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Digital adoption may accelerate in automotive shop floors during post-Covid: EY

G Balachandar Chennai | Updated on May 11, 2020 Published on May 11, 2020

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Though still at a nascent stage, digital adoption on manufacturing shop floors in India may gain momentum with more and more vehicle producers and auto parts makers embracing it for competitive reasons, said a report of global consulting firm EY.

The Covid-19 outbreak creates a new set of challenges on the shop floor for Indian automotive OEMs. It has further slowed down demand and impacted labour availability apart from flagging health and safety concerns, said the report, titled ‘EY Digital Manufacturing India Survey 2019’.

This makes it important for firms to expedite a well-planned road map to manage the crisis and build resilience for future uncertainties. Digital may be an ideal option to enable manufacturing and supply chains to build strength and adapt to the new normal, the report added. For the auto industry, investment in digitisation of manufacturing should be viewed as a risk mitigation technique (much like insurance), it further noted.

The report said only 23 per cent of the large manufacturing firms in India have a clear digital strategy. However, unlike other industries, the automotive shop floor leads in the adoption of emerging technologies in India.

Productivity gains

Thus, digitisation is likely to help OEMs and auto component manufacturers extract data to help them study past events and improve their productivity. The data can also be used for gathering insights that can be leveraged to make smarter decisions and predict future events, said the report.

It would also help the shop-floors to remain functional in such crisis situations, where the dependency on manpower has been a challenge. Digitisation may also address the strategic imperatives like preparing for volatility and variables, reinventing manufacturing and supply chain, and evolving workplace models to attract talent, said the EY report.

While it is urgent to respond to the current situation, there is also a need to plan for the future as the industry dynamics are likely to change significantly as the world comes out of this crisis and a new normal/paradigm is set to emerge in each industry, the report noted.

Digital maturity

The current stress on liquidity and factory operations due to the disruption caused by Covid-19 will most certainly accelerate the digitisation of shop floors and enable auto manufacturers to become proactive, agile, flexible and adaptive.

Each auto manufacturer would need to immediately undertake a stage-wise approach to achieve digital maturity at a faster pace. Irrespective of their size and scale of operations, companies may have to work out a well thought-out strategy and a roadmap that leverages Industry 4.0 interventions to regain stability and stay competitive in the medium to long term, it said.

Published on May 11, 2020

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