The New Auto Industry: Change And Innovation For A Sustainable World

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One industry constantly changing is the auto industry. See how it is making changes for a more sustainable world.

According to Forbes:

“There is a story many like to tell about human ingenuity – or rather, its limits. It goes something like this. In the late 1800s, larger cities around the world were drowning in horse manure thanks to the widespread usage of horse-drawn carriages.

“According to Historic UK, in London alone there were 11,000 cabs each needing a horse, not to count the horse-drawn busses that required 12 horses each. And, each horse produced 15 to 35 pounds of manure per day.

“The problem was worse in New York, where there were 100,000 horses producing 2.5 million pounds of manure a day.

“The cities were quite literally drowning in manure, and in 1898 a group gathered at the world’s first international urban planning conference in New York to discuss the issue. No solutions were found.

“By 1912, however, the issue was to be moot. More than 600 miles away in Detroit, Henry Ford was experimenting with not just a new mode of transportation, but mass production for it. Cars solved our manure problem.

“Today, the automotive industry that changed the world – and paved the path for large scale city living – is innovating within itself. Changing consumer preferences, a need to help curb emissions, and the infiltration of new technology both within and throughout an automobile mean automakers must learn to react to industry changes in real-time, all while innovating their business models and working seamlessly with partners within their ecosystem.

“Ford’s assembly line innovation of the early 1900s changed the world. Today, the supply chain of automotive companies stands to once again re-shape our lives and economies.

“Here are four strategies automakers must consider to address the changing market, and position their companies as leaders of change and innovation for the next century.

Customer Centricity

“How consumers view mobility is changing, this has implications beyond just the car sales process, but impacts design, manufacturing, and after sales.

“Subscription and mobility as a service are on the rise for those in the market for a new vehicle, and automakers must learn how to balance these new business models to ensure they continue to meet customer expectations and their own revenue sales goals.

“This means automakers must get better at marketing their services, providing various buying, leasing and mobility options for their customers, and using data from those customers for better customer service and ultimately a better solution the next year.

“This is about innovation and personalization in real-time.

Connected Cars

“This new speed of innovation and personalization is powered by increased connectivity within the vehicle. This means better entertainment and more pleasurable for the customer, and real-time access to larger data sets than ever before for the automakers.

“That data is then used to get newer models to market 10-15% faster, save 10-15% in R&D costs (since identifying areas to update is made much clearer with larger datasets), to provide better services from within the car and ultimately to drive 25% increased revenue for the auto company.

Digital Supply Chain and Smart Factories

“To keep up with all this data, however, and the accompanying new designs, parts, and more that come along with it require responsive, digital supply chains that use intelligent technologies to ensure rapid flows that result in productivity, flexibility, and new dimensions in customer service.

“More detailed and granular production planning is necessary, as is the move to more modular vehicle parts and design. Done right, automakers can see a 10% reduction in manufacturing cost with a 4% improvement in volume throughput and 11% faster response time to customer demands.

Sustainable Mobility

“Finally, the automotive industry must shift to a more sustainable business model, and that will require a paradigm shift in the industry. Even battery-powered cars still need green electricity to run clean. Automakers must think through carbon footprint minimization for the next century, how they are going to become part of the circular economy and minimize waste, and ultimately how to turn those innovations into new streams of revenue.

What’s Next

“These changes are not easy, and they require new investments in tools and technologies to empower automakers to shift their practices. Similar to the late 1800s, the automotive world stands to completely transform in the next two decades.

“I recently took part in a podcast alongside Martin Builderbeck, Business Development Executive in the North American Automotive Practice at Capgemini to discuss what these changes mean for the auto industry, how technology can help, and what the future of the industry will look like for our children.”

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