Now or never: the automotive collaboration imperative

Abstract

Today’s automotive leadership faces harsh competitive truths. Six forces will have transformed the automotive world by 2008: (1) an imperative to create value for consumers and shareholders, faster; (2) further consolidation and scale (yet scale alone is not guarantee of success); (3) a greater need for production and process agility, to embrace technological breakthroughs in vehicle engineering; (4) the advent of new disruptive technology in vehicles, and in supply chains; (5) accelerated innovation of products and services; innovation is the differentiator; and (6) Increasing customer expectation of both choice and value. Success in the future will depend on adopting a model that is based on collaborative relationships with suppliers and others. Companies that can assemble the best supply communities and accelerate consumer‐centric innovation faster than their competitor’s network will be the winners. Collaborative product commerce (CPC) provides the framework under which multiple‐company collaborative communities can flourish and deliver long term sustainable value. The transition to a collaborative model requires strategic leadership. The formation of new communities will not happen as a natural evolution from the lower forms of collaboration that currently exist. The benefits of CPC include: shorter cycle times, cost reductions, development of consumer‐centric offerings. Six key steps to CPC are: (1) make collaboration the centerpiece of strategy: obtain a community of partners that excel in customer responsiveness, speed to market, and innovation; (2) anticipate the upcoming disruptive forces and create a collaborative response with key community partners rather than in isolation; (3) work with community partners to identify essential areas where collaboration can create a superior business model; (5) begin working with partners first on enhancing product development; (5) focus on core competencies and eliminate redundant processes; and (6) share value within the community. The mastery of collaboration will prove a defining and indispensable strategy for the automotive leaders that will emerge early in the second automotive century.