Cooper Tire Cuts Time-to-Market by 50 Percent; Higher Revenues and Lower TCO to Total $2.9 Million Over Three Years
Published by Microsoft: March 2003 For another new product success story, see the REI Case Study
Over the past
decade,
Cooper Tire & Rubber Company has seen product life cycles in its industry
shrink from 10 years to as few as 3.
That made it increasingly important for the company to cut its two-year
time-to-market. To increase market share and profitability, the company set a
six-month time-to-market goal. It consolidated server platforms by moving from
UNIX, mainframe systems, and proprietary software to a solution based on
Microsoft software—including Microsoft Visio, Microsoft Project, SharePoint
Portal Server, and BizTalk Server‑‑and XML Web services, all
running on Windows 2000 Advanced Server. The solution, now being deployed, is
on track to deliver a six-month time-to-market. Cooper Tire expects to win
U.S.$1.6 million in additional net revenue over three years and to reduce
total cost of ownership by an additional $1.3 million.
Cooper Tire & Rubber Company, founded in 1914, specializes in the manufacturing and marketing of rubber products for consumers. Its products include automobile, truck and motorcycle tires, inner tubes, NVH (noise, vibration, and harshness) control systems, automotive sealing, and fluid delivery systems. Cooper is headquartered in Findlay, Ohio, and has more than 23,000 employees and 52 manufacturing facilities in 13 countries.
Cooper Tire has called itself traditionally a “fast follower,” meaning that it introduces products to capitalize on opportunities created by new markets. But over the past decade, the definition of “fast” has changed. Whereas tires formerly had 10-year product life cycles and Cooper Tire could afford to introduce its products one to two years after new markets had been created, today that is no longer acceptable, according to Jeffrey F. Schroeder, Director of New Product Development at Cooper Tire.
“Competition is driving a shortening of the product life cycle,” says Schroeder. “Product life cycles are down to three years, and we have to introduce new product within six months of the start of a new market—when that market is most profitable‑‑if we’re going to capture significant market share and revenues. It’s not just that product cycles are shorter; there’s more competition than ever before. We can’t sell older styles if our competition has new tire lines. Accelerating our time-to-market, cutting it by at least 50 percent, to six months, is absolutely crucial to the future of our business.”
Designing and manufacturing a tire involves at least eight major steps—from marketing concept development and project mold creation to prototype procurement and design certification. Compressing the process to just six months would require both shortening the steps and running some of them concurrently, rather than sequentially. But before Cooper Tire could do that, it would have to overhaul a process that included hundreds of applications—running on Oracle, UNIX, DEC VAX, Unisys mainframe, and iManage document management—few of which could interoperate. The existing mix of systems required manual rekeying of data from one system to another and the added time and expense of correcting the errors that resulted.
Cooper Tire initiated its “CP6” project—for “Concept to Production in Six Months”—and began to consider its options. The company first looked at product life cycle management (PLM) solutions from vendors. But such solutions would cost about U.S.$3 million to license and customize, according to Schroeder.
“Worse, those solutions would force us to change our processes to suit the software and then they’d lock us into a fixed solution,” says Schroeder. “Every time we’d want to revise or extend the solution, we’d pay a high price in integration fees. We needed another option.”
Cooper Tire found that option—and the key to the success of its CP6 project—in a range of Microsoft® products and Microsoft .NET–connected applications. The proposed consolidated solution resides primarily on clustered servers with dual processors running the Microsoft Windows® 2000 Server and Windows 2000 Advanced Server operating systems. The Microsoft solution enables easy collaboration by all users with browser and intranet access. It addresses the problems Cooper contemplated with PLM software: At $800,000, it costs less than 30 percent as much as the PLM solution and, because it’s based on the Microsoft Windows platform and .NET-connected software, it eliminates “lock-in,” enabling Cooper to extend the solution when and as it wishes to meet evolving needs.
The first step of the CP6 process‑‑marketing concept development—will be managed on Apprentice Mentor, a custom application from Apprentice Systems, based on Microsoft Visio® drawing and diagramming software. Marketing identifies target market segments, and designers, using the Visio-based software, model their initial plans for the new tire. The software then exports the XML data needed to automatically build a Microsoft Project file for each tire within a tire family.
Once the data is exported to Microsoft Project Server and stored in Microsoft SQL ServerTM 2000, it can be accessed by marketers, designers, procurement specialists, and manufacturing personnel through Microsoft SharePointTM Portal Server, and analyzed and amended through the familiar Microsoft Project client and Microsoft Office programs. Microsoft Office smart tags allow users to call up detailed data simply. For example, users can view the complete range of products meeting a certain size specification, just by keying in that size or passing their mouse over it.
While Cooper Tire plans to consolidate its database environment, for now it is continuing to use a variety of legacy databases running on UNIX, Windows 2000 Server, and mainframe systems. One of its key interoperability mechanisms will be Microsoft BizTalk® Server. BizTalk Server will pull data from some of the legacy databases, convert the information into standard XML format for use by the CP6 solution, and forward the information to the SQL Server database, the Oracle database, or both, so it can be accessed by users.
SharePoint Portal Server provides a centralized location containing all needed information for the design-to-production process. In contrast, users would constantly move among 10 or more applications as they worked with the former environment.
“Everything we will need will be right there in Microsoft SharePoint Portal Server,” says Todd Wilson, Technical Systems Project Manager. “That’s a huge advantage for our users. People will do all their work from our intranet. They can access multiple applications without going out to the mainframe. They see exactly what they want—all the published data is right there. They will get the right information in the right place, at the right time.”
Cooper Tire plans to consolidate and eliminate at least 50 mainframe, VAX, and UNIX applications previously associated with tire design and manufacturing. Applications and their associated databases will, over time, move to either of Cooper Tire’s two standard database environments—SQL Server and Oracle. The two databases interoperate seamlessly using a combination of Web services and application programming interface (API) calls.
Web services are being used in other ways by the solution. For example, a unit conversion Web service supports metric-to-English unit conversions for any application in the solution. The Web service works in the background, identifying whether a user is at Cooper Tire’s U.S. or United Kingdom facilities and automatically ensuring that data requested by that user is presented in the appropriate units of measure.
To get what the company calls a “jump-start” in its CP6 solution, Cooper Tire turned to Microsoft Consulting Services (MCS).
“We had been trying to make this work along with all of the other projects that an IT department has,” says Schroeder. “Microsoft Consulting Services really gave us a jump-start and ensured that we didn’t waste time with wrong approaches or wrong people. They put a tight timeline on the project, proved it could work, and really breathed life into it. Because of their expertise, MCS could always bring in the right resources to address the challenges of developing CP6—and they drew not only on their own resources, but also on Microsoft Certified Partners such as G.A. Sullivan.”
“Another Microsoft Consulting Services contribution was to really show us the potential of the Microsoft .NET Framework to achieve our goal,” says Wilson. “And MCS wasn’t just interested in bringing in their consultants; they wanted to ensure that we were self-sufficient and could help develop and then maintain this solution over the long term. MCS conducted a .NET bootcamp that brought our developers up to speed quickly so they could be effective members of the development team for CP6. Moving forward, we will be very capable of maintaining and expanding the solution.”
The solution has been fully prototyped and tested and is now in the midst of Phase II deployment, with full rollout expected later this year. The company anticipates migrating to Windows Server 2003 within the next few years.
By enabling Cooper Tire to run its concept-to-manufacturing processes both more quickly and in tandem, the Microsoft-based CP6 solution will enable the company to meet its goal of reducing the time-to-market cycle from one year to six months. As a result, Cooper Tire will introduce products not only more quickly, but also more frequently, boosting both unit sales and revenues per unit. New products typically allow for higher margins. This greater agility will also enable Cooper Tire to respond more promptly and ably to competitors, ensuring that it maintains and expands market share.
All of those factors contribute directly to greater total revenues. A rapid economic justification study conducted by Microsoft projects that the company will boost revenues by $1.6 million over three years, thanks to the CP6 solution.
Beyond the $1.6 million boost in revenues over three years, Cooper Tire expects to see total cost of ownership (TCO) decline by $1.3 million over that same period, for a net gain of $2.9 million. The TCO decline is anticipated in three areas: process improvements, improved collaboration, and direct cost reductions.
The biggest chunk of that TCO savings—a projected $1.05 million over three years—is savings from improved collaboration, including the elimination of duplication of effort, better data to improve production scheduling and meet demand, lower cost of producing quality goods, consolidation of the server infrastructure, and the creation of an environment for the rapid deployment of new products involving
