An interview with the Ulm-based Steinbeis expert Professor Dr.-Ing. Thomas Schmitz
Far-reaching changes in the world around us necessitate a transformation of the automotive industry, not least among suppliers. TRANSFER magazine spoke to Professor Dr.-Ing. Thomas Schmitz, Steinbeis Entrepreneur and Vice Dean of the Faculty of Mechanical Engineering at Ulm University of Applied Sciences, and asked what suppliers can do to actively deal with this time of new challenges. He also spoke about the role played by knowledge sharing between science and business. With many years of experience in automotive industry, in addition to a long track record in teaching and research, Schmitz has become familiar with the industry from a variety of perspectives.
Hello Professor Schmitz. The automotive industry is undergoing major upheaval at the moment, with digital transformation, the move to become climate-neutral, and self-driving vehicles just some of the factors bringing about sweeping enforcing significant changes in the sector. What do these developments mean for the large number of SMEs operating in the automotive industry?
The supply chains of the automotive industry are structured hierarchically, which ultimately means new requirements spawned by this period of upheaval have trickled down to suppliers. Many of the major Tier 1 suppliers reacted to this years ago by changing course, restructuring, and opening up new areas of business. My impression is that for many Tier 2 and Tier 3 suppliers, this transformation began with a bit of a delay and only now are the necessary measures being introduced. Of course, it’s particularly difficult for companies who, until now, have been mostly involved in components used in combustion engines.
What can companies do to meet these challenges?
The required measures are equally important for products, personnel, skills, and business processes. To develop new and profitable fields of business, it’s important to make a realistic assessment of strengths, weaknesses, opportunities, and threats specific to your company. Entering a saturated market, based on existing manufacturing processes, holds little promise as a strategy. For example, the attempt made by the producers of cast aluminum engine blocks to enter the market for aluminum chassis components was a failed. So it’s imperative that they innovate.
The question is: What can suppliers do now to build new and successful business relationships? The way I see it, the most important task for component or systems manufacturers is to pique the interest and curiosity of potential new customers. Most business relationships are long-term and underlying structures are anything but flexible. It’s a huge risk taking on new suppliers, for all manufacturers. Thinking back to my time as a global manager in chassis development at a large automotive group, I had a continual stream of inquiries from new suppliers. The company reps could rarely offer me specific answers – from the first question I asked, which was, “Why should we consider your company for future inquiries?” Entering into a new business relationship is a huge risk for OEMs. It entails additional effort, so it’s crucial for the long-term success of suppliers that they create enthusiasm among customers by offering USPs. The way to do that is to differentiate yourself from the competition through innovation, effective manufacturing processes, and robust business processes that focus on the customer. Also, you shouldn’t underestimate the importance of accurate communication with customers in English or their native language.
What solutions can you offer to support customers during the current period of change?
Having knowledge of the decision-making processes in the global automotive industry, I help my customers align their product portfolios to match the requirements of their customers. I also advise international suppliers on their communication strategies with new customers. They must showcase their products, innovations, processes, and capabilities accurately and credibly. The aim is to convey a strong and positive message and thus get the customer interested in closer collaboration.
In addition to strategic consulting, I also offer technology services to my clients. The focus of my Steinbeis Transfer Center lies in the conceptual planning and design of modern chassis systems. The first step is to put lightweight solutions in place, in a cost-effective format, by optimizing systems. The second is to integrate new materials, such as glass fiber composites.
Over and above that, we need to consider new approaches and methods in the field of modern mobility. If you can come up with universally applicable concepts for intelligent transportation vehicles, this allows you to enter new areas of application. Innovative chassis concepts – individual corner modules offering steer-by-wire capabilities – allow vehicles to move around in the tightest of spaces.
Another area is the subjective assessment of driving dynamics, in combination with detailed measurements of all motion variables relevant to vehicles. The aim with this is to see if there’s a correlation between subjective perception and objective values. As automatic driving functions have become more prevalent, there have also been changes in customer expectations regarding driving performance. You have to ensure these new requirements are captured in objective parameters and use these to define new and objective targets.
Working with a partner company, our goal is to democratize sustainable mobility. Vehicles such as bicycles and scooters can be easily, quickly, and inexpensively converted into electric vehicles by using the electrical conversion systems that have been developed. We can also help companies prepare staff for times of change by providing effective training on new topics. Continuously developing workforce skills will be much more important in the future than in the past, because skilled worker shortages will spike again in the coming years.
What technological developments do you think will determine the future of the automotive industry?
The key topics are already known. Continuous increases in battery range, quicker charging times for electric vehicles powered by batteries, expansions in the charging infrastructure, further developments in automatic driving functions, and the networking of all areas involved in modern mobility – they’re the topics that are certain to determine a significant share of our development efforts. The aspect of sustainability is becoming increasingly important, and suppliers will only survive in the long term if they establish sustainable development and production processes. The growing use of recycled materials is also part of the change that’s currently happening.
It’ll be interesting to see how the small car segment develops in Europe. The price of small electric cars has risen so sharply – due to high battery costs – that they’re no longer affordable to low-income households. To make things worse, some of the traditional carmakers are now focusing solely on the market segments that can generate significantly higher profits for them.
I also believe the practical approach we have at the moment – with politicians telling industry which technologies to develop – should be put right. A better approach would be to suggest targets purely on a functional basis, to identify the optimal technological solutions. This is where it will be exciting to see the role synthetic fuels and fuel cell drives will play in the future.
What does this mean for knowledge sharing and technology transfer in this area?
This is another area undergoing change. For example, the automotive engineering degree at Ulm University of Applied Sciences used to be primarily about the application of mechanical engineering. That’s changed now; skills relating to electrical engineering, control engineering, and computer science have become much more important.
The universities are contributing to the training of future generations of engineers by continuously adapting course content to the current requirements of industry. Our Steinbeis Enterprises put us in a position to transfer current know-how to companies through training, consulting, and involvement in projects. I’d like to eradicate the belief that future vehicles will only be about bits and bytes. The intelligent and networked cars of the future are sure to still weigh one to two tons, which makes it easy to figure out that traditional engineering disciplines will continue to play an important role.
Companies are defined as Tier 1 or Tier 2 suppliers according to their degree of contact with car manufacturers.
Firms that deliver directly to car manufacturers are called Tier 1 suppliers. Such suppliers typically work with other subcontractors, which are described as Tier 2 suppliers, Tier 3 suppliers, etc. depending on their position in the value chain.
Prof. Dr.-Ing. Thomas Schmitz (interviewee)
Steinbeis Transfer Center Vehicle Dynamics & Chassis Engineering, Vehicle Systems & Concepts (Ulm)