The Digital Transformation of Automotive Businesses: THREE ARTEFACTS TO SUPPORT DIGITAL SERVICE PROVISION AND INNOVATION

Digitalisation and increasing competitive pressure drive original equipment manufacturers (OEMs) to switch their focus towards the provision of digital services and open-up towards increased collaboration and customer integration. This shift implies a significant transformational change from product to product-service providers, where OEMs realign themselves within strategic, business and procedural dimensions. Thus, OEMs must manage digital transformation (DT) processes in order to stay competitive and remain adaptable to changing customer demands. However, OEMs aspiring to become participants or leaders in their domain, struggle to initiate activities as there is a lack of applicable instruments that can guide and support them during this process. Compared to the practical importance of DT, empirical studies are not comprehensive. This study proposes three artefacts, validated within case companies that intend to support automotive OEMs in digital service provisioning. Artefact one, a layered conceptual model for a digital automotive ecosystem, was developed by means of 26 expert interviews. It can serve as a useful instrument for decision makers to strategically plan and outline digital ecosystems. Artefact two is a conceptual reference framework for automotive service systems. The artefact was developed based on an extensive literature review, and the mapping of the business model canvas to the service system domain. The artefact intends to assist OEMs in the efficient conception of digital services under consideration of relevant stakeholders and the necessary infrastructures. Finally, artefact three proposes a methodology by which to transform software readiness assessment processes to fit into the agile software development approach with consideration of the existing operational infrastructure. Overall, the findings contribute to the empirical body of knowledge about the digital transformation of manufacturing industries. The results suggest value creation for digital automotive services occurs in networks among interdependent stakeholders in which customers play an integral role during the services’ life-cycle. The findings further indicate the artefacts as being useful instruments, however, success is dependent on the integration and collaboration of all contributing departments.:Table of Contents Bibliographic Description II Acknowledgment III Table of Contents IV List of Figures VI List of Tables VII List of Abbreviations VIII 1 Introduction 1 1.1 Motivation and Problem Statement 1 1.2 Objective and Research Questions 6 1.3 Research Methodology 7 1.4 Contributions 10 1.5 Outline 12 2 Background 13 2.1 From Interdependent Value Creation to Digital Ecosystems 13 2.1.1 Digitalisation Drives Collaboration 13 2.1.2 Pursuing an Ecosystem Strategy 13 2.1.3 Research Gaps and Strategy Formulation Obstacles 20 2.2 From Products to Product-Service Solutions 22 2.2.1 Digital Service Fulfilment Requires Co-Creational Networks 22 2.2.2 Enhancing Business Models with Digital Services 28 2.2.3 Research Gaps and Service Conception Obstacles 30 2.3 From Linear Development to Continuous Innovation 32 2.3.1 Digital Innovation Demands Digital Transformation 32 2.3.2 Assessing Digital Products 36 2.3.3 Research Gaps and Implementation Obstacles 38 3 Artefact 1: Digital Automotive Ecosystems 41 3.1 Meta Data 41 3.2 Summary 42 3.3 Designing a Layered Conceptual Model of a Digital Ecosystem 45 4 Artefact 2: Conceptual Reference Framework 79 4.1 Meta Data 79 4.2 Summary 80 4.3 On the Move Towards Customer-Centric Automotive Business Models 83 5 Artefact 3: Agile Software Readiness Assessment Procedures 121 5.1 Meta Data 121 5.2 Meta Data 122 5.3 Summary 123 5.4 Adding Agility to Software Readiness Assessment Procedures 126 5.5 Continuous Software Readiness Assessments for Agile Development 147 6 Conclusion and Future Work 158 6.1 Contributions 158 6.1.1 Strategic Dimension: Artefact 1 158 6.1.2 Business Dimension: Artefact 2 159 6.1.3 Process Dimension: Artefact 3 161 6.1.4 Synthesis of Contributions 163 6.2 Implications 167 6.2.1 Scientific Implications 167 6.2.2 Managerial Implications 168 6.2.3 Intelligent Parking Service Example (ParkSpotHelp) 171 6.3 Concluding Remarks 174 6.3.1 Threats to Validity 174 6.3.2 Outlook and Future Research Recommendations 174 Appendix VII Bibliography XX Wissenschaftlicher Werdegang XXXVII Selbständigkeitserklärung XXXVII

Strategic supply chain management implications of an unregulated BREXIT

Due to the integrated, complex and long supply chain structure of the automotive industry and the large size of cross-border trade of components and cars between UK´s and EU´s automotive supply chain actors, the implementation of a tariff scheme and custom handling procedures in the event of an unregulated (hard) BREXIT by March 2019 negatively affects the industry. The fundamental Four Freedoms are hindered resulting in an increase of sourcing costs. Assembly parts and distribution of final cars becomes costlier. The crucial JIT (just-in-time) philosophy is jeopardized due to the requirement of safety stock and custom checks. The purpose of this thesis is to develop a case study providing students with an effective way to apply Strategic- and Supply Chain Management (SCM) concepts based on a real case scenario of automobile industry (BMW). Professors are provided with resolution documents to effectively assess students’ solutions. A deductive approach was adopted in which the causal relationship between a hard BREXIT and strategic SCM implications is elaborated. A qualitative exploratory method was adopted, and the nature of the collected data is primarily qualitative, but also entails quantitative elements. Data was retrieved from scientific articles, industry specific reports, company reports, interviews and documentation from BMW. A hard BREXIT presents great challenges for BMW and their suppliers. BMW should foster cooperation with suppliers and engage in more backward integration policies to secure supply of strategic components and avoid supply stops. Supply network flexibility is crucial to maintain a sustained competitive SC. To offset trade barrier costs, BMW should partially shift MINI and eMINI production from the UK to other suitable European countries such as Hungary or the Netherlands and the company should aim towards more local sourcing in the UK for more standardized components

Managing Information Systems and Technologies for Agility: Case Studies in Supply Chain Management.

This research examines how information systems and technologies enable supply chain agility. The research was performed through the field study method involving 18 organizations representing the OEMs, suppliers, and IT vendors within the aerospace, automotive, electronics, healthcare, and fast moving consumer goods industries. Interviews were undertaken with managers from the IT and supply chain departments. The interviewees conceptualize supply chain agility with respect to the level of agility (internal or external) and the directions of agility (upstream or downstream). While supply chain agility is essentially regarded as the capability to rapidly match demand requirements and supply constraints by sensing and responding to change in the environment, form IT perspective, it means offering products and services that could increase transparency and improve relationships between trading partners. These are exemplified through the use of emergent IS/IT services, such as Supplier Portal, Vendor-Managed Inventory, E-Marketplace, and Web-based EDI, as well as industry-wide standards and solutions

Why and How to Balance Alignment and Diversity of Requirements Engineering Practices in Automotive

In large-scale automotive companies, various requirements engineering (RE) practices are used across teams. RE practices manifest in Requirements Information Models (RIM) that define what concepts and information should be captured for requirements. Collaboration of practitioners from different parts of an organization is required to define a suitable RIM that balances support for diverse practices in individual teams with the alignment needed for a shared view and team support on system level. There exists no guidance for this challenging task. This paper presents a mixed methods study to examine the role of RIMs in balancing alignment and diversity of RE practices in four automotive companies. Our analysis is based on data from systems engineering tools, 11 semi-structured interviews, and a survey to validate findings and suggestions. We found that balancing alignment and diversity of RE practices is important to consider when defining RIMs. We further investigated enablers for this balance and actions that practitioners take to achieve it. From these factors, we derived and evaluated recommendations for managing RIMs in practice that take into account the lifecycle of requirements and allow for diverse practices across sub-disciplines in early development, while enforcing alignment of requirements that are close to release.Comment: 19 page

A Framework for Managing Information during the Design and Development of Complex Systems

Many products developed today are becoming increasingly reliant on embedded software to facilitate customisation. Such products are becoming extraordinarily complex systems to design, update and maintain throughout the entire product life cycle. To support the design of complex systems there is a need for a complete re-conceptualisation of the traditional approaches to the management of information throughout the design and development process. This research is being undertaken within an action research framework and involves professionals from across the automotive sector, including participants from major OEMs; suppliers and support organisations and small start-ups. This paper sets out a new conceptual view for managing the information needed to support the design and development processes for complex systems. The framework has been evaluated through a number of workshops and is now informing work on a business transformation project in a large OEM for luxury cars

A framework for cooperative engineering

This paper discusses a framework for Cooperative Engineering (CE) and itsprototype implementation. Cooperative Engineering concerns the application ofConcurrent Engineering techniques to the design and development of products and oftheir manufacturing systems by a network of companies coming together exclusively forthat purpose. CE is a common practice in many industries such as automotive, aerospace,shipbuilding, defence, and pharmaceutical. This framework provides a formal model forCE. This is done in the context of distributed hybrid systems (DHS), a modelling andcontrol framework for networked systems introduced recently by the control andcomputer science communities

Development of an extended enterprise performance measurement system

Copyright © 2005 Taylor & Francis. This is an Accepted Manuscript of an article published by Taylor & Francis in Production Planning & Control: The Management of Operations, available online: http://www.tandfonline.com/10.1080/09537280500112355This paper discusses the development of a performance measurement system specifically designed for the requirements of the extended enterprise, via two performance measurement frameworks: the structural extended enterprise balanced scorecard and the procedural framework for the selection and implementation of measures. The extended enterprise balanced scorecard offers a four-perspective framework, implemented at each node, that provides a generic structure for the management of performance measures in the extended enterprise; while the procedural framework operates at both the local and holistic levels, to provide a step-by-step generic process towards performance measure selection and implementation. When combined, the two frameworks produce the basic extended enterprise performance measurement (EEPM) system, which was subsequently tested at a first-tier supplier in the European automotive industry. The characteristics of the extended enterprise are taken as a given starting point, and the paper concludes by pointing out the need for extended enterprise performance management to balance the developments outlined here.European Commission's programme for Competitive and Sustainable Growth under the Fifth Framework programm

Re-organizing for Digital Product Platforms: The Work of Vehicle Motion Engineers

As flexibility and generativity of digitized information continuously afford new possibilities, a significant challenge for organizations becomes pinpointing forms and kinds of practice that are befitting from various aspects. Two overarching digitization eras have so far determined the greatness of the challenge for organizations; ‘computerization’, and ‘the Internet’. Today, a third era of digitization is marked by the emergence of digitized products. As an increasing number of code lines and software are being incorporated in previously physical products such as cars, they can be used as complete products on one layer, and simultaneously turn into platforms enabling other firms to develop and integrate new components, content, or services on another layer. As digital product platform’s multiple design layers need to be open to various applications and agendas, their development requires new justifications and approaches for organizing work. By looking into the characteristics of digital product platforms, we discuss the shifts in the work of engineers as they engage in developing digitized products along three main courses of action. We illustrate how these courses of action are formed based on the requirements of developing digital product platforms rather than managerial presuppositions

A collaborative framework for feasibility analysis in automotive product development with global supply chain

In the competitive world, time to market, new technology and innovation are the measures of the performance of New Product Development (NPD). Companies tend to use a conventional approach to NPD by assigning representatives from their own support functions to review and recommend changes as projects evolve. In recent years, this approach has been questioned since it is a costly and time-consuming approach due to its iterative nature. Researchers argue that the time to market process and the cost of NPD can be reduced considerably by involving the support functions of the supply chain to a greater extent and also earlier in the NPD process. There is a potential industrial requirement for a collaborative framework that facilitates the linkage between Supply Chain Management (SCM) and New Product Development (NPD). This research project focuses on the early stages of the collaborative product development process in the extended enterprise. The research output includes the functional requirements of a framework and a developed prototype methodology with tools and technologies that are tested from case studies within industry. The research also introduces the development and analysis of the framework that allows the integration of the flow of product development related activities within original equipment manufacturers (OEM) and suppliers providing future business benefits. An industrial investigation of an OEM in the automotive industry within the research identified that there are different decision making points in product development and manufacturing. The proposed methodology and framework use key drives to predict and quantify its impact on four main criteria namely: feasibility, time, cost and capability that support or advise on key decision making of OEM’s product development and management process

Governance architectures for inter-organisational R&D collaboration

Inter-organizational relationships are becoming an increasingly important source of competitive advantage and innovation. This study looks at these relationships in the context of inter-organizational R&D collaborations in the European automotive industry. Previous work led to the proposal of a competence-based portfolio framework that explains the design of the inter-organizational architecture and an indicative relationship strategy. This framework comprises four distinct types of governance architecture and relationship strategy. This paper reports on the first confirmatory transfer study, conducted at Jaguar Land Rover, in the UK. The study illustrates developmental paths and patterns in the evolution of inter-organizational relationships using empirical insights. Their configuration and dynamic evolution is contingent upon the ‘engageability’ of the partner companies’ competences based on their attractiveness, transferability and maturity. The study shows that the contingency framework is transferable and practically useful, as well as yielding further practical narrative about inter-organizational practice