The pace and complexity of change the automotive industry is facing is staggering. If we look ahead 10 or 20 years, how many times will the product need to change? Joe Barkai and I have taken a look at just a few of the high profile announcements we've seen over the last couple months - from recent auto shows, investments in new technologies, and even the relationship between the industry's products and regulations, voluntary or involuntary. A common theme runs through
Earlier in January, at Detroit's auto show, much of the conversation was about incorporating new greener technology into the products. "Green technologies are the master key to the future of the automobile," said Thomas Weber, the head of research and development at Mercedes-Benz.
A wave of technology and business innovation is upon us in the form of electric vehicles and new supporting infrastructure. In December, 40 cities around the world announced that they will focus on four key areas necessary for becoming electric vehicle ready in collaboration with BYD Auto, Mitsubishi, Nissan, Renault and the Clinton Climate Initiative. Cities in the United States include Chicago, Houston, and Los Angeles.
Better Place, an infrastructure provider for electric cars founded by former SAP executive Shai Agassi, raised $350 million in equity as part of a second round of financing. Better Place is working on creating a network of battery-swapping stations (to complement a network of battery charging spots) for plug-in electric vehicles. In September of 2009, Renault and Better Place signed an agreement to bring the infrastructure and Renault's first passenger electric vehicle to Israel.
Automakers also need to respond to the growing pressure to capture their product's environmental footprint, for their own use as well as for outside interests, including regulators and even car buyers. The Product Life Cycle Accounting and Reporting Standard is one of two new GHG Protocol standards that defines a method to account for emissions associated with individual products across their life-cycles and of corporations across their value chains. The standard was developed in 2009 and recently introduced by the World Resources Institute, which developed the standards along with the World Business Council for Sustainable Development. Ford Motor Company is one of the companies testing this new reporting standard.
We also acknowledge that it's going to be years before we have a regulated or de facto standard for green autos and a supporting green infrastructure. But this industry can't wait. It's essentially guaranteed that automakers are going to have to redesign their products over and over again in response to changing customer expectations, regulators, and the available infrastructure. For an industry that is characterized by very long engineering cycles and multiple iterations to align technology, quality, and customer adoption, this is going to pose yet another significant challenge for which it may not be ready.
We think that it's this complexity inherent in sustainability-centric decisions that makes product lifecycle management (PLM) such an important component in a company's sustainability efforts. We expect PLM to be essential for companies in the auto industry to evaluate vehicle platforms and pick the optimal design. And we expect companies to rely on PLM to be the basis for change when that design has to change once again.
Are you using PLM for your sustainability projects? Let us know.