STEEL MAKES IT COOL LEAN CUSTOMIZATION PRINCIPLES BUSINESS MECHANICS OF STEEL JOHN WARANIAK

Transcription

1 STEEL MAKES IT COOL LEAN PRINCIPLES BUSINESS MECHANICS OF STEEL GREAT DESIGNS IN STEEL SEMINAR LIVONIA, MICHIGAN USA 09 APRIL 2008 JOHN WARANIAK VICE PRESIDENT VEHICLE TECHNOLOGY SEMA

2 LEAN PRINCIPLES ONE AFTERNOON IS ALL IT TAKES Great Designs Blend Science with Art Innovation Drives Purpose Beyond Reason Designing for Customization Engineering for Accessorization Marketing for Personalization Collaborating for Growth

3 BUSINESS MECHANICS OF STEEL ILLINOIS MAFIA MEETS STEALTH 8620 to AF1410 Lot of Great Papers and Presentations Today Steel is the Closest thing to Alchemy Steel is the Mark Twain of Materials Steel Makes it Cool Strength with Style Steel is a Brand It s What s for Designing

4 HIGH-PERFORMANCE STEEL METRICS WHEN DESIGN MEETS MANUFACTURNG Value Stream and Business Model Mapping Metric 1: Time-to-Profit with Bio-Mimetic Tools Metric 2: Margin x Market Share x Market Size Operational Excellence and Strategic Positioning Steel Makes it Cool The DFC Top Hat Dividend WHEN DESIGN MEETS COOL THINGS HAPPEN

5 OEMS MAKE COOL PRODUCTS SEMA MAKES PRODUCTS COOL AMERICA S BIRTHPLACE OF

6 AFTERMARKET EVOLUTION THE VALUE OF SEMA-OEM COLLABORATION A lot of aftermarket companies are becoming so good we cannot discern the difference between OEM and the Aftermarket. These guys at AEV have really raised their game. They make their own Steel Hood, stamped in Detroit at Quality MetalCraft, phenomenal work, absolutely OEM, very well integrated Ralph Gilles, VP of Design, Chrysler What s in it for us? We gain incremental sales and increase revenue. It broadens our appeal to Micro-Segments that the mass market doesn t touch. It lets us participate in segments that we cannot do profitably in our high-volume business. It gives us much faster to market solutions and exposure in the media. SEMA is Ford s conduit to the Aftermarket with over 6800 companies Hermann Salenbauch, Director SVT, Ford Motor Company

7 AFTERMARKET EVOLUTION THE VALUE OF SEMA-OEM COLLABORATION SEMA is the stimulation for creating the Scion brand. We judge our success at Scion and Tundra not by how many vehicles we customized, but by how many vehicles are on the SEMA floor in other peoples displays that we didn t pay for. We will have two global debuts this year at SEMA, not at the Detroit Motor Show or LA, but at SEMA, because the venue is so important to us.. Jim Farley, VP of Marketing, Toyota Collaboration in many ways is an unnatural act. It s not easy to work together as a team. What we are looking at is reinvention of the business model and changing how you think about the way we do things. Clearly, there are reasons why the OEM and Aftermarket need to come together and collaborate more effectively Dave Cole, Chairman, CAR

8 WHY MATTERS MORE MODELS FEWER PLATFORMS SALES PER MODEL DECREASED 50% WHILE NUMBER OF MODELS INCREASED 40%

9 THE DFC TOP HAT DIVIDEND STEEL CASH CURVE FROM CORE TO PLATFORM TO TOP HAT POSITIVE CASH FLOW 3 PLATFORM CORE ENGINEERING 2 DFC TOP HAT VALUE CURVE Design Start-Up Manufacturing Start-Up Volume Production End of Production TRADITIONAL VALUE CURVE TIME 1 LAUNCH 1 Faster Time-to-Profit DESIGN DEVELOPMENT 2 Larger Market Share NEGATIVE CASH FLOW 3 Increased Margin

10 LEAN ECONOMIES OF INTEGRATION CUSTOMERIZATION HIGH MARKETING PERSONALIZATION CUSTOMERIZATION LOW STANDARDIZATION LOW HIGH PRODUCT AND OPERATIONAL Adapted from: Wind and Rangaswamy

11 FIRST WAVE OF LEAN ECONOMIES OF SCALE HIGH MARKETING Customized Products - DFC Modification - EFA Flexible Manufacturing Large Batch Sizes - HVLM Mass Product Customization Product Flow Kaizen - PLM Low Customer Input Focus Groups LOW STANDARDIZATION LOW HIGH PRODUCT AND OPERATIONAL Adapted from: Wind and Rangaswamy

12 SECOND WAVE OF LEAN ECONOMIES OF SCOPE HIGH MARKETING LOW PERSONALIZATION STANDARDIZATION Customized Marketing - MFP Segmentation - CFG Flexible Production Small Batch Sizes -- LVHM Lean Product Customization Lean Marketing Market Info Kaizen -- CRM High Customer Input Social Networking LOW HIGH PRODUCT AND OPERATIONAL Adapted from: Wind and Rangaswamy

13 THIRD WAVE OF LEAN ECONOMIES OF INTEGRATION - ULSAB-AVC HIGH PERSONALIZATION CUSTOMERIZATION MARKETING LOW STANDARDIZATION LOW HIGH PRODUCT AND OPERATIONAL

14 SEMA BUSINESS MODEL COST vs PERSONALIZATION CAPABILITY COST MASS PRODUCTION Stable, Predictable Demand Long Product Lifecycles, Inflexible Production Low Competition and Model Differentiation Low Buyer Power, Standardized Products Mass Markets and Large Segments MP Build to stock SEMA MODEL Build to order MC PERSONALIZATION MASS Unstable, Unpredictable Demand Short Product Lifecycles, Flexible Production High Competition and Model Differentiation High Buyer Power, Customized Products Target Markets and Fragmented Segments POST-PRODUCTION AFTERMARKET BUSINESS MODEL aka SEMA MODEL

15 SCALING STEEL BUSNESS MODELS MASTERING THE ART OF DISRUPTION - THE LONG TAIL MAINSTEAM POPULARITY HEAD Large Markets Mass Production AUTOMAKERS SHOULDER Market Segments Low-Volume Production INDIE DRIVERS Democratized Production Democratized Distribution Democratized Integration Death of the Rule AFTERMARKET TAIL Niche Markets Customerization SMALL BUSINESSES CREATE 60% OF NEW JOBS AND 50% OF GDP PRODUCTS

16 STEEL MAKES IT COOL LEAN AND BUSINESS MECHANICS OF STEEL Steel as a Material Style and Strength Steel as a Brand Simplify Choice Steel as a Business Model Scales to Application Steel as a Solution Total Impact on Planet FUTURE STEEL VEHICLE 2020 THANK YOU.