Automotive Industry Life Cycle Stages, Challenges, And Their Solutions

Cars are no longer considered luxury commodities. Today, they stand for totally different and diverse purposes. They are seen as inevitable elements that offer independence, mobility, and convenience to a modern-day consumer.

However, all the convenience and liberty cars offer do not just crop out of nowhere. There is a definite and exhaustive development cycle that is diligently followed to ensure every model that rolls out serves unique purposes distinct to specific market segments. And this is exactly what we will cover in this post of our Digital Transformation In The Automotive Sector Guide series.

For those of you who are new to this, we recommend you read the previous chapter to get an overview of the industry and understand the context of the guide better. And for those of you who have been following us, let's get started with today's topic.

An Overview Of The Development Cycle In The Automotive Sector

In our previous chapter, we mentioned that most of the greatest cars were first made on a sheet of paper. That is the pre-designing process. From that instance, tons of processes are initiated and triggered in sequential manners until the final product rolls out of the manufacturing unit.

In simple words, a product development cycle is a systematic approach that dictates processes and tasks in each stage of the vehicle manufacturing process. For the uninitiated, it all starts with research and development of a model that is based on inputs, feedbacks, and requirements in a specific market segment. Once the consumer behaviour is determined and requirements are included, the vehicle designing process starts.

With changing consumer habits and behaviours, the needs of vehicles change as well. This makes manufacturers look for newer vehicle materials, components, and more to complement the vision and purpose of the vehicle.

At the same time the vehicle is being manufactured, the sales and marketing team also works on the best ways to tap into its target audience and create interest around the new model or variant. The final product is then tested and approved and shipped to dealers and units from where they are sold to consumers.

Though this is a very generic outlook of a vehicle's product development cycle, several companies out there modify or include processes within this framework. And in these processes lie tons of challenges and hurdles, which constantly deter the manufacturing process.

When delays are caused, chances are highly likely that the manufacturing brand might also lose to competition that is simultaneously building and rolling out a similar model for the same market segment. To keep the processes running and optimized, these challenges have to be identified and fixed.

Challenges In Automotive Product Design

If you're an automotive business owner unsure of the challenges in your unit, here are some of the most common concerns plaguing your productivity and progress.

Let's check them out one by one.

Complex Ecosystem

The product design phase is very crucial in the product development cycle as it not only kickstarts the entire process but makes other subsequent processes dependent on this as well. And one of the major challenges in this process is the ecosystem being too complex. Designers and stakeholders have too many pieces of information and insights scattered across too many places. This makes collaborating and coordinating with other team members and teams difficult. Designers have to get details from market analysts who have to fetch details from dealers and sellers for real-world feedback and more. In each stage, the information has to be translated and transmitted without distortion to add value to the entire process.

Architectural Design

The changing consumer behaviour and the need to integrate futuristic tech require unique concept designs. Optimum innovation has to be maintained for the vehicles to accommodate modern-day requirements. From aesthetics and convenience to dynamic features, vehicle designing is complicated without the right tools. When you further consider one single bubble in the ecosystem of product design, refined challenges are prevailing. For instance, the designing team has multiple sub-teams working on diverse aspects of the design. While a specialized team works on tires, another one works on chassis build and durability. And at all times, collaboration has to be maintained for the final product to be complete and airtight. With obsolete technologies, real-time collaboration isn't possible among designers.

Solution for Product Design Challenges

3D Modelling And Augmentation

3D modelling and augmentation is the best solution as it allows designers to seamlessly recreate realistic designs digitally and even simulate diverse scenarios. For instance, they can test the durability of their build and design with appropriate scenarios and make inferences accordingly. Besides this, 3D modelling paves the way for a swift and precise designing process that also brings everyone on the same page.

Product Information Management Systems

Or known as PIMS, this is a single dashboard or page for all the stakeholders involved in the product designing process to get their respective insights and information from. It brings together external and internal teams to give the most updated information on the market, products, specifications, requirements, modifications, logistics, taxation, and more. It makes the entire process more agile and limits time spent on back-and-forth communication.

Product Development Life Cycle

Enterprise Resource Planning

These applications replace obsolete mechanisms to streamline processes such as resource allocation, deployment, skills analysis, training and upskilling, and more. It brings together multiple teams involved in the development process and allows stakeholders to have a decentralized view and take necessary actions and procedures for seamless inter and intra-departmental operations.

To give you a quick idea, here are the processes and streams enterprise resource planning tools combine:

• Inventory Management
• Quality Control Management
• Finance Management System
• Human Resource Management
• Service Management
• Order Management System
• Sales Management
• Fleet Management
• Procurement

Challenges

• Procurement Forecasting

One of the most crucial stages in the development cycle is procurement forecasting. This is when you estimate the materials and components required for the manufacturing of your vehicle. From readily-available components to made-to-order materials, all the resources needed have to be instantly available to the manufacturing units to keep the belts running. It could be geared, door handles, upholstery or the needles for it, and more. Forecasting of materials and components should be done by combining past and present data to come up with an estimate of the materials required for diverse processes.

This also involves proper coordination among vendors, on-time payments, invoicing inventory management, supply-chain optimization, fleet management, and more.

• Integration of All Supplier And Market Information

As a vehicle manufacturer, we are sure there are hundreds of vendors on your list. From the smallest of components to industrial machinery suppliers, the information on each has to be on a portal that is built for easy access and retrieval. Unfortunately, these details are scattered across places, and in several companies, they are still paper or ledger-based. The absence of digital systems makes the process go haywire and confusing, stalling subsequent processes.

Solutions

• Business Intelligence Solutions

These systems are powered by artificial intelligence and Big Data technologies. They learn from usage patterns and help stakeholders automate several complex processes including fleet management, vendor responses, invoicing, materials estimation, supply-demand analysis, inventory replenishment, and more. Besides, the systems also give you insights on cost-cutting practices and make you identify operational loopholes for optimized performance.

• Supplier Management Systems

This is indeed a blessing for industries and manufacturing units as it compiles all vendors and suppliers and presents them in a single place. Stakeholders can search, filter, and sort materials and suppliers and execute appropriate tasks. They can also look at pending dues, delayed shipments, order new batches of materials, request invoices, resolve conflicts, and do more. The learning curve with these systems is minimal as well.

Product Development

Challenges

• Manage Product Lifecycle

Like we mentioned, product development is a lengthy journey of interconnected tasks and processes. All the processes in the stream have to progress simultaneously without any delay. And if there's a delay, the other processes would be stalled as well. For instance, tasks in the procurement division should be on time every time as it affects the manufacturing process, which is dependent on the procured materials. It is a web of affairs and that's exactly why optimum levels of coordination and planning are required at all times.

• Resource Planning Across All Departments

The right manpower with the right skills should be deployed at the right divisions to ensure a smooth product development process. The requirements and the scope of operations and productivity should be planned in advance and scope creep should be considered as well. It is then that the workforce needs to be deployed after working on rosters, shifts, and working hours. Backup manpower should also be considered to make space for unforeseen consequences such as absenteeism and emergencies. And resource planning is not just limited to these. They have broader aspects that include resource planning in terms of variety of materials, car components and parts, raw materials, data insights, actionable insights, product design and more.

Solutions

• Product Lifecycle Management Systems

These are efficient portals that take care of all the four stages involved in the development cycle – initiation, planning, execution, and closure. These four parameters are involved to kickstart, monitor, execute, and close tasks and processes. The advantage of these portals is that all stakeholders can look at their distinct modules and make informed decisions about forthcoming days. This allows them to plan better, foresee worst-case scenarios, have backup plans, and ensure the flow of processes is smooth.

Manufacturing

Challenges

• Management Of Vendors

To keep the manufacturing process going, what is crucial is effective management of vendors. They are the backbone around which your entire building process is reliant on. Prompt payments and invoices, orders and requests and more should be initiated for your vendors to process and ship them. Considering the scale of the manufacturing process, the number of vendors you would be liaising with should be massive, which makes it all the more challenging to retrieve, store, maintain individual records of each for years consecutively.

• Quality Control

Quality control is essential in the vehicle manufacturing process. This is the stage that defines how durable vehicles are and how functional each component and module in a vehicle is. Having and maintaining individual quality reports of each process, their cycles, and upgrades is difficult without a sound management system.

• Order Management

Order management offers an estimate of the volume of production and insights on market demand. Without an efficient order management system, companies could be either over or under manufacturing, affecting dealership inventories in either case. Their procurement and vendor associations are also affected subsequently.

• Maintenance of Equipment

All the equipment involved in vehicle manufacturing should be well maintained for the smooth functioning of the processes. Specific cycles should be maintained and frequent breaks should be given to machinery for optimized efficiency. Besides, they should also be serviced frequently to ensure they don't malfunction and cause production delays.

• Inventory Tracking

A poor inventory tracking system will result in inaccurate inventory insights and ultimately lead to the deployment of more manpower for manual intervention. And because of this, you could also incur losses and delays in deliveries or worse, wrong deliveries of your orders.

• Assets or Inventory Management

There are three different types of assets involved in the automotive sector – moving assets, human assets and non-moving assets. From the imports of spare parts to resources and fleet, different materials and aspects fall under these three broad categories.

And with a conventional asset management system, tracking and maintaining each becomes a hurdle for the employees. And with each aspect and module requiring distinct storage procedures, maintenance protocols, contracts and more, a centralized system is inevitable.

• Supply-chain Optimization

Your procurements from multiple vendors should reach you on time and your finished vehicles should reach your dealers on time. The process that bridges this gap is what we call a supply-chain and a poor supply-chain network can bring in bad PR for your brand and business.

Solutions

• Predictive Maintenance Solutions

Concerns we discussed on equipment and machinery maintenance above can be easily fixed with digital transformation. With the help of predictive solutions – powered by artificial intelligence and machine learning mechanisms – you can automate your equipment maintenance. These systems can work on current and historic data and forecast when the equipment would malfunction. With that insight, these systems can also autonomously schedule service requests and maintenance notifications to concerned stakeholders and ensure processes are unhindered at all times. The best part is they can also order specific units for replacements.

• Vendor Management Solutions

Vendor management solutions compile all the vendors that are associated with you and give you seamless options to retrieve data and trigger actions. With these systems, no more looking through countless pages or cells. It's a simple sort and filter feature with designated buttons to order, reorder, request services and special features, track shipments and do more.

• Smart Manufacturing And Factory Solutions

The best by-products of the Industry 4.0 revolution, these solutions deploy the super-advanced and the latest technology such as Big Data, industrial IoT, analytics, artificial intelligence, and more to build a manufacturing ecosystem that is optimized for efficiency, accuracy, and productivity. They are completely digital modules that reduce operational costs, eliminate instances of unplanned breakdowns, optimize time-to-decisions, and more.

• Mobile-enabled Asset Management Solutions

We saw how asset management is a real struggle in the industry. But the fix to that is as simple as having a mobile-enabled solution. Through an enterprise app development or a custom-designed mobile application, all your assets can be monitored, modified, and managed from your smartphone. No advanced systems or modules. Just a simple app you can work on from the remote.

• Integrated Smart Enterprise Applications

Running a connected plant or a manufacturing unit is a goal that when realized can yield priceless results. However, that is possible with integrated smart enterprise applications. Powered by advanced analytics and technologies like 3D printing, additive manufacturing, machine-to-machine networks, Big Data and more, these applications connect processes, people, devices and modules to form an ecosystem of interoperating units. Together, they optimize efficiency, productivity and help reduce overall expenses.

• Supervisory Control and Data Acquisition Tools

Inevitable aspects of industrial units, these tools comprise both hardware and software systems to help plants make smarter decisions autonomously, keep productivity at optimum levels, communicate data and information across systems and networks and more. These systems are designed to interact directly with sensors, valves, factory equipment, and more and work with software at the backend to seamlessly process data for systems to make informed decisions.

Marketing And Sales

Challenges

• Loyalty Management

There are fans and then there are loyal fans. As a business, it is vital to recognize and support such fans and engage with them for good PR and reputation optimization. They are the ones who stick with your brand, follow your updates regularly, are passionate about your R&D announcements, and await the commercials and launch of a new model or variant.

They are also the ones who keep upgrading their models frequently with a newer variant of the same brand. Insights on that could help you turn them into evangelists. Otherwise, it's a missed opportunity for marketing and reach.

• Lack Of Personalized Marketing

According to reports, 80% of consumers tend to engage better with brands and purchase from them when they receive personalized campaigns, recommendations, offers, and messages. Generic targeting is almost obsolete now as they offer no traction and very minimal conversion. The more personalized your campaigns are, the more hooked your consumers are. The lack of it, however, could stall you from penetrating the market.

• Order Management

If you have a dedicated eCommerce business for your venture, you need to have a specialized order management and fulfilment module embedded in it. Without one, you wouldn't be able to track orders and ship your models. You wouldn't also have a payment gateway in place to receive payment via payment gateway app for the purchase or initiate financial processes.

Solutions

• Digital Customer Onboarding

This is a new and cool way to welcome new customers into your brand and ecosystem. From giving your customers a tour of their newly-purchased models to offering the latest updates on other automotive developments in your company, this is an ideal platform to engage with those who are interested and invested in you. This module is also ideal to perform KYC, collect basic details about customers, automate redundant tasks, and deliver more to them.

• Content Oriented Apps

A buyer's journey is a systematic process that assists consumers in their quest to solve real-world problems. In our case, it's the one on getting a new car. With a content-oriented app, you can nail the brand value among your users by offering them personalized and relevant information through blogs, reviews, emails, videos, podcasts, and more to ultimately get them to buy your product. The engagement is real and informative with abundant information. It's a win-win situation with content-specific apps.

• Marketing and Loyalty Apps

To treat your loyal fans in special ways, a loyalty program app can be deployed. With that, you can offer personalized campaigns such as buy-back options for car upgrades, servicing at reduced prices, premium merchandise, lounge facilities at service centers, priority sales and assistance, and more. You could be creative in coming up with engagement with the app.

• Commerce Apps

Commerce apps make it easier for your business to look for vendors of spare parts, components and other materials required for vehicle manufacturing. They support both mobile and eCommerce.

• Workflow Apps

Marketing is a complex process and it could be all over the place without a workflow management system. There are tons of tasks associated with marketing and promotion and all these are scattered over months until and even after vehicles are rolled out. From commercials and influencer campaigns to print advertisements and billboards, generating a buzz is critical. And only a workflow management app can help your business steer through the chaos through marketing calendars, content strategies, advertisement budgeting modules, deadline management, resource allocation, and more.

• Omnichannel Marketing Solutions

With so many social channels and web avenues available, what becomes extremely crucial is your customers having a similar experience across all your points of contact. No matter whether they are on your Instagram page or your website, they need to look at the same messaging, tone, approach, and colour scheme. And this is where omnichannel marketing solutions come in handy. You can use them to automate social posting, ad campaigns, messaging, reputation management, and more to offer a unanimous experience to customers.

After-Sales and Service

Challenges

• Field Service Operations

Field service is important after the sales process that sustains the trust your customers have in your brand. It is when they require on-location support for their concerns and are looking for seamless ways to get that support. Poor field service can result in frustrated customers and a bad reputation in the market.

• Manage Customer Relationship

Some of the biggest brands fail and crumble because they stop listening to their customers. Ventures that are always paying attention to the concerns of their customers and responding to them with their actions and gestures are loved and supported. But for that to happen, ideal relationship management tools are necessary. Otherwise, a manager wouldn't have the tools or mediums to view complaints, suggestions, or questions and take necessary actions.

• Manage Employees

Servicing associates play an important role in maintaining brand reputation. They ensure the quality that the brand promised is sustained over the years through professional servicing. However, recruiting, managing, and maintaining the right workforce is a challenge in itself. Unplanned leaves, poorly-trained staff, and other instances can result in service delays or faulty servicing. Resource planning and management are part of the servicing aspect as well.

• Manage Dealers

If there's the concern of vendor and supplier management on one side, there is dealer management on the other. From inventory management and finances to billing, service requests, paperwork, and credit information, there are ample processes and information needed to be maintained among dealers. Without a central management system, companies could be incurring losses as well.

Solutions

• Digital Query Assistants

A separate wing to answer queries can be set up by your brand. The best part is this can be automated by deploying bots as well. Powered by artificial intelligence, they can answer questions, resolve conflicts, take advanced credible decisions, and even manage reputation seamlessly.

• Digital Customer Experience Solutions

Digital customer experience solutions work on making your marketing campaigns more airtight and ideal for-profit generation. They work on customer life cycle and segregate tasks so you reap benefits across your marketing processes and goals such as quality lead generation, lead conversion, performance marketing, customer satisfaction optimization, understand market behaviour better and do more.

• Human Resource Management

A human resource tool or portal can allow dealers and service centers to manage their employees better. From automated attendance tracking to payroll and welfare management, these portals can help managers do a better job at maintaining center efficiency.

• Dealer Management Solutions

Dealership management solutions connect you and your dealers across the world for a smooth collaboration. Through the portal, you can retrieve information on sales and statistics for individual dealers by region and other parameters, respond to service requests and dealership queries, transact finances and invoices, supervise brand goodwill and PR, assist with marketing efforts and do more.

The Future of Automotive Product Cycle

This is the most exciting part of the guide for us, where we get to shed light on the future of the sector considering the trends of today and the historic data of previous years. From our observation and expertise, we see a more tech-driven manufacturing process. We see underrated technologies like virtual reality being used in the designing phases that will allow designers to get a first-hand experience of being in their designs and then making changes to accommodate convenience.

From components and build perspectives, we see the incorporation of more sensors and embedded systems in vehicles to pave the way for collision-free roads. Niche marketplaces for automotive spare parts will also crop up across diverse market segments. Obsolete technologies will replace coordination and collaboration phases and technologies like blockchain will dominate the scene. This will allow vendors, suppliers, and stakeholders to make personalized smart contracts for transactions that are tamper-proof and more transparent. As manufacturing units become more advanced with deep learning algorithms and robotic arms, we also see a world of DIY cars with 3D printing technologies.

Final Thoughts

So, what do you think? Where do you see your business in the coming years and months? Do you see it struggling to keep up with volatile consumer behaviours and stagnant product development processes or do you see your venture setting examples in your market, gradually becoming a pioneer?

If you're a visionary, you would get in touch with us today to get specialized ERP systems, automotive embedded software systems, and management portals developed from us. Having been in the industry for years, we know what it takes to build the finest solution for automotive purposes.

Reach out to us today.