Martin Rhisiart Cardiff Business School

1. New Product Development in the Automotive Supply Chain: challenges for SMEs and regional support frameworks Martin Rhisiart Cardiff Business School

2. The Autochain Project • Transregional Innovation Project, funded by the Innovation Programme • Partners • Wales • Castilla y Leon • Aragon • Develop a pilot action for the improvement of the automotive supply chain • Project in Wales focused on NPD/NPI

3. Automotive sector trends Modularisation Supply chain restructuring Reduction in number of platforms Integration with client Globalisation Technological advances Consolidation

4. Platform Strategies of Japanese and selected European car makers Source: FT World Automotive Marketing

5. Automotive sector in Wales • No original equipment manufacturer (OEM) • Approximately 180 automotive companies • 30 Tier 1 companies • 150 Tier 2 & 3 companies • 25,000 jobs • Turnover of 3.2 billion euros

6. Difficulties for the sector in Wales • Most high level executive decisions not taken in Wales • No OEM • Corporate headquarters of most Tier 1 companies not in Wales • Competition from lower wage economies, esp. Central and Eastern Europe

7. Research results

8. Research results

9. NPI/NPD Problems for SMEs • Point of entry into the development process – “customers don’t give suppliers enough time” • IT and communication, especially electronic data interchange. Problems with compatibility of CAD systems • Toolmaking – lack of appropriate level of toolmaking locally

10. NPI/NPD Problems for SMEs Technological capacity: • Most innovative companies – and those that had high quality products – had invested heavily in technology • Lack of technological capacity in some companies (especially smaller companies), e.g rapid prototyping, mould flow analysis. • Technology is available (e.g in the Universities) – but has not been exploited to maximum effect

11. Good practice Learning from customers Learning best practice in NPD from OEM Strategic innovation Business of today <>Business of tomorrow

12. Support framework Regional Development Agency Tier 1 co Tier 2 SME Tier 2 SME Tier 2 SME Tier 3 SME Tier 3 SME Tier 3 SME Universities Automotive Forum

13. Implications for NPD support Technological needs • RDA’s best practice programmes & RTP concluded that automotive companies were ahead of the game in technology • Autochain project suggests that there is a need for supporting skills and application of new technology

14. Implications for NPD support Learning from other sectors • Automotive companies can learn good practice from other sectors: • Technology upgrading • Skills and training • Electronics procurement

15. Implications for NPD support Cluster approach • Density of companies in some areas could lend itself to a cluster approach, building support facilities alongside management best practice programmes

16. Implications for NPD support Strategic innovation • Companies need to be aware of strategic as well as incremental innovation. • Analysis of trends – economic, market, technological • Foresight studies

17. Implications for NPD support Smaller companies • Need to be innovative but problem of remoteness from OEMs and Tier 1 companies • Support framework should look at ways of assisting smaller companies – to become more engaged in the NPD process

18. Comparison of key support elements

19. Conclusions for support framework Skills The essential triangle Welsh Automotive Sector Automotive Forum Quality programmes Best practice programmes Technical Resources