—in less time, few costs and greater quality than ever before. Hang on. It’s going to be a faster and wilder ride!
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