Zehender: The answer is CASE
There are four mega-trends shaping the future of mobility: Mercedes-Benz Cars Procurement & Supplier Quality concerns itself intensively with these trends. An interview with Klaus Zehender.
The four CASE mega-trends are shaping the future of mobility: Networking (Connected), autonomous driving (Autonomous), flexible use (Shared & Services) and electric drive systems (Electric). Klaus Zehender is member of the Divisional Board of Mercedes-Benz Cars and responsible for Procurement & Supplier Quality. His unit concerns itself with these trends well before customers can experience them in their vehicles. An interview with Klaus Zehender appeared in the business magazine Top Career Guide Automotive, and in the Daimler Supplier Magazine it is now also available online for the first time.
Dr. Zehender, Mercedes-Benz achieved a record year in 2016 and has reached the No. 1 position in its segment four years earlier than planned. What happens now?
Zehender: For Mercedes-Benz 2016 was the most successful year in the company’s history. We achieved record figures for sales and operating result. At the same time, we were able to establish impressive innovations in our vehicles, e.g. in the new E-Class, the world’s most intelligent business sedan. The results are no accident, we all worked hard to achieve them. Our responsibility is to ensure increasing sales volumes in partner-like cooperation with our global supplier network. However, it is also important to develop innovations together, and in the top quality for which we are known.
You asked me what happens now. There is a new approach to mobility, and all of the mega-trends have the potential to turn our industry on its head as disruptive game changers. Our answer to this is CASE. This is a new autonomous unit in which the aspects of Connected, Autonomous, Shared & Service and Electric Drive are being intelligently linked. We have also aligned ourselves with these four trends in my own unit, Procurement & Supplier Quality. One important milestone is this is the new generation of electric cars.
Mercedes-Benz covers the entire bandwidth of intelligent drive technologies, from the internal combustion engine to electric drive and the fuel cell. On the procurement side, we will use the tools at our disposal intelligently and make our contract placements for future technologies as flexible as possible. This will e.g. ensure that we are always able to install the latest generation of displays in our vehicles. In addition we are actively seeking new partners in the fields of consumer electronics and IT.
What changes are taking place thanks to the use of new components, software and services on the way to autonomous driving? What changes are taking place thanks to the use of new components, software and services on the way to autonomous driving?
Zehender: Autonomous driving is set to revolutionize individual mobility. In the future we will be able to do some work, communicate with others or simply relax in autonomous vehicles. This means that we no longer just purchase production materials, but also data and software such as map material from HERE or vehicle apps such as Remote Parking Assist. As you can see, this requires innovative new players. Together with the development departments, we seek out interesting companies and visit shows such as the CES in Las Vegas to scout for trends. Our aim is to actively drive current trends forward. To do this, we rely on innovation scouting.
Apart from our organizational thrust, we at Procurement & Supplier Quality have also developed new methods and capabilities, especially where digital content is concerned. In the software field we are developing projects on an evolutionary basis. Familiar consumer brands with their fast innovation and update cycles have definitely set the bar high here.
We are moving away from the time-intensive new development of apps towards upgrading of existing products in the form of software updates. This means that our customers can e.g. obtain navigation map updates “over the air” directly into their vehicle, with no workshop visit. The challenge for us is to ensure much shorter product maturity processes as well.To make sure that this goes smoothly, we have e.g. developed a toolbox of methods for the preventive verification of software contract placements.
How is the supplier environment changing, what new players have been added?
Zehender: The supplier environment is undergoing change, and we perceive it very clearly. Vehicles are increasingly changing from purely a means of transportation to a communication center. At the Daimler Supplier Award ceremony, Tencent has just received the special award in the category “Innovation” for onboard integration of WeChat in China. WeChat is the Chinese WhatsApp. It is clear that customers have become used to the fast pace of change in the consumer sector. It has become almost normal to buy a new smartphone with new features every one to two years. The fast development of product cycles, new markets, different local legal requirements and the aspect of data management are a challenge – also for the suppliers. Apart from great flexibility, it needs a problem-solving approach and willingness to innovate.
For long-term supplier partnerships, the decisive factor is reinforcing the topic of software development and software integration as a core area of expertise. As well as the established supplier partnerships, we also have completely new players on board. These come from the IT sector, the internet industry and consumer electronics. The giant high-tech companies are of course cool employers in the eyes of young professionals. Many of these new, non-automotive competitors are now keen to enter the automotive market. Which of course shows how attractive our industry is. At Procurement & Supplier Quality we now need engineers just as much as IT specialists. We give them the opportunity to combine the two, and as a bonus we offer 130 years of experience in automotive engineering.
In this dynamic environment, how does Mercedes-Benz assure quality from new suppliers from other industries?
Zehender: We familiarize new partners with our high product, process and quality requirements, and advise them continuously in the process. These requirements are much more stringent in the automotive sector than in the consumer electronics sector. For example, the display of your smartphone needs to withstand temperatures up to around +35 degrees Celsius. In a vehicle, the same display has to cope with -40 to +85 degrees Celsius. Long-term durability is a further important aspect. In contrast to a smartphone, a display cannot simply be replaced once a year or every two years. Naturally we also demand 100% data and functional dependability here, with no tolerance for errors. The systems have to function in the market – around the world and around the clock. This is why our quality engineers are active with suppliers all over the world.
What does the supplier manager of the future look like? What qualifications and talents do you want to see in your personnel?
Zehender: We see digitization as a huge opportunity. In an era of increasing connectivity there is great demand for specialist personnel, and further training of personnel is of increasing importance. We are constantly expanding our know-how, and we use various initiatives such as e.g. recruiting days to attract young talent at an early stage and bring it on board. Especially in the area of electrics/electronics, we need experts with the corresponding skills. This means IT expertise in addition to the classic production and automotive engineering qualifications.
We have spoken about the drive systems of the future. What drives you on personally each day?
Zehender: It is precisely the topic areas of Connectivity, Autonomous driving, Shared & Services and Electromobility that are increasing our design scope. At the same time we have the opportunity to reassess our organizational structure by working together with startups and new players. This makes us more agile and flexible. A good team spirit and an informal working atmosphere are enormously important to me, and they provide the best conditions with which to lead the way into the new era of mobility.
What I like so much about my job is the sheer variety of activities, increasingly also in Asia. Another aspect I find exciting is that the internet industry is playing an increasingly important part. Equally exciting is our existing supplier network, which is gradually realigning itself.Today I might be negotiating the app for Remote Parking Assist, tomorrow I can be conducting an intensive technological discussion about a new generation of battery cells, and the next day I could be flying to Beijing for an award ceremony with Chinese suppliers. Bottom line is that I derive my daily energy source from the variety of activities together with our innovative products.
This interview was published in German language in Top Career Guide Automotive 2017 / 13th annual edition.