Come 2010, your new car will be different. It may be a hybrid, running on a combination of gas and electricity. It will certainly be crammed with novel electronics gear. More surprising: It might also cost less than that 2000 coupe you just picked up at the lot. That is, if there still is a lot--or dealers, for that matter. In 10 years, you might just surf to Honda.com, tick off a few specs for the new Accord, and click the buy button. And, if this dream becomes reality, the car would then show up in your driveway in five days' time.
Less expensive cars, hassle-free Web transactions, and a much faster order fulfillment are some of the goals carmakers have set as they race to strip inefficiencies from the manufacturing process. Auto execs have talked about such developments for years. But as the Internet grows bigger and more robust, companies are finally starting to link all their diverse product development systems together. Web-based collaboration will soon pervade every step of auto manufacturing, from basic research and product design to parts procurement, assembly, and presentation in the showroom. Ideally, such collaboration will help auto makers chop months from the time it takes to create a new model, days from the time required to manufacture a car, and hundreds of dollars from the price tag.
Virtual design is at the heart of this process, and global auto makers are well-positioned to benefit from such a leap. The family buggy is the biggest, most expensive, and most complex consumer product ever to be mass-produced. A typical car is composed of more than 20,000 parts, provided by about 200 different suppliers--all of whom must deliver the parts to the factory "just in time."
None of this would be possible without significant computerization. And the auto industry has decades of experience with that. Since the 1970s, carmakers have been steadily adopting tools such as product development management (PDM) software and computer-aided design, manufacturing, and engineering systems--known, respectively, as CAD, CAM, and CAE. These tools have helped companies slash the time it takes to bring a new model to the market from around five years to about three. Final assembly used to take from 30 to 40 hours. Now it takes fewer than 20.
BARRIERS FALL. Hooking all these internal systems together via the Web is the next big wave. And it promises to push the envelope even further by speeding communication across the operation, beginning with the designer and ending with the customer. Industry watchers predict that the time to develop a new model can quickly be cut to a year or less. "The lack of a virtual web environment didn't allow simultaneous users or real-time interactivity," says Michael J. Kidder, director of marketing at Altair Engineering Inc. in Troy, Mich. "Today these are ceasing to be obstacles."
Indeed, producers of old-style, stand-alone manufacturing software are rushing to make their design and engineering programs run securely over the Web. And the auto makers are quickly forming strategic alliances with them. General Motors Corp. (GM), for example, recently inked a $13 million deal with Unigraphics Solutions Inc. (UGS); Ford (F) has teamed with Structural Dynamics Research (SDRC); and DaimlerChrysler (DCX) is partnering with France's Dassault Systmes (DASTY), which offers a program called CATIA, to develop computer-aided, 3D interactive applications. "I'd put Detroit's investment in Web-enabled systems at $1 billion or more per year over the next several years," predicts Michael Burkett, an e-business manufacturing analyst at AMR Research in Boston.
Once all the systems are connected, teams of engineers located around the world will be able to communicate by voice while viewing a part--or an entire car--on their computer screens. Each will be able to make changes that can be seen by their colleagues. These designs will be tested in virtual cars on virtual tracks. Engineers will evaluate simulated performance in various conditions, such as rain or snow, in 3D. Specifications for the part will be sent directly to the toolmaker, who will be part of the team.
By designing digitally, engineers hope that they may someday eliminate most of the expensive hard tools--clay prototypes, metal machining, wind tunnels, test tracks--that product development has required in the past. "An engineer can depress a virtual brake pedal in Stuttgart and others in Detroit or Tokyo can watch the calipers close to stop the car. These systems can manage thousands of design changes," says Scott F. Merlis, an analyst at Wasserstein Perella Securities in New York, who coined the term E2E (engineer to engineer) to describe the collaborative design process.
The World Car Project may be a harbinger for the auto industry. Last spring, three teams of automotive designers and engineers on three continents developed the European Roadster Challenge (EUROC) race car in just seven days. A team in Europe designed the chassis while a team in Japan designed the body, and a U.S.-based group created the power train.
Admittedly, the teams worked by selecting or modifying existing parts. But their feat established a benchmark in fast-turnaround automotive design. "No one truly starts from scratch in designing any large product," notes Wayne George, senior vice-president at PTC (formerly Parametric Technologies Corp.) in Waltham, Mass. His company markets a program called Windchill that enabled the developers to collaborate on the Internet in real time.
MANY LINKS. Another project on the cutting edge of Web collaboration is DaimlerChrysler's FastCar program. It is also one of the most ambitious efforts to reinvent Motown now under way. The company is linking not just design, engineering, and manufacturing but also quality control, finance, procurement and supply, and sales and marketing into one seamless system. Any decision will be passed immediately across the entire chain. "Right now information moves along from point to point, so everyone downstream is working with bad information," says Gary E. Dilts, senior vice-president of DaimlerChrysler's eConnect Platform.
Today, for example, if a designer specifies a new seat fabric, it may take weeks for the fabricmaker to learn of the change. In the meantime, the mill continues to churn out the old fabric. Then the supplier has to change over its looms, and more time will pass before seats covered in the new material show up on the assembly line.
When the FastCar project is completed over the next several years, some 4,000 internal and 5,000 external users will have access to the interactive, 3D "homepage" and all the data behind it. Dilts says the hypercommunications will yield a huge payoff. "This will allow 12 people to look at a decision at once, not one by one," he says. "It will take time and money out of the process of making automobiles."
BIG WINNER. Merlis of Wasserstein Perella couldn't agree more. He predicts that by going online, auto makers will cut their product development time in half and chop the cost of making a vehicle by an average of $900 to $1,300 per unit over the next five years. The overall savings to the global Big Three? Merlis pegs it at $18.5 billion by 2005. "The supply chain is suddenly becoming a value chain," he says. "Everyone, from the top tier to the third tier of suppliers will be tied directly into the design process."
But the biggest beneficiary of a more nimble Detroit may turn out to be the driver who purchases the new car. "The integration of the Internet will change how the auto industry interacts with its customers," says Zahed Siddique, an assistant professor of engineering at the University of Oklahoma.
That's because communication will flow upward from the marketplace as rapidly as it travels downstream to the production line. Large fleet owners, such as Hertz, Avis, or the military, can be brought directly into the design process. Production can be matched to demand. And customized models can be quickly delivered to dealers. "The biggest effect on the bottom line is when you create a new product that everyone wants, and you can get it to the market on time," says PTC's Wayne George.