TRAVERSE CITY, MICH. (Aug. 10, 5:20 p.m. EDT) — Up to this point, automakers and their suppliers have focused on using the Internet to buy and sell products, especially through automakers' e-business platforms. Those systems typically benefit the buyer, not the seller.
But consultants at the University of Michigan Management Briefing Seminars, held Aug. 7-11 in Traverse City, said suppliers can benefit by learning how to take advantage of growing e-business opportunities.
"There are changes going on in the relationship" between suppliers and automakers, said Gary E. Baker, advanced technology group leader at Arthur Andersen LLP's office in Ann Arbor, Mich. "The partners of today are going to be the vendors of tomorrow."
Suppliers can use the Internet to their benefit by opening their portals to shared information with their own supply base and customers, he said. Participants in the chain must work together in pre-production to ensure that each player understands what the others are doing and reduce expenses, he added.
"We all know that there is a lot of overengineering that takes place," Baker said.
While the benefits are not as great or clear-cut for lower-tier suppliers, they still can benefit from using the Internet by getting a better grasp on demands, he said. For instance, they do not need to produce an item with all the bells and whistles if the supply chain only needs a streamlined model.
"Find something you can do. Do it very, very well and collaborate with your customers," Baker said.
Even the U.S. government has gotten into the e-design act, using virtual reality to work on future weapons technology, connecting officers, tank designers and even front-line soldiers so they can see exactly how proposed designs will work in battle situations.
The design program under way at the U.S. Army Tank-Automotive and Armaments Command's center in Warren, Mich., is a key to reducing development of new weapons from more than 20 years to less than five, said Grace Bochenek, director of the center's advanced virtual environments lab.
But do not expect everyone to open virtual doors readily to outside engineers; that simply goes against tradition, Baker said.
Companies that consider design innovations their greatest sales weapons are not anxious to offer potential competitors access to their files, Baker said. At the same time, automakers do not want suppliers to see their plans for fear they could use that information against them in a bid with another automaker, he added.
Suppliers may be in a good position to adapt quickly. But since different companies are not communicating with each other, no one knows what the potential is, said Steve Scott, chief technical officer for computer service group Powerway Inc. of Ann Arbor.
But in the end, suppliers may have little choice except to decide when and how readily they will change, Scott said.
"The riskiest place will be for those who don't adapt," he said. "They'll be eliminated from the supply chain."