April 2003 | V Sumantran

Rebuilding success stories

"With constraint capital, investment and resources, we have the ambition to grow products into market segments, market regions and build the basis of our future competitiveness in the auto industry," says Dr Sumantran, executive director (passenger car business unit) of Tata Engineering

Dr V. Sumantran
The acceleration of product development has been recognised as a key initiative across industry segments. The phenomenon has been well documented through a range of sectors, particularly those engaged in consumer products. For the auto industry, the challenge comes at a time when many regulations have been tightened. This has only served to increase the magnitude of the task confronting the industry as it seeks transform itself. There is no doubt that, as an industry, the auto sector has risen to this challenge. However, the degree of success that any organisation achieves in this transformation seems to define its viability for the future.

Market perspective
One may start with the hypothesis that the communication of information and ideas is now faster than ever before. As a result, personal opinion, tastes and values seem more vulnerable to rapid change than at any other time in history. The toy industry faces this situation every year. The most popular toys this Christmas are very likely passé by the next season. Products are less capable of holding the attention of the consumer for any length of time and the novelty factor seems to play a larger role in product choice and selection.

Reacting to this trend, auto makers are increasingly seeking to find that elusive combination of attributes that will create the next success story. Arguably, the times have never been better for a consumer. The prospective buyer today can choose from an array of products whose diversity has seldom been matched in the century that automobiles have been in existence. Where one saw distinct vehicle configurations 30 years ago (sedans, station wagons, vans and pickups), today the product landscape is smeared with all sorts of combinations (hybrids combining the virtues of several categories, for example, crossovers, derived from sports utility vehicles, station wagons and vans).

At the same time, the search for novelty offers a limited window of opportunity and, therefore, product lifecycles are reducing rapidly. To auto makers the new environment demands faster replacement of products, the need to have a wider range of product offerings, and increased technology and features / content that address not only consumer expectations but also regulations in various parts of the world. These multiple goals impose a huge burden in the form of increased development cost and investment. At the same time, with market prices being under severe pressure, these costs may not be passed on to the market. Therefore, auto makers have been compelled to significantly reduce their cost of product development and, at the same time, find very efficient uses of investment to keep capital needs in check.

These efforts have resulted in a lot of credible progress in the past decade with reference to reducing the time taken for vehicle development. At the start of the 1990s, auto makers required 30 to 45 months to execute a full development cycle, depending on the complexity of the product. Today, it is not uncommon for the cycle to be completed in 18 to 24 months.

This speedup in product development has affected auto makers positively, offering them some badly needed benefits. Investments in a vehicle programme start generating returns sooner. For a programme shortened from 45 months to 24 months, this means that amortisation of capital starts almost 21 months sooner. Besides, the constrained capacity, human resources, development resources, etc are now better able to cope with the increased number of vehicle programmes. Third, the focus on making these processes efficient has had the benefit of increasing process focus in all organisations.

Platforms and their value
Fundamentally, what one chooses as the starting point of a programme defines, to a great degree, how much work needs to be done to execute that programme. Most auto makers have a range of products and systems. When the new programme carries over many of these systems, a significant amount of workload and cost is reduced from the new programme.

When one considers that the average vehicle uses over 10,000 parts and 300 systems, each requiring design, development, validation and manufacture, it seems obvious that the more one uses of what already exists, the sooner one can complete the new vehicle and the less it will cost. In most cases, the constraint to carry over arises from new regulations, standards and consumer expectations. However, it may be argued that any process that maximises the use of carry over, while meeting all the new demands and appeal, contributes to overall cost efficiency.

Clearly, the most effective solutions call for directly taking over some of the existent systems or sub-systems in the new vehicle. In many cases, regulations do not change often, and, when these systems are not directly 'seen' by the user, carry over makes a lot of sense. 

In some cases, it may not be feasible to carry over the specific component itself. However, in these cases, if the design philosophy or the manufacturing philosophy is carried over intact it contributes significantly to minimising risk in the process. Many organisations have well-developed philosophies for the design and manufacture of door systems or engine-mount systems. Even when a specific carry over is not practical, the carry over of the design and manufacturing philosophy still generates a number of benefits.

Platform concepts
This scenario has led the auto industry to exploit the concept of platform engineering. The concept is best understood when referring to the example from Volkswagen. Today the Volkswagen ‘Golf’ platform [see Exhibit 1] is widely recognised as one of the most versatile platforms, giving rise to a range of over 14 distinct models used by four separate brands within the Volkswagen group, namely Audi, Seat, Skoda and VW.

What is fundamental to the concept of platform engineering is that these 14 models share many common components under this skin. These components include big investment components such as floor pan, firewall, power-trains, power-train mounts and suspension.

And, yet, sharing these critical and expensive components, one is still able to create a distinct and diverse range of products that give rise to everything from a small open roadster (Audi TTS) to high-performance coupes to sedans, station wagons, hatchbacks and multi-purpose vehicles. With well-controlled investments, this has allowed Volkswagen to reach a very large marketplace in terms of segments and brands. As a result, this platform is produced in excess of 1.7 million units annually.

Tata Engineering uses the same concept [see Exhibit 2]. The robust 207 platform serves as the basis for a number of vehicles like the Tatamobile, the Sierra, the Estate, the Sumo, the Safari and the 207 DI.

The car platform will now see greater diversity. This is already happening with the Indigo joining the Indica from the same manufacturing system. For this platform (X1), care has been taken to ensure sufficient differentiation between the Indigo and the Indica [see Exhibit 3].

The Indigo uses the exclusive sophisticated three-link independent rear suspension to provide better ride and handling characteristics, a longer wheelbase (by 50mm) over the Indica and new rear seats to improve rear cabin space and comfort.

Even the engines of the Indigo are different from those of the Indica. The Indigo’s diesel is turbo-charged and the petrol used has higher power (85 compared to 75) over the Indica. These changes make the Indigo a more competent player in the premium ‘C’ segment.

At the same time, because of the sharing of the platform and the manufacturing systems, the Indica and the Indigo are produced on the same assembly line. This step allows Tata Engineering to use its assets more efficiently and create the Indigo at lower cost than would have been possible had it been a completely independent vehicle. Doubtless, further platform extensions can be anticipated in the future.

Closure
This philosophy is extremely important for Tata Engineering. With constraint capital, investment and resources, we have the ambition to grow products into market segments, market regions and build the basis of our future competitiveness in the auto industry.

E Pluribus Unum is the motto of the US. It means that out of many (people), is created ‘one’. For our purposes, this platform concept can be reversed to read E Unum Pluribus or "out of one, many"!

* Dr Sumantran is the executive director (passenger car business unit) of Tata Engineering.