Mastering Engineering Service Outsourcing in the automotive industry
Mastering Engineering Service Outsourcing in the automotive industry Mastering Engineering Service Outsourcing in the automotive industry
2 | Market study Contents 1. Executive summary 2. Automotive R&D spend in light of the market downturn A. The market downturn is heavily impacting automotive R&D spend B. Key regulatory and technological challenges ahead for the automotive industry C. Engineering outsourcing offers flexibility and cost savings 3. Engineering outsourcing in the automotive industry A. Engineering outsourcing is competing against captive R&D B. Distinct benefits and risks associated with engineering outsourcing C. Automotive engineering outsourcing demand varies across domains 4. OEM/OES approaches to engineering outsourcing and offshoring A. Engineering outsourcing is driven by key market trends B. Automotive OEMs and suppliers practice different approaches to outsourcing and offshoring C. Different scopes in the engineering V-model are considered for outsourcing D. Three key criteria apply when selecting an engineering service provider E. Engineering outsourcing is conducted according to different operating models 5. Engineering Service Provider landscape A. Established ESPs maintain the lead in terms of domain expertise B. Emerging market ESPs offer low-budget engineering and are steadily increasing their market share 6. Concluding perspectives on how to successfully master engineering outsourcing A. OEMs and suppliers must define their individual strategic approach to ESO B. Engineering Service Providers should continously expand their own domain expertise 3 4 4 4 5 8 8 9 11 13 13 14 18 19 21 24 25 26 28 28 30
3 | Mastering Engineering Service Outsourcing in the automotive industry 1. Executive summary The Engineering Service Outsourcing (ESO) market is growing steadily and offers flexibility and cost-saving potential for Original Equipment Manufacturers (OEMs) and Original Equipment Suppliers (OESs). While certain domains (e.g. body/interior) will not see major growth rates, powertrain and electronics/electric (E/E) are the fastest-growing segments for outsourcing. Both vehicle manufacturers and suppliers are facing increasing pressure on development costs and must leverage engineering outsourcing to benefit from gains in flexibility and efficiency. Emerging market players, in particular, provide the right assets, in terms of both a low-cost engineering workforce and the mastery of low-budget vehicle design concepts. Due to a steep learning curve, they are now increasingly advancing into the high-end segment, and also urging established market players to engage in low-cost engineering. We at Roland Berger have examined with a market survey amongst leading automotive managers major trends and successful business practices in engineering outsourcing. Based on our findings we have formulated comprehensive insights and recommendations for both, the OEM/OES as well as the Engineering Service Provider side.
- Page 1: Wolfgang Bernhart, Norbert Dressler
- Page 6 and 7: 4 | Market study 2. Automotive R&D
- Page 8 and 9: 6 | Market study Automotive produce
- Page 10 and 11: 8 | Market study 3. Engineering out
- Page 12 and 13: 10 | Market study Once the peak dem
- Page 14 and 15: 12 | Market study While E/E compone
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- Page 18 and 19: 16 | Market study Due to difference
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- Page 34 and 35: 32 | Market study About the authors
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2 |<br />
Market study<br />
Contents<br />
1. Executive summary<br />
2. Automotive R&D spend <strong>in</strong> light of <strong>the</strong> market downturn<br />
A. The market downturn is heavily impact<strong>in</strong>g <strong>automotive</strong><br />
R&D spend<br />
B. Key regulatory and technological challenges ahead for<br />
<strong>the</strong> <strong>automotive</strong> <strong>in</strong>dustry<br />
C. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> outsourc<strong>in</strong>g offers flexibility and cost sav<strong>in</strong>gs<br />
3. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> outsourc<strong>in</strong>g <strong>in</strong> <strong>the</strong> <strong>automotive</strong> <strong>in</strong>dustry<br />
A. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> outsourc<strong>in</strong>g is compet<strong>in</strong>g aga<strong>in</strong>st captive R&D<br />
B. Dist<strong>in</strong>ct benefits and risks associated with eng<strong>in</strong>eer<strong>in</strong>g<br />
outsourc<strong>in</strong>g<br />
C. Automotive eng<strong>in</strong>eer<strong>in</strong>g outsourc<strong>in</strong>g demand varies<br />
across doma<strong>in</strong>s<br />
4. OEM/OES approaches to eng<strong>in</strong>eer<strong>in</strong>g outsourc<strong>in</strong>g and<br />
offshor<strong>in</strong>g<br />
A. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> outsourc<strong>in</strong>g is driven by key market trends<br />
B. Automotive OEMs and suppliers practice different approaches<br />
to outsourc<strong>in</strong>g and offshor<strong>in</strong>g<br />
C. Different scopes <strong>in</strong> <strong>the</strong> eng<strong>in</strong>eer<strong>in</strong>g V-model are considered<br />
for outsourc<strong>in</strong>g<br />
D. Three key criteria apply when select<strong>in</strong>g an eng<strong>in</strong>eer<strong>in</strong>g service<br />
provider<br />
E. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> outsourc<strong>in</strong>g is conducted accord<strong>in</strong>g to different<br />
operat<strong>in</strong>g models<br />
5. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> <strong>Service</strong> Provider landscape<br />
A. Established ESPs ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong> lead <strong>in</strong> terms of doma<strong>in</strong><br />
expertise<br />
B. Emerg<strong>in</strong>g market ESPs offer low-budget eng<strong>in</strong>eer<strong>in</strong>g and<br />
are steadily <strong>in</strong>creas<strong>in</strong>g <strong>the</strong>ir market share<br />
6. Conclud<strong>in</strong>g perspectives on how to successfully master<br />
eng<strong>in</strong>eer<strong>in</strong>g outsourc<strong>in</strong>g<br />
A. OEMs and suppliers must def<strong>in</strong>e <strong>the</strong>ir <strong>in</strong>dividual strategic<br />
approach to ESO<br />
B. <strong>Eng<strong>in</strong>eer<strong>in</strong>g</strong> <strong>Service</strong> Providers should cont<strong>in</strong>ously expand<br />
<strong>the</strong>ir own doma<strong>in</strong> expertise<br />
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