Automotive electronics supply chain has undergone a major transformation recently. Not only that, their future projection can’t seem to be brighter.
The automotive electronics industry segment is worth close to $180 Billion annually, plus another $35 billion for infotainment and this is a segment with current and projected double-digit growth.
Eighty million cars are sold worldwide and they average around $2,700 of electronics content. What’s more, content is developing rapidly. Our desire to bring our connected life into the car is one driver, another is the development of piloted or driverless cars, this with safety, engine and energy management, and lighting that included LED and laser. It’s clear to see this is one of the more exciting and rapidly developing areas of the electronics manufacturing industry.
Automotive electronics supply chains
Ever-changing market
For many years the car industry has been more conservative, focused appropriately on reliability, and moving slowly to introduce new products. Now things are changing and these two areas of the supply chain colliding. The conservative car industry with its seven-year design cycles must collaborate with the consumer market, with its seven-month product life.
These worlds are different and require different techniques and disciplines. The strategy of some companies like Mercedes and Audi is to partner with consumer electronics giants like Google and Infineon to create new product initiatives. They are also opening design centers in high-tech areas like Silicon Valley. Therefore, they can be close to potential partners and to work more closely with the fast-moving consumer electronics supply chain.
In an interview conducted at this year’s Consumer Electronics Show (CES), where automotive was the clear star, Robert Bosch GmbH Board Member, Werner Struth talked about the red world of the consumer market and the blue world of car manufacturing. He feels that these two supply chains are different.
However, they need to work in harmony. Hence, a company like Robert Bosch GmbH Board has a role to play in bringing them together. He also cautions against underestimating the speed at which the car industry can develop and adapt.
Clearly much about the two supply chains are different. Nevertheless, once you get below the surface much is actually very similar. The electronics manufacturing industry has learned a good deal over the years from the car industry. After all, it was the Japanese car giants that brought us lean manufacturing.
Furthermore, much of what we currently refer to as the digital factory, the smart factory, or even Industry 4.0 has come from the automotive industry. Mass customization and configuring or build-to-order (CTO and BTO) is part and parcel of car manufacturing. Besides, automation and robotics are trends that run concurrently in both electronics and car assembly.
Prospect of the industry
Perhaps the key differences come in research and development (R&D). More importantly, new product introduction (NPI) where the consumer market (red) is naturally less considered and rigorous than the more conservative (blue) car industry.
The key to the successful merging of these two sectors is their ability to manage both complex supply chains well, regardless of differing speeds or differing variables. Managing technology is one thing, and ideas like firewalls to keep the email and video data away from mission-critical data like engine management, and driver assist makes perfect sense.
Although in manufacturing the world, they will have to harmonize. Therefore they will need intense collaborations, and genuinely progressive manufacturing excellence driving quality and repeatability. Perhaps most importantly accurate and available manufacturing data with complete supply chain visibility and traceability.
Project this all forward a few years to where we are all relaxing in our vehicle listening to music or watching a movie or perhaps answering emails. In the meantime, our car is driving us safely to our next meeting through a smart city. The traffic lights and other control systems guide us via satellite positioning. Google updates us on traffic via the web. Safety systems keep a look out for stray dogs or errant children running into the road. The car is now so much more than a mere mode of transport. It is probably the most powerful computing product in our lives.
With multiple connections to our surroundings via the Internet of Things (IoT) and huge amounts of data are being pulled and pushed to cloud storage networks. The value of the electronics is likely beyond the value of the remainder of the car and our expectation of its ability.
Keeping up with content, application, and software trends is parallel to that the expectations of our smartphones. Our car has become our most prized consumer electronics device.
At this point, the supply chains for electronics need to be seamless. They may even be singular with car manufacturers and electronics companies merging to form new companies. Google introduced Android Auto this year and has been using driverless cars for some time. How long before they become a brand or co-brand player in the car industry?
Doubtless, the car is changing fast, as is the supply chain that surrounds it. What remains the same is the relentless drive for safety, reliability, and quality. This can only be achieved with a fanatical approach to manufacturing excellence at the highest level. Data and traceability should be at the core, enabling a fast, flexible, and agile electronics supply chain.
With Industry 4.0 traceability ‘Comes of Age’
Not so long ago, traceability was predominantly a function required only by certain quality-sensitive manufacturers, particularly those within the automotive, medical, military, and aerospace sectors. Principally in these market segments, production was, and indeed still is, impossible without strict adherence to legal requirements (RoHS, WEEE, Congressional Tread Act, etc.). With it, the necessity for scrupulous measures and processes that track and record each manufacturing step to achieve compliance.
No doubt there has always been a myriad of processes applied by various manufacturers even outside of those segments. The process helped track material flow within production to aid planning and offer relatively simple traceability capability. Often these processes, however, required time-consuming administrative tasks or very simple automated solutions.
In principle, these measures were introduced to manage costly product recalls. Yet, they are able to react after an issue had been identified. In practice, however, compared to today’s more sophisticated solutions, these were relatively primitive.
Labor and time-intensive standalone systems required a large amount of data storage capacity. Consequently, they did not provide a fast and efficient traceability solution.
The economic downturn hit in the early part of the century. The entire electronics manufacturing industry is focused on developing and offering the most cost-effective solutions. They offered speed, precision, and flexibility. Strong pressure from customers to reduce costs across the supply chain triggered a shift within the industry.
The economic downturn hit in the early part of the century. The entire electronics manufacturing industry is focused on developing and offering the most cost-effective solutions. They offered speed, precision, and flexibility. Strong pressure from customers to reduce costs across the supply chain triggered a shift within the industry.
Globalization, miniaturization as well as the trend to outsource parts or all of the production process, have created a whole new set of challenges. Today manufacturing often takes place in ‘foreign’ countries. Consequently, different laws, different cultures, and different reputations govern quality control and the result thereof. Traceability has become a vital function for brand protection through active fault recognition in order to avoid costly recalls.
Coupled with the proliferation of counterfeiting, traceability solutions have certainly moved up the requirement list for many manufacturers today. Although still often viewed as a separate function required only for specific customers and products, many recognized early on that implementation of compliance, test, and control systems beyond any legal requirement could also offer a competitive advantage.
Today, test and control solutions have quickly developed into advanced and intelligent automated systems. They check each component and every manufacturing process to ensure the required quality and the prevention of faults. No longer is traceability a separate function and end goal, but a by-product of an efficient control system.
Manufacturing Execution Systems (MES) connect to Enterprise Resource planning systems (ERP). It offers factory-wide qualitative and cost-reducing advantages through improved inventory management, material flow, quality control, order processing & tracking as well as database management, etc.
Survival of the fittest
Industry 4.0 has introduced a new concept of organizing and controlling the complete value chain over the entire product lifecycle. Now, we are making our first steps towards the fourth industrial revolution. Cyber-Physical Systems (CPS), will now be required to seamlessly connect people, objects and currently, still, autonomic systems to create dynamic, real-time optimized, and self-organizing, cross-company value-chains. In tomorrow’s manufacturing plants, all products, components, materials, and processes will be intelligent. Together they form the basis of the so-called Smart Factory.
Every component will be individually identifiable and can be located up and down the value chain. History, current status, as well as alternative and more efficient production paths can be easily and directly recognized and adopted.
Particularly with today’s complex manufacturing processes that are spread globally, a worldwide trace for each component and process needs to be ensured in order to guarantee safety and quality in the smallest detail. Information regarding the origin, storage, state, and location of materials, components, and products will be instantly retrievable.
In reality of course it won’t be easy to achieve. As the different systems used by suppliers, producers, clients, and right through to even recyclers will need to be compatible in order to be able to seamlessly communicate with one another.
What is required is highly specialized software support and a radical rethink with regard to traditional control processes. Concepts such as the internet of things (the interconnection of uniquely identifiable objects and devices within the existing Internet infrastructure) are already viewed. They are being developed as drivers for a forward-looking production and further developments in this area offer exciting and infinite possibilities.
Looking back at the industry over the last 10 years, progress has certainly been fast. It continues to gain speed, particularly in this immaterial virtual sphere. People, machines, processes, etc., seamlessly and invisibly need to communicate with each other. The progress will also have to adapt to past, present, and future events.
Traceability will come of age by effectively no longer being a mere requirement for certain manufacturers, but a resulting by-product of the entire production control process.
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