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Engineering excellence 2018

Portrait of Jochen Gleisberg
Senior Partner
Stuttgart Office, Central Europe
+49 711 3275-7221
September 25, 2018

Savings of 15-25% possible by addressing 10 key areas

Electrification, automation and digitalization are bringing about fundamental change for engineering-driven firms. The challenges facing these companies are twofold. On the one hand, firms must adapt to the latest technologies, for example autonomous vehicles or artificial intelligence, and develop corresponding expertise. At the same time, they need to improve their current product portfolio, while facing growing pressure from competition, falling prices and ever tighter budgets.

The answer to this paradoxical problem is what we call "engineering excellence". With a thorough and systematic analysis, firms can identify inefficient or wasteful structures and processes in their organizations. Following this, they can then set their ambition level and set about making the required changes.

How can you serve your existing customers and still find the resources to develop new business models? Through engineering excellence.
How can you serve your existing customers and still find the resources to develop new business models? Through engineering excellence.

In our focus "Engineering Excellence": Squaring the circle in times of technological change we identify 10 key areas for improvement. Cost savings of 15-25 percent are possible for firms that address all relevant areas. These include:

  1. Portfolio and requirement management: A company's selection of products defines its engineering decisions. Having a clear market segmentation, long-term technology roadmaps, well defined cycle planning and strict prioritization of development projects are part of a catalog of best practices.
  2. Simulation, prototyping and testing: Optimized validation and verification processes and coordinated prototype planning and purchasing to reduce overall engineering effort and costs are best practices in this area.
  3. System architecture and variant management: Having the maximum degree of modularization and clearly distinguishing between platform and application should be aimed for.
  4. Lean engineering: Best practices include lean and robust processes, tools, automation, and process standardization to avoid over-engineering, and reducing the administrative burden and non-productive waiting time so as to maximize pure engineering time.
  5. Project management: Stringent and transparent project steering and monitoring, and robust, realistic milestone planning are ideal.
  6. Global R&D footprint: Optimizing task allocation between different regions and taking labor costs into account are recommended.
  7. Core competencies/"make or buy": Best practices include target core competencies derived from the brand position, defining what is core and what is not, reallocating tasks, and answering the "make or buy" decision.
  8. Organizational structure: Optimized allocation of tasks and responsibilities across the entire development and related organizations, support for a stronger system perspective, and enhanced interfaces.
  9. Transparency and performance measurement: Best practices here include general and research and development specific key performance indicators for all project phases.
  10. Resource and budget management: Best practices include optimal matching of available and required resources and target budget planning and controlling on a project level.

Following our engineering excellence approach will not only solve problems in your current design and development processes, it will also set you up for future success. By establishing best practices and a mindset geared towards innovation you create an organization that thrives in times of technological disruption. Download the full study below to explore the topic further and read our full analysis, which includes a case study on a leading automotive supplier that achieved costs savings of 18 percent by addressing three relevant areas.

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Focus

Engineering excellence 2018

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The engineering excellence framework enables you to transform your business, while lowering your engineering costs by up to 25%.

Published September 2018. Available in
Further reading
Portrait of Christian Böhler
Principal
Munich Office, Central Europe
+49 160 744-8017
Portrait of Michael Zollenkop
Partner
Stuttgart Office, Central Europe
+49 711 3275-7220
Portrait of Carsten Bock
Senior Partner
Stuttgart Office, Central Europe
+49 711 3275-7223
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