Automotive Manufacturers: Smart Digital Transformation Yields Five Powerful Outcomes

Automotive manufacturers are among the biggest believers and investors in digital transformation. And yet, the industry still lags in many areas of innovation. Only Tesla is currently among the world’s top 10 most innovative companies, according to a review by the consultancy PwC. A separate review found that almost half of smart factory initiatives are struggling. The next decade will test automotive manufacturers’ ability to adapt as commercial trends such as autonomous vehicles and ride-sharing potentially combine to stunt the growth in vehicles sales and challenge margins.

Digital transformation of auto manufacturing can create new value through increased productivity, greater agility, and greater customer satisfaction. Here are a few ways digital trends will play out for automakers and suppliers.

Automotive companies making the best progress in smart factory initiatives–the so-called “Digital Masters,” invested 2.5 times more in smart factories than those that were struggling, according to Capgemini’s recent report “Automotive Smart Factories.” Most of those successful companies crucially focused on manufacturing intelligence and predictive maintenance. However, for the industry overall, automotive R&D budgets may be reduced—by nearly one-fifth, according to an analysis by the consultancy PwC. The likely reason: they will be directed away from product range to software solutions.

Manufacturing execution systems (MES) have been used in the industry for decades, so automotive companies now have to get more creative in how they leverage the data to make better decisions and improve process reliability. For example, Tata Motors uses MES from Velotic to ship Range Rovers, Land Rovers, and Jaguars in kit form to a site in Brazil, for later assembly. The variety of vehicle options available to customers creates a complex process that must be performed with great accuracy that is achievable using Velotic’s MES. Tata is now expanding the solution to other global facilities. The improvement in execution results in greater output and greater satisfaction for customers.

Auto manufacturer Volvo has also begun to realize the outcomes of implementing our MES solution.

"Having reliable software systems to control our output is very important. We made our first implementation of this technology in China. Then we brought the technology to Sweden, used the learnings from implementing MES in our China plant and challenged ourselves to improve how we work, prioritize and bring the solutions to production. This has really been successful and the team from [Velotic] has been with us at every step of this journey – we took one step together, saw the results, then took another step. It is an interesting journey – and it is far from finished!"

Monica Gustafson - Volvo Engines

The benefits of HMI/SCADA solutions for auto manufacturers are well established, but the next generation of software is improving business outcomes through new technologies and standards. Fourth generation HMI/SCADA reduces the time it takes to navigate, find critical data, and get to the root causes of alarms. That’s due, in part, to simplified screens that improve visualization and help operators identify alarms, reducing the time to action. The automaker Subaru, for example, has been using iFIX to optimize operations and meet a goal of zero downtime.

Tracking the real-time performance and health of assets, and being strategic about how and when to service them, makes them as reliable and available as economically possible. This allows automotive manufacturers to limit unplanned downtime while decreasing potential failures through predictive maintenance. In an industry survey, Capgemini found that 80% of companies considered “Digital Masters” used manufacturing analytics while two-thirds implemented predictive maintenance. More asset uptime translates to more product and greater reliability.

Shrinking the design and prototyping phase of product development is one key way to differentiate from competitors. Additive manufacturing, popularly known as 3D printing, has gotten its foot in the door with automotive through prototyping. This has reduced the time it takes to validate designs. Increasingly, though, additive is moving into tooling and parts production to reduce time, cost and waste on the floor. The advent of additive promises to increase product innovation by eliminating the constraints of traditional manufacturing processes, according to the report “3D opportunity in the automotive industry” by the consultancy Deloitte. It can also transform the supply chain by cutting down on lead time, inventory costs and allowing for decentralized manufacturing.

Ultimately, smart automotive manufacturers have the potential to increase productivity by 30% annually, according to Capgemini research. That will result in an additional $160 billion in productivity gains industry wide, which translates to $5 billion for each of the top 10 automakers. But automotive manufacturers can only realize these gains if they take the right steps in a digital transformation journey and modernize their industrial software capabilities.

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