Artificially intelligent: Top 10 Red Sofa interviews on supply chain digitalisation

Digitalisation can take many forms, especially in something as inherently complex as a supply chain. In principle, it refers to creating, adopting or leveraging digital technologies to transform operations or processes. The implementation of digital approaches can vary, ranging from companies integrating AI and data analytics tools to automation management systems. 

A thread that is apparent throughout the Red Sofa interviews that Automotive Logistics has conducted is that, no matter what approach is taken, adopting more digital strategies can only be to a company’s benefit. Through this evolving list of conversations with key decision makers, find out just why this is the case.  

GM’s Jeffrey Morrison on improving partnerships  

Jeffrey Morrison, senior vice-president of global purchasing and supply chain at GM, sat down on the Red Sofa at Automotive Logistics and Supply Chain Global 2024. In the conversation, he outlined how GM is focused on ensuring its partners are also invested in adopting new approaches alongside the OEM. “We’re focusing on bringing the best technology forward, but it’s equally important that our partners are ready to navigate these changes as well,” he said. 

Using the example of EVs, he explained that sharing values with partners will be key to ensuring that vehicles are delivered efficiently. The increased weight of EVs and the associated limitations to transport spur discourse and investment across the value chain, such as looking into electric-powered freight solutions.   

It is through such discourse that solutions can be found and new avenues for efficacy introduced. To summarise the benefits this can bring for OEMs and their partners, he  stated that collaboration is “more than just securing capacity; it’s about finding new efficiencies and enabling key investments that will benefit both sides”. He added: “Together, we can be at the forefront of this industry transformation.”  

Birgit Fuchs at Infineon Technologies on using digital approaches to improve collaboration and standardisation  

Building on this theme of collaboration through digitalisation, Birgit Fuchs, vice-president of supply chain at Infineon Technologies, explored how digital platforms can be used to champion these core values and the benefits this can bring for OEMs and tier suppliers.  

She said: “Standardisation of processes and adopting digital technologies can help companies to streamline their operations and reduce lead times, which is essential for an agile and responsive supply chain to meet customer needs”.  

Furthermore, she suggests that the strength of a supply chain lies in the strength of its parts, so the sharing of data, insights and best practice is vital for success. In doing so, all players in the value chain can benefit, and this information sharing is made easier through digital approaches such as blockchain.  

A collaborative and standardised approach is especially relevant for Infineon Technologies, a global leader in semiconductor power systems and technology solutions, as semiconductor shortages in recent years have had severe knock-on impacts across the automotive industry. However, the lessons from the Red Sofa can be applicable to players across the industry.  

Nissan’s Todd Myers explains how data-led approaches can combat disruption  

Fresh from a panel about meeting complexity head-on at this year’s Finished Vehicle Logistics North America event, Automotive Logistics sat down with Todd Myers, director of finished vehicle logistics North America at Nissan.  

Expanding on several panel points, he outlined how Nissan is mitigating any potential chances for disruption across its supply chain. The OEM’s focus is on using key performance metrics – including free cash flow, total delivered cost, and cost per unit – to influence operational processes. These metrics are used to ensure that any decision “made in the silo of vehicle logistics ultimately enhances the revenue side of the business”.  

To facilitate this data-led approach, several digital platforms are used – both public industry standards as well as in-house tailored tools. These include visualisation platforms such as Tableau and PowerBI and simulation platforms such as CPLEX and Gurobi.  

Myers tied the use of these platforms directly to supply chain success. Such interactive platforms give the logistics team access to ongoing and evolving planning, allowing for “continuous optimisations on some element or some node of the supply chain at any given time”. This continued optimisation creates fluidity and adaptability, minimising the impacts of any potential disruption as the team can quickly pivot as necessary – a useful lesson.  

John Torres at Mercedes-Benz on why data quality is integral to any digital strategy

With digital strategies – such as AI-led forecasting or the streamlining of operations systems – holding such potential for businesses, it makes sense that they are rapidly being introduced. However, John Torres, lead senior data scientist at Mercedes-Benz, reiterates the importance of ensuring that any such strategy is led by good data.  

Sitting down on the Red Sofa at last year’s ALSC Digital Strategies Europe, he summarised the foundations needed for a successful strategy to be “data completeness [and] data transparency”. With these metrics in mind, teams can ensure that their work is optimised, as well as approach business units and work collaboratively with them to set parameters for actionable and quantifiably beneficial analysis. Using the example of vehicle delivery after purchase, a digital model with proper data can give customers a more accurate and realistic outline of delivery, boosting the customer experience and improving satisfaction.  

He also stressed the importance of proper data governance, exploring the need to improve data literacy throughout organisations. With this, the human-focus of digital strategies remains at the forefront. As Torres pointed out, “the most important asset in any company is definitely the people” – a key takeaway but one that is often at risk of being overlooked.   

Amy Paulsen at GM on lessons learnt on digitalisation in the EV space  

This reminder of the human-side of digital transformations is echoed by Amy Paulsen, director of finished vehicle logistics at GM, in her Red Sofa at Finished Vehicle Logistics North America event last month.  

Joining GM after a decade of experience at EV start-ups, she reflected that, while she was impressed at how nimbly the OEM can pivot and adapt, there is still room for improvement in its usage of data and systems. Her vision is for programmes and processes to be updated through the addition of new data and growing analysis platforms. Despite this, she reiterates the importance of keeping the team in mind when introducing new technologies:   

“A lot of what we’ve accomplished is by sheer force of will and a lot of human effort. To keep the team balanced, we need to automate a lot of our function and leverage technology, including some AI and machine learning, to support the people endeavour behind everything.” 

Paulsen used the example of strengthening network design for EVs as an example of where these technologies could be effectively implemented. She explained that the knowledge gained through AI and machine learning tools have allowed teams to leverage the network in new ways, “whether that’s a different loading point, a different carrier, or a different routing”. In fact, Paulsen pointed to these tools as the reason for the company’s success in dealing with recent exigencies – reinforcing the potential of properly implemented digital tools.  

Anu Goel at Volkswagen Group of America on how digital strategies can combat tariffs 

A major discussion point in recent months, both in and out of the automotive industry, has been tariffs. Recent tariffs from the US government have caused widespread confusion and disarray at every stage of the supply chain, especially for manufacturers and suppliers in the North American region.  

While, in this instance, the introduction and severity of tariffs may be hard to predict, digital strategies can still be valuable in mitigating their impacts. Speaking at Finished Vehicle Logistics North America, Anu Goel, executive vice-president of group service and after sales at Volkswagen Group of America, explained how streamlined data sharing is vital for overcoming potential bottlenecks. Through using “simplified metrics with the same definition” that are routinely reviewed, the FVL teams can quickly compare cross-border data and adjust their logistics plans at speed to ensure that they remain optimised. Coupled with the introduction of automated reporting, data-led decision making can be improved significantly.   

However, Goel also suggested that there still remains scope for further and more integrated strategies to be introduced under certain parameters. The FVL team has not yet introduced AI tools into the process yet, as there needs to be complete clarity surrounding “what that data actually is, before you implement it”. This is good advice for any company planning to integrate such tools – especially when delays and margins are at stake.  

Fabian Pobantz at Schaeffler on AI’s role in overcoming supply chain unpredictability  

While tariffs have proven to be incredibly disruptive, they are not the only risk that supply chains can face. Recent years have seen disruptions that range from labour and part shortages to severe weather conditions. Navigating disruptions is key, and Fabian Pobantz, vice-president of operation digitalisation & IT, supply chain and purchasing at Schaeffler, discussed how vital digital tools can be at countering their unpredictability.  

“AI is here to help, this is clear”, he stated, going on to explain that there should be a move away from a basic discussion on AI introduction but instead the focus should be on maturity. With this mindset change, such tools can best be implemented, especially when introduced across different facets of the business: “The divisions have different priorities, so it’s more about really bringing it down to granularity. In every single organisation, what is the supply chain main pain point they have where we can contribute digital solutions. We are no longer in the high level; we are becoming more mature and granular for every single case.” 

It is through this granularity that unpredictability can be countered – by improving the detail of inputs, the stronger the outputs. This is something that companies should also keep in mind when introducing digital strategies to ensure optimised results.  

Carolin Richter at BMW discusses advanced automation in plants 

As discussed in other Red Sofa interviews, generative AI is a tool that holds immense potential for the industry – it can be used to streamline and speed up tasks, develop more intricate and evolving models, and facilitate operational efficiency. But, it can do more than support operations. In some instances, it can spur innovation itself: “Developments in the field of generative AI offers completely new challenges and possibilities of using AI models in robotics. The expectation of the next generation of robots would be that they can be trained entirely without programming, almost autonomously. It’s like a ChatGPT moment for robotics!” 

This is an idea that Carolin Richter, head of next generation robotics at BMW, explored in her Red Sofa at ALSC Digital Strategies. There was good cause for her excitement, as she explained that BMW have already been able to automate tasks that “have previously [been] considered impossible due to cost effectiveness” in their plants. Expanding on the automation that is already in place, the advancements in AI have allowed Richter and her team to explore the possibility of using humanoids in manufacturing operations. Their benefit is that their design allows them to better interact with an environment designed for humans and is a prime example of how far digital solutions can be taken. What once was in the realm of science fiction, is now a viable option for companies to invest in and scale up.  

Saba Azizi at CATL on diversity in digital platforms   

In her Red Sofa interview at Automotive Logistics & Supply Chain Digital Strategies Europe in Munich last December, Saba Azizi, overseas service network and development manager for CATL, discussed how digital solutions are at the forefront of the EV battery giant’s approach to customer satisfaction.  

Traditional service network systems can lead to a lot of inefficiency, including “inaccurate data entry, tracking and performance”, and the lack of an integrated system did not align with customer values. Azizi’s introduction of a digitalised service network platform countered these issues, allowing for one synthesised portal to track functions across the network. Transparency and consistency can therefore be improved for customers, helping the company to achieve its goal of keeping the customer “satisfied, happy and loyal”.   

The benefits in this case study extend beyond the customer too. Azizi explained that digitalisation is not just about creating a technology platform but instead is an avenue “where everyone with different backgrounds and perspective can cooperate with each other and exchange their ideas”. Azizi went on to explain that this is vital for growth and innovation, as the automotive industry is at a key junction in the road to electrification, especially at a global level. Creating such an avenue for discussion allows for greater insight to be gleamed and expertise to be utilised, which can be spun off into better understanding customer demand and adjusting accordingly to capitalise on it.  

Dr Gisela Linge at Autoliv, on balancing AI’s potential to reshaping logistics with the human element of the industry  

To finish off the first iteration of this Top 10 list, we return to the idea of understanding digitalisation through a sustainable lens. Like with the many different forms of digitalisation, sustainability also has different focuses – and one that is often overlooked is the human element. To be sustainable, there must also be investment in and support for the people that make up the industry, and Dr Giesela Linge, vice-president of global logistics at Autoliv, argued that digital tools can help remind the automotive sector to do exactly that.  

“Yes, it’s a lot about IT, getting the right data sets together and having the right data quality, but a big part is human interaction,” she said. “Act as if AI is a team member; that means changing the interactions and the way we work, changing the skill sets needed, and there needs to be a lot of communication and change management.” 

She also argued that the success of any digital measure is as reliant on the people working on the project as it is on the software or hardware involved. She stressed the importance of having a diversity of backgrounds, ideas and perspectives on a project are vital, as each difference brings with it experience and nuance that can be translated into project design. Through this, any digital transformation occurring is approached with a much more holistic perspective, guaranteeing a higher likelihood of success while reinforcing the importance of the people element in the sector.