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February 26th, 20071
«Open Innovation in Global Networks»Symposium
Copenhagen,
February 28, 2008
Patrice ReilhacInnovation Director
Driving Assistance Domain
Valeo’s Domains: A disruptive innovation approach in the automotive industry
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Domain as a disruptive innovation approach
� Valeo: the Group & the Branches
� The classical innovation process
� The need for more
� The solution: Valeo‘s Domains
� Lessons learned and next steps
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The Group
Valeo is an independent global
industrial group fully focused
on the design, production
and sale of components,
integrated systems and
modules for cars and
trucks, in both the OEM
and aftermarket segments.
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2006 Customer Mix Passenger Cars
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
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February 26th, 20075
Valeo Key Figures
131 plants131 plants
29 countries29 countries68 R&D centers68 R&D centers
91 nationalities91 nationalities
71 100 people71 100 people€ 10 Bn sales€ 10 Bn sales
31 December 2006
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February 26th, 20076
Valeo Group Organization
Chairman& CEO
Valeo ServiceTechnical
Vice President
FunctionalVPs
VLS VWS
VIC VES
VEC VC
VSS VEMS
IAM
OES
VCC
VT
ChiefOperating
Officer
10 Industrial Branches – 2 Aftermarket Branches100 Divisions – 10 National Directions
Quality
Purchasing
IS
Industrial
HR
Comm
Finance
Legal
R&DSales
Strategy
Operations
(P&L Responsibility)
Networks
(Functional Organization)
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Global Footprint 2007
North AmericaNorth America
16 Sites(10 LCC)
16 Sites(10 LCC)
1.3 bn1.3 bn
South AmericaSouth America
10 Sites10 Sites
0.5 bn0.5 bn
EuropeEurope
70 Sites(24 LCC)
70 Sites(24 LCC)
6.9 bn6.9 bn
North AfricaNorth Africa
9 Sites9 Sites
AsiaAsia
26 Sites37 sites*
26 Sites37 sites*
1.1 bn2.2 bn*
1.1 bn2.2 bn*
*Including unconsolidated companies
Globalization
R&D
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R&D 2007
� More than 6% of sales in R&D
� More than 6,000 engineers and technicians
� 68 R&D centers
� More than 600 new patents filed in 2005
Mainly organised by Branch (Product Ligns)
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R&D Mission
StrategicCreate market driven, leading innovations and
effectively translate them into standards
OperationalDevelop best in class competitive products efficiently within simultaneous engineering
project teams
NetworkDevelop expertise within R&D teams, well
adapted to their tasks and promote synergies, generated via network actions
The Valeo Innovation Process
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Advanced TechnologyAdvanced Technology
ConceptConcept DevelopmentDevelopment ProductionProduction
CustomerCustomer
P2P2P3P3
P0P0P1
ValeoValeo
Principles
���� Deliverables by Phase
���� Simultaneous Engineering Project Teams
���� Validation and management committees
���� Structured processes with phases
���� Annual strategic planning > TDP Process
���� Indicator driven Improvement processes
INNOVATION PROCESS
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� Test new creative market driven ideas� Test new creative market driven ideasP3
Project Objectives
� Build global Standards� Build global StandardsP2
� Develop Customer Applications� Develop Customer ApplicationsP1
� Optimize existing Products� Optimize existing ProductsP0
Branches
Divisions
P2P2P3P3
P0P0P1
Innovation Process
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The rationale for the Domain creation in 2004…
NEED FOR MORE
� Transversal approach
� Extended carmakers intimacy
� End-user orientation
� „Embedded“Societal trends
OLD APPROACH
� Product line focus only
� Intimacy with carmakers only at component level
� Lack of end-user input
The Valeo Domains
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Technology and Innovation Strategy
► Safety
Focus on Market NeedsTransversal Synergies
► Well-being
► Environment & Mobility
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Driving Assistance: Reconciling automobiles and safety by reinforcing the active aspects of accident prevention and avoidance.
Powertrain Efficiency: Reconciling automobiles and the environment by contributing to the creation of cleaner, more fuel-efficient vehicles.
Comfort Enhancement : Reconciling automobiles and well-being by making vehicles easier to use and enhancing driver and passenger comfort.
Valeo Domains
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Driving Assistance
� Driving Assistance
� Monitor vehicle perimeter, inform or alert driver and other road-users, initiate appropriate corrective actions
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Domain Tools
PowertrainEfficiency
ComfortEnhancement
DrivingAssistance
Demo Cars
SolutionMapping
TransversalProjects
MarketStudies
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Domain General Principle
Component
P2
Domain Funding and
Control
Domain orBranch
Funding and Control
BranchFunding and
Control
Domain
� drives process via TDP and Specs
� supervises execution
� has funds to supportprojects, relevant for the domain
System/Module
P3Component
P3
System/Module
P2
Domain as innovation & business development incubatorDomain as innovation & business development incubator
Solution-System/Module
P3
Concept ValidationConcept Validation
Customer communication Customer communication
via Domain demo carvia Domain demo car
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Domain organization: basic principles
� Each Domain has a Domain director with a dedicated budget.
� The main lever of the Domain is innovation,
� based on market inputs like: societal analysis, internet surveys, customer clinics with demo cars, focus group, predevelopment and/or co-innovation with carmakers.
� The Domain is in charge of coordinating the TDPs(Technological Development Plans) of all Branches belonging to its Domain and to propose a global Domain strategy aligned with Valeo corporate targets.
� A Domain can have a dedicated technical center to work on specific transversal advanced projects and to integrate the technologies of the Branches into single demo car.
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Blind SpotDetection Radar
Adaptive rear lights with MicroOpticsTM
technology
UltrasonicPark Assist
Front and Rear Flat Blade wipers
Adaptive XLedTM
headlamps
V-360 A sixth sense for safety
Human
Machine
Interface
FRONT SYSTEM
FUSION
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BeamAtic ™ Plus
A new link between the front camera and a fully adaptive
headlamp system
Progressive Lighting ModuleProgressive Lighting Module
Beam PatternBeam Pattern
VideoVideo
AnalysisAnalysis
in in
PrototypePrototype
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Human Machine Interface Domain Car
*
Features supporting your drivingFeatures supportingyour manoeuvering
XtraVue picture on Head-up Display
ParkVue picture on navigation display
Automatically activated when reverse gear
*
USES A PROTOTYPING SOFTWARE ENVIROMENT
FROM A SOFTWARE START-UP
TO QUICKLY INTEGRATE
NEW FUNCTIONS COMING
FROM INTERNAL OR EXTERNAL SOURCES.
���� Strong enabler for Open Innovation
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Classical creativity processes follow the Closed Innovation paradigm
Source: H. Arnold
Chesbrough´s closed innovation model
Research Development
The MarketResearch Projects
Boundaryof the firm
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Open Innovation paradigm:Valeo’s Domain as enabler
Source: H. Arnold
Chesbrough´s open innovation model
Research Development
The MarketResearch Projects
Boundaryof the firm
New Market
Domain coordination for an open & global network leading to best-in-class solutions
Domain coordination for an open & global network leading to best-in-class solutions
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Why disruptive?
� Domains are neither a central, nor a product lign R&D
� Aligned with societal trends and OEM R&D strategies
� Similar to the concept of Ambidextrous Organization:
– Incremental innovation inside „traditional“ product lign
– Radical innovation boosted/pushed by the Domain team both for transversal innovations or for new fields
� Dedicated resources (people & expenses) allocated on a yearly basis by the Group, but monthly follow-up fully integrated with associated Branches
� Both Domain Advanced Tech Center and Product Marketing under the lead of the Domain Director
� The Domains are the main source of Open Innovation interactions with the surrounding „eco-system“
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Where are we?
� Domains launched since 2004:
� Strong impetus to Valeo‘s innovation approach
� Increased R&D visibility externally & internally
� Strong market recognition
� Impact on the order intake
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What‘s next?
� Consolidation of best practices between domains
� Exploration of Interdomain synergies
� Integration into R&D excellence clusters
� In-depth investigation of Open Innovation potential
….. and the ideas coming from this symposium
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