Alex Teo of Siemens Digital Industries Software talks about the current automotive manufacturing trends; their collaboration with VinFast; and the impact of COVID-19. Article by Stephen Las Marias.
Alex Teo is the Managing Director for Southeast Asia at Siemens Digital Industries Software. In an interview with Asia Pacific Metalworking Equipment News, he discussed the trends happening in the automotive manufacturing industry right now, how these trends have changed the requirements from manufacturers, the impact of COVID-19 pandemic, and their collaboration with VinFast.
WHAT TRENDS ARE HAPPENING IN THE AUTOMOTIVE MANUFACTURING SPACE RIGHT NOW?
Alex Teo (AT): Overall, the automotive manufacturing sector is expected to continue its rapid journey of transformation. Global competitive intensity will also rise, as manufacturers in China and Vietnam expand their attention beyond domestic markets. Technological advances—including interactive safety systems, vehicle connectivity, and self-driving vehicle technology, among others—will continue to drive development.
In particular, two trends are leading the way in automotive manufacturing. On the one hand, autonomous vehicles are expected to become mainstream soon, with some estimates projecting that up to 15 percent of all vehicles sold worldwide will be autonomous by 2030. For automotive manufacturers, the rise of autonomy also comes with a new premium on agile development cycles, shorter production runs of a wider array of vehicle types, and new partnerships and collaboration across the supply chain. The new autonomous vehicle ecosystem includes new chip, software, sensor, and systems-oriented technology companies, in addition to the traditional manufacturers and their upstream partners. Meanwhile, automakers must still maximise revenue from existing product lines and appropriately balance R&D spending to refresh these lines today while investing for a likely radically different future.
On the other hand, growing efforts to fight climate change in the region are also likely to drive an increase in demand for electrification in vehicles. Government regulations, such as Singapore’s recently announced plans to incentivise electric vehicle adoption, will drive significant shifts in consumer demand. To capitalise on this demand, car-makers must be able to develop and produce electric vehicles with adequate range, fast-charge capabilities, and multiple design variants in each vehicle segment. Achieving all this with the same (or lower) cost of ownership as conventional vehicles requires bringing innovations and engineering efficiency that has been unheard of in the automotive industry – without risking safety, reliability, and quality.
HOW HAVE REQUIREMENTS FROM AUTOMOTIVE MANUFACTURERS CHANGED?
AT: Across the region, trends in automotive manufacturing are largely being driven by governments, through policy and regulatory initiatives, as well as end-consumers, whose preferences continue to shape the market. Automotive manufacturers will have to tap on digital technology and software-driven solutions to balance these needs while maintaining profitability.
Regulations arising from the need to go green will likely require manufacturers to better understand both the performance of their final products, as well as the sustainability of their supply chain. Aside from emissions data of the finished vehicle, manufacturers also need to assess the environmental impact of their operations throughout the value chain. At the same time, evolving regulations relating to autonomous vehicle development will require that automotive manufacturers are able to ensure the safety of passengers, pedestrians and property.
A lot of this can be addressed with digital twin technology, which will allow automotive manufacturers to simulate and test at much greater scale, and lower cost. This will allow them to uncover in greater detail the performance of their products, as well as gain visibility into their product lifecycle.
HOW DOES INDUSTRY 4.0 IMPACT AUTOMOTIVE MANUFACTURING? WHAT ARE THE BENEFITS AND CHALLENGES?
AT: The car of the future will be connected, working seamlessly as part of a larger, intelligent mobility network. It will be able to communicate with other vehicles, devices and smart roadway infrastructure. As every vehicle becomes a source for receiving and transmitting bits of information, key concerns for consumers, governments and manufacturers alike will include factors such as cybersecurity and energy efficiency. As interconnectivity between vehicles and systems grow, automotive manufacturers will have to work with a large range of other technology partners to provide a seamless customer experience for their products.
Similarly, Industry 4.0 brings unprecedented connectivity to the product lifecycle, while allowing manufacturers to innovate at lower cost, step up efficiency across the supply chain, and reduce their impact to the environment.
However, manufacturers—especially in various parts of developing Asia—should also focus on upskilling their workforce to fully realise the benefits of a digital factory. While new technologies possess great autonomy, humans must provide direction and control—and apart from overseeing technology, they are needed to gather, compare, analyse and apply data. Implementing Industry 4.0 technologies without knowing how to interpret, manage, and act on the insights leaves businesses with just a buzzword that has no real applicable value. There is a need for organisations to develop talent strategies, as well as build up staffing and training plans to meet the changing needs in terms of skills, job description and organisational models of the companies.
Siemens Digital Industries Software addresses this issue through initiatives such as its Technical Competency Hubs, one of which was launched in Penang in 2019, the only such facility in Southeast Asia. It is part of Siemens’ efforts to support Industry 4.0 development efforts with countries in the region. The hub will also serve as a platform for Siemens to help companies, especially SMEs, begin their digitalisation journey in order to meet the needs of the new economy.
HOW WILL THE TREND TOWARDS ELECTRIC VEHICLES IMPACT THE AUTOMOTIVE MANUFACTURING INDUSTRY IN ASEAN?
AT: Undoubtedly, automotive manufacturers in the region will need to adapt their production capabilities to accommodate these changes and trends. As the ASEAN region grows in importance as an automotive manufacturing hub for the world, businesses here will have to cater to these changing trends.
More importantly, however, businesses need to recognise that the shift towards electric vehicles is just one trend in a long line of many. Consumer demand is always shifting—and at an ever-increasing pace. Instead of concentrating on one trend, automotive manufacturers in ASEAN should focus on becoming more nimble and agile, which will allow them to capitalise on the pace of change in consumer preferences, especially amidst growing uncertainty in global markets.
For carmakers, the ability to analyse real-time road data should improve the efficacy of sales and marketing, while digital design and manufacturing can raise productivity in a dramatic way: big data simulations and virtual modelling can lower development costs and speed up time to market. That should resonate with customers conditioned to the innovation clock speed of consumer electronics, such as smartphones or laptops.
COVID-19 PANDEMIC: WHAT HAS BEEN THE IMPACT IN THE AUTOMOTIVE MANUFACTURING INDUSTRY, AND WHAT LESSONS CAN BE LEARNED FROM THIS?
AT: It is difficult to assess definitively the impact of COVID-19 on the automotive manufacturing, or any other, industry in Asia at the moment, given that the situation is still developing, and is expected to persist for quite a while more.
What we do know is that there is now a pressing need for manufacturers to pivot their operations to become more innovative and agile, so that they are able to quickly capitalise on new trends, or leverage technology to become more efficient. For example, capabilities such as additive manufacturing may allow manufacturers to minimise the impact of supply chain disruption, as it allows for a much larger range of complex parts to be built onsite, while also reducing the need for tooling. Manufacturers need to take this period of downtime to upgrade their capabilities, so that they can fully realise the positive effects from when the economy recovers.
TELL US ABOUT YOUR COLLABORATION WITH VINFAST. WHAT WERE THE COMPANY’S CHALLENGES AND GOALS, AND WHERE DID SIEMENS COME IN TO HELP ADDRESS THEIR ISSUES?
AT: VinFast had big goals. Before its 335-hectare plant in Hai Phong was established, there was no Vietnamese brand for passenger cars. It wanted to be competitive both domestically in Vietnam and globally right from the beginning, and relied on Siemens’ expertise to utilise the latest technology. This resulted in a closed-loop manufacturing system which uses digital twins of the products, the production, and the performance of production and product. The fully digital factory was built in 21 months—50 percent faster than usual—and is designed to be easily scalable for future expansions.
VinFast uses the comprehensive offerings from Siemens that combines Product Lifecycle Management (PLM) software such as the Tecnomatix portfolio with Manufacturing Operations Management (MOM), through the new harmonised, holistic portfolio Siemens Opcenter, to realise lean manufacturing across all phases, and with Totally Integrated Automation for all automation, including robots, conveyors, presses and milling machines.
This holistic approach has increased the speed and flexibility in development, ensured high global standards in production, optimised the manufacturing process, and made the entire plant future-proof for further expansions and new business models.
VinFast also works closely with Siemens Digital Industries Software to implement a fully functional digital twin. Developing new cars and scooters, planning the new plant, and finally producing with the help of digital tools creates a detailed virtual image, the digital twin. The digital twin creates new insights, thanks to the combination of physics-based simulations with data analytics in a fully virtual environment. This makes it possible to realise innovations faster and more reliable, while also requiring significantly fewer real prototypes. Even more data are created when the product is being produced or a plant begins operation.
These performance data of the real production and of the real product can be collected, analysed, and fed back into the development cycle. Here, they help VinFast to improve and optimise new products and processes at an early stage.
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