Do Suppliers Now Drive Technology?

Originally posted May 14, 2013 by Oliver Liu on the W&L Economics 244 Web Site. Modest additions by the Prof.
At the Federal Mogul Plymouth Technical Center, I was shown a new spark plug technology that Federal Mogul engineers developed called the Advanced Corona Ignition System (ACIS). ACIS looks like a conventional spark plug except it has a crown on the end instead of the ignition electrode with the ground in front. ACIS fills more of the chamber with ignition-producing electricity (25 mm i/o 1 mm), which will allow for higher compression ratios (about twice conventional levels), resulting in a cleaner burn with improved fuel economy and emissions. It's also faster and the corona can be modified in line with engine speed. The engineer, Mr. Mixell, said that ACIS will be optimized with changes in engine design and that it may take a while before it is available in aftermarket applications for older vehicles.

This is but one of several examples we saw of suppliers as the source of new technology — we also visited Brose with their hands-free kick-to-open tailgate. Both Brose and FM had lots of other things to show off. So what then is the role of OEMs when it comes to technology? Or rather, what can't suppliers do on their own when it comes to new technology?
Andrew Shipp wrote: Despite this technology being a few years away from equipping a production car, the idea and practicality are very cool. I also found it interesting that the spark plug works like that of those plasmid bulbs that follow your hand around the outside of the container. The future is now!
Smitka (the prof) wrote: For a video 2:25-4:00 minutes into the Autoline Daily podcast Episode 1069 of Feb 12, 2013 YouTube link. It includes an interview with the engineer (Kristapher Mixell) who talked to us about it. FederalMogul's page on ACIS is HERE.
It’s not yet on a vehicle because to take full advantage of it requires adaptation of the engine with a couple years to test performance and durability. I have a Model T spark plug, which in design is similar to those used today (though the ceramics and metals are now much better). Putting in a better version of a plug is basically requires asking: is it cheaper and/or does it last longer? As long as the manufacturer can provide data to back that up – the test standards are well established — then changing doesn't require lead time.
ACIS is different – requires adding new electronics (and taking away old). While it doesn’t require the high voltages of a traditional spark, it still uses lots of power to ionize and ignite the fuel. What are the failure modes? Is there any interference with other electronics? How do we re-write performance standards, and how do we audit the ability of FM to deliver? – we don't want to design an engine around it if we aren't convinced that FM has a robust production process, both in terms of ability to keep production flowing and to keep quality high. Then there's cost effectiveness: if FM is the only supplier, then is their price acceptable? And are they willing to cross-license so that we have a second source? Hence (per John McElroy's video) we're looking at 2017.