Contribution by Sonia Kallat – Associate Manager at Bristlecone
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.
(1) 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.
(2) 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.
(3) 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.
(4) 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.