Logistics& automotive: how the automotive industry is transforming itself

after the diesel scandal, the german automotive industry has a lot to make up for. This may also explain why it is working at high pressure on autonomous driving. But when it comes to digitalization, big data is another trend that has long been overlooked.

An upper mid-range car has up to more than 90 sensors. At least one of them recognizes if the vehicle is on the test stand. This is the decisive factor in the diesel scandal, which was first uncovered at VW. In the meantime, however, virtually all german carmakers have been pilloried, and millions of german citizens feel they have been deceived by them. For a long time, diesel was sold to them as a particularly clean drive technology.

This contribution is aimed at:

  • Owners or managers of medium-sized automotive suppliers who want to catch up with the digital transformation and industry 4.0 do not want to miss
  • IT managers looking for relief from external IT service providers and specialists for all the tasks that lie ahead of them and their respective teams

Automakers show innovative power

On the other hand, this also shows that there is no lack of innovative power in the industry. In fact, in many respects, the automotive industry is also a pioneer when it comes to the internet of things, networking, industry 4.0 and digitalization. In this respect, suppliers must also meet the expectations of OEMs (original equipment manufacturers), i.e. brand manufacturers, writes IP-insider in an article on the digital transformation of the automotive industry. The magazine points out that although headlines such as "carmakers miss the big data trend" and "digitalization: small steps to the goal" still predominate, the digitalization of the industry has "picked up speed". And not only with the major manufacturers, but also with many suppliers.

Of course, this shouldn’t come as a surprise to seasoned industry insiders. after all, the automotive industry has been setting the standard for other industries for decades with complex JIT/JIS logistics processes. In addition, integration into the ERP systems of OEMs and suppliers via EDI across the supply chain has been an integral part for decades.

It is not only in connection with electromobility and autonomous driving that German manufacturers are repeatedly reproached by elon musk and tesla and that they are being left behind by silicon valley in terms of digitalization. However, according to IP-insider, the major car manufacturers have now caught up considerably in this respect. Positions such as chief digital officer, vice president digital strategy and own laboratories, where agile development is carried out together with digitalization gurus from silicon valley, are only part of it, or the icing on the cake, as the authors of the IP insider article call it.

Connected cars& co.

Much more noticeable is the drive with which German automakers are pursuing developments such as connected cars and autonomous driving. New alternative propulsion technologies, such as e-mobility, CNG or synthetic gas, hydrogen and fuel cells, have been pursued only half-heartedly, as critics say. After the diesel scandal, however, people are literally stepping on the gas here too.

As far as the use of industrial robots is concerned, the automotive industry has been very far ahead since the 1960s. BMW has for the first time placed man and machine side by side at its US plant in spartanburg, instead of having them work separated by safety grids. This has been made possible by a piece of artificial intelligence that is increasingly finding its way into the industry. The major automakers were also among the first to test the use of augmented reality and AR glasses in logistics for picking goods and spare parts, as well as for maintenance and repairs. During repairs, 3D CAD information is displayed with the help of SAP 3D visual enterprise, among other things. The german software manufacturer is very active in the AR area at all.

In-house logistics are becoming more and more automated at major carmakers and suppliers, with delivery robots already in use. Today, SAP S/4HANA is already used in many cases to control processes and goods flows. As the number 1 SAP system house, All for one steeb offers comprehensive advice on this and other possible uses of the new ERP suite.

Oems make suppliers steam

The big car manufacturers are already very far advanced in terms of digitalization and are setting the pace. Suppliers will have to follow suit if, for example, the OEM wants to communicate via video conferencing or if the supply chain, production or logistics want to be adapted to ISO standards and Industry 4.0 align. As production processes become more and more networked, cloud computing is practically the basic framework of any digitization and for processing the huge amounts of data that will be generated with the internet of things or industry 4.0 and big data analytics.

In order to avoid vendor lock-in, a hybrid cloud model is recommended for medium-sized suppliers. But according to IP-insider, it’s not that easy to implement. Because if production and logistics facilities are also to be connected via the Internet, this contradicts the previous approach of deliberately keeping them separate from the rest of the company’s IT for security reasons. The previous stand-alone systems are often not even equipped for connection to the Internet.

Smart sourcing instead of doing everything yourself

In order to keep pace, more and more suppliers are therefore turning to external help, but this also requires them to jump over their own shadows. For most automotive suppliers, the "we’ll do it all ourselves" approach still prevails. Apart from standard software, everything, including IT, is therefore developed and managed in-house, based on the idea that corporate knowledge must be protected and compartmentalized. The supplier companies, which are mostly located in rural regions, have also had no difficulty in recruiting IT specialists for this purpose, which is still reflected today in a make-to-buy ratio of 80 to 20.

But it is becoming increasingly difficult to find IT specialists and to attract them to the countryside. This, together with digitalization, is forcing suppliers to buy in more IT solutions and support. However, this requires a new corporate mentality or culture toward smart sourcing and adaptation to increasing globalization, emphasize the authors of the article. With globalization, the internet and iot, without the industry 4.0 is inconceivable, but the demands on security are also growing. Because no one wants their intellectual property or their own knowledge advantage to be unthinkable in the globalization of industry 4.0 or fall victim to the iot.

The manual workflows will eventually become digital, and the non-IT users will become IT users, according to the article. This in turn requires a new IT support and service structure that also allows self-services. With the new delivery models via the cloud and X-as-a-service models, IT is also moving more and more into the specialist departments. As a result, the CIO and his team are increasingly becoming IT brokers, and the departments are more or less becoming their customers. To relieve the burden on IT teams, IT service providers with a strong focus and expertise in international service desk and end-user support are in demand, as they also understand how to innovate with a view to the digital workplace, according to IP-insider.

SAP leonardo as a digital innovation driver

All for one steeb fully meets this requirement profile. As a leading SAP system house, the company has set itself the task of bringing SAP S/4HANA to small and medium-sized businesses, so that automotive suppliers can also benefit from the many possibilities offered by the new ERP suite. In the future, it will also be important for them to get to grips with SAP leonardo.
According to computerwoche, the new "digital innovation system," deliberately named after the italian universal genius leonardo da vinci, comprises various applications and microservices for the internet of things, machine learning, blockchain, analytics and big data analytics.

"SAP leonardo will connect people, things and businesses" thorsten zube, head of blockchain SAP SE

It is essentially about the development of digital innovations and new business models, which are created together with the SAP consultants of digital business services and should lead to a prototype in just a few weeks with the help of so-called accelerators (acceleration packages). Such accelerators are available through SAP leonardo center in the global network of interconnected sites in new york and paris for, among others, retail, consumer goods and discrete manufacturing, which includes automotive suppliers.

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