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AUTOMOTIVE Collaborative technology for automotive manufacturing

Aug 26, 2019

Compared to just two decades ago, the automotive industry today is building more diverse and intricate complex products and using altering corporate structure to deliver more content to consumers while essentially bringing down prices. They now also look at opening up and partnering up with technology companies who can help them abstract more value from consumers. The Viewpoint section finds out how the automotive industry can make the most out of collaborations, how lack of trust can be overcome, and what are the skills required to collaborate effectively.

When collaborating with competitors, the main challenge is the patent rights - Pramod Khot, Vice President, Powertrain Manufacturing, Fiat India Automobile

Support for collaborative technology is a dire necessity during the proof of concept, actual implementation and trial run. This can be managed by annual contracts for maintenance and support. When the automotive industry looks to collaborate with technology companies, a business case must be prepared considering today’s need for collaboration in accordance with market trends, brand positioning, government regulations enforcement, target customers, product positioning with cost band and organisational long range plan, etc. Based on the business case, one must look out for technology companies who are masters in their field of research. With this new ecosystem, the automotive industry will benefit by eliminating cost on R&D, and technology companies will benefit by leveraging economies of scale by collaborating with the automotive industry.

When collaborating with competitors, the main challenge is the patent rights and core technological aspects associated with products. Though NDA is a primary legal tool available, in today’s dynamic world, mutual trust and risk taking ability is a must in order to survive. Information, today, is available at the click of a computer and competition is going on value proposition and not the technology content. Also, collaborating effectively asks for open-minded business acumen, adaptability to creativity & innovation, agility to dynamic market trends, and challenging the market status quo.

Automakers should rapidly get comfortable with absorbing new capabilities - Rajesh Nath, Managing Director, VDMA India

As the tech and automotive worlds merge, a complex ecosystem is creating new rules for success. By taking stock of this ecosystem, automotive OEMs can determine which players should be collaborated with to accelerate the path to the future. Most importantly, close interactions between the providers of collaborative technologies and the automakers is the key to fostering and advancing this ecosystem. However, the operating models of the two sides differ dramatically. For example, design cycles of the auto industry still do not keep pace with that of the tech industry. Moreover, making new investments as well as building new manufacturing capabilities while simultaneously writing off previous manufacturing investments can prove to be a very expensive ordeal for the automakers. Further, standardisation will play a salient role in overcoming the lack of trust and subsequently in improving the effectiveness of these collaborations.

Besides, in order to master change and operate with new partners, automakers should rapidly adjust their core to be able to work with new ecosystems and should get comfortable with absorbing new capabilities. Yet, the resultant collaborative technologies do employ easy to use interfaces designed to optimise human machine interactions. For example, cobots can work with operators having minimal skills and still ensure superior productivity plus safety. Also, 3D printing, robotics, and collaborative IT can aid OEMs to enhance product design and transform traditional production and supply chain inefficiencies. As the industry’s needs shift toward complex products, minimal lead times, raw materials and custom products, it is certain that most automakers will adopt this transition.

From our end, through numerous roadshows and forums in various cities in India, we have attempted to get the automakers and technology suppliers close together to help them comprehend the immense potential and advantages of collaborative technologies in manufacturing and its key role in optimising the human machine interaction to enhance productivity.

The most relevant skill will be the ability to partner and build trust - Sudhir Gurtoo, Managing Director, Leadec India

The future is all about successful collaborations. Those who are leveraging this will emerge as sure winners. Some auto OEMs we see are playing the waiting game and they may not last long. A systematic approach for an auto OEM requires grasping the new technology and collaborating with tech companies to develop new products. Those who can build new low-cost prototypes, harnessing the new technology, will emerge as winners. The most relevant skill, thus, will be the ability to partner and build trust.

There exists a likelihood of a “tech company” getting into vehicular production in the near future. The future vehicles will have a high dependency on new technology and relevance on old ICE engineering will simply dissipate. The trust, or lack of it, is a resultant of this belief. The auto OEM, thus, needs to carefully select its tech partner and work closely to build and enhance trust levels. What’s more, elements within Industry 4.0 like, Additive Manufacturing, IoT, AR-VR, advanced robotics, cloud computing, etc will get commonly deployed on the automotive shop floor. We can already see some of these being introduced on the OEM production floor. OEMs need to introduce and leverage these for optimised product launch and mass production. Our company is trying to enhance sensor-based predictive maintenance (pilot stage), AR/VR deployment for plant maintenance (remote maintenance), resource tracking, deploying advance sensors (ex productivity or output measure), and engagement with some auto MNCs for battery assembling services.

Automotive markets should focus on digital enablement of JIT supplies - Rajib Kumar Jena, Vice President, Bajaj Auto

The needs for fulfilments of future automotive markets are personalisation of product, ability to customise product at home, ability to direct customer issues to the component owner directly, co-innovation with component suppliers, and inventory visibility at every nodal point of 3PL, Tier-I, Tier-II. They should also focus on digital enablement of JIT supplies, tracking of supply, co-innovation with customers, tracking trends ahead of others, and adoption of new technology in product, process & supply chain. In order to do this, OEMs need to create an ecosystem of tech suppliers, component manufacturers, supply chain partners, customers, employees & consultants. They should have a structured approach with cloud platform for collaboration with ecosystem, a governance mechanism through block chain based contract management, IP right safeguarding mechanism for the collaborators, and the mechanism for benefit-sharing. Currently, we have a supplier community body with which we are engaged for policy creations, technology sharing & adoption, culture creation and adoption & design collaboration. We are in the process of establishing a similar body with dealers & distributors.

When it comes to such collaborations, skills are necessary. These skills involve leadership skills to inspire & resolve disputes, trust enablement, fairness in the process for on-boarding and project awarding, and objective approach in qualifying membership. Additionally, when it comes to Industry 4.0, it can help with collaborative technology for automotive manufacturing. The collaborator can view references, understand technology & processes, engage with tech & service providers, buy the services, and publish their stories.

Both sides are focused on making mobility safer & universally accessible - Pankaj Srivastava, AGM, Honda Cars India

To meet the customer wish list of the future, the automotive industry & technology companies must continue to collaborate more closely. Automotive companies have the capability of producing products at a high volume & with a high degree of reliability & durability. They have developed the capability of design, testing, manufacturing, sales & service expertise & infrastructure, including dealer networks. At the same time, technology companies have an unrivaled set of capabilities in developing software & electronics at a reduced cost & super improved performance. So, both sides are focused on making mobility safer, cheaper & more universally accessible.

The main challenge standing in the way when it comes to collaborative technology for automotive manufacturing is uneven balance of power; advanced technological companies normally operate on high margins, while the mature automobile sector is always grappling with the issue of thin margin due to high cost of production & development in order to give their customer better value for money product. Also, there’s a corporate culture difference, where automobile companies are more conscious of their brand image, always striving for providing best products & services to their customer, vis-a-vis their competitors. On the other hand, technology companies’ business model is normally based on licensing; their product can be used across as many companies as possible. Automotive companies need to anticipate & identify new market trends and explore alternatives that complement to the traditional business model. They need to form an alliance with their suppliers & service providers & align their skills & processes to address new challenges, like cyber security, data privacy & continuous product updates.

Without data sharing in a healthy environment, no collaborations can succeed - Dr Ravi M Damodaran, Chief Technology Officer, Greaves Cotton

Automotive companies generally understand what their gap is with respect to competition and customer expectations in the short-term. Most collaborations with technology partners are made to bridge this gap. However, this approach results in a constant catch-up game with technology leaders in the market and sometimes frequent switching of partners also. It is important to understand the technology trends in the market and one’s own technology roadmap in order to select the technology partner. The collaboration approach shortens the lead time to technology capability development and also allows the technology partner access to a larger market and thereby lower technology costs, which in turn will have a cascading effect on technology adoption.

Nevertheless, roadblocks stand in the way and cultural difference is the biggest roadblock to collaboration. Indian companies tend to protect even known prior art under the garb of intellectual property and are skeptical of the standard Non-Disclosure Agreements (NDA) they themselves sign. Without data sharing in a healthy environment of mutual trust, no collaborative effort can succeed. Industry 4.0 is an enabler and can facilitate collaboration but cannot succeed in an environment where people are reluctant to open up their data and system access to partners. With its high security networks, Industry 4.0 can build confidence and alleviate security concerns about data breach. Apart from that, the company should invest in high performance technical talent in order to have an effective communication and technology absorption capacities. These technology leadership talents are often expensive and Indian companies largely tend to shy away from hiring them.

To implement Industry 4.0, it is necessary to build a complete ecosystem - Dr Pradeep Chatterjee, General Manager – GDC Office, Tata Motors

Whenever one looks for collaboration, it is important to first figure out what needs to be kept internal and what needs collaboration or outsourcing. Something which is very critical and has competitive advantage needs to be kept internal. On the other hand, with certain things, which are important but one does not want to build internal capability as someone has already built capability in that space and excelling and we can leverage each other’s capabilities, we should look for collaboration. Rest of the other things which are commodity in nature can be outsourced to any competent third party.

Industry 4.0, too, has its role to play. To implement Industry 4.0, it is necessary to build a complete ecosystem. No automotive OEM will be interested to build all the components of Industry 4.0 in-house as it is not their core business. So, there will be dependency on partners to collaborate on the technology front. In fact, Industry 4.0 is bringing technology and automotive companies closer, which earlier used to be viewed as core mechanical organisations; now the mechanical automotive organisations are getting transformed towards technology-oriented organisations. The challenges standing in the way when it comes to collaborative technology for automotive manufacturing are identifying and segregating what needs to be in-house/ collaborated/outsourced. Plus, one needs to find out the right partner to collaborate with and matching the interests of the organisation and partner, so that each other’s capabilities can be leveraged. Also, in order to collaborate effectively, open communication, compromise, tolerance, joint ownership of a problem, and joint problem solving is necessary.

The responses are the individual's personal views and in no way represent the views of the organisation for which he works.

Image Gallery

  • Pramod Khot

    Vice President

    Powertrain Manufacturing

    Fiat India Automobile

  • Rajesh Nath

    Managing Director

    VDMA India

  • Sudhir Gurtoo

    Managing Director

    Leadec India

  • Rajib Kumar Jena

    Vice President

    Bajaj Auto

  • Pankaj Srivastava

    AGM

    Honda Cars India

  • Dr Ravi M Damodaran

    Chief Technology Officer

    Greaves Cotton

  • Dr Pradeep Chatterjee

    General Manager – GDC Office

    Tata Motors

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