Table of Contents
Abstract
The Automotive Industry is one of the most dynamic and innovation heavy markets at present. Hence in order to keep up with the competition and capture the market automakers need to ensure the success of their projects, this makes Automotive project management a field of utmost importance. However it is only in recent years that this has been given the importance it deserves. This work is a critical review of the various phases of automotive project management as illustrated by Midler and Navarre.
Introduction
This paper will be an in depth critical review of “Project Management in the Automotive Industry” by Cristophe Midler and Christian Navarre. Their paper talks about how automotive project management has developed after World War II. It mentions how the Japanese made an impact on the Western Automotive Market and brought about the beginnings of an actual project manager. It mentions how it brought about lasting changes in corporate structures, the relationship amongst OEMs and their suppliers. It also discusses the importance of project management when dealing with a large number of differentiated products. They’ve discussed this four phases which start after the war. The review will be a discussion and will address how the paper has covered project functions during the different phases of project management in the Automotive Industry.
This work will include a brief summary of the paper being reviewed followed by a discussion of the data provided that explains the different phases which is then followed by a conclusion that brings together all the information provided and the data used. Note that several other academic material related to the topic have also been taken in consideration for this critical analysis.
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The Beginning of the Commercial Era
The period immediately after the saw no big difference between the strategies of American and European carmakers. Project management was never a major focus in their manufacturing and research endeavors. This period was characterized by a small number of models with minimal diversity which were meant to be long lasting. Major expenses were reduced by mass production. These cars were designed by so called project crafts which were focused on trade and only the top tier had any say on changes that were to be made. This was because the various departments had zero communication between them and reported to the top directly. The major issues were addressed only within the projects. This made the risk assessment easier and clearer. However, the level of performance was considerably low and product development took several years. The longer lead times only made it worse. It took many months to reach nominal production rates, much like the issue that Tesla is facing at the moment. A large number products failed to capture the market even though the competition was almost non-existing.
The Beginnings of Project Management
The period between the 70s and 80s saw a rise in competition which brought about the saturation of the automotive market. Project management now became more of a competitive advantage rather than a luxury. As modes vehicles more diverse and variety of vehicles started rolling out. Carmakers wanted to look toward a global market. The older so called project craft was proving ineffective if handling the task at hand. This lead to the beginning of actual project management in professional terms. This involved the overlooking and guiding a project until completion within a specific timeline, the various economic trends that could possibly affect the project were taken into account. However, there was no actual change to bring about a relationship between the various departments other than centralizing control. This gave the project management team close to no power to back their logic against the technical teams.
Though light weight project management did bring about a few improvements, the limits became evident soon enough. There was no one on the inside who has enough control and power to manage the possible risks and improve initial product quality. However, the Japanese Automakers were the ones that brought about an innovative change to the system. Their ideas could possibly flush out their entire competition as they could rapidly bring new products to market. This was the major reason for their success in North America. The Japanese had a wide variety of vehicles to offer which were way more recent and advanced than their American counterparts. Such a strategy can only thank efficient project management for its execution. It concentrated on reducing lead times and making the project teams more productive, this immediately impacted the quality of vehicles made. This lead to a new way of project management in the following years.
The Rise of the Project Director
By the end of the 80s the concept of concurrent engineering saw the light of day which lead to a massive rise in the implementation of project management. This resulted in the appointment of project directors. They were the epitome of the heavy weight project manager’s structure. The Japanese coined them as Susha. The Susha has control over the entire scope of a project. Chrysler was the first to bring this to the United States. Chrysler which was in state of bankruptcy due to a weak brand identity and the failure of their corporate structure needed a new management to redefine their product range. Their products were divided into five platforms: Small cars, Jeeps, Trucks and Minivans. Their workforce was split up and one person was designated to lead each team and cooperate with the other teams.
The last phase which had just one person pulling the strings and causing the chaos this brought about increased costs and a lack of accountability and solidarity. This hindered the success of the project. The new system however encouraged people to take responsibility as the project directors made their teams more focused on quality, cost and duration. The rules of the game had changed and it was more team based than ever. The first change was timing based. This involved the anticipation of problems by using early prototypes and check feasibility. The second change was on the communication between the various departments. The top tier was no longer the only playmaker. The project teams made sure that lower levels had a fair share to voice their concerns.
The final change was the spatial reorganization of work, the teams were put together in offices. Chrysler built their own development center which promoted communication among its workforce. The previously independent teams started working in unison to address the project’s issues. This made concurrent product development possible through simultaneous engineering. This new trend however was detrimental in terms of capitalization, hence the major problem was implementing them without causing a negative effect on trade. To counter this the OEMs set up expert clubs to promote technical skills under a general manager. Projects now became more than just something the OEMs worked on by themselves. Their suppliers were now more than mere contributors.
They were now a part of the development process itself. They became regular participants in progress meetings and provided input that best suits the overall development. Projects now became a more professional process, the major concern is maintain connections between the management and technical teams. The greater the strategic standing of an organization the heavier will be the function of the management teams. This phase led to the spectacular rise of Western carmakers, they had finally caught up with their Japanese counterparts. Lead times had been reduced significantly. However the 90s didn’t end so well. The end of the millennium saw that these strategies couldn’t quite keep up. The new product development strategy didn’t necessarily reap in the profits.
Project Management for the New Century
As the new century was closing in the competition became more innovation based with rapid development in technologies. The advantages these companies had was soon lost as competitors soon started using their best practices make it a tied game. To best their competition carmakers started making radical innovations which were accompanied with higher risk but the bigger concern was the fact the project directors were not good enough to handle such tasks. Radical innovation required that the companies address and control learning features of new technologies.
The heavyweight project management template worked well only when such projects had lower volumes of production. The Japanese found that their Susha system was dealing with too many departments and coordinating a variety of projects. This caused a huge strain as they only had 15 Sushas and it was impossible to supervise them without setting up bureaucratic system. The issue they faced was that they were more disconnected with the outside world than before. The plethora of projects led to the appointment of inexperienced Sushas who had narrow expertise.
The 90s saw a disruption of the system brought about by the system itself. To tackle this the initial project functions were sent to the lower levels. A better suited overall system was implemented. Partnerships were the main focus as only they had enough man power and resources to handle such huge tasks. The importance to just quality, time and cost was not enough for the new century. Only changes to the upstream could now make an impact. The research divisions now worked in close quarters with the management team. The result of this was not a car that could be put in market but rather a concept that could be tested. Intramanufacturer partnerships were the only way to handle the plethora of tasks at hand.
The combined strength of a joint strength to tackle the problem. However, this was accompanied with the risks of misunderstanding were just as high. The partners had to be treated equally and the opinions of both sides mattered. A global platform had to be brought about which would reduce R&D expenses while at the same time making it possible to use the platform with a wide range of vehicle segments. This significantly reduced the time for the product to reach the market. As the scope of projects became bigger, the boundaries between OEMs and suppliers became thinner. The auto industry had come so far that codevelopment was the only way forward. An open architectural platform was introduced to make more versatile yet cheaper parts.
Discussion: A Critique’s View
The paper covers the absence of project functions and the hierarchal management strategies of the post war phase pretty well. The fact that project management is concept that’s been pitched for 35 years but only been put to effective practice in the 2000s is proof of this [2]. But it fails the mention the fact that the majority of manufacturing and management during this period had already begun in Japan. Their ruins after the war led to set up a team of Sushas that would oversee their project functions. The concept of project craft followed by western carmakers was a practice they had followed through the wars which they then considered as best. While addressing the second phase, the paper introduces the concept of multi-project management which was then a behemoth of a task.
The paper mentions how the introduction of a project team was ineffective but does not cover the part where the Japanese had already started working on a sort of global architecture. They used similar parts on their variety of product ranges. This made management simple and brought down the risks [1]. The paper also discusses about best practices in industry which major competitors adapted by the end of the third phase. It also mentions how Chrysler lost their market standing despite adapting these. However the paper does not touch on the fact that the best practices for the company may not necessarily mean it is the best in the industry [2] .The reason was that the Japanese automakers could produce just as many cars in half the time [3].Their practices made it possible for them to introduce products into markets rapidly. The paper does not however touch on the best practices which were followed by German automakers who after the war had to put into work their best efforts to change how the world perceived them but rather only talks about French automakers.
The paper generalizes the European project functions as it does not cover the entirety of Europe. The paper misses out on pointing out that innovation in the future needs to be agile, that is the ability the respond to changes and create a turbulent business environment [4]. The reason why Chrysler and Renault were outdone by their competition was because even though they did invest in project function they could see their own plans. When competitors started busting out their big guns they could not respond with a proper counter attack.
Only when planning for inevitable changes can one truly be an efficient project manager. However the uncertainty is factor that can only be managed only as time progress, hence the higher risks that the companies are taking in phase IV is a necessary evil [3]. The paper fails to mentions the various tools that were used or that could have been used to successfully finish a project. How a PERT analysis could have done better than a simple Gantt chart and so on. For projects to be successful in the future it is necessary to have a contingency plan or rather an approach. Companies make the mistake of using their old plans in new projects [5]. However, projects are temporary entities unlike the company itself. While it is important to document and learn from previous experiences, every project is different and new technologies are introduced. The best practices from the old times will not always hold good.
Conclusion
The Automotive Industry is one of the most dynamic markets at the moment. The principle Kaizen that is continuous improvement is the only way to maintain successful projects and the same time capitalize on them. Customers do not just want new technology but they are more attracted towards reliability and serviceability of their cars. Companies should not just be focused on making what they think the customers want but should stop and look around to evaluate what the demographic needs. The rise of common vehicle is a sign that companies are learning that the customers have a wide range of needs and giving them the choice to choose from while reducing production costs and improving reliability is the right step forward.
References
- Cusumano, Michael A., and Nobeoka Kentarō. Thinking beyond Lean: How Multi-Project Management Is Transforming Product Development at Toyota and Other Companies. Free Press, 2010.
- Kerzner, Harold. Advanced Project Management: Best Practices on Implementation. John Wiley & Sons, Inc., 2004.
- Maylor, Harvey. “Beyond the Gantt Chart:” European Management Journal, vol. 19, no. 1, 2001, pp. 92–100., doi:10.1016/s0263-2373(00)00074-8.
- Highsmith, James A. Agile Project Management: Creating Innovative Products. Addison-Wesley, 2011.
- Shenhar, Aaron, and Dov Dvir. Reinventing Project Management: the Diamond Approach to Successful Growth and Innovation. Harvard Business School Press, 2007.
- Midler, Christophe, and Christian Navarre. “Project Management in the Automotive Industry.” The Wiley Guide to Managing Projects, 2007, pp. 1368–1388.,doi:10.1002/9780470172391.ch55.
