Table of Contents
Abstract
A critique of project management in the automotive industry is offered in the paper below. It is bolstered by case studies and examples of real-life project management setups in the automotive industry, with a rumination of innovation and platform approach challenges in particular. Agile and lean methodologies are dwelt upon to examine if they offer a new perspective.
Introduction
The organization of this paper will offer a critical review of the core text, which is “Project Management in the Automotive Industry (Midler and Navarre.), followed by a look at the near future of project management and the challenges inherent in it for the automotive industry, as well as a possible solution to some of those challenges encapsulated in a few ideas offered by me.
Review – Project Management in the Automotive Industry
Midler and Navarre offer a succinct historical perspective of the evolving nature of the automotive industry’s relationship with project management, and the mutually symbiotic relationship between the two, where while the industry updated itself periodically with regards to techniques of project management owing to novel challenges; the world of project management also learned much from the automotive industry and was changed by its implementation within the automotive context.
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I found the paper deeply informative and relevant – however the textbook nature of the layout meant that nuance and necessary expansion of concepts were sometimes lost, owing to the width of the subject covered.
Navarre and Midler traced the evolution of project management in the auto industry. The first stage implied no differentiation between project strategies in north America and Europe, the second was accompanied by saturation of markets, the introduction of Japanese carmakers in North America, and explosive increase in the number of projects. The third stage introduced project management for new vehicles embedded in the heart of corporate strategy, and the fourth was accompanied by a second wave of reorganization in the face of new alliances and globalization. There are a couple of points I would like to touch upon here. The second phase was marked by an increase in the number of projects was also accompanied by the need to reinvent the wheels in which said projects had to be managed.
The nuance is added by the cultural shift in project management introduced by the Japanese carmakers. This additional complexity cannot be solely attributed to increased competition, but rather to the nature of such competition. Similarly, I believe the third stage also requires a little more explanation. The goal of developing quickly at lower cost to greater number of products at high quality must always have been the goal, yet something changed in the 80s and early 90s. Could the answer lie in evolving macro-economic conditions as well? On the whole, however, these questions are perhaps not in the purview of the chapter mentioned.
The first phase was marked by undifferentiated product strategies. It is interesting to place this in the general post-scientific management era. The authors’ claim of universality in management are supported by the idea that there is an objectively best way to manage that exists. This is supported by examples such as Luther Gulick attempting to transfer internal organizational ideas from corporate origins to the public sector as well. The second phase introduces us to the term “Lightweight project manager”, while talking about the beginnings of a professionalization of project management.
This is a standout term to me, which I believe is still relevant in particular companies and industries, along with a heavy project manager that the chapter later introduces, as we will see case studies discuss project teams and managers that do not have the political weight or expertise needed to defend their strategies. This phase also introduces Japanese producers whose success the authors attribute to highly effective project management methods. While this is very true, I would argue that larger domestic economic policy perhaps also had something to do with it, particularly in the case of the Asian tiger countries, while the government handpicked winners and molded corporate strategy to a large extent.
Chrysler noticed the inability of vertical functional groups to cooperate and how they were incompatible with innovation. To me, this is very important, and I would add that along with innovation, the balancing of testing of audacious product policies in real life situations and risk management were also incompatible with vertical functional groups. I would also say that ownership and responsibility that are sometimes lost with this sort of hierarchy are correlated with the spirit of innovation and out-of-the-box thinking. This led to project management promoting dialog at the bottom in decentralized work groups and leading to colocation and increased communication in the organization. I would be interested in the level of formality that such interdepartmental communication held at this stage.
The fourth phase led to a relapse because the competitive benefit of efficient project systems were running out. This can be related to the concept of marginal gain, where as you move up the curve, the gains from marginal efficiency peter out. The innovation policies then take center stage in both engineering and styling. So far the project management methodologies had a glaring gap in that they did not address cross-functional and cross-product projects to coordinate learning on radical innovative features. I wonder if part of this can be added to the “deadweight” generated by the hierarchy of this system that brings with itself multiple middle management issues that were so far not addressed. However along with increased upstream exploration of vehicle projects, the risks have also increased. To the risks included in the text, I would add one more, one that has to do with moving beyond the stage of exploration and innovation, turning this into a viable product is another costly uncertain outcome of these ideas.
Some of my key takeaways from this article had to do with the ranges defined near the end of the article, namely how carmakers in North America are close together in terms of measured quality, which does not preclude the wide variations in quality as perceived by the consumer. There is an urgent need to build on this concept of perception and behavioral responses to standardize practices in the automotive industry. I will explore this further as I move on to the near future of the industry.
A Prediction of the Next 5-10 Years of the Automotive Industry
One of the key concerns for the industry in upcoming years, along with the ones listed in the chapter has to do with project risk management. In this industry, the time to develop and industrialize new vehicles is necessarily decreasing in order for manufacturers to be competitive. This reduces the time necessary to detect possible errors and reaction time (Lamas) . According to a case study of a Spanish Business Unit of an automotive multinational company, one of the key factors contributing to risk management is how different phases of the process do not include a shared coherent definition of risk categories where coordinating shared meaning between suppliers and companies becomes an immense task.
A concept that was touched on in some detail by Midler and Navarre has to do with process planning. The process planner involves the interface between design and development and production department, where they manage the projects in terms of the technical side until it can be implemented in a series production. This position will become increasingly tenuous in the coming years when such differentiation must necessarily become complicated (Margineanu, Prostean and Serban). An idea that would help deal with this transition is that the implementation teams in series production should be involved in the very beginning. The process planner here is related to both the supplier of equipment and supplies them with all the topical details necessary to build equipment and devices from the very beginning, eliminating some of the ambiguity between stakeholders as mentioned above.
A comparative analysis of innovation life-cycle management in the automotive industry adds other important dimensions to the study (Beaume, Maniak and Midler). The introduction of the platform approach as introduced by Midler and Navarre, innovation management does not hold the traditional definition for automotive terms. They do not have to deal with necessarily introducing radically different products but streamlining innovation within the regular pipeline of platforms. They must, therefore, increase the reliability and profitability of innovations which are usually developed during R&D and maintain the ability to produce more vehicles than before through constraints of cost and time. This leads to changes in design processes.
For instance, heavyweight project management with its problems manifesting as the fat design issue, led to companies implementing a sharing of components and subsystems through global path sourcing, leading to the pre-project phase becoming bloated. The pre-project phase must define the product, work at risk elimination, and at reducing the problems that would be faced during the development phase. With the platform strategy, the gap among automotive OEMs has been narrowing. I would argue that this requires a change in the way knowledge is viewed during the pre-production phase. Knowledge creation must be oriented towards real-life application in defined timeframes. Therefore research does not lead to development, but development and knowledge must rely on each other throughout the life cycle of the product. At the same time learning activities will start to differ within each vehicle development process and contextualization of this is a must.
However innovative features cannot be asked for upfront validation because that would lead to routine product development. Technical learning and traditional quality indicators will be incomplete if not accompanied by a synergy between engineering, customer needs, and the financial side of the product. A product’s project strategy according to Beaume, Maniak, and Midler, must prioritize innovations for their financial value in the short term, as well as the long-term where it affects brand values and larger technology policies.
In summary, I believe the next 5 to 10 years will feature the integration of innovation at every step of the life cycle of the product, and the necessity for actionable inputs from the technical side as well as the R&D divisions which must go beyond the pre-development phase, particularly with factors like increased software updates; some of the risks that we have discussed here, including those of perception, can be seen now in cases like Tesla, where turning innovation into viable products is problematic. Similarly the platform problem gets more complicated with the arrival of new types of customers and brand loyalties defined in ways that were previously unknown. How the industry can turn this into an opportunity remains to be seen. Additionally, I would also like to point out that the necessity for alliances between suppliers and manufacturers, as well as multifunctional teams within the OEM, goes beyond the need for more communication and even the simplistic cultural differences argument. These alliances need shared goals and values in order to be stable. I hope to offer a framework within which this can thrive.
Another key sector that the authors did not necessarily explore, was the variation between the Asian market and manufacturers. Certain important real-world insights were studies by (Iamratanakul), which showed that the standardization and platform approach, which was becoming the norm in North American markets, was being constrained by project managers in Asian manufacturing environments. Business sponsors also played a big part in subverting initial project goals and external suppliers’ involvement skewed project management, especially in large scale projects. In these cases, project management tools are not utilized and project management teams have to work around each other. A number of project management processes are then performed in an informal manner in this context. Various shoot-off plans have to be created to manage dependency in this case. For any project management methodology to be successful, it must be studied, including these real-life constructions to be meaningful.
From this articulation of challenges and necessities for the field, I will select two – capacity for innovation and the problematic hierarchy encapsulated in the second and third stage to highlight my ideas that might help answer them.
My Ideas for the Field
I argue that insights from the fields of lean and agile project management will prove extremely helpful for the automotive industry. Lean project management is based around the principle of delivering more value with the least amount of waste possible (Senthilkumar). One of its key methods involves standardization analogous to the platform approach in the automotive industry. Innovation is highly encouraged in complex environments. An experimental analysis of the differences between different project management processes and conventional processes reveal that a significant difference in terms of project delivery time, hence an innovative lean management technique might have a lot to offer to the field in the near future. Similarly, agile project management methodologies – borne from the agile software development movement – have not necessarily been fully explored in the automotive industry.
Agile methodologies include active user involvement in the project, an empowered interdisciplinary team, iterative process with fixed timescales, incremental releases, and continuous testing (Hilt). This methodology can help manage complexity while increasing efficiency, particularly in conditions where the outcomes and requirements are not completely defined – a growing condition of the automotive industry. According to case studies where agile methodologies were applied to different parts of the process, the fact that sprint meetings, a regular part of the methodology, required a definition of done for every task helps create mutual shared meanings for various stakeholders involved. Short iterations not only provide a feeling of productivity, but also help manage risk. I believe agile approaches can be applied from the early development stage, and must be tailored to context in order to find success in the automotive industry. They can help us remove communication barriers over OEM and supply interactions, inefficiency in prioritization, and help manage changing requirements.
Summary/Conclusions
In summary, I believe the next few years bring immense change with the introduction of new technology, evolving definitions of brands and loyalties, expanding customer profiles, the increase in software involved, et cetera. How the industry chooses to respond to this and what ends are being a threat or a new opportunity remains to be seen.
Works Cited
- Midler, Christophe and Christian Navarre. ‘Project management in the automotive industry.’ The Wiley Guide to Managing Projects. 2004. 1368-1388.
- Lamas, Martínez, et al. ”Project Risk Management in Automotive Industry. A Case Study.’.’ 6th International Conference on Industrial Engineering and Industrial Management. 2012.
- Margineanu, Laurentiu, Gabriela Prostean and Popa Serban. ‘Conceptual model of management in automotive projects.’ Procedia-Social and Behavioral Sciences 197 (2015): 1399-1402.
- Beaume, Romain, Remi Maniak and Christophe Midler. ‘Crossing innovation and product projects management: A comparative analysis in the automotive industry.’ International Journal of Project Management (2009): 166-174.
- Senthilkumar, P. ‘Lean Project Management – Innovative Strategies in the Automotive Industry.’ International Journal of Scientific and Research Publications (2017): 8-16.
- Hilt, Martin J. ‘Agile predevelopment of production technologies for electric energy storage systems–a case study in the automotive industry.’ Procedia CIRP 50 (2016): 88-93.
- Iamratanakul, Supachart. ‘Project Management in Asian Car Companies.’ Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management. 2013.
