Organizational agility in the automotive sector

The capability of a company to rapidly change or adapt in response to changes in the market. A high degree of organizational agility can help a company to react successfully to the emergence of new competitors, the development of new industry-changing technologies, or sudden shifts in overall market conditions.

Organizational Agility in Automotive Sector

The automotive sector is one of the world’s fastest evolving industries, spending around €54 billion (or more than $61 billion) on research and development (R&D) each year. This amount is justified as established engineering-centered auto companies such as BMW and VW feel pressure both from the intensifying competition in Silicon Valley and consumers’ growing demand for smart, connected, and autonomous vehicles. Companies such as Google and Apple tend to outpace traditional automakers in the software development sphere.

Car manufacturers need to realize they’re in the midst of a transformation. They have to shift the way they build vehicles and rely on software as much as mechanics; vehicles run more on code than horsepower, and automakers can’t afford to ignore that. Three drivers for agile implementation include efficiency, effectiveness, and steering. Agility is a key characteristic that automakers must embrace in the digital and connected age, and both original equipment manufacturers (OEMs) and Tier 1s, companies that supply software and hardware to OEMs, should pay more attention to agile development in automotive R&D.

Purpose of Agile over predictive methodology:

Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.

Traditional (or waterfall/predictive) project management, the majority of the time, follows a fixed sequence that is Initiation, Planning, Production, Monitoring, and Closing. When one process is complete, only then can the next one begins. Typically, this method is more suited for projects that anticipate very few changes from the start to finish.

However, not every project can be planned in the same manner. For software development projects, frequent iterations are required, flexibility which Agile methodology provides. Instead of planning the entire project beforehand, teams focus on quicker iterations and increase efficiency.

Although most of the steps involved remain the same, it is not necessary that they are carried out in a sequential manner. These steps are broken down into smaller segments known as sprints. At its core, agile comprises a set of principles that guide an entire way of working; it does not constitute a dogmatic prescription of specific structures and rituals. As the automotive industry becomes increasingly driven by innovation and software, agile delivers many advantages, including the following:

  • Better Products: With consumer expectations at an all-time high, automakers must understand what guides buyers’ purchasing decisions and respond rapidly. Agile teams continuously engage with customers and recognize changing market forces as they emerge.
  • Reduced Risk: With so much innovation happening in vehicle design, automakers can’t afford to get bogged down with late-stage changes and rework. Cross-functional, dedicated teams have full visibility into products and processes to minimize miscommunication and delays.
  • Accelerated Speed to Market: Automakers need to find ways to keep up the freshness of their products. Traditional, hardware-driven product cycles must be managed in conjunction with software-driven innovation so that new functions and services can be updated over any given vehicle’s lifetime.
  • Cost Savings: The shift toward EVs and autonomous driving requires a massive investment for automakers—and reducing costs is a priority. Agile ways of working allow teams to increase efficiency, boost productivity, and do more with less.

In short, agile offers a secure foundation upon which automakers can build the company of the future.

Considerations of Agile Methodology:

There are some possible problems that arise when implementing this kind of methodology into the system of automotive which is very different than the software industry. There is nothing revolutionary for many in agile processes for product development. Agile transformation successfully moves around the planet, being implemented in a variety of areas. Of course, agile methodology is most widely used in software development, due to the relative ease of implementation. But when it comes to any hardware product, there are new, hard to overcome obstacles. Here, quick prototyping tools (for example, Arduino, Raspberry PI, etc.) came to their aid, as well as 3D printing, which grasps more and more new areas, such as medicine or construction. But tools only are not enough when it comes to Agile transformation of a large organization, as an automaker.

Since the automotive industry is a very competitive environment, it is rather difficult to learn something about competitors and learn from other people’s mistakes. In addition to the long lead times, there is another significant problem — the impossibility of applying common practices. And although the process of developing new nodes, electronic modules, etc. one way or another is similar, the internal processes of companies are significantly different. Therefore, it is impossible to write a transformation script beforehand. It is a constant work on changes and fine-tuning of internal processes. And how this will be realized in any organization cannot predict by any agile guru.

The next and probably the biggest obstacle is the change in the culture of the organization. Until recently, the automotive industry was inactive, when it comes to internal processes. Many people worked for one automaker for decades with constant processes. And of course, this caused addiction to the way of working, accepting it as an axiom and resisting everything that does not fit into the usual work process.

 

My ideas in addition to the existing approach in the automotive sector:

  • Hybrid method using V model and Agile:

The V-model is a graphical representation of a systems development lifecycle. It is used to produce rigorous development lifecycle models and project management models. The V-model falls into three broad categories, the German V-Modell, a general testing model and the US government standard. The V-model summarizes the main steps to be taken in conjunction with the corresponding deliverables within the computerized system validation framework or project life cycle development. It describes the activities to be performed and the results that have to be produced during product development. The left side of the «V» represents the decomposition of requirements and the creation of system specifications. The right side of the «V» represents the integration of parts and their validation. However, requirements need to be validated first against the higher-level requirements or user needs.

Furthermore, there is also something as validation of system models (e.g. FEM). This can partially be done on the left side also. To claim that validation only occurs on the right side may not be correct. The easiest way is to say that verification is always against the requirements (technical terms) and validation always against the real world or the user’s needs.

Validation can be expressed by the query «Are you building the right thing?» and verification by «Are you building it right?»

The-V-model-in-the-automotive-industry

The figure above shows clearly the steps involved in a V model in the automotive industry. All the pre-implementation steps are mostly done by an OEM and the parts are actually manufactured by suppliers. The steps which are being created by an OEM are periodically tested by the OEM itself simultaneously and the implementation process by suppliers is supposed to follow the same kind of procedures by them in order to standardize the method. This is an example of the traditional method. Some industries are using a new type of method to make the process agile without compromising the traditionality by maintaining it. That is the Hybrid methodology.

benefits of using a hybrid approach

Implementing Agile-Waterfall Hybrid allows certain software-specific teams to work Agile while hardware development teams and product managers can keep using a traditional PMP/Waterfall approach for the overarching project.

This method involves tight integration and continuous collaboration between Waterfall and Agile departments and teams from product concept through validation and production. The Agile-Waterfall Hybrid method enables efficient collaboration and a better adaptation to changing requirements.

The Hybrid model greatly supports product line management and reusing software code when dealing with a line of somewhat similar products. In such situations, quick turnaround and the efficient reuse of work items and processes are crucial. Backlog management is a critical area for the successful adoption of this Hybrid model, increasing the importance of adequate software version/release planning methods. The Agile-Waterfall Hybrid model aims to retain the dependency tracking and clarity of Waterfall, while embracing the strengths of the Agile methodology, providing the flexibility and transparency necessary to adapt to fast-changing requirements.

agile waterfall hybrid modelagile-waterfall hybrid model

Agile with the collaboration of waterfall or V-model is done by implementing the agile methodology in any one of the steps of the V model. For example, In V model all the steps can follow and only the design can use agile/scrum to make the process rapid and flexible. It is basically splitting the whole V into smaller V’s that are sprints as seen before in the agile definition. Each sprint the project approaches at a higher pace and at the same time after each sprint, the manufacturing can start processing not waiting until the end of the design process. This benefits the customer to deliver the products at a higher frequency than before. In the below figure it is shown how a normal V-model is split into smaller sprints for the agile usage.

v-model agile vs waterfall

  • Agile problem-solving in the industry

When organizations – large or small – want to serve their customers better, an agile framework is a powerful tool to equip everybody in the organization to deliver solutions faster. If a team wants to achieve something they will find a way to make it happen. Conversely, if the team doesn’t want to achieve a goal, there is no way they will. Therefore, the single biggest factor which contributes to productivity is the motivation or morale of a team.

Treating employees like volunteers means engaging with them and making sure they want to do what they have been asked to do. It would be better yet to let them select what task they do Celebrate the success of every launch/release, even if only in a small way, but draw attention to the fact that the team was successful. Allow everyone to feel great about what they have achieved. Praise team members and offer some gold cards like compensatory off.

Most of the time team is struggling to get enough shared understanding to deliver a working tested increment of product every couple of weeks. With Scrum, we know we need clarity, accountability, and the ability to measure progress at frequent intervals, Once Scrum starts to go mainstream, all people remember the rules but they forgot the meaning behind the rules. Common failure areas are:

  • Culture doesn’t support change – Try to keep cross-organizational uniformity and use PMOs as enforcers
  • Lack of retrospectives. Action items generally get lost, hence they should be tracked in the system with the due date assigned, and should be tracked in reports
  • Lack of collaboration in planning – Lack of communication and hence lack of collaboration
  • PMO or scrum master should force to sit in one common room during planning week, where they are forced to collaborate and communicate
  • A tsunami of technical debt – Stop and clear, one should not process till WIP or technical debt reach a level where it can be controlled

The idea is to create a cross-functional team under a scrum master who is in charge not only of the production thinking and also to solve problems that arise during the process. Development team is responsible for both production and problem-solving in some cases. The teams of 4-6 people analyze the problem and during each sprint, the solutions are trying to frame.

sprints

Conclusion

Agile method is becoming a trend these days in every kind of industry by considering customers are the first priority and their expectations. The kind of hybrid method is not common in these industries due to some complexity and training. Still, there are some projects which use this kind of hybrid methodologies, and one example case is given below of Mercedes F1 scenario which uses partial hybrid as explained above.

Organizational Agility in Automotive Sector

 

Lewis Hamilton’s success in winning his 5th Formula 1 World Drivers’ Championship is the latest in a string of victories since Mercedes re-entered F1 back in 2010. In fact, they’ve dominated the sport with 5 World Drivers’ Championships and 5 Constructors’ (team) Championships in a row; having also nailed their 5th Constructors title in 2018. They’ve perfected the discipline of winning, and have adopted an Agile approach to do so offering lessons for anyone trying to drive innovation and foster a culture high-performance.

 

Author

Revanth Shankar Muthuselvam

Advanced Manufacturing Engineer | Industry 4.0 | Digital Transformation | Data Analyst

 

 

 

Experta en BIM Project Management. Arquitectura, Interiorismo y Diseño Gráfico.

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