Breakthrough technologies are driving transformation in the automotive industry at a record pace. These innovations are disrupting industry fundamentals, changing the current value chain, and will radically alter how we view transportation in the future.
However, in the midst of this transformation, a global pandemic has caused unprecedented business disruption, halting vehicle production, stalling vehicle sales and forcing millions of staff to work remotely.
On the road to recovery, automakers are navigating a new landscape. What Microsoft calls tech intensity – building and mastering one’s own digital capabilities to innovate past disruption – is now even more critical. Businesses need to focus on three primary strategies to help them deal with the current challenging environment:
• Navigating the now
• Planning for the comeback
• Shaping the new normal.
Despite the challenges during the early stages of the pandemic, we were inspired by the automakers that stepped up to show leadership and navigate the crisis. They shut down vehicle production for the safety of their workers and in many cases reconfigured their production lines and supply chains to manufacture and deliver critical supplies to frontline responders.
One especially exciting example is the VentilatorChallengeUK consortium. A group of companies - including Ford, Rolls-Royce, several UK-based Formula 1 teams, and Microsoft – came together to produce ventilators for the National Health Service. The speed of this project was unprecedented, with the consortium producing 10 years’ worth of ventilators in almost as many weeks.
Navigating the now
To navigate the now, automakers’ most pressing needs are to maintain business continuity and keep their operations running remotely. With global employees being separated due to work-from-home requirements, companies are turning to Microsoft Teams to support the transition to remote work. For example, tyre manufacturer Goodyear has successfully transitioned 25,000 associates to remote work in just days, with a 410 per cent increase in Teams meetings.
Meanwhile, Microsoft High Performance Computing solutions are enabling engineers to use very demanding software from home, accessing powerful remote workstations in Azure using a standard laptop and internet connection. Complex design work and high-performing simulation capacity can perform irrespective of the local device’s compute power, since all the computation and graphical rendering are processed by the virtual machines hosted in the cloud. This has allowed Alstom, a leader in integrated transport systems, to seamlessly shift more than 2,000 engineers to a work-at-home strategy in under a week, saving them an estimated €2 million ($2.24 million) a day.
Beyond remote work, sales and services opportunities were all but lost for most businesses during the early stages of the crisis. To enable positive brand experiences, dealerships leveraged tools like Dynamics 365 Commerce to continue retail transactions and the Microsoft Bot Framework to maintain deep and immersive customer engagements and deal with significant shifts in online demand until services can resume.
Planning for the comeback
Beyond the immediate crisis response, automakers are also well on their way to planning the comeback, looking for cost savings to match current reductions in product demand and cash flow, while planning for economic recovery. This means that factories and supply chains are being reconfigured, with employee safety at the centre.
Technologies enabling remote assistance are well-positioned to help employees maintain social distancing and still be productive in the factory. By leveraging tools such as Microsoft HoloLens, Dynamics 365 Remote Assist, and partner solutions like PTC’s Vuforia Chalk, workers can be remote, and yet still be right next to someone that needs assistance.
Automakers also need to have good visibility into their supply chain, including the inventory and manufacturing capabilities of their suppliers. Microsoft empowers automakers to take control of their critical warehousing, unpredictable demand, backlogged goods and supply chain by streamlining operations with Dynamics 365 Supply Chain Management and rapidly build and deploy supply chain solutions with Azure IoT Central.
Among Microsoft partners, Blue Yonder is offering artificial intelligence capabilities that provide automakers with real-time supply chain visibility so that they can plan for and adapt to changing circumstances. Meanwhile, manufacturing data platform Sight Machine is working closely with automakers to help them manage and optimise their production. Combined with other supply chain capabilities, the solution proposes to create a single end-to-end solution for the whole critical products production and supply system.
Shaping the new normal
We know this crisis will have a permanent impact on customer demand patterns, vehicle innovation efforts and future mobility services. Therefore, automakers will need to reimagine their businesses based on this new normal.
We can expect to see innovations born out of necessity, such as remote control of production processes. Our partner Annata offers management solution Annata 365, built on Microsoft technology with the Automotive Accelerator, helping businesses drive efficiencies in automotive retail and take advantage of opportunities in the market.
Our solutions across connected and autonomous development will continue to play a key role to accelerate vehicle innovation, building on the work we are already doing with customers like Renault-Nissan-Mitsubishi and Audi. Emerging mobility services will focus on new and safer opportunities. For example, cities can leverage Microsoft technology to bring together data from many sensors – from intelligent traffic lights to air pollution sensors and connected vehicles – to gather new insights and deliver a safer and more sustainable environment.
While for some companies the crisis has stalled their core business, for others it has accelerated their digital transformation journeys and demonstrated all the benefits of digitalisation. The VentilatorChallengeUK is an example that teaches us about the possibilities in a post-Covid-19 world. One where we move from years to weeks, and even days, for innovation, supply chain agility and production execution. We’ve seen other Automotive OEMs use this as an opportunity to transform and move traditional IT payloads to the cloud, reducing fixed costs, turning legacy assets into value and increasing their corporate agility with one initiative.
As the new world evolves, organisations are realising they need a comprehensive solution that brings together operational resiliency, business continuity and tech intensity to realise their new normal. And they need a trusted partner to help them execute.
Microsoft is a partner you can put your trust in. Our strategy in automotive is aligned to three key principles. First, we do not compete directly with automakers and mobility service providers. We are not in the business of making vehicles or delivering mobility services. We ensure that data is always under our customer’s control and is theirs to monetise. And finally, we focus on helping automakers and smart mobility service providers strengthen their own unique brand and customer experience within their vehicles.
The implications of Covid-19 on the automotive industry are profound. It is unclear what the long-term impact on the economy will be, but one thing is clear – the automotive industry is not only embracing the disruption at hand but pioneering new and exciting ways to drive the next level of mobility in the new decade.
Sanjay Ravi is general manager of automotive industry at Microsoft
This article was originally published in the Summer 2020 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.