Winning Manufacturing Strategies

November 8, 2016

Connected Cars: Forging New Partnerships in the Automotive - Supplier Landscape

Authors:

Deepthi K. Bhat, Lead Consultant, MFGDCG, Infosys Ltd., deepthi_bhat@infosys.com

Bharath Krishna Bellamkonda, Senior Consultant, MFGDCG, Infosys Ltd., bharath.bellamkonda@infosys.com

Snigdha Goyal, Consultant, MFGDCG, Infosys Ltd., snigdha.goyal@infosys.com

Kunal Kumar, Senior Associate Consultant, MFGDCG, Infosys Ltd., kunal.kumar12@infosys.com


The concept of connectivity in the automotive industry was pioneered by General Motors, when it introduced emergency assistance with OnStar in 1995. The concept was connectivity, which was previously limited to infotainment, has evolved to remote applications, safety and security, vehicle intelligence, eco driving, vehicle diagnostics and secondary services.

Ecosystem.png

Fig: Evolution of Connected Cars Features

To captivate the nextgen buyers, Automakers are now converting their vehicles into smart vehicles on wheels. Gartner predicts that 250 million vehicles will be connected with a 67% increase in the number of installed connectivity units by 2020. With an engineering legacy, automakers are now partnering with Technology Service Providers (TSPs) to reduce time-to market and increase the car maker's footprint. If they fail to do so, in the long term, automakers could end up as hardware suppliers to tech giants such as Apple and Google.


Factors Forging Partnerships

Automakers are investing in technologies related to vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I) services, and fleet services to engage the millennial. Most of these services are realized by partnering with Technology Service Providers (TSPs). Our studies of the investments made by OEMs in Connected Car Services, suggest that the key influencers to forge partnerships are  - advanced driver assistance system (ADAS), semi-autonomous driving (SAD), remote applications, single mobile platform that manages the entire digital automotive experience, intuitive and safe access to infotainment, urban mobility and secondary services (usage-based insurance, toll collection). While a majority of these shifts demand collaboration with technology companies, trends such as urban mobility and secondary services require partnerships with fleet service providers, city and government administrators that provide infrastructure services, and research partnerships with universities.

A few examples of such partnerships: General Motors' partnership with Shanghai OnStar and Didi Chuxing - China's largest car-hailing app - to support expansion plans in China; Toyota's partnership with City of Grenoble, Grenoble-Alpes Métropole, Cité lib and the EDF Group (an electric utility company in France); BMW's investments in MyCityWay and Parkmobile. From an infotainment perspective, multiple automakers have partnered with Google, Apple, and MirrorLink to develop a single mobile platform. Until 2016, 35 auto brands have tied up with Android Auto, 41 with Apple CarPlay, and 12 with MirrorLink.

An unlikely avenue that compels automakers to form robust alliances across industries is cyber security. Ransomware designed by professional attackers, could be the most serious form of threat. Consequently, automakers are addressing these issues by opening up information sharing platforms, with security agencies, hackers and other OEMs. Automotive Information Sharing and Analysis Center (Auto-ISAC), German Cyber Security Organization (DCSO), and GM Vulnerability Disclosure Program with HackerOne are some notable collaborations. Auto-ISAC is a collaboration of Automotive OEMs that promotes transparency in sharing cybersecurity threats and countermeasures. DCSO is a holistic effort to address cybersecurity across industries in Germany.


Constraints Around Partnerships

Some of the key challenges faced by the automakers in forming strategic partnerships today are:

  1. Partner explosion due to regional complexities: Enabling secondary services such as car sharing, usage based insurance, etc. will require OEMs to spend considerable effort in developing local alliances. Based on the area covered, multiple partners for a single region, and service, is a possibility.
  2. Long lead times to enable services: Scouting for the right regional partner and arriving at consensus on liabilities, could entail significant lead times. Unless tackled swiftly, OEMs could lose their first mover advantage and run the risk of becoming market followers than trend setters.
  3.  Inability to pass on the cost to the customer: While the consumer desires a world of functionalities, his willingness to pay for the same is not proportionate. Automakers have to absorb the cost of enabling digital features. E.g.: The total price of Mercedes E-Class increased by €1,654 between its 2010 and 2015 digital packages while the cost of adding connectivity options was €7,0002. OEMs cannot lose sight of indirect costs incurred due to strong vendor management programs and legal teams to enable these services.
  4. Strategic Failures: OEMs are investing millions in R&D towards services like urban mobility. Inability to predict the pioneering services with geo-specific variants and converting investments into viable products and services could lead  to heavy losses.
  5. Brand Management: Partnering with third parties for services with possible undetected vulnerabilities in the products, such as safety, will ultimately still be the responsibility of the OEM in case of recalls & lawsuits.


Trends

With burgeoning telematics services and complex TSP ecosystems, following are some of the trends we may expect to see in the near future:

  1. Bundling Telematics Packages: Given most of the telematics revenue is expected to flow from the customers of the passenger car segment, competitive pricing is key. If manufacturer installed options are offered at premium prices, the customer could very well chose a third party add-on solution, available at a much cheaper rate. Eg: Navigation devices are available in the market for €180, as compared to a €600 embedded option offered by the manufacturer2.
  2. Traditional technological providers reinventing themselves: TomTom, is a classic case of an organization that transformed itself from a portable navigation device manufacturer into a supplier of embedded telematics equipment. Proliferation of smartphones, that left portable navigation-only devices obsolete, forced the supplier to foray into the telematics business for survival. Today, major OEMs like BMW, Daimler, GM, Volkswagen, Toyota and Volvo use the platforms and offerings from TomTom in one way or the other.
  3. Cyber security: Besides a collaborative approach, automakers could engage with independent security validation services that review application code and provide unbiased views on the security features developed and closed out with their partners.
  4. Consolidation of Telematics Service Providers: Today, most TSPs specialize in services that pertain to one or two areas of Connected Car Services like infotainment or vehicle diagnostics. Automakers will look at enabling services across the spectrum. Instead of direct partnerships with multiple TSPs across service lines, they will look to minimize the overhead of supplier management. TSPs that provide a consolidation of services and in turn manage the tier 2 and 3 suppliers, will be the go-to partners in the future.


Conclusion

Global penetration of automotive telematics is expected to grow, from the current 48% to 62% by 2020, in the area of Vehicle Diagnostics. Safety & Security, is expected to capture more than 60% of the telematics services3. The evolution of partnerships is observed the most, in the areas of Urban Mobility and Infotainment.

With mobility services touted to be a profitable source of income for automakers in the next 5-10 years, it remains to be seen how the automakers will pool together and convert their R&D investments, partnerships across ecosystem players, regulations and understanding the consumers' needs (and services they are willing to pay for) and stay ahead of their competitors and/or afford to retain their spot. Investment in enabling these services and prudence are inevitable.

In the short term, connected cars services will act more as a product differentiation strategy rather than a source of revenue. In the long term, it will help open up new digital revenue streams through service offerings such as urban mobility, infotainment, and concierge services.


References

"Gartner Says By 2020, a Quarter Billion Connected Vehicles Will Enable New In-Vehicle Services and Automated Driving Capabilities", by www.gartner.com

"Automotive Telematics Market: Asia Pacific Industry Analysis and Opportunity Assessment 2014 - 2020", by www.futuremarketinsights.com

"Connected Car Study 2015: Racing ahead with autonomous cars and digital innovation", by www.strategyand.pwc.com

Continue reading "Connected Cars: Forging New Partnerships in the Automotive - Supplier Landscape" »

October 14, 2015

Future of eCommerce in India and its significance to a Common Indian Customer

Having noticed a tremendous innovation and growth in the Digital Transformation space, I wonder what it would mean to be a normal Indian consumer, who is now experiencing these changes. In this blog, I attempt to understand and bring forth the perspective of their experience on these wonderful E-commerce sites.

Continue reading "Future of eCommerce in India and its significance to a Common Indian Customer" »

September 15, 2015

The + Service opportunity for Industrial Manufacturing

Industrial manufacturing is typically a low-volume high-value long-term play. The potential high value of each sales transaction is counterbalanced by a generally protracted sales gestation period. And post commissioning, most of these capital intensive solutions have impressively enduring lifecycles

Continue reading "The + Service opportunity for Industrial Manufacturing" »

May 6, 2015

A subdued future for IOT

 

In case you haven't heard, the world is going to collapse soon! Well, not really but scientists and experts from UK have predicted that, at the current rate of data consumption, the internet will collapse in about 8 years. Wow! That's as good as the end of the world for the digital dreams we all had.

Which brings me to my favorite subject - Internet of Things (IOT). This premonition about the 'capacity crunch' of the internet will spell doomsday for companies betting on IOT enabled products and services since they will rely heavily on the internet. Real-time sensor-data transfer over the internet is the backbone of the connected world and one that will bring immense transformation to the way we use products and services. Gartner predicts 20 billion devices to be connected to the internet by 2020. This figure will only increase exponentially beyond 2020. All this internet activity due to IOT will only accelerate the downhill spiral towards the internet capacity crunch. If there is a capacity crunch in the offing, what happens to all the IOT use cases? With no regulations or regulatory bodies, how does one optimize usage of available internet capacity? With much to lose, I think it is time to introspect and determine what could possibly be a more practical choice for customers to get the benefits of IOT while still doing their bit to delay the doomsday.

I foresee a subdued future for IOT rather than the enthusiastic hurrah we hear from most analysts. Let me explain what I mean by 'subdued'. I believe that the theory of a connected world will remain just that - a theory. (Well, at least in the short term until we are able to figure out what and how to handle the entire IOT ecosystem and that too in an unregulated arena.) Gartner may be right about the number of devices being connected by 2020 but when it comes to transmission of data (and here's where the bandwidth crunch comes into play), it may not be practical to have all the connected devices to send data at all times. In fact, the rate and type of data to be transmitted will be controlled by the biggest equalizer in business - the humble customer or end user.

I think it will be futile and in fact amateurish for companies to just put up a few sensors on their products and start relaying the data over the internet. Not every customer would be ready to pay for this service especially if you are unable to show her the value of doing this activity in real time 24x7. I predict a bouquet of services to be offered by corporations to its customers to choose and determine which option best suits their (customer's) needs. Let's take an example of a smart refrigerator. Not all customers would be able to afford their refrigerator monitored for its health 24x7 since that would entail paying for a higher internet plan. Some may opt for an option wherein once the refrigerator starts giving trouble, the customer will be alerted on their smartphone and they will then have the ability to trigger a health check from their phone app. This app will finally push the logs (findings in software code) from the smart refrigerator to the service company over the internet for the technicians to analyze and revert with the best solution. The solution could either be an over-the-air software update or a field technician visit to check and rectify the problem at site. In any case, it will mean that the service company will have data upfront to analyze and decide before any visit.

The higher end customers may go in for predictive maintenance type of service packages which will help prevent failures but for those who cannot afford such premium services, they could at least go for these intermediate solutions. So how does this help in capacity crunch? Voila! - Optimized transfer of data over the internet from these connected devices. These assets will be part of IOT and hence connected; they will support customers to control when to send data and hence control costs and lastly, customers will be in better control of their data - thus addressing the data privacy concerns of many.

Internet doomsday or not, customers will challenge the IOT companies to come out with innovative options that will make the technology economically feasible to all. And it's upon us to make that happen. It will be disastrous for all players to thrust connected devices without providing options on how to optimize internet bandwidth. What do you think is going to happen in the future of IOT?

April 6, 2015

Records Management: Disaster Recovery Plan for Offsite records storage

In my previous blog "Significance of Records Management and Types of Retention Policies"

www.infosysblogs.com/thought-floor/2013/09/significance_of_records_manage.html, we talked about a well-designed Retention Management solution. We saw how it provides a cost effective method to manage large volume of records and help to adhere to compliance standards.

Continue reading "Records Management: Disaster Recovery Plan for Offsite records storage" »

April 2, 2015

Comparing the Big 4s of Social Media

Social Media revolution has enhanced the way we communicate with our acquaintances and also helped improve the efficiency of conducting business. There is not a single day when we don't hear news about Social Media or use them. Overall it enables individuals to receive update from friends, share videos and Photos. For business, it helps them to build and maintain new relationships.

Continue reading "Comparing the Big 4s of Social Media" »

March 31, 2015

The Digital Transformational Journey for the Manufacturing Industry

 

Manufacturing Industry had to go through a lot of challenges to cater the digital disruption is addition to the tradition challenges listed below.

·         Reaching out to the new market segments

·         Reducing the Operational cost and increasing efficiency 

·         Reducing the Time to Market                            

·         Ensuring that the logistical operations run smoothly

Continue reading "The Digital Transformational Journey for the Manufacturing Industry" »

February 13, 2015

POV on Architecture for Internet of Things

1.0 Introduction:

This article embodies the architectural thoughts on Internet of Things for Architects and developers. The aim of this paper is to provide a base architecture that covers challenges and main requirements of IOT projects and systems - devices, server side, cloud based services, third party integration that interact with and manage the devices.

1.1  What is Internet of Things?

The Internet of Things (IoT) is a scenario in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT has evolved from the convergence of wireless technologies, micro-electromechanical systems (MEMS) and the Internet.

 

A thing, in the Internet of Things, can be a person with a heart monitor implant, a farm animal with a biochip transponder, an automobile that has built-in sensors to alert the driver when tire pressure is low -- or any other natural or man-made object that can be assigned an IP address and provided with the ability to transfer data over a network. So far, the Internet of Things has been most closely associated with machine-to-machine (M2M) communication in manufacturing and power, oil and gas utilities. Products built with M2M communication capabilities are often referred to as being smart. ( smart label, smart meter, smart grid sensor)

 

1.2  Devices

The simplest devices have embedded controllers - they have no operating system
Devices with 32-bit system that can support OS - such as Linux
Devices with 32 bit/64 bit computer platforms such as a wearable watch that can connect to internet and support 2 way communication
Devices that communicates to gateways; these gateways perform filtering, aggregation, event processing

The way devices communicate with gateways/internet could be based on:

Ethernet, WiFi using TCP/IP or UDP, MQTT, http, CoAP

UART, SPI/ I2C

Near Field Communication(NFC)

Zigbee and mesh networks in RF, blue tooth

Modbus

Low Power Bluetooth technology

SRF


2.0 Challenges

We have to address the obstacles to the connection to the devices - Firewalls, Network Address Translation (NAT) and other obstacles on the way.

There could be issues in connectivity of devices due to internet connectivity, battery life, RF interferences, simply being switched off, physical security/damage etc.,

There is plethora of protocols, vendors in this space. Inter-operability among these and derive the required data from these could be a challenge.


3.0 Key Requirements:

·        Device management - remote provisioning and upgrade of firmware/software.

·        Device security is mandatory - only the authorized personnel should have access to the information from the devices. Also, lock and isolation of impaired/hijacked devices should be supported.

·        Ability to process live stream of data and apply configurable complex event processing/rules on the incoming data to respond real time/near real time.

·        Support for time series data and transformation of data to the granularity required for reporting.

·        Leverage existing open/marketplace API's, technologies - should have a loosely coupled architecture, where we can plug/play/replace these components.

·        Multi modal communication API's - support for tablets, mobiles, web applications and other third party integration.

·        We need an architecture that scales well (horizontal) with addition of devices; should have high availability and fault tolerance features. Should support cloud hosting.

 

4.0 Architecture:

View image

4.1 Device Layer:

Sensors, Actuators, Bar code reader, RFID readers, wearable, smart meters, GPS locators, mobile phones, google glass, biometric sensors, drones are examples of devices in this layer. They communicate in various protocols covered in Section 1.2. Gateways can act as protocol translators, data aggregators, data cache (where connectivity is intermittent).

 

4.2 Data Ingest/Processing Layer:

The data from the devices is accessed over various protocols as mentioned above and protocols with lowest overhead over payload - MQTT and CoAP are clear winners on this account.

We can have an implementation of Agent Hub running in the device/gateway layer, which would collect the data from devices and send it over to a Central Registry (which is the case with Bosch M2M platform) in the ingest layer. 

We need a filter, adapter, transformation are part of data ingestion; Complex event processing (CEP), Business process Modeling (BPM), Business Rules Modeling (BRM) are in the Processing layer. A pub/sub model is best for handling data at this layer. Choices could be ActiveMQ, RabbitMQ or cloud bases offerings such as SQS. CEP is available in many flavors - open source tools such as WS02, ESPER; enterprise tools from Oracle etc; also, Storm/Spark from Hadoop world. Data in flight Analytics using R or any other similar tool can be done in this layer. Volume/Variety will decide the selection of tools in this layer.

4.3 Data Storage and Access Layer

SQL and NoSQL data bases are candidates for storing data. Depending on the volume HDFS can be used as well.

Recommended data access to the consuming applications is over REST API. This layer of abstraction enables access across different data sources.

4.4 Applications

Employee health and Safety, Remote Monitoring, Track and Trace, Traceability, Predictive Maintenance, Risk/Fraud Analytics, Digital Farming, Industry 4.0, Connected Vehicle Technology, Smart Home/Factory/Warehouse/City are some of the applications in this space.

4.5 QoS/Monitoring

he Quality of Service is across all the layers - it should support non-real time, soft real time, hard real time depending on the application requirement. Architecture should support measuring the latency, data loss, ability to handle duplicate data, late arriving data, identify error in data. Instrumentation should be provided in all the services in the system that is capable of reporting the health, resource utilization, efficiency etc.,

 4.6 Security

Security risks associated with using inherent internet and risks that are associated with IoT devices should be addressed. Best practices such as encryption, Identity and access management with OAuth/OAuth2 (tokens rather than username/password) are suggested. XACML based Attribute/Policy based Access control are appropriate.   

5.0 Conclusion:

This article covers the overview architecture of internet of things. We will elaborate on the individual layers of the architecture in the coming articles.

January 8, 2015

The Re-dawning of Business Intelligence

That the Business Intelligence world is being disrupted with new technologies is now common knowledge. However, very few businesses & their BI groups have a holistic view and roadmap to embrace this change. All have few specific new capabilities in mind and here is an opportunity to apply the Infosys 'New and Renew' Strategy to enable BI in your organizations take the next leap.

 

So, firstly let's assess what are we hearing from various stakeholders and the wider BI market:

 

Our Customers:  We need BI to be agile, responsive, trustworthy, cost efficient, easy to adopt and make the right strategic business impact quickly

 

Infosys Experience from Engagements:  Need to Reduce time to insights, bring in some unique assets to accelerate programs, Align customers to industry best practices and need for clear engagement charter in terms of business value and capabilities within an agile delivery model.

 

Industry Analysts:  Analysts like Gartner, Forrester emphasize need for different pricing models, expand BI usage thru' the enterprise, leverage cloud/big data/mobility/advanced visualization etc. They expect avg. BI market growth to be 10% ; 70% of which will still be IT controlled;  Analytics to command 20% of those budgets and rest on Query/integration and reporting.

 

Given these key learning's, the new vision at Manufacturing BI is 'To transform our customers from today's data driven to Analytics driven Enterprises enabled by Rapid, Deep and Actionable Insights'.

 

In order to enable 'Rapid, Deep and Actionable Insights', the following offerings are being planned:

 

Analytics Driven Enterprises: The goal is to help enterprises transform from traditional data driven to analytics driven organizations. This is to be enabled by an Analytics adoption framework that helps make the right analytics investments that matter, 'Leverage-your-data' initiatives to take a deep look at available data & innovate to make strategic use of it and Predictive & Descriptive modeling services driven actionable insights for Manufacturing & Hi-Tech relevant areas like Supply chain optimizations, Personalized customer service, sales, marketing and finance analytics functions.


Responsive Business Intelligence:  This includes unique data exploration Services, Self-service BI capabilities, Persona based KPI solutions, Adv. Visualization tools driven data analysis, Reporting Factories, Data Virtualization and agile delivery models.

 

Big Data Enabled Insights: The above vision of transforming organizations into Analytics Driven Organization will be deepened by leveraging Infosys Information Platform (IIP)  for Predictive maintenance, Manufacturing Quality Analytics, Strategic sales opportunity management, IoT driven usage & health analytics, Agro research, Intelligent Asset mgmt., Customer insights etc.

 

For any of the above to be impactful, Our goal is to help customers have a solid backbone in terms of 'Amplified & Efficient Data Operations'. Some of the offerings towards these are:

 

Landscape Modernization:  Help our customers renew/modernize their existing landscapes with  BI tools consolidation and re-platforming, upgrades, big data migrations, clean & conformed Master data mgmt. strategies, Data quality improvements and implementation accelerators for productive COE's.

     

High Performance Computing: Leverage high performance tools based on in-memory , columnar stores, other No-SQL stores to renew existing systems needing such high performance e.g supply chain visibility, Financial consolidations, Just-in-time offers, Asset management and real-time enterprise data warehouses.

 

Amplified Data Warehousing: Existing data warehouses augmented with Hadoop based platforms to reduce turnaround time for multi-structured, high velocity datasets needed for insights. This can also be leveraged to reduce the fast escalating cost of data warehousing.

 

Manufacturing BI believes this dual strategy of transforming organizations from data driven to Analytics driven enterprises and creating an amplified & efficient data backbone will help next gen enterprises stay ahead in the marketplace & outperform today's run-of-the-mill BI Maturity curves. 

January 1, 2015

Predictive service maintenance - A step ahead

 Author: Alpesh Chauhan, CRM Lead Consultant, Manufacturing, Infosys Ltd.

 

Proactive service maintenance is not just limited to preventive maintenance but it is also includes predictive maintenance. Service management is usually associated with negative experience as customer contacts service provider when product has some issues. But it can be turned in to positive experience if services are handled carefully and promptly, which can result in lesser asset down time and faster service resolution. That's why, it can be an opportunity for service provider to convert bad customer experience into a good experience. Of course, it is not easy task and risk is always high as if service provider is not able to provide better service, customer is gone forever and he may provide negative feedback for your products/services.

 

Continue reading "Predictive service maintenance - A step ahead" »

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