The federated approach presented in this paper supports global product development needs. It reduces human communication gap due to time zone, schedule, etc. between OEM and suppliers. It diminishes possibility of error during data inputs, and protects intellectual properties of each party. The federated approach allows suppliers to try out optimization, Design of Experiment (DOE) and Design for Six Sigma (DFSS) to make automotive under-hood thermal system more reliable and robust. Virtual Product Development (VPD) process using simulation techniques is now a well established engineering practise in the manufacturing industries such as automotive and aircraft. However, there is an increasing need to connect geographically distributed teams which are responsible for different parts of a product to collaboratively engineer the final system. In simple terms, the teams used to collaborate by updating and sharing common CAD data are now asked to evaluate the product performance using CAE tools collaboratively. Such situation happens among the divisions within a company as well as between OEMs and suppliers. For example, OEM's system performance simulation model requires the input from the component performance data which OEM doesn't have. Whereas supplier cannot determine how their component design may influence the overall system performance without accessing the system model. The traditional communication means by phone, fax, e-mail, etc., and the needs to protect intellectual properties are the biggest bottleneck in order to conduct such iterative, collaborative engineering task. In this presentation, we will discuss using Federated intelligent Product Environment (FIPER) as a collaborative engineering framework in a cooling system design. FIPER was first conceived in the late 1990th. The technology has been commercialized in 2004 and has been adopted in the European VIVACE project. We will demonstrate through this example how OEM and Suppliers can have a joint development (simulation-based) methodology for an engine cooling system design. Using FIPER Business-to-Business (B2B) feature suppliers remotely run OEM's engine cooling system model to size the cooling module. This methodology dramatically improved the iterative design process and eliminates duplication of efforts.