Smart supply chains: data, IoT and the future of automotive logistics

In the high value world of vehicle sales, customer experience is hugely important. The smoother, quicker and more accommodating the consumer’s experience with a vehicle manufacturer is, the more likely they are to become a brand advocate.

Efficiency in the supply chain is critical to providing this level of customer experience. However many automotive organisations struggle to provide the same, seamless operation behind the scenes as they offer in the public-facing parts of their businesses.

One of the reasons for this is that, although companies are generating a lot of useful data, they aren’t always sharing it across the organisation. Most are operating in siloes, and this can create situations where vital information isn’t being shared effectively across departments. In fact, our recent digital transformation survey revealed that only 13% of automotive organisations are investing in data connectivity.

As a result, not only are many automotive businesses not operating as cost-effectively as they could be, they are also hindering their ability to give the customer a seamless experience.

We need to look, therefore, at ways that data can be shared more easily – and building greater connectivity into automotive logistics through the Internet of Things (IoT) is one way to achieve this.

How can IoT transform the automotive supply chain?

To give you an example, one major challenge that automotive suppliers face is getting the right part to the warehouse, at the right time, in order for it to be used on a vehicle.

Picture a scenario in which an IoT-connected car can alert the owner’s local dealership that a part has developed a fault and will need replacing within 100 miles. A subsequent alert can then be triggered to let the manufacturer know which part needs replacing, and when the vehicle will be coming in for repair, so that the supplier can ensure the requisite item can be delivered at the right moment in time.

With IoT capabilities, there is no more need for urgent phone calls to be placed to the manufacturer or supplier when the vehicle arrives at the garage with a problem, and no more need for the customer to wait around while diagnostic work is carried out and subsequent parts are ordered in.

With IoT, the automotive supply chain can become much more efficient, and enable the timely updates that increase customer satisfaction levels. Not only that, but it will make it much easier for organisations to operate a just in time (JIT) manufacturing model, which saves money by reducing storage needs and also production of surplus parts and materials.

What challenges will automotive businesses face with IoT adoption?

Increasing connectivity and data intelligence in the supply chain sounds like a winning scenario, so why haven’t more automotive companies embraced IoT to date?

The simple answer is that many of them are trying to, but there are certain logistical obstacles to overcome along the way. One of the main barriers to entry is security; the greater volume of data being generated from an increasing number of touchpoints, the more vulnerable an organisation becomes to a breach.

In order to address this, automotive businesses need to invest in software that not only secures the IoT-enabled device itself – in most cases, the vehicle – but the gateways that connect those devices to their logistical network.

It may sound like a complex and daunting challenge, but with the right technical partner, IoT has the power to quickly and safely revolutionise automotive logistics. And not only will this make meeting the customer’s ongoing needs a whole lot easier, a leaner, more responsive supply chain will have bottom line cost benefits for the organisation concerned.