Digitisation Is Imperative! But Are We Ready?

By S Raj (Regional Director- Southern Region, Indo German Chamber of Commerce):

The invention of the wheel some 5000 years ago was a great boon to mankind. It changed the way people travelled and connected. However, it was 131 years ago, in 1886, that the modern automobile, with the Benz Patent-Motorwagen, by German inventor Carl Benz, was born. Motorised vehicles replaced animal drawn carriages, particularly after automobiles became affordable for many when Henry Ford started assembly line production and introduced the Ford Model T in 1908.
Though the technology made gradual progress for a few decades, the strides by the automotive sector in the last few decades, and more so in the last decade, in terms of safety, comfort and efficiency is mind boggling. The automotive sector is one of the most innovative sectors, particularly in Germany where an average of 10 patents are registered every day.
Globally, more than 81 million cars were produced in 2016. Majority of these (estimated 98 percent or more) are of conventional IC engines, driven by fossil fuel, causing environmental concerns and depletion of natural resources. By 2020, the global car market is expected to grow around 11 percent to 91 million. Add commercial vehicles, two-wheelers, three-wheelers and tractors and the figure is very huge.
Germany, a global automotive powerhouse, manufactured around 5.8 million cars last year and exported more than 74 percent (4.4 million). German manufacturers continued the trend of manufacturing more cars outside Germany and crossed 10 million for the first time. For most Americans, the aspirational brands are BMW, Mercedes, Audi or Porsche – all of which are German and embodies precision engineering, quality, fit and finish, giving the owner the ultimate in driving and riding experience, with highest safety standards. No wonder, President Trump is planning to make German cars more expensive by increasing taxes on them.
The German automotive industry is right on track with a proposed investment of over 40 billion euros in alternative powertrains by 2020 and targeting to treble the electric car portfolio from 30 models to 100. Corresponding infrastructure to support electric mobility is addressed by the German Government with a plan to invest 300 million euros in the charging infrastructure by 2020.
This would take public charging points to around 15,000 (currently around 6,800) and in the case of rapid charging stations from 150 to several thousands. The recently announced joint venture between German automotive manufacturers and Ford Motor Company for installing 400 ultra-fast, high-power charging network on Europe’s freeways signifies the intent of the German manufacturers in providing clean mobility. By 2025, around 15 to 25 percent of new registrations are expected to come from electric cars. The increase in models and affordability would enable electric mobility reach the mass market in the next decade.
Innovations
Disruptive technologies like the Internet of Things, Big Data and sustainable
energy together make what is referred to as `Industry 4.0’. It is also called a `smart factory’. Within the modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralised decisions. In the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time via the Internet Services.
Both internal and cross-organizational services are offered and used by participants of the value chain. Simply explained, it is connecting your life to the computers and controlling it using your computer or smart phone, be it the machines in factory or the gadgets at home or office like cooling/heating, lights, security systems, your schedule, etc.
The automotive sector has made great strides in digitisation – from engine management to diagnostics to navigation. According to some reports, almost 75 percent of the parts are designed by the suppliers, indicating that car manufacturing is no longer the job of an individual enterprise. It is a complex ecosystem of supply chain partners. With advancement in technology, the automotive industry is bracing for more changes in the supply chain as well as manufacturing.
Such technologies include 3D printing, robotics, and collaborative IT, all of which help automakers improve product design and transform the supply chain. In fact it has connected the entire value chain by way of robotics and artificial intelligence which enables to customise the platform. The machines communicate with the computer and take input from the customer requirement fed into the computer, to produce customised cars. Digitisation has thus enabled mass customisation.
Digitisation has also enabled the cars to communicate with the external world and gives inputs to the driver on the traffic, alternative routes, weather condition, etc. This results in saving time and conserves energy. In fact, cars are becoming more of a computer on wheels, indicating a shift in manufacturing from the conventional car manufacturer to the Googles and Microsofts of the world. With digitisation, cars have become more intelligent. Take for example the Hybrid cars which switch from conventional fuel to electric depending on the driving patterns, weather condition, etc. This helps a great deal in conservation of fuel and environment.
The main objective of all this is to aid humans in becoming more productive and creative. In the developed countries, the trend is gradually moving towards driverless (autonomous) cars controlled by computers, and tests are being conducted. It is because they have the systems in place and the necessary infrastructure.
Any change in a system, such as this one moving from manual to digital and driverless , requires discipline, civic sense and strict adherence to road safety rules, which has to be monitored and regulated. Developing nations like India should first regularise the driving rules. This should begin by regulating issuing of licence as in developed nations. Once a system is implemented and monitored and the price of non-adherence is severe, digital systems can be implemented successfully.
Of course, the basic infrastructure of roads, power, etc. have to be in place for this to happen. Hopefully, by then the developed nations would have tried and tested driverless cars. But with the organised chaos in traffic, it is a no go for now. Moreover, with a population of 1.3 billion and growing, India has to have a mix of digitisation/automation and manual labour to ensure employment and livelihood for all.
The imagination and fantasies of humans will decide the future of the automotive industry. Take the example of mobile phone – who would have ever imagined that this device, the basic purpose of which is communication between people, would combine the functions of a personal digital assistant and a mobile phone (smart phones) to give an entire gamut of functions like banking, travelling, scheduling appointments, booking tickets, and also controlling other gadgets. This saves a lot of time and energy.
However, for countries like India one also needs to take into consideration the weather conditions which are not conducive to electronics and digitisation unless they are in a controlled environment. One also needs to study and consider the sociology of the country carefully. Training, skilling, retraining and customer education is extremely important before introducing new technology in any eco-system.
While digitisation and artificial intelligence (AI) would certainly make humans more productive and creative, we also become vulnerable on the internet. A hack or malware into the system could bring your world, if not the whole world, to a standstill. We have recently witnessed a ransom malware attack. Therefore, a cautious and balanced approach is the key.

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