Technologies like M2M, IoT and 3D printing playing a huge role in automotive industry: Vijay Sethi, CIO, Hero MotoCorp
Hero MotoCorp’s CIO, Vijay Sethi is not only popular for being a pioneer in adopting technology, but also for being ingenious in leveraging newest technologies. In a candid conversation with Express Computer’s Rashi Varshney, Vijay Sethi tells us how Hero MotoCorp is leveraging technologies like IoT, Machine to Machine (M2M) and 3D printing, and the way technology is disrupting the automobile space in India
Some Edited Excerpts:
How do you see role of technology in the automobile industry in India?
Automobile industry is one of the early adopters of technology from day one. For instance, in the early days automobile industry was the one of those first industries which adopted ERP, when others were not even thinking about ERP. Now coming to the current trends of technology like social media or Internet of Things ( IoT), we really push for adoption of social media and IoT owing to the fact that youth is our target market. Automobile industry or the two-wheeler industry gives the biggest examples of IoT like connected cars or connected bike or a driver less car, or a Google car. So, automobile industry is one of the great adopters of technology, not just within the company but in the entire ecosystem.
This industry is a competitive, as well as a cost competitive industry. The margins are low, hence the players keep looking at ways of improving productivity, boosting efficiency, reducing waste, value additions in the business. And, technology is playing a huge role to achieve it. For example, all the dealers of Hero Motocorp across India are connected. That helps us in reducing our cost of serving a customer or even acquiring the customers. We are now able to give all the information that a customer may need.
What are the technologies which are truly innovative and are making an impact?
A lot of new technologies, such as IoT for connected cars or connected bikes, social media, predictive analytics, collaboration software are making an impact. Existing technology such as cloud is also playing a huge role. Also, machine to machine (M2M) communication is playing a major role in the auto industry to reduce costs.
The new and trending technology is digital manufacturing, which enables us to make digital prototypes. For instance, we can create a prototype of our factory, and then work on eliminating the various constraints to improve efficiency or the cost. Today, the entire design is done with IT-based systems. For example, 3D printing is playing a huge role in the automotive industry, which enables one to create parts of a bike or even a full bike with the technology.
Earlier, we used to create clay models of bikes, and it used to take a lot of time in modifying or redesigning the model. Now all these are done on a digital platform, which not only reduces the cost in a big way, but more importantly it reduces time, like doing repeated iterations. The auto industry, whether it is R&D, production, operations, supply chain, finance, or even for customers — some of these new technologies are playing a massive role.
How Hero MotoCorp is leveraging new technologies?
We are leveraging all these technologies at Hero MotoCorp. For instance, we are using AutoDX for suppliers, and all our transactions with the suppliers are Electronic Data Interchange (EDI) enabled, which has resulted into zero manual intervention, zero error ,and zero delay. This deployment has enabled our company to reduce cost of doing transactions by 90% -95%. On the front end, we have linked dealer and sub dealers on a single cloud based system with all our customers. This gives same level of experience, in terms of IT to all the customers, whether they are in Delhi or in a rural area.
Moreover, we as a company give a lot of focus on R&D. We have recently set up a R&D centre- Centre of innovation and technology (CIT) in Jaipur, which is fully IT-enabled with cutting edge technologies such as simulation, 3D printing, IoT, to name a few. We have also setup a Global Parts Centre (GPC) at Neemrana, which can be claimed as Asia’s most automated warehouse of any company. We are also setting up a new plant in Halol, of which the entire planning has been done in a digital platform.
Please tell us more about the GPC?
The centre is the most automated of its kind in Asia and the state of art technology used has ensured that manpower usage has minimized to the minimum possible levels. Solar based energy sources have made sure that a major chunk of the energy requirements of this facility are fulfilled internally. With a green ecosystem, we have ensured that the carbon footprint has been minimized drastically. The way the systems at the GPC are integrated with the enterprise systems SAP and Hero Connect (Dealer Management System) makes sure that the supply chain is fully integrated. The orders for parts which flow from the field through Hero Connect and the dispatches are in sync with the help of the strong integration which has been built. The ecosystem ensures that the supply chain starting from the suppliers of raw materials for parts to the retailers/dealers who are the interface with customers is streamlined and transparent.
The spare parts business at Hero MotoCorp has been growing at a steady pace since the past few years and this increase in the business volume had led to increasing complexity in the operation of the old part centre, which was operated manually. This led to a host of problems for us, as all operations at the old part centre were manual. Thus, increase in business volumes brought incremental cost of additional manpower. Dependency on manpower was not only creating manageability issues, but also the storage system was manual with fixed location for each part.
Overall result was a decline in the service ratio, loss of productivity and, increased spare parts operation cost. To overcome these issues, a fully automated state of art Global Parts Centre was conceptualized and developed. The company used a Warehouse Management System (WMS) which was integrated to its enterprise system SAP at one end and to the Warehouse Control System (WCS) at the other. The overall ecosystem ensured that the equipment operations are in line with the order processing requirements coming from SAP.
A unique thing is the underlying concept of “goods to man” which essentially ensured that the company minimized manual movement and the goods reached the right spots rather than people reaching out for the goods. This concept brought huge benefits to the organization in terms of minimizing errors and reducing manual fatigue for the manpower. The technology used for minimizing manual intervention resulted in increasing the throughput of the operation significantly and also ensured minimal discrepancy in inventory.
This will enable us to meet and surpass our business targets through enhanced shelf availability & in time delivery of spares. This will also help in further improving our inventory norms. This is the first warehouse with complete automation in Automobile Industry in India.
As an industry veteran, what are the do’s and don’ts you will suggest for a IT head or CIO of a automotive company?
For a CIO in auto industry, I would say, one need to be very cautious of the fact that auto industry is very competitive, cost competitive, and cost conscious, so one should actually use technology, to improve competitiveness of the organization. One should not just stick to legacy systems or current way of working or not exploiting the technology.
There are times where people get stuck to their own decisions. The technology is moving so fast, may be that decision was right at that time, today it’s not the right decision. Today it’s creating inefficiency in the system, so one should have courage to review my own decisions.
Despite of being competitive, the auto industry has also shown that it is one of those industry which is ready to collaborate a lot. So, the CIOs should also use the power of collaboration, not just among within our own ecosystem, but with other companies within the auto industry to help improve the entire auto industry.
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