Lately, the automotive industry has faced many challenges due to the pandemic. Manufacturers experienced losses of billions of dollars because there was a global microchip shortage in 2021, and fewer vehicles were produced.
Some companies (Ford) even suspended their operations at some plants to focus on other processes.
But there were other causes of this outbreak, including labor shortfalls, lack of raw materials, and trade tensions.
All these supply chains that were affected made automotive companies look for solutions, being forced to build more adaptive manufacturing processes, from retrofitting to reshoring.
Although the pandemic has stopped and we’re back on our feet, the industry has still to change and adapt. But there’s hope for the future due to automation and digital manufacturing software, which is what we’ll discuss in the following paragraphs.
Businesses need to eliminate waste
Cars are the most recycled items worldwide, but they’re also a significant cause of waste production.
While 2.01 billion tons of solid waste are generated annually, the number is expected to grow substantially in the next few years. Unfortunately, a big percentage of it is not managed environmentally safely, damaging nature.
But what can the automotive industry do to stop the increasing waste? It can:
Design vehicles from renewable resources. Toyota is among the manufacturers that started using bio-renewable materials, with soybean-based polyurethane foams for the seats.
Luckily, more experiments are conducted to find more ways of introducing renewable resources into the manufacturing processes.
Minimize water usage. Wastewater is a significant part of the waste streams, and companies can try chemical drying instead of using tons of water. But they can also collect runoff rainwater (which they can later treat and filter) or reuse water when possible.
Change the packaging and part distribution. In the manufacturing process, many cushioning materials have been used, eventually ending up in landfills. A solution for that would be recyclable wrappings or reusable metal shipping containers.
Track waste. Such a system can help companies identify their current waste streams while determining how much waste they generate.
Manufacturers should aim for continuous improvement
Automotive manufacturing companies develop and produce complex products that require special processes. But as stated before, it’s not enough to produce if sales decline.
So, businesses need to look for improvements and embrace technology and CPQ for manufacturing.
Such software programs are meant to reduce quotation drafting and generate personalized documents explaining how the product is better than the competition.
The term CPQ comes from configure, price, and quote, and these applications can help increase sales and reduce wasted time.
Moreover, it can automate forecasts with smart integrations (CRM solutions, bills of materials), so businesses can have a broader image of their future performance.
Usually, CPQ is used simultaneously with CRM (customer relationship management) to increase revenues and efficiency.
CPQ software for manufacturing provides:
- Fully cloud and web-based tools for businesses to be able to configure and quote anywhere in the world;
- SaaS (Software-as-a-Service) to ensure the latest functionalities and features;
- Direct insight into the product’s characteristics with 3D solutions;
While CRM software offers:
- Better customer services by managing all contacts and gathering important customer information;
- Detailed analytics to contextualize data and optimize campaigns;
- Higher productivity and efficiency through marketing automation technology.
Manufacturing businesses are expected to improve their customer experience
Even if car manufacturers are able to prove their engineering capabilities and provide customers with excellent products, nowadays, customer experience is what balances everything.
For example, customers are not thrilled anymore about visiting a car showroom; instead, they prefer digital interactions.
For example, Tesla allows customers to buy cars with few clicks and fast customer support.
Plus, they provide other services, like worry-free energy packages (where you can have someone charge your vehicle through the app) or battery rentals. And Tesla is not the only company that offers more digital features.
Most electric vehicles come with more benefits than a usual car in terms of customer service.
To enhance customer experience, companies need to listen to their customers, offer more discounts and exclusive deals, and create tutorials and educational materials about their products.
That’s why some brands are behind others (Toyota, Honda, and Tata Motors are the ones outperforming this year).
What are the threats automobile manufacturers are dealing with?
Like any other industry, the automotive one has its threats when it comes to some manufacturing aspects, which include:
- Supply chain shortages. As materials are becoming more complex and difficult to reproduce across the world, manufacturers will experience chain disruptions.
- Repair costs. As the vehicles are getting more sophisticated, the repair costs are higher, increasing the cost of ownership.
- Cycle time. To ensure productivity, parts made of innovative materials need to be manufactured similarly to traditional ones.
- Costs. As new materials (carbon fiber) are introduced in certain vehicle parts, the final product will be more expensive.
- Corrosion. New materials can break down over time due to exposure to moisture.
Toyota: an example to be followed
Toyota Production Systems (TPS) is a unique manufacturing process that aims to eliminate waste and achieve the best possible efficiency. It is based on two concepts:
- Jidoka. This Japanese term can be translated as “automation with a human touch”, which is a method used to identify and correct any issues that could present risks. It improves quality and efficiency in the manufacturing process and can be implemented in any business.
- Just-in-time. The second concept is about refining and coordinating the production processes so that they only make what is required to minimize waste by eliminating inventory storage, saving money, and reducing the chances of errors associated with carrying inventory.
And the numbers prove that these principles are efficient. As of 2020, Toyota was the leading vehicle manufacturer worldwide based on global sales, and it’s the first and largest company to offer hybrid cars in its line-up.
In conclusion, the automotive industry has plenty of things to develop and change, but luckily, there’s a lot of demand, which is why research is done to find the best solutions for customers’ needs.