Digitalization & Industry 4.0: Capturing Value from Disruption (Part 1)

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Interview with Norbert Audéoud, Operational Excellence & Strategic Transformation Expert

Disruptive new technologies are bringing the entire automotive interiors supplier ecosystem to re-think the way it works. We sat down recently with two experts to discuss the impact of Industry 4.0 standards.

 

Q. What does the 4.0 approach achieve that lean manufacturing does not?

A. The automotive industry is the benchmark for lean management. And lean managers, obviously, plant managers, are looking for new opportunities: productivity, agility, safety, lead-time, time-to-market and so on. But there are now boundaries and the 4.0 technologies are pushing the performance boundaries. Just to give you a few examples, when you are working on process controls, you have to manage a lot of parameters at the same time. And with a conventional approach, like statistical process control, even with DOE (Design of Experiments), you can only manage a handful of parameters at the same time. But with big data manufacturing and connected machines, you can manage hundreds of parameters all at once and find optimized settings and instant monitoring for your line. And that can generate huge gains in productivity while also improving quality. Another example—the new generation of robots can create great agility in the production line because you can change robot settings at will, and you don’t need to have a long range of production for a robot. Another example is in supply chain. New tools and equipment for automatic preparation can reduce cycle time by 50 to 60 percent.

 

Q. How mature is the automotive industry when it comes to 4.0 processes?

A. The automotive industry is among the leaders in 4.0 strategy but there is a big gap between the major players and the Tier-2s and Tier-3s. There, we have a huge difference in maturity, but we need to take into account that although most companies have undertaken efforts, only 16 percent have a true strategy at scale. Normally, companies should have 30 percent of profit coming from digitalization and that’s not the case today.

 

Q. What is the most important success factor for 4.0 transformation?

A. I would say that 4.0 technology is first of all for the customer, and for market development. And that is also at the core of lean management. Lean management is not only meant to downsize costs. It’s also meant to create value—for customers as well as all stakeholders, including social and environmental interests. The first point is to always start with the customer, bringing them new services and added value. Developing intimacy with customers is really the first building block of 4.0 strategy. The second point is the need for genuine leadership. The awareness of top management regarding new technology and the impact on the business model must be high, so you have to invest a lot to open the culture to this new environment, not only from a technological point of view but also with all the collateral impacts of these technologies. For example, changes required in organization, management and communication, as well as in partnership building are all to be taken into consideration. The third point is to think big, start small, but go fast, at scale. The clock is running. What’s difficult about 4.0 strategies is that we must act immediately on the project while bearing in mind a mid- to long-term view. The next big technologies will be in factories in the next five to 10 years, but you need to prepare for them as of now. So one of the success factors will be reconciling a short-term and mid-term approach.

 

Q. How would you describe the link between customer experience and Industry 4.0?

A. The link between the customer and the factory is getting shorter and shorter. Now the customer can go inside your factory, because new technologies enable him to customize vehicle models and enjoy a first experience of his new car through virtual reality. That’s an amazing advance for the customer but also a huge help for the sales teams because it makes it easier to explain the product to the customer. The second point is that the customer will be inside your factory, because he’ll be able to see the key steps of production. Third, he will be able to follow all the products in the supply chain and benefit from a first customer experience while the product is still at the factory, before it is even delivered. Perhaps a last point to bear in mind with respect to customer experience is that the customer will be able to share his experience with other users, he will have added service with the provider, he will be able to modify his product because he’s linked with a software platform, and so on. It’s not a one-shot experience, like going to a dealership and choosing a vehicle today. The customer experience will change and evolve in the coming years, and it will be an all-new, sharable experience.

 

Q. How are new technologies reshaping the business-consumer relationship?

A. The new technologies require a change of mind-set regarding the relationship we’ve built with customers. And there is a new intimacy that should be developed because on one hand, you will have more and more information about your customers, your end-customers and the entire supply chain, and on the other hand, the expectation of an exciting customer experience will be greater and greater every day. With the data you’re getting from customers, you’ll be able to have a better design, a better production and better service.

Read our white paper to see how digitalized manufacturing processes can help automotive seating and interiors suppliers stay competitive.

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