Volkswagen Moonraker Team Calls on International Motor Vehicle Program
Emily Kearney
April 8, 2005
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John Paul MacDuffie and Fritz Pil share their ideas with members of Volkswagen's Moonraker Team. |
Volkswagen wants to know what US car buyers want. To find out, the Moonraker task force is traveling the country to observe American shopping, family life, travel habits and car buying practices. Dispatched by Volkswagen Chief Executive Officer Bernd Pischetsrieder and led by former BMW manager Stefan Liske, the Moonraker team includes experts from such diverse areas as research and design, marketing and purchasing. On their way across the country, eight members of the team stopped at MIT to hear from International Motor Vehicle Program (IMVP) leaders and researchers.
IMVP Executive Director John Moavenzadeh opened the March 8 meeting by describing the common qualities of IMVP research: rigorous methodology, international scope, and a focus on value. Founded in 1979, the IMVP consortium of car manufacturers and suppliers supports automotive industry research all over the world, at such institutions as MIT, the Wharton School at the University of Pennsylvania, University of Michigan, Carnegie Mellon University, Oxford University, University of Cambridge, INSEAD, É cole Polytechnique, University of Mannheim, Seoul National University, University of Tokyo and Indian Institute of Management.
Three IMVP researchers gave the Moonraker team a quick look at some of the questions being studied. University of Pittsburgh Professor Frits Pil shared some of the ideas from The Second Century: Reconnecting Customer and Value Chain through Build-to-Order, which he wrote with fellow IMVP researcher Matthias Holweg. IMVP Co-Director and Wharton Associate Professor John Paul MacDuffie discussed issues surrounding modularity in automotive design. MIT's Professor Charles Fine , a former IMVP researcher and co-director and author of Clockspeed: Winning Industry Control in the Age of Temporary Advantage , provided a broad perspective on the automotive value chain.
Frits Pil on Understanding the Customer and Built-to-Order
Automakers have pushed for high production volume at the expense of flexibility, and have neglected to create systems that respond to customers' needs, said Pil. Highly efficient factories fill dealers' lots with cars according to the demand predicted in industry forecasts, but the forecasts may or may not reflect what the customers actually want. Dealers then use financing offers to convince customers to make a purchase from among the products in stock-even if it means settling for a car that is not precisely what the customer intended to procure. Savings garnered via efficiently building cars to forecast rapidly evaporate via, among other things, expensive incentives, poor information flows, and product obsolescence.
As in The Second Century , Pil argued for creation of a responsive supply chain in which auto companies rethink product design and production, as well as the role of suppliers, logistics providers, and dealers, in a shift to producing cars to specific customer
requests. Pil also highlighted the importance of rethinking basic premises in the industry. For example, per unit cost, volume, hours per vehicle and similar metrics still dominate how many managers are evaluated, including the Moonraker participants. However, these are often at odds with measures that drive long-term organizational viability, like customer responsiveness, quality, and per unit profit. Pil talked about the challenge of "guessing" what customers might want, and gave examples from product design and factory scale and location choices to show how capabilities sustaining rapid response to shifts in demand may be critical drivers of future success.
John Paul MacDuffie on Modularity in Product Architecture
MacDuffie has been studying the trend towards modular product design, which allows subsections of a vehicle, such as doors, seats or instrument panels, to be built at separate locations and then put together in fewer steps at the assembly plant. Modularity has been predicted to radically transform the automotive industry, especially the relationships between automakers and their suppliers, who are being asked not only to manufacture but also to design a larger portion of a vehicle. MacDuffie and other IMVP researchers have been studying car makers and their suppliers to see how modularity is being defined, how it is being adopted, and how the trend is changing product development, production, and automotive supply chains.
His conclusion is that, unlike the IT and electronics industries where modular products are common, automotive product architecture has proven quite resistant to modularity. The trend towards having suppliers build (and even design) larger "chunks" is unmistakable, but for the most part, these chunks don't fit the definition of module as interchangeable across different products, connectable along a standardized interface, and capable of being developed independently from other modules. Instead the chunks are mostly model-specific, with idiosyncratic interfaces and requiring a great deal of coordination and collaboration between automaker and supplier during the development process. He is exploring the implications of this move towards chunks that aren't modules. In particular, MacDuffie is examining the consequences of shifting the frame of design activities from individual components to spatially co-located groups of components from different functional subsystems.
Charles Fine on the Automotive Value Chain
Fine applied some excerpts from Clockspeed to the automotive value chain, describing the interdependence of factors such as technology design, regulatory policy and customer preference by comparing them to a set of interacting gears.
Fine suggested that the Volkswagen team could prevail in a difficult market by considering the larger picture along with great product design. Giving the example of Apple Computer setting up its own retail stores with free service desks, Fine illustrated that a company can attract business by providing the customer with unmatched service.
The Moonraker team will have a chance to study Volkswagen customer service over the next two months in California , where they will live together and observe Volkswagen's largest American dealership. Whether their research will result in a new car model, a new supply method, or a new customer-relations strategy remains to be seen.
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