Key manufacturing trends: what's driving the connected car?

2015 was a year where embedded technologies enabled manufactured products to be more “informed”. New stakeholders with innovative products and services entered the ecosystem, traditional supply chains have been disrupted through new channel options, and, above all, customers demanded an ever-increasing level of customization; not just in products and services, but also across the entire procurement and product usage experience. Let’s take a look at one of the biggest trends in manufacturing for 2016 - automotive and the connected car:

1. Consumerisation: Consumers’ buying behaviour is changing and today, it is not just items such as clothes and electronics that are purchased online; often, the process of buying a car starts with online research. Buyers used to speak to dealers and then make their decision, whereas now, a lot of the background work is happening online before reaching the dealership. Car dealers have long been aware of this trend, and are working with car manufacturers to make the most of this trend. Some car manufactures have made creative use of augmented reality to establish virtual dealerships for potential car buyers to experience the ‘look-and-feel’ of the vehicle before purchase. As a result of the proliferation of consumer devices there is a step change in expectations in B2B environments as, ultimately, it is the user experience taking centre stage. This means that traditional B2B manufacturing companies will increasingly adopt a B2C approach towards their B2B customers.

2. Connected cars and infotainment: A study by McKinsey suggested that a rise in the number of connected cars will increase “the value of the global market for connectivity components and services to €170 billion by 2020”. For many, the car is now turning into an extension of the home, with drivers’ digital, social and mobile habits – underpinned by technology advances – being integrated into the vehicle. This trend is set to continue next year with car manufacturers keen to take advantage of monetisation opportunities around the connected car, not least by taking demographic tastes and needs into consideration, and applying these to the vehicles. Through the use of sensors, which deliver data for analysis, the connected car provides yet another opportunity to understand driver characteristics, their needs, the features they might appreciate, while introducing an additional layer of safety.

3. Robotics and automation: Automation has started to infiltrate a number of industry sectors - from banking and insurance to healthcare and manufacturing - to various degrees with increasing impact. In fact, a recent study by Cognizant found that roughly 50% of respondents see automation as significantly improving processes over the next few years.

As a result, automotive and vehicle manufacturers too have begun to make use of automation and automated process in a number of situations. For example through Advanced Driver Assistance Systems (ADAS), vehicle manufacturers are able to move to the next stage of autonomous driving and we will see an increase in the use of this technology. Secondly, there is vehicle-to-vehicle communication, another major enabler of autonomous driving. For example, if there is a traffic incident ahead, current navigation systems offer a diversion around the traffic incident. Thirdly, there are autonomous trucks which can provide relief to the driver during long-haul journeys and finally, autonomous drones will be increasingly used to inspect land and railways tracks and yard and inventory management.

These trends provide opportunities for organisations to rethink, reimagine and reinvent themselves and stay competitive by doing business more effectively and efficiently. Manufacturers must fully embrace social, mobile, analytics and cloud (SMAC) and sensor technologies to achieve the operational excellence, agility, innovation and customer centricity required to remain relevant with customers, business partners and the entire manufacturing ecosystem.

Prasad Satyavolu is the Head of Innovation, Manufacturing and Logistics at Cognizant

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