A British report commissioned by KPMG has highlighted the opportunity for the automotive industry to make billions of pounds over the next two decades by embracing digital manufacturing.

The first-ever report on the potential of digital automotive manufacturing in the UK says the industry stands to make an extra 74 billion pounds in profit over the next 20 years by adopting the computer-centric method.

Digital manufacturing uses computer modelling to determine the tools, machinery and materials required in the manufacturing process. It allows engineers to discover ways to increase production efficiencies before production even begins.

The report, produced by the Society of Motor Manufacturers and Traders (SMMT), calls for the British Government to put digital manufacturing at the heart of its industrial strategy, along with autonomous and connected vehicles, and e-mobility.

Benefits of digital manufacturing highlighted in the report include:

  • reduces parts inventory by up to 30 per cent
  • increases productivity by up to five per cent
  • reduces machine downtime by up to 40 per cent
  • reduces time to market by up to 30 per cent
  • 2.6 billion pound annual benefit to suppliers
  • 4.3 billion pound annual benefit to manufacturers, and
  • 1.7 billion pound annual benefit to the wider economy, with a total cumulative economic benefit of 74 billion pounds by 2035.

Digital manufacturing has been called the fourth industrial revolution and marks the greatest change in automotive manufacturing since automation was introduced to production lines in the 1960s.

The report, titled ‘The Digitalisation of the UK Automotive Industry’, predicts that new technologies, such as artificial intelligence, advanced robotics and 3D-printing, as well as new data management techniques, will enable manufacturers to save time, boost productivity and respond more quickly to customer demands. The need for plant maintenance will decline and the ability to plan and predict consumer desires will increase.

Customers will benefit via greater personalisation, shorter waiting times, more content and greater connectivity.

An SMMT survey found that automotive companies were most concerned about funding, knowledge and skills development. Respondents called for government to help promote and encourage digital manufacturing, with measures including funding and tax incentives to support innovation and investment in new machinery, technology and plant development; regulation to encourage adoption of machine to machine communication, and regional policies to encourage technology providers to locate close to manufacturing hubs.

Other countries have already adopted digital manufacturing strategies. Germany and the USA are at the forefront, with Germany the first nation to develop a digitalisation strategy, known as ‘Industrie 4.0’, led by Chancellor Angela Merkel. In the US, US$1 billion in funding has been committed to the Industrial Internet Consortium.

These nations already collaborate on standard setting, and Japan will soon join them following the imminent launch of its Industrial Value Chain Initiative.

What about Australia?

Unfortunately for Australia, a report from the Turnbull Government’s Advanced Manufacturing Growth Centre has found that most Australian companies are not equipped to match it with overseas rivals when it comes to advanced technology. This is in spite of the government’s $1.1 billion Innovation Agenda.

With Australian automotive manufacturing set to wind up by the end of this year, it appears the local industry can do nothing but wait and watch developments overseas.

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