In the past 5-10 years, from a design standpoint, we are starting to see manufacturers bring in and accelerate the amount of digital content in a vehicle, which causes a convergence of the classic mechanical and materials design with software design.
With this, we are seeing greater integration of automotive design more closely with manufacturing, all driven by Industry 4.0 and AI (artificial intelligence). This comes at the perfect time too because automakers are feeling the pressure to deliver cars faster than ever before.
This is precisely the conversation I had recently with John Reed, global solutions leader, manufacturing & mobility industries, Microsoft, on The Peggy Smedley Show. He says AI can cut development time by a third or half and that it can deliver products at a greater speed, while still producing vehicles that are reliable, safe, and sustainable.
“Recognizing that the automotive industry across the value chain has made huge strides in the last several decades around the areas we have talked about quality of vehicles, safety, reliability,” says Reed. “We are now seeing the acceleration of powertrains, options for sustainability, discussions about what the right mix of powertrains are. So, AI comes into an environment where it has the opportunity in a well nurtured landscape to drive that sort of acceleration of all these factors—speed, time to market, impacts across the value chain.”
We discussed the tremendous opportunities that exist to converge what is happening in the vehicle and create a lifetime engagement with a customer—which ultimately begins with design. It is that digital thread that runs through the entire value chain.
“We are seeing transformation with technologies—specifically with AI—across the value chain,” says Reed. “The business, of course, starts with design. We are talking about the style of the vehicle, its technical design, its powertrain, the vehicle platform, all of the aspects of the experience, whether it is a consumer or a commercial customer, begin there.”
To give some examples and numbers, Microsoft did a deep dive into some highlights across the value chain, and it found:
- Manufactures can achieve a more than 50% increase in software coding speed with generative AI.
- Gen AI-based ecommerce and fulfillment optimization improves last mile profitability by 15% as well as improves operating costs by 5%.
- Shop-floor productivity can be enhanced by as much as 20% using gen AI-based assistance recommendation in autonomous systems.
- From a sales and marketing standpoint, as much as 30% of outbound marketing messages can be synthetically generated.
- From an after sales and service and support perspective, customer service bots can answer as many as 30% of conversations.
- In internal corporate operations, finance and administration, for example, Microsoft estimates by 2025 or so, 90% of quarterly report material could be synthetically generated.
“Across the value chain, whether it is design, build, operate, or even internal operations, there are huge opportunities to apply AI in the broader landscape in order to drive tremendous efficiency and effectiveness,” says Reed.
With all of this, we need to keep in mind workers need to have a willingness to change and act in a targeted way. Reed also says one of the leading factors is that transformation needs to be leader led—changes need to come from the top-down and then they need to be integrated across the enterprise.
In the end, he says Microsoft recognizes manufacturers and their partners can differentiate in a competitive global marketplace.
“The types of opportunities that are present, not only with AI, but the rest of the technologies we have looked at, as well as the tremendous partners that work with car manufacturers, all enable a broad set of choices that enable then this transformation toward that safe, sustainable future,” he says.
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