UK car industry urged to invest more in digitalisation

Posted on 31 Aug 2017 by Jonny Williamson

Rapid development of digital technology within the automotive industry will give an annual benefit of £8.6bn cumulating to a total benefit of £74bn by 2025, according to the SMMT.  

Tracked cars on a moving assembly line, wiht tool car interactions highlighted - image courtesy of Ubisense.
The SMMT is convinced that the UK car industry needs to become a leader in the application of digitalisation.

As it has the potential to significantly enhance the competitiveness of the UK car industry, digitalisation deserves, according to the ‘Society of Motor Manufacturers and Traders Ltd.’ (SMMT), greater focus from both the Government and the industry.

Globally, the automotive industry puts significant emphasis on digitalisation, considering the substantial initiatives underway most notably in Germany, US and Japan.

The SMMT is convinced that the UK automotive industry needs to become a leader in the application of digitalisation, to remain a credible competitive player on the global stage.

The UK is well-positioned to benefit from this digitalisation trend. There is a diverse range of vehicle manufacturers – Nissan, Toyota and Honda from Japan, BMW from Germany, Vauxhall (part of General Motors, a US based company) and local premium manufacturers including Jaguar Land Rover, Aston Martin, Bentley, McLaren and Rolls Royce amongt others.

On average, the UK’s vehicle plants are the most productive in Europe and most of Formula 1 teams are based in the UK. These teams boast advanced real-time scenario modelling and analytics capability which supports race strategy.

The UK also has many game developers who are collaborating with manufacturers and organisations such as the Digital Catapult and High Speed Sustainable Manufacturing Institute (HSSMI).

According to the SMMT, the challenge is to turn these existing assets into a coherent strategy that makes the UK automotive industry an attractive destination for investment in digital technologies.

The study found that many vehicle manufacturers, while recognising the importance of digitalisation, had only initiated a series of pilots so far. Some suppliers, notably SMEs had not begun any significant digital pilots.

Manufacturers and suppliers both forecast substantial benefits from digitalisation including productivity gains, shorter lead times more personalised vehicles and enhanced services for customers.

A key barrier to implementation was found to be a lack of knowledge and the necessary skills to design and execute a company-wide digital strategy. Another key barrier is the trust needed between supplier and manufacturer to share data electronically. SMEs identified funding for investment as a concern.

There are many UK digital technology demonstration facilities that might be further developed into deep clusters of expertise.

The Digital Catapult in London, the Manufacturing Technology Centre in Coventry and AMRC Factory 2050 in Sheffield all demonstrate industrial digital applications, and bring together manufacturers, entrepreneurs and start-ups.

Some SME suppliers reported that a “first-step” programme would also be a helpful addition.

The SMMT recommends that the Government places digitalisation at the heart of its new industrial strategy, focusing on skills, digital infrastructure, cyber security, access to finance and technology demonstrators.

The organisation further recommends that vehicle manufacturers and their suppliers develop a digital strategy led by the CEO supported by cross-functional teams underpinned by new digital skills such as digital scientists, digital architects, digital engineers and operational development capability.

These corporate digital strategies need to consider a whole value chain perspective as substantial benefits can be unlocked by establishing a digital thread that connects suppliers, vehicle manufacturers and customers together.