TRENDS IN THE AUTOMOTIVE INDUSTRY

The Journey of Automotive Industry with Information Technology

In the Indian context, while computers made their mark in operations as much as half a century ago, there has been a profound shift in their role in business. Earlier they were confined largely to processing data in commercial areas such as payroll and purchase where their utility was seen in number crunching operations. On the other hand, today they are integrated to such an extent into the operation that the line separating business and Information Technology, is fast disappearing.

If we were to broadly analyze the impact of Information Technology on business in the automotive industry, we would see the following phases. In the opening phase, the role of IT was almost exclusively to save clerical effort. This was marked by applications such as payroll and billing in large organisations, where large mainframe systems could compress the time for such documentation and bring high levels of accuracy in mass scale work. The style of doing business was however, completely unaffected. Next, with the advent of desktop systems in the eighties, the emphasis shifted to empowering individual users to create their own local applications, which would bring relief to the user. This was based more on individual creativity and hence users developed applications more from the viewpoints of their interest and ability. Typical applications revolved around information that had to be submitted periodically to some authority such as daily material receipt or cash collection data. Some relief was available to individual users but again, these were in pockets and did not materially alter the business scenario or the overall working environment in any significant way.

"Information Technology is a very powerful tool and the ultimate benefit can be extracted only when the application directly impacts business"

In the nineties, the emphasis shifted to the use of IT over a wider horizon, marked by the introduction of larger applications such as Enterprise Resource Planning and the use of advanced software in technical areas such as planning, design, quality and manufacturing. These helped to tackle some of the chronic issues such as, suboptimal decision through the use of inappropriate local applications, or, difficulty in churning out drawings and developments expeditiously, with changing customer requirements. In addition, with the shift to larger servers with wide area connectivity, it became possible to give access to large number of users at different locations and all could share information from the same database. Real time systems became the norm and across the organization, the integrity and consistency of information were enhanced substantially. 

In the nineties, the emphasis shifted to the use of IT over a wider horizon, marked by the introduction of larger applications such as Enterprise Resource Planning and the use of advanced software in technical areas such as planning, design, quality and manufacturing. These helped to tackle some of the chronic issues such as, suboptimal decision through the use of inappropriate local applications, or, difficulty in churning out drawings and developments expeditiously, with changing customer requirements. In addition, with the shift to larger servers with wide area connectivity, it became possible to give access to large number of users at different locations and all could share information from the same database. Real time systems became the norm and across the organization, the integrity and consistency of information were enhanced substantially. 

It is significant to note that through all these transformations, several areas were being addressed such as cost reduction, information reliability, rapid developments, quicker processing and enterprise wide participation. However a key aspect was still missing. Information Technology is a very powerful tool and the ultimate benefit can be extracted only when the application directly impacts business. One index is that final end customers, outside parties, agencies and institutions with whom the business enterprise has a relationship should perceive the benefit of technology and two, business itself needed to go through a change, in order to be relevant in the changing world. From these viewpoints, several changes are occurring in the business environment that can be traced to the powers of technology. Having seen the various phases of IT applications in the industry, it would be useful to examine in depth, some of the developments taking place as of now.

The business process starts logically from the customer and it would be interesting to see the developments taking place here. Customers demand immediate and complete information. In the automotive industry unlike the old days, this takes the shape of enormous choice of models, variants, colours and products, each of which is processed appropriately so that the customer gets delivery on time. This backward scheduling of customer deliveries is facilitated by complex dealer software that absorbs inputs in the form of customer preferences and translates these into shipping schedules from the manufacturers. In turn these are exploded further into part requirements from various suppliers so that they get a schedule for delivery of parts in a seamless manner.

Engineering and design software play a key role in product development and in ensuring rapid turnaround of new products to gain competitive position in the market place. In addition to providing a design platform, such tools are performing a range of comprehensive functions. These include 

1. Search mechanisms for locating similar products or tools to avoid reinventing the wheel during a new product development, 
2. Providing a framework for traceability so that the complete history of design changes, their impact on the inventory of products, remedial action taken and final resolution of inventory are all preserved, to enable future investigation. 

Collaboration between suppliers and vehicle manufacturers is the name of the game and increasingly business processes are becoming collaborative in nature. Areas include design and development where customer and supplier cooperate over the web electronically for product design and development, submission of product data, display by manufacturers of supplier performance parameters and conducting transactions through portals.

Being the heart of an automotive enterprise, manufacturing has evolved significantly in the use of technology. Use of shop floor automation through either hand held devices or through SCADA and similar technologies help to control groups of machines and their outputs, as also to report production. Also machine performances, downtimes and reasons are being captured through such avenues. Vehicle manufacturers insist on systematic documentation of production through well-defined processes and IT plays a part in the generation of such documents.

“Vehicle manufacturers insist on systematic documentation of production through well-defined processes and IT plays a part in the generation of such documents.”

An area that is well addressed is planning at the shop floor level as well as the enterprise level through advanced planning software and Manufacturing Resources Planning software. At the shop floor level, the challenge is to optimize a deliverable such as customer satisfaction and to arrive at the best manufacturing plan for the week, month, quarter or the year. Complexity arises since the best plan to maximize sales may not maximize other parameters such as profits or customer deliveries or satisfaction. While scheduling looks at these issues, MRP goes beyond, to generate or regulate orders for supply of materials and requirements for all the inputs necessary to make the final product. Other developments that are helping to bring sophistication in shop floor operations include

1. Supplier portals that assist in interaction with suppliers through electronic mode for all transactions 
2. Quality control tools such as in- process gauging, calibration software to monitor the quality of gauges and statistical quality control software for real time quality analysis. 

Shop floor material management and control is a crucial area since day to day shop floor scheduling has to be based on the position of material availability. Demands by various agencies such as auditors, excise authorities and customers are compelling organisations to have clear data on material movement between manufacturing organisations and their subcontractors and customers, as also accounting of rejections, scrap, reconversions and dispatches. With large volumes of transactions involved, stock status and monitoring has become a concern area and this is a focal point for every commercial and enterprise software.

With customers demanding Just in time (JIT) based deliveries, there is a major need to build complete transparency in the final delivery. This is required to empower field personnel who interact with customers, to apprise them of delivery position. This calls for total integration of data between manufacturing, transport and warehousing organisations. A well-executed integration facilitates the tracking of consignments with clear geographical location, from the moment they leave the manufacturing unit, till the time the customer accepts the material. To enable tracking of products with high level of accuracy, several aids such as barcodes and RFID tags are being employed in the dispatch and warehousing process.

Finally we come to current developments where technology and products have started to merge. With a view to vastly enhance the reliability of vehicles, developments are taking place wherein software will reside in the vehicle and operate, to close a vital need. The simpler examples are where vehicle controls can be made to respond to individual drivers based on say fingerprints or biometrics and everything from seat to mirrors can be automatically adjusted based on the driver. The more advanced involve applications using software embedded in components such as engines or brakes so that the component behavior can be transmitted directly to say service centers, which can diagnose faults and prescribe remedies.

Thus, the impact of information technology in automotive organisations spreads not only into the management of its operations but on to the end product itself. Success of organisations depends on their ability to foresee customer preferences, emerging business processes and other changing requirements and adopt technology to suitably close the gaps.

This article was given by Mr. Srinivasan S (Chief Information officer – TVS InfoTech) and has also been published in Strive 4. Mr. Srinivasan S  has over 38 years of experience in materials management, corporate planning, manufacturing planning, logistics and information technology in leading organisations in India and Oman. In his tenure at Sundram Fasteners Ltd., he implemented SAP at a dozen plants of various types and sizes and also handled all aspects of IT, ranging from hardware and software to connectivity and special applications. 

Srinivasan is a B Tech from IIT Madras and an MBA from IIM Calcutta. He was nominated by the Automotive Component Manufacturers Association (ACMA) to discuss the methodology of data exchange with vehicle manufacturers and was deputed by the Ministry of Commerce to UN-ESCAP for understanding EDI and data exchange issues.