Reinventing
the Wheel

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.

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.

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.

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.

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.

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.”