Driving India’s automotive future: The reign of digitalisation

In the ever-evolving world for automobile companies, predicting customer demand is becoming increasingly challenging. Every time the demand is placed for supplies, the pull of cost efficiency is found giving way to integrating with the wider system – data drives risk management and resilience. For tomorrow’s automobile supply chain, the advantages of a digital supply chain could help their manufacturing lines whirring and the cash registers ringing.

To continuously hear the sound of the cash registers ringing, automobile companies transition to a digital supply chain, which offers the flexibility to grow and serve as the foundation for their success.

Digitalisation is critical for automakers, along with its intertwined ecosystem of dealers, original equipment manufacturers, third-party logistics providers, various tiers of suppliers, and the manufacturers of electronics systems for automobiles. If any one of them face supply chain challenges, the disruption affects the entire network. The granular supply chain has the capability to factor in and analyse a wide array of internal and external factors. The consistent stream of data that the digital supply chain provides can be leveraged for the insight into trends at all times.

Work together, work seamlessly
The standardisation of digital platforms holds the potential to enhance communication, better traceability and visibility. It has the advantage of reducing errors, besides driving collaboration among suppliers, manufacturers, and distributors. Clearly, procurement, logistics, manufacturing, and data management and analytics will all play a vital role in the digital value chain.

The system can now be ready and is integrated to allow for data to flow seamlessly from suppliers to manufacturers. This will facilitate agile production adjustments based on real-time demand. Predictive analytics can now take centrestage to help in decision making, optimising inventory levels and minimising lead times, ensuring efficient and cost-effective product delivery to customers.

The real time concurrent visibility of all the parts & components at all the suppliers including development, production, transit, dispatch, quality, warehouse, should, ideally, be the final aim of such a supply chain process. To wring the maximum benefits from an agile system, it could be the way ahead.With more data readily available for the enterprise that can think ahead, the potential is emerging to improve the accuracy of planning and predictions could go up as well. With a plan to build volume, automakers could work on real-time scenario analysis to better react to the constantly changing customer requirements.

Staying supercharged for EVs
While the data intensive supply chain is getting ready, the electric vehicle (EV) revolution is unfolding too. The automobile industry is preparing for an unprecedented churn by the turn of the decade, which could lead to the number of automobile suppliers being cut, including the base for all the original equipment manufacturers and tier one suppliers.

The factors that could determine the market competence of suppliers as the new landscape emerges is getting clearer. The deciding factor could well be how well technology-ready a supply is and how seamless it could integrate with the supply chains of its customers. Add some more factors – higher vertical integration, value shift to new technologies in production of new sub-segments, greater quality standards along with the tighter delivery schedules – and they could be among the determining factors.

With the rapidly expanding market for EVs, working vertically and horizontally, across internal systems and with all external partners, will require a system that is agile and can support visibility that the current system often does not provide.

With a resilient and agile supply chain for the digital age, the system is ready beyond data collection. It demands a comprehensive approach encompassing technology adoption, process refinement, and workforce empowerment.

As technology has taken centrestage, an oft-use line was often heard – data is the new oil. For the data-driven world, that line too has evolved – data is the new soil, on which everything grows.

(This article is generated by ET Grey Cell and published by the ET Spotlight team. You can get in touch with them on etgreycell@timesgroup.com)