Four Trends Driving Automotive Industry Innovation
The manufacturing sector has seen some interesting innovations over the past several years, and it looks like 2018 will be no different. Automotive in particular is not only thriving, but as PwC reports is “now at the forefront of global technological innovation.”
So what factors will drive innovation in the coming year? In this edition of our Twelve Days of Digital Transformation blog series, I share my view of the top four trends driving digital innovation for the sector in 2018.
The Internet of Things Sparks Innovation
A hot topic across industries, the Internet of Things (IoT) will have a significant impact on automotive in 2018 and beyond. Connected devices are the next major step as the industrial market revolutionizes, and automotive value chain processes will be greatly affected by innovation in this area.
“The connected car will become among the most important “things” connected to the internet over the next several years. While not a new technology, the pervasiveness of connected vehicles will rise over the next four years.” — Gartner
Not only is IoT pushing the industry toward new data-enabled service offerings, but manufacturing are also placing sensors in the final product for performance tracking capabilities. This creates a virtuous cycle of data that can help improve current quality, inform future product improvements, and enable the industry to deliver new services.
For its part, the industry will need to take steps to make the increasing flows of data actionable for the business.
Cloud Technology Speeds Growth
The automotive industry is beginning to embrace the many advantages of cloud technology. In 2018, a larger move-to-cloud is anticipated with many factors influencing this trend, including the “Industry 4.0” transition.
“Industry 4.0 is holistically transforming the design, manufacture, operation, and service of products and production systems through cyber physical systems. As a result, factory processes are becoming increasingly mature through various stages such as visibility, transparency, predictability, and adaptability.” — HfS Research
The flexibility of cloud to support a growth mindset is one major appealing factor to manufacturers, including auto manufacturers. With cloud there is the ability to deploy and pay for data storage capacity as needed. Processes and services can also be scaled easily in response to changing demand and growth requirements, also eliminating waste and cutting costs.
Cloud and hybrid implementations of an application platform as a service capability can improve R&D, production quality, and customer satisfaction:
- The cloud can enable “Voice of the Customer” programs and social collaboration for early detection. This kind of consumer feedback improves quality and organizational response.
- Cloud-enabled collaboration among knowledge workers can help to streamline processes and improve business productivity.
- The cloud can support engineering and design activity to accelerate the development and delivery of innovative products and services.
Advanced Analytics Will Inform Products
Industry experts predict that a heightened focus on analytics will increasingly impact automotive. Emphasis on analytics will be the key to streamlined, agile, and smart processes that promote innovation in the sector.
“Automotive industry CIOs — like their peers in other vertical industry segments — are convinced that analytics will have a bigger impact on the business than any other technology” — Gartner
By utilizing predictive analytics, companies can see trends in the auto industry as they develop and therefore seize new opportunities as they appear. In addition, analytics gather feedback on product performance, helping manufacturers develop the best possible products that garner both customer satisfaction and safety.
Artificial Intelligence Shifts to a Higher Gear
Artificial Intelligence (AI) embedded in robotic process automation (RPA) has been prevalent in automotive manufacturing for years, but as AI evolves and grows more intuitive, the industry will reap additional benefit.
The use of enhanced AI in assembly lines has streamlined vehicle production, making the manufacturing process more productive, efficient, and cost-effective. With its ever-improving cognitive abilities, AI will be able to perform more complex tasks that require immense detail, speed, and precision. This, in turn, will improve process quality.
Advanced AI will also be able to detect problems within manufacturing systems. Analysis from AI-based quality reports can be used to discover the root causes of defects and improve overall production processes, saving manufacturers from potentially catastrophic events
Quality assurance will be a major benefit of improved AI technology. Currently, most quality inspections are performed by human workers; this is a relatively slow process that is prone to errors. An AI based system will constantly improve its analysis based on feedback, growing more intelligent over time and offering the most accurate and efficient quality testing.
Looking Down the Road
2018 is sure to be an exciting year for automotive. These four trends will accelerate an already transforming industry, putting forth new business models, highly advanced product offerings and ground-breaking applications of technology.
“The automotive revenue pool will significantly increase and diversify toward on-demand mobility services and data-driven services. This could create up to $1.5 trillion—or 30 percent more—in additional revenue potential in 2030.” — McKinsey
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