To tap the full potential of ad-vances in electronics and deliver the technology's promise, key tier-one suppliers like Delphi Automotive Systems are confronting the many challenges on the road. Aside from generating excitement for OEMs through innovative new products, the suppliers must also build trust and confidence with their OEM customers. This trust will motivate automakers to turn over important engineering work to tier-one suppliers earlier in the design process. Also, cost continues to be a challenge. Plus, aggressive efforts are under way to keep cutting the price tag of the electronic technologies used in vehicles.
While the manufacturing process continues to be revamped, standardization is another approach being taken by car makers and suppliers jointly to keep the cost of automotive electronics low. Standardization will attract more semiconductor and electronic component suppliers to enter this fray, thereby making the environment cost-competitive.
A good example is the AMI-C consortium, formed by a group of 12 global vehicle manufacturers to facilitate the development, promotion, and standardization of automotive multimedia interfaces to vehicle communication networks. As a partner in this organization, Delphi Automotive Systems intends to expedite the development of AMI-C specifications.
This will enable electronic devices and connections to be interoperable and interchangeable among car models of participating automakers, allowing suppliers to sell the same components to various car makers. In turn, vehicle manufacturers will be able to use components from a myriad of suppliers.
Competition will become fierce, performance levels will rise, and production costs will be checked. Additionally, it will bring many more benefits to the industry. These include flexibility, expandability, and a reduced time-to-market, as well as the ability to upgrade components during a vehicle's life cycle without having to go through a major redesign.
Another initiative that will provide greater access to semiconductor and other component suppliers is the Covisint, the global internet exchange formed by General Motors, Ford, DaimlerChrysler, Renault, and Nissan. By using Covisint as a primary exchange for conducting electronic transactions with customers and suppliers, Delphi Automotive Systems hopes to include more players in the process, and to provide greater value to its customers. In fact, Covisint will further extend the company's e-business and online procurement capabilities, which yielded more than $70 million in savings last year. By reducing potential system redundancies, improving supply chain management, and en-hancing communications, Covisint is expected to propel these savings far beyond the current level. In essence, tier-one suppliers and automakers are collaborating more closely today to take full advantage of electronics and unleash that promise.