No. 4 carmaker Toyota hopes to leapfrog competitors with digital-modeling software that links production and design
While car lovers lavished their attention on sleek concept cars at last week's New York International Auto Show, No. 4 carmaker Toyota Motor Corp. put the pedal to the metal on plans to build an IT system that will let it fabricate digitally designed cars and build them in digitally designed factories, a milestone on the road to cutting months and years out of the time it takes to turn dream cars into street iron. In a deal that defies recession-sensitive, pinchpenny logic, the Japanese car company signed a contract worth an estimated $800 million to $1.2 billion for software, hardware, and services. Toyota intends to model every aspect of car production, from the automobile's look to the parts that make it run, from the sequence in which components are assembled to the design of the factory itself.
The deal is easily one of the largest ever for the installation of a single suite of software tools, AMR Research automotive analyst Kevin Prouty says. The software is Dassault Systèmes S.A.'s 3D Product Lifecycle Management suite, an integrated offering that includes design collaboration, product-life-cycle management (PLM), and production-support applications. The implementation includes hardware, middleware, and services from Dassault partner IBM. Deployment is expected to take three to five years and will link Toyota's 56 plants in 25 countries and its 1,000-plus suppliers. The system will replace Toyota's proprietary CAD platform, Togo, and its homegrown product data-management system.
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Toyota's selection of Dassault and IBM is significant beyond the size of the deal in a down economy. First, it suggests the system is becoming the industry's default standard. Last month, Sweden's Volvo Group disclosed a multiyear, multimillion-dollar software and hardware contract with the same two vendors; DaimlerChrysler AG and 21 other automotive companies also use at least some part of the Dassault suite. Second, Toyota is revered for quality and efficiency. The fact that Toyota chose third-party software to replace its much-praised, much-studied proprietary production system indicates a sharp focus on core competence combined with a strong desire to stay ahead of the car-market curve.
Toyota officials declined to talk about the specifics of the deal or how the technology will be used. But Dassault and IBM are privy to some of the company's plans, and even a competitor has insight into Toyota's strategy.
During the two-year period when Toyota was considering replacing its proprietary production system, its executives and engineers met with their counterparts at DaimlerChrysler to see the Dassault software in action, says Karenann Terrell, director of E-connect, the business-to-business infrastructure group for DaimlerChrysler. "They were particularly interested in how DaimlerChrysler was pulling suppliers into the design process using our PLM tools," she says. Dassault's design-collaboration software, called Catia, and its product-life-cycle management tool, Enovia, cut 60% to 90% off the time DaimlerChrysler needed to communicate design changes to suppliers and get back required changes, Terrell says. DaimlerChrysler is using the tools to design all of its 2004 models.
The software will let Toyota's designers collaborate with each other and with far-flung suppliers that are also design partners, using Catia's 3-D CAD/ CAM capabilities. Automated Catia tools will test digital designs for "manufacturability"--whether the design of individual parts and assemblies of parts makes them easy to install in the car as it rolls down the assembly line. Toyota will be the first manufacturer to globally deploy software that automatically tests designs for manufacturability, AMR's Prouty says. Other manufacturers use such tools in isolated processes, such as testing the fit of precision parts in a critical assembly.
Toyota is aiming at young drivers with its Scion brand; it hopes the deal with Dassault will cut time to market for cars like the Concept Coupe Crossover
The Catia deployment also will let Toyota reuse designs for parts, such as a hood, in a process known as "morphing." Toyota engineers will be able to search a library of existing hoods, use the tools to make changes to the shape and contours of a design, and automatically test it for manufacturability. That way, the carmaker can use the hood's current supplier for the part.
As design and production engineers work on the look of a new car model, the production-support software, called Delmia, will let separate engineering teams use design and manufacturability data to create a plan that specifies the order in which parts are to be installed in a car as it moves down the production line. That plan ultimately will be used to digitally model the entire factory environment, specifying step by step what's done at each stop in the production process; which tools, supplies, and parts will be used; how many people will be stationed at each assembly stop; and exactly what they will do. Toyota already uses Delmia software on a limited basis in some plants to model the production line, says Dassault Systèmes' president Bernard Charles.
Only after all the pieces fit together--the design, the production plan, and the factory-floor strategy--will Toyota roll the specs for the new car model into its production and supply-chain management systems, says analyst Prouty. The integration of digital design and digital manufacturing will let Toyota speed new models to market in months, rather than years, Prouty says. That's increasingly important because cars have become as much fashion statements as transportation, especially with young people, who buy cars such as the Chrysler PT Cruiser or the Volkswagen Beetle, relying on many of the same impulses that guide the way they buy clothes or electronics.
And Toyota faces challenges in the fashion-car market. The average Toyota buyer's age has crept up to 45 in recent years, according to Toyota execs, and the company is trying to counter that. At last week's auto show, Toyota unveiled a new brand, Scion, that will be aimed at younger buyers and heavily marketed on the Internet. This follows on the heels of an earlier youth-oriented model, the Prius, which also reaches its youthful target market over the Internet. "Scion will target consumers who are well aware of, and may even covet, Toyota's strong heritage of quality," says Jim Lentz, VP of Scion at Toyota Motor Sales. "But they're also consumers who require unique product concepts that are high in personal expression that can be accessed and purchased on their own terms."
The new system could give Toyota an edge in realizing the ultimate prize for automakers: the ability to build a car to customer specifications and deliver it within days. That's a marketing model that would appeal to buyers of all ages, Prouty says.
DaimlerChrysler is working toward the same goal, Terrell says. The next step for DaimlerChrysler is adding the software Toyota saw as its starting point--software for digital production and factory-floor modeling. Ronald Bienkowski, director of technical computing for DaimlerChrysler, says the company is adding Dassault's Delmia production-support tools to its mix of design-collaboration and product-life-cycle management applications. Different divisions of DaimlerChrysler are at various stages of deploying the software. Use is most widespread at Mercedes and DaimlerChrysler's commercial-vehicle unit, where it's used to model the production process; the Chrysler Group is deploying the software.
Such automated tools make sense, Bienkowski says, considering that a typical DaimlerChrysler assembly plant produces 250,000 vehicles a year, often producing one per minute. That means the smallest bottleneck in a factory line is expensive. "It's a good thing to automate the design of a car," Bienkowski says. "But it's a real good thing to automate design and planning of the production process and tooling and equipment."
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