Only major culture change will drive sector onwards

The biggest automotive suppliers need to become better systems integrators to continue to meet the demands of car makers.

To do this while saving costs, a culture change is needed to bring engineering and purchasing functions closer together. This was the message from consultant Solving International at a conference on ‘The Automotive Supplier in the Digital Age’ in London this week.

Solving, whose biggest presence is in mainland Europe and Scandinavia, said that the trend of big car makers to push more responsibility for designing components and systems on to suppliers was set to continue, presenting them with a dilemma. ‘What are companies supposed to do? They are asked to take on more design responsibility for more modules at the same time as financing innovation and cutting costs,’ said Solving vice-president John Saladino.

He added there was little opportunity to cut costs in the process of simply supplying parts in the traditional way. Designing whole systems offered greater opportunities for optimisation. But, he said, ‘to do it properly you need integration at a high level’.Solving’s solution is a combination of systems engineering and what it calls ‘reverse systems engineering’.

Reverse systems engineering is a second, complementary phase of the design process, to seek out suppliers whose existing components and technology come close to meeting the requirements. If the design can be modified slightly to incorporate the existing products it can be made more cost-effective.

However this requires effective collaboration from everyone involved down the supply chain. It needs a greater integration of the purchasing function earlier in the programme, said Saladino, as well as a database of the capabilities of lower-tier suppliers.

Though this sounds straightforward there are problems. ‘The role of purchasing departments is changing: they will have a higher technical content and buyers will be involved earlier in the project,’ said Saladino. ‘Some buyers don’t have the right skills to involve suppliers effectively.’ This also raises potential problems of company culture, in which engineering and purchasing functions are not used to talking to each other.

However, such an approach was successfully used by automotive component supplier Visteon when it wanted to develop a 42V electrical system. Lacking systems integration capabilities, the firm appointed Solving to develop a demonstration system for the 1999 Frankfurt Motor Show, winning orders from two major car makers.