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Feb 24, 2012

3 Disruptive Lessons Automakers Should Learn for Greater Efficiency


Originally published at GreenBiz.com on February 13 as the second of a five-part series by RMI professionals on how to put into practice the ideas of Reinventing Fire: Bold Business Solutions for a New Energy Era. The series continues at GreenBiz.com each of the next two Mondays, and will be reposted on rmi.org’s Outlet on subsequent Fridays.

Automakers facing unprecedented market conditions, including higher fuel economy standards and consumer demand for efficiency in response to high fuel prices, can look to human evolution for design solutions that promise breakthrough efficiency.

Recent evidence suggests that lightweight design enabled by the best available technology allowed humans to develop large brains. Early in our evolution, cooking food allowed fire to perform much of the work otherwise done by the digestive system, making more calories available per pound of ingested food and allowing us to develop lighter digestive machinery — about 35 percent smaller than a typical mammal of our body weight — and heavier brains.

Eventually, harnessing the energy of fire also led to today's combustion-based transportation system. But that system has not benefitted from millions of design cycles, as our species has, to produce optimal, lightweight systems that maximize utility per pound. Recent advances in lightweight, ultrastrong materials have nevertheless enabled leading manufacturers to dramatically reduce vehicle weight — increasing utility per pound -- with no compromise to safety or performance, achieving up to 240 miles per gallon equivalent.

Reinventing Fire recognizes the fundamental business opportunity that will come with transitioning the U.S. transportation system off oil, eliminating external costs paid in blood, health care, and environmental degradation and instead capturing a $3.8 trillion net prize for not using oil. While incremental vehicle efficiency gains are possible with current design paradigms primarily based on steel and aluminum, lending up to 30 percent weight reduction, the truly transformative opportunity lies in moving to a new paradigm.

The human body hints at where this paradigm might be found. Our skeletal structure is composed of bone, a composite material consisting of highly elastic mineral fibers embedded in a stiff organic matrix. Composite materials made of carbon fiber, lending among the highest strength and stiffness per pound of any known material, are beginning to find their way into vehicle structures produced by technological leaders including Boeing, BMW and Volkswagen.

Producing a new vehicle around carbon fiber composites is a disruptive business model, requiring restructured supply chains and redesigned, retooled factories. But manufacturers can begin with immediate steps outlined below, to smooth the transition and apply the benefits to any vehicle, whether built with advanced materials or not.

1. Examine your culture and take lessons from other industries.

An institutional culture conducive to transformative, lightweight design is among the most important variables in determining who will reap the competitive spoils of efficient vehicle design. It is also among the lowest-risk components of the transformation, requiring only careful hiring; clear, decisive leadership; and intelligent institutional structuring.

Without this foundational element established, any move to a new design paradigm will yield much less than its potential. What does this institutional culture look like? The aerospace industry, whose products are more severely impacted by weight than perhaps any other transportation mode, can offer insight.

Boeing establishes an overall weight target for each new airplane program it initiates, based on a combination of top-down historical parametrics, bottom-up weight accounting, and theoretical limits based on material properties. The target is always aggressive and always difficult to achieve, and is broken down and distributed to each area of the airplane so each team owns its portion and strives continuously to meet it.

Secondly, visibility of progress toward the target is provided regularly to senior leaders, who also examine design studies involving weight savings at the "whole-airplane" level so individual teams can never lock themselves away and optimize their system at the expense of the airplane as a whole.

A third critical element to Boeing's lightweight institutional culture is a dedicated, cross-functional team whose sole focus is to ensure that weight targets are met, that weight savings ideas receive their due attention and analysis and that ideas are evaluated according to the whole airplane impact. Finally, company incentives are established to elicit and encourage generation of innovative weight-saving ideas.

2. Seek out wise investments and partnerships.

Once this culture is established, manufacturers can move to investing in advanced materials, including establishing partnerships with other manufacturers to precompetitively work out particularly challenging technical problems, such as the Automotive Composites Consortium. Partnering opportunities can often also take the form of a joint venture between a manufacturer and material supplier, such as the partnership between BMW and SGL, and more recently, GM and Teijin.

The transition toward retooled factories can begin with a substitution phase in which a few standard parts on an existing vehicle are replaced with lightweight composite parts, enabling a manufacturer to build analysis and design prowess for composites while establishing industrial partnerships, working out the raw material supply chain and gaining a head start on tooling.

3. Make marketing work.

A final immediate step manufacturers can take is to market lightweight vehicles in a way that emphasizes performance in addition to efficiency. Lightness, particularly of the magnitude possible with advanced materials, allows better acceleration, particularly if combined with electrified propulsion. Many customers will pay a high premium for performance regardless of efficiency. Luckily, the industry transition toward lightweight vehicles offers a robust business model to U.S. manufacturers, helps move the U.S. transportation system toward an oil- and emissions-free future and enables some of the fastest, most appealing vehicles to come out in the last decade. How could we have better examples of what's possible than the Tesla Roadster or BMW i8?

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