Industry 4.0: Role of Business Intelligence in the Automotive Industry

By Naren Vijay, EVP – Growth, Lumenore

The automotive industry has always been at the forefront of leading changes in the industrial world. Be it the application of assembly lines by Henry Ford for mass production in automobile manufacturing in Industry 2.0 or the usage of computers in design and production in the later part of the 20th century in Industry 3.0 that enabled the working of machines in a production process without human intervention. 

Due to increasing competition, changing consumer preferences, globalization, cost pressures and volatility, the automotive industry is increasingly harnessing the power of technologies like big data analytics, artificial intelligence, machine learning, self-driving vehicles, and business intelligence under Industry 4.0.  

Business intelligence plays an essential role in bridging the gap between automotive companies and the increasing technological changes in the industry. By providing machine-readable datasets that can provide actionable business insights to various departments, automotive companies can respond in time to the changes and improve efficiency. 

As the automotive industry needs heavy capital investments to go through a cycle before profits start to roll in, business intelligence helps reduce the risk involved. With multiple data sources involved in the process, relying on a robust business intelligence platform is crucial to ensure high productivity across the board. 

Here are the various areas in which business intelligence is helping the automotive industry: 

  • Production planning

Major automotive giants rely on business intelligence to ensure no shortage in product supply using the right insights at the right time. Business intelligence tools with capabilities like conversational intelligence, predictive intelligence and self-service analytics help in optimal demand forecasts and procurement of resources. Effective production planning provides a bird’s eye view of the future and gives better control over business operations. 

  • Sales planning

Consolidating and evaluating consumer data and utilizing solutions like predictive intelligence can help identify the expected market size, customer segment and other sales planning tools that help allocate and spend effectively. A study claimed that retailers worldwide lose a massive $1.75 trillion annually because of overstocking and understocking products. With big data analytics, a business can invest resources in effective sales planning to identify the best possible launch time for the product line for maximum impact. 

  • Estimating CTC cycle 

CTC (cash-to-cash) planning is essential in the automotive industry. Especially considering the long investment cycle before the returns start coming in, business intelligence helps in figuring out the cycle for each product before the company will receive the money back from sales. This information is critical for the success of any automotive company that is aiming for maximum returns for invested resources. 

  • Supply chain planning

An average passenger vehicle is built of over 30,000 parts, leaving a lot of scope for supply chain glitches and gaps. Avoiding manufacturing holdups is possible with the use of business intelligence solutions. In addition, analytics can help predict expected supply chain issues due to external and internal factors, which can help in better planning and execution. 


  • Optimized marketing spend

Applying statistical models to generate insights from historical data from various sources can help identify the value generated from variable and fixed marketing investments. These insights help automotive companies develop a practical approach to the composition of marketing spending. 

  • Better customer service

Business intelligence enables an automotive business to establish a single source of truth for better customer service. In this digital era, customers are becoming more and more particular about the brands, products, and services that continuously deliver outstanding value with the least amount of hassle or strain. A single negative encounter causes 32% of consumers to abandon a brand they love, according to a PwC study. With data-driven business actions, it is possible to improve customer satisfaction scores and create self-service solutions for the seamless acquisition of new customers. At a time when the modern consumer is more aware and demanding than ever, business intelligence and analytics can make way for setting up intuitive and real-time customer service systems. 

Modern business intelligence solutions provide AI-powered recommendations and have moved beyond vanilla spreadsheets and dashboards. Utilizing the power of analytics and business intelligence can help streamline demand forecasting and supply chain complexities. The automotive industry must harness the power of business analytics because of a highly competitive landscape and the shift to electric and autonomous vehicles. 

Automotive IndustryIndustry 4.0
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