Closing the Digital Gaps in the Automotive Industry
Digital data flows to realize step-function improvements.
If we do not grow and change, we will not succeed. Over the past decade, the automotive industry has been at the bleeding edge of developing digital thread capabilities; in a technological arms race to create the leanest, most resilient business possible.
In this race, success means expansion into new markets and a profitable outlook. Failure means being relegated to a case study in future business courses.
Challenges Facing the Automotive Industry
The global automotive industry is facing increasing challenges, including:
- Recent labor agreements that place a premium on people within manufacturing.
- Generational change leading to seasoned personnel aging out of the workforce to be replaced by less experienced, but more technology savvy workers.
- Governments and regulatory bodies increasing the quantity and complexity of safety, quality and environmental regulatory requirements.
- The pace of innovation needed to keep up, increasing substantially from what was a stable industry.
- The shift towards electric vehicles and hybrids from internal combustion engines.
On top of this, we’re seeing significant turmoil globally in the automotive supply chain:
- Management focus on more comprehensive automation of activities that are traditionally difficult to automate.
- Unprecedented supply chain disruptions slowly dissipating.
- Demand uncertainty, driven by economical and political factors as well changes to ownership models and a rise in the sharing economy.
In the automotive industry, while there is great need for digital transformation, there is also great opportunity — because in most cases, foundational technologies and data already are in place. While companies often use these technologies independently of each other, there’s value to be gained by connecting them as digital threads within their business. This flow and reuse of data, including analytics, is unlocking value for adopters.
Closing the Gaps
It’s hard to define what digital is until you understand how we got to where we are today. Digital technologies, such as computer-aided design (CAD), enterprise resource planning (ERP) and programmable logic controllers (PLCs), have existed for decades in the automotive industry and have contributed to improved operational and financial performance.
As what’s possible continues to advance and the candidates for digitization grow, connecting these individual point solutions has become just as important. Users of digital enterprises are realizing the value from the flow of data across such solutions.
The industrial digital thread comprises several interconnected threads, each forming a seamless flow of data that weaves together business processes, systems, products and equipment across the value chain.
This increased connectivity stretches from ideation to product development, through manufacturing, supply chain and service, and closes the loop by integrating feedback from later design stages, operations and customers with products in the field.
Each stage can reuse data from earlier stages, improving operations and efficiencies — so that the virtual improves the physical.
Our model focuses on the importance of closing digital gaps for a complete, uninterrupted flow of information from product design, through to manufacturing and distribution. Linking compatible product lifecycle management (PLM), enterprise resource planning (ERP) and manufacturing execution systems (MESs) into one single thread of information allows for compounding gains on investment, with each successive investment making each capability more powerful. Businesses can be more cost-effective and operate with lower costs, but the true differentiator here is speed.
It’s important to be aware of current trends, but it’s just as important to be prepared for the unexpected. Electrification has been a paradigm shift, and both drivetrain and battery development have accelerated. This has not only changed the product consumers expect, but also the flexibility manufacturers demand from their process and equipment.
Add to this global supply chain uncertainties and the value of strong change management and the ability to design, develop and order replacement parts rapidly becomes clear.
A complete digital thread can support accelerated rates of change to product and process to get a step ahead of competitors while also supporting operations to decrease error rates or wastage.
Ready for the Unexpected
Enabling the digital thread can make automotive manufacturers and suppliers more agile than their competitors. Unexpected global events that were once great risks to a business’ outlook can become their greatest opportunity. The speed at which planning, design and execution decisions can be made increases exponentially, making change your greatest friend and giving you a head start over competitors.
Organizations need a partner that has the tools and know-how to identify and implement a digital thread strategy that goes beyond a patchwork of improvements and uses complementary solutions to produce a coherent, complete digital thread across the whole value chain.
It’s important to close digital gaps and build a complete thread. The challenge is identifying how to balance immediate benefits with a long-term approach to closing digital gaps that leaves your business in a position to lead the pack five years from now.
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