Krzysztof Szabelski explores the many and varied benefits of leveraging digitalization in the automotive industry
The automotive sector has evolved rapidly over the past two decades. The industry has seen steady improvements in manufacturing, efficiency and design, but digitization represents a sea change. Recent advancements have spawned rapid and disruptive innovations that have not only accelerated efficiency, but also improved user experience, key areas for increasing ROI.
The automotive sector makes a significant contribution to trade; in the UK, for example, it is worth more than £100 billion. However, customer preferences are changing rapidly. According to a 2021 report, 59% of young consumers are considering buying a car, up from 35% in 2020. There is also a shift in preference from offline to online. As the post-pandemic landscape boosts digital, auto companies are scrambling to transform their operations.
The benefits of leveraging digitization are many and varied. For example, repair and maintenance can increase the accuracy of estimates, while automotive manufacturing can benefit from improved efficiency. The UK is currently experiencing a fuel crisis, partly due to Brexit and the resulting shortage of HGV drivers. This labor shortage has made it clear that auto executives should consider going digital to avoid further risks like these. Digitization does not necessarily eliminate the need for a large workforce, but it can reduce labor demand.
Artificial intelligence in automotive repair and maintenance
The role of artificial intelligence (AI) in the automotive industry is not limited to autonomous driving and tracking; it has potentially greater reach in other areas such as vehicle repair and maintenance.
In previous years, people relied solely on manual guides that spelled out the same guidelines and instructions for everyone. However, it would be unrealistic to say that manual vehicle guides can be suitable for every vehicle. This is because the conditions of different vehicles can vary depending on how they are driven. The current trend of sensors in vehicles is gaining popularity with the help of AI, as sensors draw the owner’s attention to parts of the system that need to be repaired.
In predictive maintenance, the driver is informed of any possible fault in the vehicle before it occurs. This prediction works through AI-enabled sensors that make an intelligent decision based on the information obtained. This can be extremely beneficial for commercial vehicles in transport which can avoid the risk of breakdown in the middle of the highway causing delay to other motorists.
In vehicle repair, mechanics use AI-enabled tools to generate vehicle diagnostic reports at the time of vehicle maintenance. With accurate insights gained from data collected by AI-enabled sensors and tools, mechanics are better positioned to see faults and provide recommendations. This process is not only cost effective and saves time, but also increases efficiency, vehicle life and customer satisfaction.
Digitization in manufacturing
Digitized factories improve connectivity by increasing communication. This allows manufacturers to continuously improve overall production. According to Capgemini, automakers expect 24% of manufacturing plants to be smart factories by 2022. The research also finds that smart factories could drive productivity gains of US$160 billion a year at global industry by 2023.
Digitizing manufacturing plants can reduce machine downtime by 20-35% and reduce plant maintenance costs by 15-25%. Installing sensors in manufacturing plants can provide automakers with a range of benefits. One such example is the ability to predict future use and diagnose faults. This allows manufacturing plants to be maintained efficiently, reducing unplanned downtime.
Sensor-equipped technology can provide factories with greater accuracy and quality in their stamping process. Any part of the vehicle is ineffective if not fed with an appropriate amount of material. Too little material can cause components to tear while too much can affect stability. Therefore, it is imperative that the material fed into the press has an appropriate amount. Sensors can automatically adjust the quantity by measuring the force exerted on the blanks and adjusting the pressure by lowering or raising the stamping dies. This can improve durability as the number of rejected parts is reduced.
Additionally, in automotive manufacturing plants, the use of AI-based technology is expanding. The systems can be used to plan, manage workflows and identify faults in components for use in vehicles. The increased accuracy improves productivity while reducing costs. Additionally, digital design not only allows manufacturers to make changes before the final design, but also provides greater certainty through virtual reality.
Digital platforms: gateway to sales growth
The rise of the COVID-19 pandemic created a barrier between consumers and typical car sales, which included physically visiting the dealership to negotiate and take test drives. The automotive industry was already slow to adopt digital best practices, but the pandemic has left no choice but to switch to digital solutions. During this period, customer journeys have undergone a sea change and have undergone a major shift towards digital.
In the UK, overall retail sales have seen four years of growth over the past 12 months. And it was no different for the automotive sector. According to a survey by BCG Digital Ventures, in the UK 38% of people bought a used car through an online portal in the last year. In physical showrooms, the paperwork when buying a car is quite long, especially when it comes to financing. Through online sales, UK car retailers can reduce transaction time in the vehicle sales process by 75%, further saving up to 45% in process costs. In this sense, creating a digital option for customers to buy a car can be beneficial for both consumers and retailers.
The automotive sector plays an indispensable role in the economy. As other sectors (e.g. finance, education, leisure and tourism) are transforming their operations to digital, the automotive sector is coming into line. The industry was already experiencing digital growth, but it is now crucial that all players in the space are aware of the benefits that can be reaped from the transition to digital. By investing in digital transformation now, automotive leaders can reduce costs, increase efficiency, take advantage of improved product quality and achieve a better return on investment. And now, in the wake of the pandemic, digital adoption has become vital to staying competitive in the marketplace.
About the Author: Krzysztof Szabelski is Chief Technology Officer at Future treatment