Operational Transformation: Top 5 Key Success Factors in the Auto Industry

In a world driven by transformational change, one industry that has remained relatively stable was automobiles.

While incremental changes regularly occurred, the way vehicles were made and operated remained fundamentally rooted around the Internal Combustion Engine. Computerized fuel injection systems replaced carburetors, suspension systems learned to automatically adjust to terrain changes and telematics enabled proactive failure avoidance. But, at the heart of it, the core technology chugged on regardless.

This, however, is set to change, and change drastically. Emission regulations, societal pressure due to climate change, and rising fuel costs are rapidly forcing the industry to move towards electric vehicles. The demand for autonomous vehicles is growing, given the shortage of skilled drivers to keep supply chains running. But, the greatest change, and challenge, that the automobile industry faces is that it will need a workforce with drastically different skills from what it has at present.

Continuous Change Requires Continuous Learning

The rise of companies like Apple and Alphabet in the automotive industry underlines an important trend – that the lines between in the automotive and technology industries is blurring. 

With AI and robotics playing an increasingly large role in automobile design, manufacturing and service, the skill sets that entry-level employees need have not only changed, but will keep changing rapidly. Building the vehicles of the future also require brand new and special skills, such as in cloud systems, UX design, driver assistance systems and autonomous systems.

There is also the reality that, with fewer humans on the shop-floor in Industry 4.0, many skills that were required of different people – mechanical engineering, electrical engineering and IT programming, are now required of one person. Therefore, learning something that will be relevant for 25 years is already a thing of the past – a skill that an employee learns today may have become obsolete even before the employee has thoroughly learned it!

Replacing an existing workforce is not the answer. Upskilling is.

Changing with the times does not require changing human resources. On the contrary, such a move can be counterproductive. Hiring and firing is costly, socially traumatic and, often, legally impossible, besides which, existing workers have core automotive production skills that those with newer skills like software engineering lack. 

“Most auto companies, in fact, have people with the necessary skills in other departments. Identifying them and cross-skilling them for new roles can often help companies overcome the talent gap.”

What is therefore required is a workforce that is mentally geared to an environment of continuous upskilling. The industry instead needs to closely examine how it can arrive at an optimal mix of experienced and new-age workers, and invest in training, reskilling and upskilling to make the most of this mix. It also needs to anticipate change, then stay ahead of the curve by upgrading its workforce to operate incoming tools and technologies. 

Cross-skilling in IT and OT is the answer

Latest technologies and machinery in Information Technology (IT) and Operational Technology (OT) have converged to a significant extent. Connected machines, connected factories, smart metering and many other ingredients of Industry 4.0 are in fact rooted in the convergence of IT and OT to make way for IoT. This means that the automotive sector will have to find professionals that bring expertise and experience in both IT and OT. They can do this by cross-skilling. 

Cross-skilling is when organizations train employees in more than one job function and skill sets. Increasing the number of employees that are experts in both IT and OT can ensure a higher bar for operational excellence through technology in the automotive sector, and that is the need of our times.

Collaboration with the educational sector is vital

The auto industry cannot in the long run manage this change in isolation. It has to collaborate with educational institutions and regulatory bodies to ensure a steady pipeline of talent that is geared towards quick learning and quick relearning and is application-oriented. This process should begin at a young age and, importantly, should treat industry-oriented courses on par with academic ones.

The AI industry is a vital part of this human transformation

As machines replace humans, the AI industry has become a core part of most aspects of the auto industry. In fact, companies like Affine can offer AI-enabled training that can identify technologies required in the future, which employees need skilling in them and design training programs that optimize skill levels and course times.

It is also crucial that companies and educational institutions give more emphasis to basic training in AI and robotics. This need not result in an in-depth knowledge of AI, but an understanding of how using AI can help employees perform and learn better.