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 1997 Projected 2005 ManufacturerAnnual volume ModelsPlatformsModels/ platform Volume/ platform Model s PlatformsModels/ platform Toyota4.89m45222.0222,2724075.7 Nissan2.74m39241.6105,3853557.0 Honda2.3m26151.7153,3333056.0 Mitsubishi1.98m21121.894,2851972.7 Mazda1.1m18141.378,5711644.0 Fiat2.7m30132.3207,69231+56.2 Volkswagen3.9m33113.0358,50355413.7 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 Short term innovation Developing and introducing new products Making improvements to production processes Large and medium companies Challenge fully understood by company; appropriate responses are in place/being developed Small companies (growth) Challenges are understood but there are barriers to implementation of appropriate responses Small companies (non-growth) Challenge is not fully understood and appropriate responses are not being developed

8. Research results Long term strategic innovation Appreciation of long term trends in the industry and implementation of appropriate steps Large and medium companies Challenge fully understood by company; appropriate responses are in place/being developed Small companies (growth) Challenges are understood but there are barriers to implementation of appropriate responses Small companies (non-growth) Challenge is not fully understood and appropriate responses are not being developed

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 Tier 2 SME Regional Development Agency Automotive Forum Tier 1 co Universities Tier 3 SME

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 WalesCastilla y LeonAragon SkillsMostly carried out by companies internally. Some support from FE, TECs, Waterton Much in house by companies. Dedicated sectoral high level training facility in place (CIDAUT) Institute of Technology provides extensive high level technical training Best practice programmes Source Wales carries out a range of programmes [Not known] Technical Resources Little technology implementation upgrading support available Many facilities in place but these are spread around, mostly in universities Lots of technical and testing resources concentrated in CIDAUT Some based at ITA QualityWales Quality Centre[Not known] ForumWelsh Automotive Forum is in place A new forum is currently being developed Currently under development

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