When talking about how the global automotive industry is set to change over the coming years, the figures can be hard to get your head around. There are now 1.2 billion vehicles in use globally, and that is expected to rise to 2 billion by 2035. There are also expected to be 250m connected cars on the road by 2020. While figures can be thrown around, the challenge is that the market is constantly changing and uneven, said Michael Martin, vice-president of strategic development for the global automotive sector at DHL Supply Chain, who was speaking at the 2016 Automotive Logistics Europe conference.
The expected growth is likely to lead to further imbalances in infrastructure to support production and sales. There will be an increase in car ownership in new and emerging markets; Mexico, India and China are expected to keep developing. But growth isn't the only expected change.
Technology will continue to play an increasing role. For example, Martin said there are more than 50 computers in a premium car today and 39% of drivers say their most important consideration when looking to buy a car is technology. This increasing level of technology leads to increased sequencing demands, along with the huge level of personalisation now available.
Although the average life of a vehicle is increasing (up from 8.4 to 9.7 years since 2006), technology has a considerably shorter product cycle, so OEMs and suppliers need to work on ways to effectively ensure that vehicles remain up to date. “Connectivity is driving large amounts of data,” Martin said. Data is not just useful for a consumer, of course, but it is another challenge for OEMs, suppliers and logistics providers to know how to make sense of it all.
Martin said there is an increasing need for standardisation and collaboration when it comes to interpreting data. “We need replicable solutions, recognising infrastructure, skills requirements and collaboration, and need to learn how to apply ways of doing business in different markets. It's easy to say, and difficult to deliver. There's a need to recognise that infrastructure is different in different markets. Sometimes the abilities in terms of road network and support aren't always there,” he said.
If improvements are made, OEMs could begin to predict future demand. Data can be used to suggest a specific number of parts that will be needed for certain months, procurement plans can be adjusted accordingly, stock holding would be leaner, and customers would be happier. Martin said that companies could hold up to 30% lower inventories.
Similar data could be also used to monitor truck drivers. Maintenance can be monitored to reduce unnecessary driving time and unnecessarily replaced parts, safety would be improved through condition monitoring, and there could be the potential to schedule servicing to integrate with daily deliveries.
Maintenance is not the only thing that would be improved for drivers. Parts tagged with RFID would enable more accurate and faster track and trace, and condition monitoring. DHL's pilot programme of the 'smart truck', for example, which took place in 2015, reduced the number of miles by 15% through a combination of RFID and optimal route planning. It also reduced the average route length by 8% and reduced fuel consumption and CO2 emissions.