Slovak Republic has attracted some of the major automotive companies in the last 15 years. Volkswagen, PSA Peugeot and Kia Motors are well established already. With Jaguar Land Rover (JLR) rolling out first cars in 2018, the country will produce around 1.4 mil cars a year. Moreover, there are more than 300 Tier1/Tier2 suppliers for this particular industry. And the story doesn’t finish here. In 2015, Volkswagen has invested 500 mil euros building a new assembly plant with hi-tech welding technology for SUV Porsche Cayenne. And another one, costing 300 mil euros, is presently being built. This looks like car makers in Slovakia have considered Industry 4.0 very seriously. New technologies, better manufacturing practice, digitization and product customization. However, what this means for business development managers of both, automotive giants and Tier1/Tier2 suppliers?
Industry 4.0 is a well-known system (industrial revolution No. 4) among industry experts and the concept is based on a sort of human-cyber collaboration where we can track each part of a particular product and make it customized according to customer request. Thus, each product is getting a unique character. We can see implementation of Industry 4.0 in many fields of industrial production; however, car industry is definitely a great leader in this process.
Companies like Volkswagen, Kia, PSA Peugeot or JLR have to invest a lot of money and resources in order to fully implement Industry 4.0. On the other hand, this can change automotive industry in a way like never before. The companies will transform to something like a “customized eshop” where a customer can send all specific requirements to a car maker. We are not speaking about colour or some accessories. It is about a whole concept which enables to order a tailor-made car today, and have it ready next week because the Industry 4.0 is fast, smart and listens to a customer voice.
The suppliers must count with higher requirements from car makers due to a better quality manufacturing and customers’ requests. Automatic inspections, RFID chipped car parts and demanding customers won’t tolerate any mistakes. In better words, a mistake will become an archaism by the time. This creates two possible scenarios. In the first one, car makers will look for the best quality suppliers which are able to participate in the Industry 4.0 processes. The second one, the market will be open for those who take innovation more seriously than others. OK guys, your headlight covers were excellent in 2015, however, we are going to change our supplier in 2018 because you haven’t even started to think about the Industry 4.0, sorry.
A piece of advice for small and medium sized companies involved in the automotive sector in Slovakia: business development is many times about how to be a step ahead of competition because you listen to your clients more carefully than others. Big players have already invested a lot of money in innovation and the Industry 4.0 processes. If you want to win the game, you must show to Volkswagen, KIA, PSA Peugeot or JLR that you are ready to join them in the Industry 4.0 today. It is a great challenge for the Slovaks to confirm that it is not a coincidence that the country produces top quality cars for customers worldwide.
What are your thoughts about the automotive sector in Slovakia and Industry 4.0? Share with us at email@example.com
(Author: Martin Zubko)
(Image source: http://www.allaboutlean.com/industry-4-0/ Video source: https://youtu.be/XZF10XrowGU)