Smart-factory Strategies to Strengthen European Automotive Industry

Article By : Henry Claussnitzer

Smart-factory strategies will help European automotive companies assert themselves against strong competition.

How will vehicles be powered in the future? How can electric mobility be driven forward? And how will the European automotive industry be able to stand up to the strong competition? These questions all took on new meaning as the Covid-19 pandemic plunged the world into economic crisis. Automotive players now have all the more reason to look for innovative strategies and technologies that will make them more efficient, sustainable, and future proof.
Car battery industry
Stanford University economist Tony Seba controversially predicts that as soon as 2025, new vehicles with all-combustion engines will no longer be sold in North America. Whether battery or hydrogen-powered fuel cells will prevail is not yet certain; different types of engines will likely share the road for some time. Declining sales, ever-stricter emissions regulations, new technologies, digitalization, and changing consumer needs are other developments that are changing the industry. They can only be countered if companies move now to convert their production lines to smart-factory technology so that they can act more flexibly and innovatively to secure competitive advantages or win back business from international competitors. The smart-factory approach meets a long list of automotive industry requirements. With the push toward zero emissions, electrification of vehicles is crucial for efforts in environmental protection and sustainability. At the same time, mobility must be maintained, and the growing market needs to be addressed. As a result, vehicles that are more tailored to individual requirements must be produced ever faster and at lower cost. Politicians have already adopted various framework conditions and regulations, for example concerning emissions, CO2 targets, CO2 fleet limit values, low-emission zones, and standard values for particulate matter. These are supplemented by regulations on transport telematics, or the collection, transmission and use of traffic-related data to organize, inform, and manage traffic using information and communication technologies. Another aspect is end-of-life directives — the requirements for taking back and recycling products. The catalog of tasks is long and varied. Since the automotive industry cannot cope with all of them alone, other areas of policy support must follow suit. Smart-factory approaches and technologies are a sound basis for future-oriented strategies that enable European automotive players to secure advantages. They help to modernize production comprehensively and to rationalize supply chains from the bottom up, in parallel with expansion and conversion to new drive technologies. Dependency on international battery supplierssurvey by the Chemnitz Automotive Institute in cooperation with AMZ predicts that in 2025, every fourth car from European plants will be powered electrically. In addition to battery-powered vehicles, the estimate includes hybrid and fuel cell drives. According to the study, more than 50% of all fully electric cars manufactured in Europe will be produced at German plants in 2025. Beyond cars, this group will include e-mobility platforms such as buses, trams, ships, underground mining machines, trucks, agricultural machinery, bicycles, forklifts, and motorbikes. Currently, however, the European economy is too dependent on imported e-mobility technologies such as battery cells. To position itself more powerfully internationally, Europe must catch up in this segment by expanding its production sites and driving innovation. As in many other industries, European car manufacturers are finding it difficult to keep pace with Asian competition. A cost-effective industrial base provides the Asian competitors with significant advantages. This industrial base has been aggressively exploited in recent years in combination with manufacturing strategies aimed at mass production of standardized products to compensate for challenges associated with process instability. As a result, Asian manufacturers now dominate the global production of many critical e-mobility products. In fact, studies show that the lion’s share of the world’s battery cells come from Asian production. The competitiveness of the European e-mobility industry is therefore closely linked to its ability to identify and implement new transformative production technologies to enable the cost-effective production of high-quality e-mobility products. Focus on fuel cell, battery production Battery cell production has so far almost completely bypassed Europe as a key technology for modern battery-powered vehicles, even though the best technical conditions are available here. European companies have done a lot of groundwork and built up know-how but have failed to commercialize it. Today, there are an increasing number of local battery cell factories in Europe, but they offer little added value to the European economy. The same has been true in other industrial fields such as solar energy. It would be advisable for the European automotive industry in its current structure to focus on fuel cells and their further development, as they are a real alternative to pure battery vehicles. The battery is a basic element for fuel cells too, but a much smaller one. Besides, hydrogen is filled up in a similar way to fuel, which is in line with common user behavior. The crux of the matter is that there is a lack of appropriate infrastructure to make fuel cell technology suitable for the mass market. Political framework conditions must therefore be created now to ensure that the price of hydrogen is kept low. In the future, a mix of drive technologies will become established in the market. The EU has the task of playing a proactive role. Not only must the technology work, but the framework and production conditions must be right. AI fuels future security Artificial intelligence can help to achieve a breakthrough in this area. Used wisely, AI releases new efficiency potential from highly complex production lines and helps manufacturers better understand their workflows. The data collected with the help of AI-based technology leads to new insights to optimize processes inside and outside the company. An example is predictive maintenance, which can be used to identify wear patterns, peculiarities, and anomalies and thus counteract machine failures, downtime, and errors. AI and sensor technology can help European manufacturers create a level playing field and drastically reduce the cost advantage that Asian competitors enjoy today. At the same time, AI can help to capture market share in “blue ocean” segments — new, innovative markets. Central data management is also essential in this context. Central data management increasingly involves the presentation of key performance indicators (KPIs) and overall equipment effectiveness (OEE) data, the visualization of sensor data, and the storage of process data in a virtual environment. By increasing process quality and agility, AI can create opportunities for the production of high-quality e-mobility products that are highly customer-specific and complex — a market segment for which the business model of most Asian manufacturers is not suitable. The important thing here is that the automotive industry must become bolder, less hesitant, and more innovative when it comes to using new technologies such as AI. The wait-and-see attitude can best be countered by involving factory employees in the design of the AI solution at an early stage and showing them the possibilities. Smart factory production models and technologies The smart factory concept is a future-oriented and flexible approach that reconciles the production of the future with familiar topics such as continuous digital supply and value-added chains, more agile process flows and the close link between production, quality (avoidance of rejects and waste), customer requirements and lifetime traceability. These are all tools that help a company to survive in the market; to act more profitably, sustainably, faster and more securely; and to stand out from the competition. Other trend topics included are digitization, track and trace, value chain participation, and improved networking. Predictive maintenance, predictive quality, integrated production planning and process visualization are also taken into account in the smart-factory model. Toward a stronger future So, what should automotive companies look for to make their production more innovative and competitive? On the one hand, edge computing offers them numerous opportunities: Today, machines can be coupled better than ever before, and data can be collected, structured, and analyzed at the machine level (“at the edge”) via powerful sensor technology. Added to this are remote services, as well as the integration of additional sensor technology in the event of missing data points, machine identification, cybersecurity, and the use and conversion of data and communication protocols. But that’s not all, because mechatronics and IT solutions are increasingly merging, supporting more efficient and flexible production processes. Tangible examples are smart industrial robots, including mobile robots and “cobots,” or robots that work hand-in-hand with factory employees. Furthermore, the various components of modern production processes can now be brought together in the cloud. Companies benefit from central and transparent monitoring of all machines, plants, and components using control-based software modules or cloud-based functions in terms of asset management, condition monitoring, predictive maintenance, and remote services. Another component of the smart factory is augmented reality. AR enables companies to obtain computer-generated information, with virtual objects complementing live images or videos, in order to gain additional information, support, and know-how. The flexible, autonomous control and optimization of production processes are only just beginning in many places. But those who explore the possibilities today and dare to take the first steps in this field can position themselves well for future requirements and be a “bonnet length” ahead of the strong global competition. This article was originally published on EE Times Europe. Henry Claussnitzer is Business Engagement Manager at Omron Europe. He works as Business Engagement Manager Automotive for Omron Industrial Automation Europe. In his role, he supports the development and enhancement of Omron’s automotive strategy in Europe, adding foresight and intelligence to future market dynamics to support the development of new and innovative solutions.

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