I just finished teaching Operations Strategy where we discuss many interesting decisions, including the impact of design complexity on outsourcing and the mechanisms to foster innovation in existing organizations. The StreetScooter is a project that hits on both these topics: this is a modular car (not a scooter!) that is designed and manufactured in Germany through collaboration by more than 50 companies. A prototype of the 5,000 euro vehicle with a 120km/hr top speed has been presented and production in Europe is slated for 2013. Here’s the 1min promotional video:
In class we discuss electronic designs as perfect candidates for modular design: after all, each electrical connection only needs a few variables (e.g., volt, amps, and frequency). These variables are easily specified and define the interchangeable interfaces that then form the input or constraints in the design of each module (using, say, CAD programs). This gave rise to the disintegration of the computer industry and all the wonders that followed.
In contrast, mechanical designs tend to be more ‘integral’ and specifying interfaces may be insufficient. Rather, the particular interaction of multiple modules can be more complex. Even an at-first-sight modular part as a tire may have complex interactions with the car body’s weight and acceleration in turns that can lead to catastrophic results when all parameters are near their limits (as we learned from the Ford-Firestone debacle).
Now, what caught my attention is that this StreetScooter project seems to indicate that this car could be designed more like an electronic product: According to Achim Kampker, a professor of production engineering at RWTH Aachen University [my second cousin Rik De Doncker is a University professor at Aachen so I need to learn more about this first-hand], as quoted:
The StreetScooter is built in modules (body, powertrain, electronics, and so on), with the companies organized into “lead engineering groups” to focus on their specialized area. Kampker says this allows the car to be built more quickly, and to be highly customizable. If there is a disagreement between the groups, the problem is sent up to a management group that resolves it.
The results are faster development time (the actual prototype was developed in just 12 months) and more variety/flexibility. Kampker describes the StreetScooter consortium as a “virtual OEM,” where powerful “product lifecycle management” and CAD software substitute for the everyday coordination of a large, integrated company.
The car is also describes as a “crowdsourced” design. Typically, this uses some type of innovation tournament (as described by my colleagues Terwiesch and Ulrich at Wharton) where many original ideas sequentially get screened down to ultimate winners. There are now about 50 companies involved but I need to learn more about how the initial stages of this project started.
This project will be an interesting test-case to see whether car design indeed has become more modular; whether a more collaborative organizational structure translates to large-scale operations; and whether crowd-sourcing also is effective in this industry. Exciting it definitely is!