Automotive industry is undergoing a transformation with significant global expansion, mergers and acquisitions, introduction of alternate energy driven vehicles, and new technology expanses. Large Original Equipment Manufacturers (OEMs) and Mega suppliers are getting a huge share of the global contracts because of their scale of operations, global factories and ability to support worldwide R&D. Auto dealers are sprucing up service and customer satisfaction efforts to enable service parts planning and order fulfilment. World over automotive companies have imbibed the proven best practices of Japanese companies including precision, just-in-time inventory management, fuel efficiency, etc. to achieve a leaner supply chain that delivers faster and far better products.
Many automotive majors have successfully contained supply chain costs to unlock huge savings, reducing waste and improving efficiency. A significant investment in technology has resulted in visibility and transparency, awarding the companies the ability to track components and automobiles as they pass through various supply chain touch points, dealer outlets and service points. This also resulted in improved collaboration, enablement of shared warehousing and enhanced transportation strategies.
The following technology trends are a few of the many observed in the modern Automotive Supply Chain Scenario:
Internet of Things – The new wave applications and in-vehicle innovations powered by the internet have gone beyond the application of RFID tags that used to regulate routing, inventorying, and loss prevention. Internet of automotive things are deeply embedded within the vehicle, in the logistics & production environments and the after-market service infrastructure. Various supply chain touch points are connected to the internet and work in tandem enabling visibility and information flow through a common enterprise platform. More and more auto companies are introducing technology enabled cars in their range of brands.
Cloud B2B platforms – With globalization at its peak, there is consolidation happening across the automotive supply chain. With consolidation, there is an increased need for integration of enterprise and legacy systems across the environment. Cloud platforms are thriving as the enabler for rapid integration and systems consolidation. The expansions, which are moving towards emerging markets such as North Africa, Vietnam and Thailand where the IT assets and skills are limited, cloud based solutions allow all plants to be connected to a centralized hub, all within the budgeted investments.
3D printing technology – Automotive companies are the pioneers to have adopted 3D printing technologies at the concept design stage for prototype development. The year 2013 saw many advances in the field of 3D printing including inventions of advanced 3D printers, mergers & acquisitions and improved business models. The renewed interest in this technology will see it being leveraged in manufacturing and aftermarket services.
Telematics & in-car electronics – This advanced technology has enabled GPS, in-vehicle entertainment and enhanced security measures among other features, boosting user experience. Speaking from the supply chain angle, the technology also enables OEMs to communicate directly with the consumer, when an oil change has to be recommended. This enables OEMs to divert the service opportunity to authorized dealers as opposed to independents. The dealer can also leverage telematics to send voice or text messages influencing the driver to stop by for a recommended service. The aftermarket service providers have the opportunity to innovate and develop ways to communicate with the driver, thereby improving customer service.
At the centre of this transformation is the automotive supply chain and to stay competitive companies’ have to adapt their business models to take up trending technologies that are suitable for their supply chains. Speed and agility will be key and with that the automotive supply chain requires fact-based intelligence to predict the future.
Data has impacted a number of sectors immensely. Decisions which were previously taken with experience are now taken by crunching information. Be it the e-marketing tools used by various companies or the multi-product retail giants who want to identify the most relevant products for the consumers .Its influence is ever increasing and affecting most aspects of business. The Automobile industry has lagged as far as application of big data goes. There are a number of areas where it can bring about significant financial as well as non-financial benefits for automobile companies. Big data is changing not only how automobiles are produced but also what we drive and how we drive. Some of the ways data crunching can be beneficial are:
Cash Flow Planning
Cash flow planning activity is conducted at regular intervals by organizations. The frequency of such activities are limited by technological capabilities in terms of the processing power of machines, the decision making algorithms used for identifying various activities as well as the amount of short-term funds that needs to be allocated. Big data products can enable running more complex algorithms at a regular frequency, which will lead to more effective decision making by finance managers.
Analysis of vehicle sales, with respect to the financing options, combined with various other factors like demography and geographical locations will give insights into the consumer needs. This will help in developing better financing solutions.
Management of Incentives
Incentives for marketing teams as well as dealers are generally decided at the beginning of the year by companies based on historical sales data, current economic situation in that region and other foreseeable factors. Once the dealers achieve their targets or are close to them they lose the motivation to sell more. A more real-time analysis of incentives can help in situations where if a region is doing exceedingly well and a region is particularly lagging behind, then the incentives can be redistributed from the lower performing region to higher performing region.
Customer Feedback/Social Data
Feedback given by consumers on various websites/blogs as well as other social networking platforms can be analyzed for developing better marketing tools and channels. This will in effect help in channelizing effort to the right set of customers.
Extended Supply Chain
The different aggregates of vehicles like the engine, gearbox, front axle, rear axle, are handled by different vendors. Currently the availability of the critical subcomponents of each of these aggregates is not available with the OEMs. Real-time information about the availability of critical components with various vendors can help in more effective planning of production schedules of different vehicles.
Availability of Spares
Information related to warranty trends (vis-à-vis car, component, geography or season), predictive maintenance trends and product performance problems can be used for more effective and efficient inventory planning and transportation systems. It is a win-win situation for customers, dealers, and manufacturers.
Warranty Analysis/ Predictive Maintenance
Consumer comments available at various service centres, social networking sites, blogs as well as warranty claims can be used to calculate the future warranty cost.
Huge amount of data is generated by hundreds of on-board sensors that have the potential to quickly highlight abnormal events and to proactively take remedial actions on potential performance problems.
Product assembly time as regards the different work stations, the time consumed and manpower involved can be simulated to identify the most optimum assembly time. Time consumed at each workstation by different automobiles of the same company can also be calculated to have more flexibility, better line balancing and reduction in Tact Time.
The influence of Big Data in every aspect of automobile is inevitable. But which companies will derive maximum benefit out of it, is something we will come to know in due time.