IoT and SCM are essential in the prevention of vehicle recalls

Today’s manufacturers face unprecedented market pressures concerning compliance, product quality and supply chain reliability. Emerging and maturing technologies like the Internet of Things (IoT), Industrial Internet of Things (IIoT) and networked Supply Chain Management (SCM) can offset risks by providing better insight into what is happening in the vehicle, on the shop floor, and throughout the supply chain. Without adequate technology in place, companies face risks that can cascade across multiple brands and products. One defective component, installed in many products, can be disastrous. It has been four years since the discovery of defective airbag inflators produced by automotive supplier Takata. This error led to the automotive industry’s largest recall, potentially affecting 42 million vehicles. The magnitude of this recall was so high because Takata supplied the same defective component to 19 different vehicle manufacturers. Takata was forced into bankruptcy and ultimately the sell-off of its remaining viable operations while the vehicle manufacturers are still grappling with lawsuits and billions of dollars of recall-related costs. On 11 April 2018, Key Safety Systems completed a US$1.6bn acquisition of Takata, with President and Chief Executive Shigehisa Takada stepping down and Chief Financial Officer Yoichiro Nomura taking up the role of President. The Takata recall and other high-profile automotive product recalls resulted in an unprecedented number of annual vehicle recalls between 2014 and 2016. In 2017, recalls dropped to numbers closer to historical averages, but the potential for more widespread, large-scale recalls remains high. Emerging and maturing technologies like the IoT, IIoT and networked SCM can offset risks by providing better insight into what is happening in the vehicle, on the shop floor, and throughout the supply chain As consolidation – driven by the need for better scalability – throughout the automotive supply chain increases, the exposure associated with a single defective component used across several vehicle models also increases. Vehicle insight New cars process considerable volumes of data – about 25 gigabytes per hour on average, according to McKinsey & Company. This information is generated by dozens of sensors installed throughout the vehicle that capture and publish performance data for critical components. IoT technologies can analyse this data to identify defects sooner; however, access to the data is typically controlled by OEMs. Suppliers are dependent upon OEMs for information about the performance of their component in every make and model where it is used. Without access to the source data from every OEM’s vehicle, it is difficult for suppliers to isolate the source of a potential problem, leading to a prolonged root cause analysis. However, with access to this data, suppliers could utilise IoT tools to analyse it and quickly spot trends and patterns that could provide insight into the conditions surrounding the problem. Individually, IoT, IIoT and networked SCM technologies enable critical insight that can help detect or diagnose the root cause of vehicle defects faster. The real promise, however, comes from integrating them into a single solution, accessible by all partners in the automotive ecosystem Individual OEMs are at a disadvantage when trying to diagnose a problem with a supplier-provided component because they do not have insight into how the same component is performing in other OEMs’ vehicles. Sharing vehicle data with suppliers and encouraging them to adopt IoT technology to conduct their own analyses benefits the OEMs, leading to a faster diagnosis of the problem. Shop floor insight Advanced shop floor management technologies, like IIoT, use data generated from plant floor equipment to calculate actual machine performance versus planned machine performance in real-time. This immediate feedback detects and predicts breakdowns or inefficiencies — in both processes and equipment — and allows operators to take corrective action if needed. In addition to improving manufacturing efficiency, IIoT technology can trace the manufacturing lineage of a given vehicle during the build process. This enables traceability of potential defects down to the precise point in the manufacturing process when problems first appeared. Supply chain insight Insight into a vehicle’s manufacturing genealogy requires traceability across the entire supply chain. Modern, networked supply chain management (SCM) solutions help manage the relationships between every partner in the ecosystem and can alert other partners of potential quality issues or parts shortages. OEMs and suppliers both need visibility on production status and inventory in transit or at rest. This enables them to allocate incoming shipments to plants or distribution centres, with the goal of minimizing inventory buffer in the chain. As consolidation – driven by the need for better scalability – throughout the automotive supply chain increases, the exposure associated with a single defective component used across several vehicle models also increases Global automotive companies can be connected to their partners, both onshore and offshore via networked SCM technology, and such technology provides real-time visibility on order and shipment status. This helps to optimise the supply chain for greater agility, faster turns, and lower costs. That connectivity is accomplished through integration with the back-office systems (e.g. accounts payable, ERP, warehouse management, and order management systems) of the all partners in the ecosystem. Networked SCM differs from traditional supply chain management – where raw materials or sub-assemblies for final assembly are received in a brand-owned plant – by accommodating production schedules managed by third parties, creating the need for multi-enterprise order management and coordination. Individually, IoT, IIoT and networked SCM technologies enable critical insight that can help detect or diagnose the root cause of vehicle defects faster. The real promise, however, comes from integrating them into a single solution, accessible by all partners in the automotive ecosystem. Real-time insight from vehicles and manufacturing operations, which is shared throughout a networked supply chain, ensures both OEMs and suppliers have access to the ‘big picture’ at their fingertips. About the author: Jeff Nedwick is Director of Product Management & Strategy at Infor

IoT and SCM are essential in the prevention of vehicle recalls

How IIoT, IoT and supply chain visibility solutions improve vehicle quality. By Jeff Nedwick

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