Lessons from 2008 for post-COVID-19 manufacturing

Photos courtesy of Siemens

The COVID-19 pandemic has impacted all parts of vehicle development, manufacturing, and sales. Automotive original equipment manufacturers (OEMs) are rethinking how they design, develop, test, build, sell, and service vehicles to protect the health and safety of employees, customers, and communities. Office buildings, factories, testing, certification, and homologation facilities have been closed or reorganized to support physical separation between employees. This creates significant challenges throughout vehicle development and production.

Vehicle designers and engineers are finding ways to maintain collaborative, productive work environments while physically separated. Computer aided design and engineering (CAD/CAE) software is standard across the automotive industry, allowing remote work, but critical junctures in vehicle development continue to rely on manual or interpersonal exchanges of information between engineers. In-person design reviews, for instance, are still common to approve work or direct refinement.

Furthermore, automotive OEMs and suppliers had to take quick, decisive action to adapt production facilities to protect employee health while maintaining as much output as possible. Engineers redistributed production stations across production lines to ensure appropriate social distancing between operators. Shared parts bins and tools had to be eliminated, with operators using their own tools and parts to prevent the spread of the disease via mutual contact with surfaces. Such seemingly small changes can greatly influence how people work, often slowing them down.

OEMs and suppliers have made large strides in adapting to these new methods. Next, they must get back to business in a manner sustainable today, and be stronger and more resilient to tomorrow’s challenges. As companies transition, it will be important to reflect on lessons learned during past crises. Meanwhile, companies should continue to pursue technologies and methodologies of the future to become faster, and more innovative and resilient.

Lessons from 2008

The global pandemic has posed a two-fold challenge. Along with altering vehicle design and manufacturing methods to protect employee safety, it spurred an economic recession due to business closures, unemployment, stagnating commerce, and general uncertainty. Lessons learned during the Great Recession of 2008 can provide a roadmap to recovery. The most critical lesson, and biggest challenge, centers on balancing vehicle production with market demand and available supply throughout the automotive value chain.

Automotive OEMs must carefully manage production rates to meet customer demand and supplier capabilities. Before production can begin to ramp, OEMs must ensure their supply and customer bases can support more new vehicles. Then, as production ramps, OEMs must be careful not to exceed customer demand and flood the market with new vehicles. Likewise, constantly monitoring the supply base will ensure production does not outpace suppliers’ ability to deliver materials and components.

It’s not just the OEMs that must make these decisions. Every stakeholder and supplier throughout the automotive supply chain has to manage output to meet demand from OEMs and their own suppliers. Building an accurate picture of market demand and available supply requires simultaneously monitoring multiple variables at every level of the supply and value chain. It’s incredibly complex.

Therefore, automotive companies must be open, communicative, and collaborative with partners and stakeholders to ensure a successful ramp-up of vehicle production. Consistent communication between OEMs and their supply bases facilitates a constant flow of information on conditions at all supply chain levels. This continuous information flow is critical to balance vehicle production with rapidly changing demand and supply conditions. OEMs and suppliers also must work closely with local, state, and national governments to ensure they continue to conform to regulations and guidelines while preparing for future phases of re-opening.

Ultimately, success of these collaborative efforts relies on the will and ability of the people involved to pull in the same direction. It’s encouraging to see automotive industry members rally together to adapt and find solutions to the difficulties they face. Such peer-to-peer cooperation is vital to the industry’s health.

Emerging technologies

Investing in advanced technologies and manufacturing processes now could spur recovery and make OEMs and suppliers more resilient to future crises. In most cases, these technologies are already in use in limited or experimental capacities. Companies are looking to apply these technologies in new ways to become faster and more agile and resilient.

Digitalization empowers industry

While adapting and responding to COVID-19, digitalization has been a powerful facilitator of close collaboration, teamwork, and agility. It supports better decision-making through robust analytics, making it easier for employees to work together across engineering domains, functional teams, and organizations. A robust digital thread allows different teams to easily share information and engineering data in a managed, secure manner. Modern engineering solutions also help engineers work and collaborate remotely. For instance, virtual reality has become a favored method of conducting live design reviews while employees work from home.

As vehicles move from production to utilization, companies with strong digital backbones can continue to support and extend vehicle value. Pushing vehicle software updates to customers remotely allows companies to continue delivering value after the initial vehicle sale and opens up revenue streams.

This level of digitalization – from vehicle development through manufacturing and into vehicle sales and service – is the next step for the automotive industry. As companies respond to and recover from the effects of the COVID-19 pandemic, those that commit to a comprehensive digitalization strategy will be best positioned to lead the automotive industry tomorrow.

Siemens Digital Industries Software