Co-creation is a collaborative form of innovation that involves working together with experts and/or stakeholders to create, improve, and share new ideas.
Compared to other methods of “collaboration”, co-creation is about creating new and valuable products, services, solutions, or concepts. It’s about bringing to life something that has yet to exist.
There are, however, many other benefits to co-creation beyond just creating new products, solutions, and services. Co-creation can support business growth, open new markets, provide valuable insight, and much more.
Why are companies turning to co-creation?
Across the globe, companies are being pushed by customers to innovate at a rapid speed.
Thanks to the internet and its many digital channels, customers can now engage brands and businesses in dialogues about the products and services they sell. They can leave reviews, provide feedback, highlight limitations, and more.
All of this puts an incredible amount of pressure on companies to ideate, create, and deliver products that meet expectations and are swiftly supplied to market.
But innovating at speed isn’t something every business can do — many spend months, if not years, developing new flagship products and solutions, optimising them over the years based on data.
However, in many industries, the current production process is simply slowing things down. It’s not flexible nor future-proof enough to help manufacturers and suppliers stay competitive, nor does it actively consider the needs of customers at every stage of the process — both now and in the future.
As a result, they’re falling behind long before the race starts; this problem is particularly prevalent in the automotive industry. It’s here where co-creation is truly making a difference, empowering engineers in traditionally VUCA — volatile, unpredictable, complex and ambiguous — environments to create with certainty.
Co-creation in the automotive industry
The great thing about co-creation is that it allows automotive manufacturers and equipment suppliers to open new avenues of cooperation. They can now leverage the expertise and insights of key stakeholders involved at every stage of the process — from concept to supply.
This means that end users (customers) can input into the production process just as much as the manufacturer. The result is that products and services in the automotive industry more closely align with the expectations and present and future needs of customers.
Ultimately, manufacturers need to go beyond just background research and focus groups and surveys when it comes to evaluating a new project idea — they need to engage customers (and would-be customers) in an interactive, ongoing dialogue.
It’s no longer optional, but a condition for success. As manufacturers race towards producing more sustainable vehicles, particularly in the electric vehicle (EV) arena, working closely with customers, suppliers, and researchers will fast-track a better future.
What are the benefits of co-creation?
Co-creation allows OEMs, customers, distributors, suppliers, researchers, and more to work in unison to create truly innovative and valuable products.
The main benefit is the development of products that meet and exceed the needs of customers, but co-creation offers so much more for everyone involved.
Here are just a few of the benefits of co-creation:
- Improved supplier relationships
By including suppliers earlier in the product/service ideation, creation, and development, manufacturers can increase commitment, transparency, and trust. This, in turn, leads to lower pricing for materials and components, technology sharing, and better relationships overall.
Manufacturers can also use virtual platforms and online portals to share product ideas and designs with suppliers so that they have a better understanding of what’s required. This can help streamline processes, bringing products and services to market much faster.
- Lower costs
Rather than investing in costly third-party research, manufacturers and suppliers can go directly to those they work with and sell to: distributors, engineers, and customers. By asking these key stakeholders the most pertinent questions relating to automotive development — i.e. what’s trending, what do customers want, what solutions are sustainable — they can cut the amount of time spent on research and reinvest in development, sourcing materials, marketing, and other areas.
- Higher ROI
According to research by Hitachi, 51% of businesses say co-creation improves financial performance.
Companies can save huge sums of money on research and development (as they can bring expertise from the outside in), marketing costs, and see lower customer churn — as products delivered are closer to customer expectations.
- Create more successful products and solutions
The most obvious and possibly best reason to co-create is to make something new. Every business wants to be unique — and in a marketplace where many car manufacturers are chasing the same thing (sustainable, high-performance EV and automation), it pays to have multiple stakeholders from different stages of the supply chain involved.
- Break down silos
Co-creation helps to foster collaboration at every stage of the auto development process, from ideation to delivery. With stakeholders and teams working closely together, communication becomes clearer, faster, and more consistent as silos disappear.
Another benefit is that new skills and perspectives can be brought into the process — manufacturers and suppliers will have a better understanding of how their products and services are being used (if at all) and what key stakeholders think (including what’s working well from a sales perspective).
Examples of co-creation in the automotive industry
For many in the automotive industry, co-creation is nothing new. In 2010, BMW created a virtual co-creation lab that allows consumers to offer their opinions on car designs, submit ideas, and get involved in the creation of new vehicles.
Similarly, in 2016, Honda opened its doors to co-creators with a new research and development (R&D) innovation lab in Tokyo. This lab specialises in the development of intelligent automotive technologies, including automated driving, connectivity, and robotics.
At tesa, for example, we’re working with a leading electric vehicle manufacturer and key parts supplier to produce mounting and insulation solutions for an interconnected system. The mounting and insulation solutions are designed to insulate electricity and provide anti-repulsion, helping to protect key parts and regulate the system’s temperature.
We’re also working with a leading auto manufacturer to co-create a removable (bond and detach) solution for their car battery packs. This is an ongoing project and started with a design workshop to understand the client’s requirements and come up with a custom adhesive solution.
What’s next for the automotive industry?
As manufacturers work more closely with suppliers and key stakeholders across the supply chain, we’re going to see a dramatic shift in terms of how cars are manufactured and developed.
But while the benefits of co-creation are clear, some lack the expertise, experience, and insight required to truly make it successful. Particularly when it comes to the next big challenge: EV.
However, with so many auto manufacturers ahead of the game, the challenge is keeping up. Traditional approaches to conception, supply and manufacture are far too slow and inflexible for today’s fast-paced world. Manufacturers and suppliers have to work with key stakeholders to create the solutions their customers want and deserve.
But where do you actually start with co-creation? The prospect of working together with everyone across your supply chain sounds promising, but implementing such a strategy requires experience, expertise, and guidance.
That’s why we’ve spent so much time putting together our guide on co-creation and how it can unlock the next chapter of your business’ innovation.
In our guide, we highlight:
- How co-creation is empowering automotive manufacturers to chase new opportunities and rapidly bring to market new solutions
- More of the benefits of co-creation
- The best way to build a team for co-creation
- Some of the most notable examples of co-creation
- And much, much more
You can download our guide for free by clicking the button below.
