The Internet of Things in the automotive industry — There may still be skepticism about the IoT in some sectors, but in automotive IoT is taking up ever more space in our vehicles. The signs are everywhere. We are all aware of the larger trends we face in the automotive industry (faster and smarter production facilities, driverless cars and Internet of Things (IoT) as a key differentiator) but which concrete areas can automotive managers focus on here and now to become more competitive and agile today?
LOGISTICS AND TRANSPORTATION: CHECK THE HIDDEN COSTS
West is moving East, East is moving West, and the implications for global automotive manufacturers are huge. Presentations from Chinese and European manufacturers at December 2015’s Odette Conference showed that European manufacturers are moving facilities further East (to Poland and Romania for example) whilst within China, manufacturers are moving facilities further West, to cut the cost of transporting completed vehicles to Europe. The presentations also showed that within China there is often no clear transportation strategy (up to 70 percent of trucks moving inside the country could be underutilized). This presents major opportunities for savings. Basic costs within China are so cheap it’s easy for auto manufacturers to overlook this, but hidden transportation costs can end up eating up savings made from relocation.
Porsche New Logistics Concept: Many manufacturers are realizing the enormous savings to be made from smarter, tighter logistics. In 2015, Porsche invented a New Logistic Concept (NLK) that it uses for the whole Volkswagen Group. NLK was based on older recommendations from the German Automotive Association (VDA). Realizing it had to change some of its messages, Audi brought in EDI Messaging to carry additional information. The new NLK now runs across the whole supply chain, from Tier One suppliers right the way up to Porsche, VW and Audi. All the SME (small to medium size enterprises) will be integrated into the information flow too. Although termed SMEs, many employ over 1,000 people, and yet still use Excel for planning and manufacturing.
The Information Technology Automotive Association in Germany promotes integrated information across the country’s automotive industry. Members include OEM manufacturers, software suppliers and SMEs, all of whom recognize that when the industry decides on new messages and labels it must provide them seamlessly to customers. By the end of 2016, the German automotive industry should have common messages and a common platform enabling layout. The days of automotive SMEs working without even an enterprise resource planning (ERP) system seem to be coming to an end.
QUALITY IS A SUPPLIER AND SUPPLY CHAIN ISSUE
Despite growing technological sophistication, the overall number of recalls within the industry increases year on year. As with logistics, information exchange throughout the supply chain is crucial to delivering quality and minimizing risk. Most large OEMs tend to use the same components in different models of their cars (Volkswagen has the same platform as Golf, for example). Therefore, when a component fails it doesn’t just affect one brand, but many. If an engineer in the OEM changes a component in his drawings it is essential that this information is transferred and acted on by all players right the way through the supply chain.
Suppliers, as well as OEMs, must prioritize information exchange and embrace software integration and planning tools. A good example of this in action is Audi. The entire front of an Audi (including indicators, lights and chassis) is delivered by one supplier. Audi insists suppliers use one of a small handful of product data management (PDM) solutions, so everyone in the supply chain can access the same data.
IOT RAISES THE BAR FOR FLEXIBILITY
Say goodbye to the car as a device for getting us from A to B and say hello to the car as an app. There may still be skepticism about IoT in some sectors, but in automotive IoT is taking up ever more space in our vehicles. The signs are everywhere:
- Over the next five years, Toyota will invest 1 billion USD in artificial intelligence for self-driving cars.
- Audi is developing a virtual instrument panel to replace their old ones, where one large screen, free of buttons, permanently connects smartphone and vehicle.
- General Motors’ all-electric vehicle Bolt EV will replace rearview mirrors with a fully digital display.
- Gartner predicts that within five years all new vehicles will be automatically integrated with drivers’ calendars so that servicing and refueling will be scheduled automatically.
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