Innovation, speed to market are keys for suppliers
Auto suppliers have until Sept. 7 to apply for the 2013 Automotive News PACE Awards.
The awards recognize innovation, technological advancement and business performance. They are presented by Ernst & Young, Transportation Research Center Inc. and Automotive News.
Innovation is increasingly important to suppliers and to the industry as automakers struggle with numerous challenges.
For instance, fuel economy standards are getting tougher. Consumers are clamoring for the latest in infotainment and connections to the Internet. To prevent accidents, suppliers and the federal government are exploring creative ways to use radar and other sensing devices.
"Innovative suppliers have better margins, deeper relations with customers and are building competitive advantages faster than peers," says J Ferron, director of judging for the Automotive News PACE Awards and Automotive News' director of strategic development.
"We PACE judges also see that those companies that celebrate their game-changing innovations attract new business in the short term," he adds. "For the longer term, they are able to retain great engineers and attract new high-performing talent."
But while the benefits are huge, the challenge of bringing innovations to market is daunting. Studies show that only 20 percent of commercialized innovations are profitable, and that only 10 percent of have acceptable margins, Ferron says.
One study found that only 30 percent of company r&d projects are commercially successful.
For suppliers, a key part of bringing new ideas to market, he says, is to build a "connected community." This path links the supplier's r&d efforts, runs to top management and marketing executives and extends to an automaker willing to listen.
"In today's markets, it's not just an innovative idea, but how quickly that idea gets to market that matters most," Ferron says. "It's the speed of the collaborative team that defines market impact."
Ferron provides this advice for supplier CEOs who want to encourage innovation:
Seek new ideas beyond the usual suspects. Even summer intern can be a source.
Assemble a critical mass of engineers and knowledge to work on new ideas.
Develop a sense of urgency in your company to create new ideas and products.
Don't punish failure, which stifles creativity and effort. Failure should be seen as an opportunity to do it right the next time.
Ferron suggests that CEOs pose these questions to encourage innovation:
How do my teams access needed information, knowledge and technologies? Is that fast enough?
How adaptable are we to changing conditions?
What customer needs are unclear, and why?
What is unique about our people and talent that automakers can use faster than our competition?
Are we ready to innovate ourselves out of our biggest or best products?
For the PACE Awards, an independent jury of industry volunteer experts visits the finalists.
During that visit, judges assess an innovation's market and competitive impact, technological achievement and impact on the company and its customers.
Winners will be announced at a ceremony on April 15, 2013, in Detroit. PACE stands for Premier Automotive Suppliers' Contribution to Excellence.
The awards competition is open to all suppliers that contribute products, processes, materials or services directly to the manufacture and sale of cars or trucks.
For more information and to apply online, visit autonews.com/pace or call 313-446-6039.
The fee for applications received on or before Sept. 7 is $1,500.