the Wheel

Product engineering processes are undergoing profound change. Companies are having to manage ever greater levels of complexity and strategically rethink established development principles. A focus on systemic processes has already been applied to cars, enabling them to be developed and produced more efficiently and brought onto markets more rapidly. The basic principle is universal, however—and therefore applicable to other industries as well.


From carmaker to provider of comprehensive mobility strategies: electric mobility, autonomous driving, digitalization, and connectivity all require a transformation of the entire product creation process. In short, automobile manufacturers need to "reinvent the wheel.”Porsche Consulting/Thomas Kuhlenbeck

Major auto­mo­bile man­u­fac­tur­ers are under­go­ing what could be the great­est trans­for­ma­tion in their his­to­ry. Pre­vi­ous­ly viewed strict­ly as car­mak­ers and loved by their fans for the indi­vid­ual fea­tures of their prod­ucts, they are turn­ing into providers of com­pre­hen­sive mobil­i­ty strate­gies. New mar­kets are aris­ing around fields such as elec­tric mobil­i­ty, autonomous dri­ving, dig­i­tal­iza­tion, and con­nec­tiv­i­ty. Car­mak­ers are there­fore rethink­ing their entire prod­uct cre­ation process­es in unprece­dent­ed ways. Their aim is no less than to “rein­vent the wheel.”

For this tremen­dous trans­for­ma­tion to suc­ceed, a cul­tur­al trans­for­ma­tion is need­ed as well. Old silos have to be dis­man­tled and new ways of think­ing and work­ing intro­duced in far-sight­ed ways. Mak­ing cars is no longer suf­fi­cient on its own. Instead, devel­op­ers have to inte­grate entire mobile ecosystems—including new charg­ing tech­nolo­gies for elec­tric vehi­cles, the inter­play of dif­fer­ent mobile devices, and cut­ting-edge, smart cus­tomer services.

Point of no return

What customers want is for their cars to be thoroughly connected with their surroundings.

Dr. Steffen WirthDr. Steffen Wirth
Associate Partner at
Porsche Consulting

This new approach is irre­versible, because the whole point is to mas­ter the increas­ing lev­els of tech­no­log­i­cal com­plex­i­ty. A fur­ther chal­lenge is posed by the need to con­nect prod­ucts through­out the entire ecosys­tem. “What cus­tomers want is for their cars to be thor­ough­ly con­nect­ed with their sur­round­ings—A wish that all busi­ness units of a com­pa­ny now have to meet”, says Dr. Stef­fen Wirth, Asso­ciate Part­ner at Porsche Consulting.

Wirth gives an exam­ple of the new mobile world: “Soon I’ll be able to enter a route on my smart­phone and the car will respond when I get in, take on the des­ti­na­tion, show me rel­e­vant charg­ing sta­tions along the way, and book a room at a hotel of my choice.” Here is the chal­lenge: “The oppor­tu­ni­ties emerg­ing from con­nec­tiv­i­ty also hap­pen to be one of the biggest future dri­vers of com­plex­i­ty in the world of mobil­i­ty. Tra­di­tion­al meth­ods of devel­op­ment can no longer address them in effi­cient ways.”

Cars of the future will need to have third-party inter­faces. New and intel­li­gent com­bi­na­tions of prod­ucts and ser­vices urgent­ly require close lev­els of inter­con­nec­tion, for exam­ple, to let a car auto­mat­i­cal­ly book a tire change appoint­ment with a deal­er in the mid­dle of a vaca­tion trip. Dri­vers expect all-in-one con­nect­ed solu­tions that can be inte­grat­ed seam­less­ly into their every­day rou­tines. But com­plex­i­ty is not the only fac­tor on the rise for carmakers—there’s the pres­sure for prof­itabil­i­ty as well. “Com­pa­nies have to be able to count on their devel­op­ment teams’ gen­er­al abil­i­ty to per­form, and above all to shape the trans­for­ma­tion itself as effi­cient­ly and flex­i­bly as pos­si­ble,” says Andreas Schnele, Part­ner at Porsche Consulting.

The Power of the 4 Ps

Efficiency doesn’t increase on its own but instead is the product of a sophisticated strategy that develops specialized expertise, improves productivity, optimizes processes, and builds powerful collaborative networks. Carmakers have recognized this and are already using the 4P strategy to achieve successful results. Porsche Consulting / Clara Philippzig
“People, partners, performance, and process“ is the approach Porsche Consulting is using to support carmakers in everything from switching to zero-emission drive systems and new technologies to guiding the transformation in development alliances and collaborative ventures. The change in products and development processes is also taking place in other sectors, which means the 4P approach is universally applicable. Porsche Consulting is already employing it on cruise ships, with agricultural machines, and in the construction industry.

Enhancing expertise throughout the ecosystem

Com­pa­nies there­fore have to take a com­pre­hen­sive new approach. They need to involve those peo­ple who are respon­si­ble for imple­men­ta­tion. They need part­ners who bring addi­tion­al areas of exper­tise. They need to increase their lev­els of per­for­mance. Last but not least, they need to align their process­es to serve the sys­tem. “We base our strate­gic goals in research and devel­op­ment (R&D) on pre­cise­ly these four Ps,” says Schnele, “in order to apply the right focus togeth­er with the client.”

These diverse require­ments can no longer be met by a region­al, autar­kic R&D site alone. Instead, com­pa­nies are build­ing part­ner­ship networks—with start-ups, estab­lished com­pa­nies, and universities—in tar­get­ed ways. Their part­ner­ships help to fill gaps in exper­tise, lower devel­op­ment costs, and meet indi­vid­ual cus­tomer wish­es with mar­ket proximity.

“It’s the strate­gic align­ment of exact­ly these net­works with the right sites and part­ners that pro­vides the key lever­age to mas­ter tomorrow’s close­ly con­nect­ed world of mobil­i­ty,” says Wirth.

Transparency is the basis for progress

An overall product architecture lays the foundation on which we can evaluate, plan, and control budgets and resources with high levels of precision.

Sebastian BernerSebastian Berner
Associate Partner at
Porsche Consulting

When part­ner net­works are set up, poten­tial­ly weak links in the chain quick­ly become appar­ent. Man­u­fac­tur­ers there­fore have to opti­mize per­for­mance equal­ly across all of their stake­hold­ers. A struc­tured means of cost trans­paren­cy is cru­cial here, for oth­er­wise there’s essen­tial­ly no way to eval­u­ate the new net­work approach. It shows the best prac­tices in high relief, which in turn allow the respec­tive part­ners to learn from each other.

“An over­all prod­uct archi­tec­ture and the asso­ci­at­ed skills lay the foun­da­tion on which we can eval­u­ate, plan, and con­trol bud­gets and resources with high lev­els of pre­ci­sion,” says Sebas­t­ian Bern­er, Asso­ciate Part­ner at Porsche Con­sult­ing, with ref­er­ence to recent suc­cess­es. For exam­ple, lim­i­ta­tions in cer­tain areas can be off­set by poten­tial resources in oth­ers, enabling capac­i­ties to be deployed in the best pos­si­ble ways.

Once the strate­gic goals are clear, the req­ui­site skills can be iden­ti­fied at an early stage in keep­ing with the estab­lished logic, for exam­ple in devel­op­ing AI-based sys­tems like autonomous dri­ving. Teams can then be fur­ther devel­oped and sup­ple­ment­ed in tar­get­ed ways.

Systematic approach to development

When ana­lyz­ing means of con­trol, it is impor­tant to iden­ti­fy suit­able types of lever­age. These are gen­er­al­ly found in opti­mized process­es and col­lab­o­ra­tive mod­els. Accord­ing to experts at Porsche Con­sult­ing, sys­tems engi­neer­ing is there­fore one of the most promis­ing prospects for research and devel­op­ment in the auto­mo­tive indus­try. This inter­dis­ci­pli­nary approach can be used to effi­cient­ly devel­op and pro­duce com­plex tech­ni­cal systems.

Sys­tems engi­neer­ing is more than a mat­ter of the process­es them­selves. It takes a sys­tems-ori­ent­ed approach to the archi­tec­ture of com­plex prod­ucts. It views the ever clos­er inter­play of hard­ware, soft­ware, and mechan­ics in com­bi­na­tion. Sys­tems archi­tec­ture lets car­mak­ers break down all the log­i­cal and func­tion­al inter­re­la­tion­ships and there­by make the com­plex­i­ty more manageable.

But what exact­ly is chang­ing in process­es? In the case of cars, require­ments are linked along a branch­ing struc­ture from the broad­est to the finest—making inter­con­nec­tions imme­di­ate­ly appar­ent. This is a huge ben­e­fit that pre­vents sur­pris­es from aris­ing in the engi­neer­ing process as a result of con­flicts with­in the require­ment man­age­ment system.

And if man­u­fac­tur­ers can suc­ces­sive­ly inte­grate com­po­nents “bot­tom up” into sys­tems and test them on a sin­gu­lar basis before plac­ing them into the vehi­cle as a whole, they can elim­i­nate defects more effi­cient­ly and avoid “nee­dle in a haystack” search­es. In the future, devel­op­ers will be able to find errors more rapid­ly or iden­ti­fy the sub­sys­tems that caused them, enabling them to engi­neer their prod­ucts with­out defects and on time.

Organizational structures are becoming more adaptable

Once a company’s silos are dismantled, the basis is laid for a new customer- and systems-oriented organizational structure.

Andreas SchneleAndreas Schnele
Partner at
Porsche Consulting

Many com­pa­nies today are still based on con­ven­tion­al, com­po­nent-ori­ent­ed orga­ni­za­tion­al struc­tures, but here too the pri­or­i­ty is shift­ing to a sys­tems approach. “Once a company’s silos are dis­man­tled, the basis is laid for a new cus­tomer- and sys­tems-ori­ent­ed orga­ni­za­tion­al struc­ture,” notes Schnele. New roles such as sys­tems engi­neer, which take an inte­grat­ed sys­tems approach for grant­ed, will become core sources of exper­tise in the years to come.

As glob­al part­ner net­works con­tin­ue to grow, they are also chang­ing the prac­tices of knowl­edge work­ers in sig­nif­i­cant ways. An exper­tise man­age­ment sys­tem has to ensure that knowl­edge is trans­par­ent and acces­si­ble through­out the entire net­work. Dr. Wirth is con­vinced that “by tak­ing a sys­tems approach and fos­ter­ing agili­ty, devel­op­ment orga­ni­za­tions will rise to a com­plete­ly new level in their abil­i­ty to adapt to chang­ing mar­ket con­di­tions and new trends.”

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