DETROIT - Valeo SA plans to use the Internet to transform itself into a faster, more efficient supplier.
Calling itself 'The Connected Enterprise,' the company wants to speed its work flow for digital mock-ups and seeks virtual integration of suppliers with its project teams.
The Paris company takes 18 months to develop a new headlamp system, which could be shortened to 10 months by speeding innovation via the Internet.
With that and other innovations in mind, Edward Planchon, Valeo group vice president for North America, announced a $100 million spending initiative last week at the SAE 2000 World Congress.
Valeo is banking on technology for a boost into the 21st century. Planchon said the company has slated $100 million for its Venture Capital Initiative to develop new technology. 'I expect to find candidates here this week,' he said.
Valeo will provide cash for individuals or companies with promising product, process or Internet technology in return for an option on that technology. Planchon had no details, but did say Valeo will not buy stock in such a venture or use the money to form joint ventures.
CUT VALIDATION COSTS
'It is the supplier that provides the innovation,' Planchon, a 45-year industry veteran, said. 'But unfortunately, the supplier has to feed itself.'
One of Valeo's most pressing needs is to cut costs in its validation of parts and components between sub suppliers, automakers and itself, according to the investment firm Merrill Lynch. Valeo is linked electronically to most of its customers through an Intranet, but such systems are costly to set up and maintain because of different operating systems.
Use of a common language on the Internet could speed the work flow for areas such as digital mock-ups. That would allow the virtual integration of suppliers with project teams, according to Merrill Lynch.
Planchon said Valeo also expects to grow its Internet-based virtual marketplace for its component purchasing. The company began online bidding in January, a practice it estimates will account for 50 percent of its $5 billion annual purchasing budget.
Planchon said Valeo's online bidding includes commodity parts but not the more sophisticated engineered systems.
Working with Valeo's suppliers will make them more efficient and let Valeo continue to cut costs to its automaker customers, he said.