Business

Industry Insight: Automotive Leaders at the 2019 APMA Conference

Active Business Services had the pleasure of taking part in a premier conference organized by the Automotive Part Manufacturers Association (APMA) in Windsor, Ontario, Canada’s automotive capital. The speakers were from leading Automotive manufacturers and their largest suppliers discussing the theme of “The RACE: Survival of the Fastest”, which accurately depicted their current environment. Although some market analysts and forecast experts had varying positions on the future of the automotive industry, there were several common themes that became apparent in nearly every session. Themes that impact more than the automotive industry, but more specifically our overall economy. Key topics centered around Digitization, Autonomous Vehicles, Shared Services and, Electrification.

From high-level industry insight to a detailed analysis of the massive transformation currently underway in the Automotive Industry, this meeting left part manufactures and their suppliers/partners (such as ABS) with an understanding of key initiatives and how the future might be shaping up. A common undertone amongst participants was the volatility created by the current state of affairs in the U.S., as repeated questions as to whether the American people understood full effects of the tariffs being imposed was frequently discussed. Leaders also urged large industrial companies to stick to fundamentals and voiced frustration to market movements caused by media/tweets from the President of the U.S.

With that in mind, here are some observations of what we believe were key takeaways from the 2019 APMA Conference:

“The Race – Survival of the Fastest”

Electrification & Electronic Vehicles:

The transition to Electric Vehicle (EV) is underway and although we see a lot of hype and movement from a consumer standpoint, EV’s still make up a very small portion of all automotive sales. In fact, we learned that a major player and pioneer of EV Toyota, with the Prius, have completely changed focus from battery powered EV to hydrogen cell. The segment of vehicle electrification is still very much in the early stages in terms of what will be the prime vehicle type as we ease off of combustion engines towards renewables.

We heard that some companies are dedicating funds towards EV’s, but they are certainly not going all in. An interesting point was that the CO2 emitted from the production of an EV car battery is over 20 Tons of CO2 emissions, the equivalent of which is over three (3) years of driving time in a standard combustion engine. The speaker also eluded to the fact that economies such as China who produce 2/3 of their electricity from Coal are not actually addressing the issue be electrifying vehicles since the electricity used will come from a highly polluting resource. The position was certainly not against electrification, but more towards a commonsense approach with a full scope of information and capability.

Digitization, Big Data & Connectivity:  

We’re seeing it all around us, every device is connected to something. As 5G networks continue to roll out, the ability to process data in massive amounts is undeniable. This means that car companies and other firms will be gathering more and more information to learn about their products, services, and customers. This segment is really going to explode and touches on the need for competing companies to collaborate and standardize. The information gathering can be a complex process, especially in varying nations with vastly different privacy laws so standardization will not be easy. The information that companies will now have visibility over can be used in many ways.

Shared Services & Personalization:  

Even in the face of Uber, Lyft and other ride-sharing and delivery services, we had not yet considered the implications for automakers. Staying ahead of the game, plans are unfolding for ride-sharing services. Market analysts pointed to the fact that millennials liked to travel in groups instead of alone and that they preferred the service instead of ownership. The thought of having a vehicle only when you need it, without worrying about maintenance and everything else that comes with ownership is an intriguing one. Some analysts say that this type of mentality and service, particularly when enabled with autonomous vehicles will drive down demand since, in theory, one car can serve several people/households. The most important aspect of this is the combination of sharing a vehicle when it is coupled with driverless cars.

Autonomy & The New Era of Vehicles:

The new era of vehicles looks vastly different than what we see today, and so far we have only seen a small glimpse of the future. When all the aspects highlighted above are incorporated into a vehicle and you add on features such as customizable interiors and exteriors that change at a touch of your mobile device, it begins to look like the future is extremely complex. It’s a future for example where we will not be required to touch a gas pedal or steering wheel, and where many will have access to on-demand vehicles without even being owners. Most speakers acknowledged a major shift is occurring and all parties are working tirelessly to innovate and incorporate cutting edge technology.

Operational Improvement For Manufactures & Suppliers:

As an energy management firm, we were pleased to see presentation and recommendations by the likes of Mr. Tom Lake, EVP- Honda Canada Manufacturing to discuss some of their energy improvements and encourage energy and operational efficiency. In Ontario, the Industrial Conservation Initiative (ICI Program) provides an incentive for manufacturers and other mid to large industrial users reduce their electricity tariff. Mr. Tom Lake discussed the generators installed in order to reduce peak demand during Ontario’s peak hours and went further to explain the impact of energy efficiency at their plants. He spoke highly of lighting upgrades and the value of involving teams and keeping departments accountable for efficiency and waste reduction. Active Business Services is a key player in achieving energy optimization and we look forward to continuing to help our clients by providing solutions that reduce cost while effectively managing risk in especially volatile energy markets.

Mr. Bernd Mangler, SVP – Automotive Solutions, Siemens presented methods through which manufacturers are improving operations using automation and smart technology. Connecting data in plants, baselining performance, providing visibility and taking advantage of smart technology to streamline production are viable ways for manufacturers to stay competitive. More specifically using Artificial Intelligence to drive performance is a method already being embraced by forward-looking companies.

Enterprise Resource Planning (ERP) systems were also presented to manufacturers as an excellent way to increase productivity and efficiency. Having key systems in place provides a way to benchmark performance at each production point with a wide variety of details being made available. For example, an employee has a mobile device outlining their daily goals and in real time tracks their progress, paving the way for the employee and management to review performance vs. targets effectively. We also saw a similar trend with Energy Management Systems that track usage at numerous points of the production process. The energy data is used to improve energy efficiency but also provides a host of other data sets that can be used for tracking machine health and provide early indicators of electrical problems.

Mr. Jonathon Azzopardi, President of Laval International, took time to explain his specific companies’ implementation of an ERP system and broke down the process easily. He outlined Laval’s journey to implementation of ERP into these steps:

  1. Look for systems
  2. End Print
  3. Get rid of memo’s
  4. Connect Quotations to Sales and Finance
  5. Digitize Bill of Material
  6. Put up screens to educate staff

What may have seemed like simple steps have optimized production while reducing overhead. The ERP system implementation touched on many points of the business from production to finance. Mr. Azzopardi described that being able to see the performance, real-time on his mobile device allowed his team to be very agile and make real-time decisions instead of waiting for production data to be made available at the end of the day or week.

Bo Andersson, President & CEO, Yazaki North, and Central America who manages one of the largest part manufacturing companies in the world provided a motivation message for the group.

“There are four things that I do every day. Give Hope. Give Direction. Give Money/Resources and Give Follow-Up”.  

This year’s conference was truly inspiring and to witness such collaboration between members and colleagues exemplifies the strength of the sector. Active Business Services wishes to thank all distinguished speakers for sharing their journey, plans, and visions.

Speakers:

  • John McElroy, President, Blue Sky Productions, Inc.
  • Peter Hall, Vice President, and Chief Economist, Export Development Canada
  • Tom Lake, Executive Vice President, Honda of Canada Mfg. Inc.
  • Michael Robinet, Executive Director, IHS Markit Automotive Advisory
  • Greta Cutulenco, CEO & Co-Founder, Acerta Analytics Solutions
  • Bo Andersson, President & CEO, Yazaki North, and Central America; President, Yazaki Europe Ltd.
  • Bernd Mangler, Senior Vice President, Automotive Solutions, Siemens AG
  • Jeff Makarewicz, Group Vice President, Vehicle, Quality & Safety Engineering, Toyota Motor North America Research & Development
  • + Others

Author: Active Business Services

Active Business Services is an energy management firm that has dedicated the last ten years to providing Canadian commercial and industrial customers with natural gas and electricity supply and risk management solutions.

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