Disruptive… Transformative… Next-Gen Automotive Industry Processes

Written by Tecwyn Hill | 7 min read
Published on: March 12th 2019 - Last modified: November 13th, 2020
Automotive Industry Processes 2019

The automotive space in 2019 is one of the world's most innovative industries, as well as a critical ‘driver’ of the economy. Find out more about the need for process change in the automotive industry and the speed of technological evolution...

2019 Automotive Industry Processes

Such is the automotive industry's economic significance that its ripple effects can dictate slumps and spark growth. 2019 automotive industry processes already support a vast supply chain, and generate a spectrum of direct and indirect business services. To take one example from the heavyweight European Automobile Manufacturers Association; the automotive industry is the largest private investor in R&D in Europe, with almost €54 billion invested annually.

However, the industry is also synonymous with complex supply chain management, large, disjointed manufacturing information systems, and inefficient, resource-demanding business application development cycles. Alarmingly, when the automotive industry stalls, so too can powerhouse companies, regions, and even nations. Just think of the recent decline in Detroit.

For example: According to EAMA, 24% of all passenger cars produced worldwide are made in Europe. And: 6.1% of the EU workforce—13.3 million people—are employed in the sector. However: For the first time in five years, the German economy receded by 0.2% in the third quarter of 2018, primarily due to the car industry regressing in the production and export of cars.

The need for process change in the automotive industry

Automotive executives and CIOs are working to minimize risks with business transformation initiatives. To ensure quality, reliability and economic efficiency, and the manufacture of vehicles and automotive components—like engines and gearboxes—and retail sales, the way work is done requires better process-centric, workflow-powered, and potentially automated initiatives.

This is especially true when we consider that the auto industry is second only to utilities as the most data-driven industry globally. So, what happens to this data, when, and how? How do we turbocharge 2019 automotive industry processes, to lay the groundwork for future success?

Business Transformation and 2019 Automotive Industry Processes

Business transformation is about the speed of business, and the ability of organizations to deal with new and emerging behaviors. For example, with the arrival of disruptive Mobility-As-A-Service (MaaS) companies like Uber, Lyft, and car2go, people no longer see owning a car as their best option, especially in larger cities around the world.

This is a profound transformation and requires an equally intense and transformative response from organizations whose business model relies on that previous reality of widespread and ubiquitous car ownership.

Connecting with Technology

Looking at the current automotive landscape, it is easy to see that the focus is instead on innovation and access through technology. The evolving nature of the automobile, pushed forward by connected-car services, autonomous vehicle capabilities, and new environmental regulations have led to a dramatic investment by major companies and suppliers in transformative business technologies.

For example: According to Gartner’s recent automotive CIO report, 30% of respondents view cloud services and solutions as an essential investment moving forward.

Business Transformation Platform

The demand for innovative solutions in the automotive industry is, therefore, higher than ever. However, these innovations require the backing of flexible and efficient process solution platforms to be successful. In other words, automotive CIOs must streamline their systems with agile process software to score big in this fast-paced market.

For example: In the same Gartner report, automotive CIOs believe that analytics will impact the way their businesses are run more than any other technology.

Why? Successful analytics tools can help identify actionable customer segments, improve customer retention, boost forecasting ability, and ultimately boost sales.

Automotive Industry Prediction 2019: Enterprise Resource Planning (ERP) systems will continue to be a key area of investment going forward. ERP systems can streamline operations for efficiency, reduce costs, and maximize profitability. With new intelligent ERP transformations, there is a massive opportunity for businesses to optimize all of their resources and improve business processes.

Business Process Management (BPM) for Franchised Auto Dealers

2019 automotive industry processes in a sales environment

The result of all this innovation is, of course, getting vehicles into the hands of consumers. But even here, there is scope for improvement, driven by a better understanding of customer needs and desires. Having the right omni-channel strategy is a prerequisite to auto retailer success because business is built on high-volume, low-margin transaction. Industry leaders must raise awareness across online research, lead-gen activities, and in-showroom sales.

But no omni-channel strategy can succeed without a valid business process management (BPM) solution. When considered as a way of working, BPM is the conductor that melds together today’s retail business model, integrating corporate processes and multifaceted procedures. These can touch both the consumer-facing user experience and back-end functionality, too.

Simplifying 2019 automotive industry processes

Auto retail today is significantly more complex than in the past. Owners and managers must now look beyond the sale yard to consider a whole range of issues and factors with an impact on their inventory, and their customers. From customer relationship management, sales planning, and accounting, the sale of financing and protection products, to the logistics of order fulfillment. Retail is now run by a web of integrated data-driven technology systems.

With this, older technology systems are now forced to quickly adapt to ensure all other operations in the dealership run efficiently.

How BPM is the invisible driver in 2019 automotive industry processes

The customer never sees BPM; they just experience the benefits during the buying process. Like all great team players, BPM keeps systems running efficiently, interdependently, and continuously. Currently, when 2019 automotive industry processes run as intended in a sales context, the customer experiences BPM through shopping, the point of sale, order fulfillment, and customer service. BPM becomes the central intelligence enabling the dealer’s success.

BPM adoption happens in two key steps:

  1. The technology helps to create a model that outlines the right process for each of the retailer’s moving parts.
  2. Correct processes enable the creation of workflows that pull employees, decisions, and technology into a seamless, transformed system.

Specific to auto retail:

  1. Dealers can incorporate several key initiatives into their organization to help identify where and how to implement a successful BPM solution.
  2. With such a system in place, dealers can structure and automate it in a way that helps identify critical metrics and ROI. This includes steps such as benchmarking to identify key areas within the organization where BPM can offer the most substantial impact, as well as simplify specific workflows.

BPM and the Automotive Industry 4.0 Revolution

If the vision of Industry 4.0 and new automobile industry standards is to be realized, enterprise processes and models must become more digitized and agile using process management systems. A critical element will be the evolution of traditional supply chains toward a connected, smart, and highly efficient supply chain ecosystem.

BPM empowers better efficiency, effectiveness, performance, and productivity through automation, workflows, and synchronization. It can also improve tracking and scheduling, and optimizes consumption which can increase turnover, quality, and profits, as well as reduce costs and waste. All things vital to current success and future triumph.

BPM as a dynamic model that incorporates business and process intelligence, and tools such as predictive analytics, is very much alive, and very much needed for your Industry 4.0 future success. Indeed, the vision of connecting Industry 4.0 with process management systems edges towards the creation of Industry 5.0.

Disruptive... Transformative... 2019 Automotive Industry Processes

As discussed, business transformation is about the speed of business, and the ability of organizations to deal with new and emerging behaviors.

This engagement empowers companies to shift away from lopsided efficiency goals, which often frustrate customers. Instead, you can move towards all-inclusive effectiveness goals with Operational Excellence (OpEx) built around the customer, at the lowest organizational cost possible.

Essential automotive industry processes 2019, and beyond

Autonomous Driving: The goal moving forward is to make the technology more readily available in less expensive ways. Consultancy firm Accenture anticipates that over the next eight years, assisted-driving techniques will be so effective in lowering insurance costs and reducing accidents, that it will save consumers roughly one trillion dollars and, most importantly, save close to one million lives.

Connected Supply Chain and Improved Manufacturing: As discussed, digitizing the connected supply chain ecosystem drives costs down, more effectively engages the consumer, and collects and uses data to serve customers better. The industry is moving away from national and regional production, and toward a more decentralized approach for both manufacturing and the supply chain.

Predictive Maintenance: Next-gen, advanced self-diagnostic systems can now instantly alert drivers to real-time problems, allowing us to proactively service our vehicles, drastically reducing mechanical failures and recalls. The trucking industry is also undergoing a similar movement powered by sensor technologies and Internet of Things (IoT) technology that allows companies to monitor data proactively to ensure safety, fuel optimization, and the condition of cargo.

Data Security and Protection: The automotive industry is one of the most data-driven sectors globally, with ‘intelligent’ vehicles collecting data about drivers, destinations, routes, traffic patterns, etc. The consumer benefits because they are at the center of these efforts, as companies continue to establish and maintain levels of customer loyalty.

Full Throttle: Business Transformation and the Automotive Industry

Transforming is about competitive advantage through clear vision, effective change management, and well-planned transformation processes. However, business transformation is not necessarily just about digital technology, but about the fact that technology, which is digital, allows people to solve their traditional problems. In practice, this means:

  • Supporting process transparency and visibility by breaking down silos and encouraging knowledge sharing, collaboration, and engagement.
  • Acting as a solid foundation for consistency, standardization, and harmonization of activities across the whole organization, so everyone moves as one.
  • Creating agency and streamlining how work gets done by putting the power to automate tasks into the hands of the people who know it best.
  • Utilizing data your organization already produces to make effective decisions, directly and continuously.

In other words, automotive enterprises need to work smarter, not harder, to take advantage of business transformation and reap the innovative benefits that follow when the rubber really hits the road.

Hit the Road Yourself

The demand for innovative solutions in the automotive industry requires companies and suppliers to make an equally dramatic investment in transformative business technologies. To find out more, download your free white paper, Driving Automotive Success: Innovative OpEx and Transformation Imperatives.

This white paper investigates the current and future opportunities and challenges for the automotive industry, and how strong process management combined with a focus on operational excellence can accelerate effective business transformation.

You can also request your personalized demo and find out how the Signavio Process Transformation Suite can turbocharge your business transformation and operational excellence initiatives. If you'd like to get behind the wheel straight away, take a test drive for yourself, and sign up for a free 30-day trial today!

Published on: March 12th 2019 - Last modified: November 13th, 2020