According to a recent study by the consulting firm PWC, German and Scandinavian industrial companies see a possible increase in efficiency of 19% over the next 5 years through investment in digital product development. In this context, data and its availability play an important role.
The aim is to better understand customer needs and develop tailor-made digital products and services not only with better precision but also with the aim of cutting down on costs.
“The rising individualization of products demands increasingly shorter product and innovation cycles.”
However, increasing customer centricity and its consequences require a radical rethinking in many areas. In recent years, product and innovation cycles have dramatically accelerated across virtually all industries, and traditional management methods and organizational structures are no longer meeting the new requirements. The main challenge therefore is to achieve tailor-made solutions with optimum cost efficiency in a highly connected world.
Challenges of product development exemplified by the automotive industry
This applies particularly to the automotive industry, which has come under increasing pressure in recent years with shorter product lifecycles. Just like aerospace, machinery and plant engineering, the automotive industry is extremely diversified, meaning that, in the case of an automotive OEM (Original Equipment Manufacturing), less than 20% of the added value is accounted by itself. In Contrast, this means no less than that 80% of the added value is generated by suppliers within a strongly developed and widely spread supply chain network. This supply chain network is divided into several tier levels ranking from Tier 1 to Tier n.
“Over 80 % external value added in the automotive industry.”
The development process described above, therefore, has influence not only on the OEM itself but also on the entire supply chain. Under the new circumstances, the coordination and collaboration between all parties involved poses an enormous challenge, not only in supply chain management itself but also in product development.
-Requirement Specification and Agreement Process at a Glance-
How complex this collaboration might be and what needs to be considered, can be seen from the example of requirements engineering as one of the first steps in product development. A car consists of over 40,000 individual parts, most of which are developed and produced by suppliers in a global network. The product, not just as a whole, but also each individual component, must be developed, validated and produced according to its exact specifications. In consideration of the associated challenges of product development and manufacturing, the coordination of requirements across all suppliers plays a decisive role. This is particularly the case since requirements are the contractual foundation for the collaboration between the OEM and the supplier.
“Requirements engineering is the contractual foundation in the cooperation between manufacturer and supplier and is decisive for the success of the project.”
The first step of a possible cooperation between OEM and supplier is to obtain a quotation. Therefore, the OEM sends the initially specified requirements to several suppliers for tendering. At this point the management and concretization of the initial requirements begins in cooperation with the suppliers. This process includes several rounds of information exchange and comparison between OEM and their respective suppliers. In order to finally ensure the comparability of all offers for the OEM, it is necessary to communicate all changes regarding the requirements with all affected suppliers. Once the validation of the requirements regarding their feasibility is concluded, a first economic offer for development, production and validation is provided by the suppliers. After considering all offers, the OEM nominates the most suitable supplier(s) and concludes the contract by signing the previously agreed specifications.
“The agreed requirements constitute the contractual basis of the cooperation in the form of the specifications.”
Data sharing in requirements engineering.
In order to enable a seamless exchange of information between all parties, there exists the ReqIF standard which was developed in cooperation with the leading companies from the automotive, aerospace and machine and plant engineering industries as well as the ProSTEP iViP association. The ReqIF standard is a standardized XML file, which optimally supports the exchange of requirements independent of the system in use, such as Doors, Doors NG, CodeBeamer, PLC, Polarion, etc. After the ReqIF file has been exported from the system being used, it is sent to the external partner. They can then either import the ReqIF file into their own requirements management system or read and comment on it using a Req-Reader. Once all suggestions for changes and comments have been incorporated, the file is exported again and sent to the OEM.
“ReqIF (Requirements Interchange Format) is an XML file format that can be used to exchange requirements and associated metadata between software tools from different vendors.”
Challenges in using the ReqIF standard.
Despite the standardized data exchange, communication between OEM and supplier raises some challenges that should not be underestimated. The reasons for this are, on one hand, the increasing heterogeneity of the system landscape in the area of requirements management systems and, on the other hand, strongly manual processes and a lack of transparency. Even if all systems involved generally support the export as ReqIF, problems occur again and again. This is, for example, due to the different functionality of the systems. It results in data and information being lost in the communication process and the overall loss in quality. This highly manual process also results in an extremely limited ability to implement changes and also results in lengthy coordination processes, in some cases lasting even several weeks. The reason for this is the lack of a uniform data view, which makes direct and holistic coordination with all parties almost impossible.
“Cesonia is providing a technology platform for secure, efficient and data-driven cross-company collaboration.”
Requirements for a cross-company collaboration platform
Given the complexity of the above situation, required is a solution that meets the efficiency and security requirements of today’s multi-versed automotive manufacturing environment. A solution that aims to connect OEMs with their numerous suppliers at all levels and provides a unified data view. What is needed is a solution that allows requirements to be shared, not just in the form of standardized XML files, but by providing and ensuring a “Single Point of Truth” for all parties.
Based on a distributed data network, the Cesonia technology platform is the first of its kind in connecting organizations and their individual IT Systems, including Requirements Management Systems. It establishes the desperately needed “Single Point of Truth” and enables efficient and secure collaboration across company boundaries.
Thank you for reading and don’t miss out on the next blog about What’s missing in the supplier’s view and what’s in it for them, Challenges of the automotive supplier industry.
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