End-to-end visibility to streamline automobile production

Insights

• The impact of delays in new automobile model launches in North America cost 2% to 7% of total industry value ($30-$50 billion annually).
• With automobiles becoming software-defined, software and its integration with hardware present a growing concern for new car launches.
• End-to-end visibility of software, hardware, and their integration will be required for proactive and timely corrective actions.
• Aligning software delivery schedules with vehicle launch dates can prevent expensive setbacks and improve resource allocation.
• End-to-end visibility enables automotive companies to identify bottlenecks and areas for improvement, to improve resource allocation, and focus on value-added activities.

New product introductions play a critical role in the hypercompetitive automobile industry. Auto manufacturers introduce more than 350 new car models globally yearly to meet changing customer demands and satisfy regulatory requirements. New product introductions present both an opportunity and a challenge. According to one estimate, the impact of delays in new model launches in North America cost 2% to 7% of total industry value ($30-$50 billion annually).

Challenges to timely delivery

The study above also reported production issues as the main reason for 34% of the delays in 2023. Major contributors to these issues are supply chain disruptions, quality standards, and workforce constraints. With automobiles increasingly software-defined, software and its integration with hardware present a growing concern for new car launches. End-to-end visibility of software, hardware, and their integration will be required for proactive and timely corrective actions. Software such as Planview’s digital product development solution enables end-to-end visibility. Metrics link customer-centric outcomes to milestones at each stage of development in a product’s lifecycle for visibility.

Conventional automotive manufacturing paradigms are changing rapidly, driven by the bimodal imperative to seamlessly develop and integrate software with hardware production. Gartner’s bimodal definition provides a useful primer as background to approach these distinct yet linked approaches into a unified operating model.

Automotive manufacturers need both operating methods to succeed. The hardware component follows Mode 1 practices, using proven, repeatable processes that maintain consistent quality. In contrast, software development follows Mode 2, employing flexible, quick-moving methods that allow fast changes and updates. These different approaches must be integrated, with each mode serving a specific purpose but must work together as vehicles become more digitally advanced.

By 2030, up to 20% of the value of a car will be its onboard software, and the trend is upward. Many carmakers have faced issues with software in recent years: 41% of recalls up to November 2024 were due to software issues, up from 15% in 2023. Volvo had to delay the launch of its flagship SUV since the automaker required more time for software development and testing. Volkswagen has grappled with software issues and, at the end of 2024, announced a new strategy, focusing on sustainability and becoming a software-oriented mobility provider. General Motors has developed a software testing lab to catch software issues early in the development cycle.

Original equipment manufacturers (OEMs) face the task of synchronizing software development milestones and timelines with vehicle launch deadlines. Unlike traditional manufacturing processes characterized by tangible quality gate checkpoints, software development is inherently iterative and demands agility to keep pace with evolving requirements. This disconnect between software and hardware cycles poses major challenges, mostly for OEMs traditionally focused on physical manufacturing.

Three specific challenges drive the automotive industry's software revolution:

• Breadth of expertise. OEMs may excel in niche software domains specific to the automotive industry, like advanced driver assistance systems (ADAS). However, they often fall short of the breadth of expertise across vehicle functionalities. Developing such wide-ranging skills is a complex and resource-intensive endeavor. To overcome this challenge, Toyota partnered with NTT to develop a mobility AI platform combining computing and communication to provide safe driving experiences.
• Depth of knowledge. Technology companies' lack of deep knowledge of the automotive domain and access to the required vehicle platforms hampers their ability to fully capitalize on market opportunities.
• Software integration. OEMs and their suppliers face issues with software and its integration. Established Tier-one suppliers of subsystems and components grapple with dual challenges: scarcity of in-house comprehensive software expertise and a lack of suitable hardware platforms to deploy and test their subsystems for quality assurance. These challenges impede their agility and responsiveness to OEM and market demands.

As OEMs synchronize software development and product launch timelines, gaps emerge, especially in resource allocation. Typically, product manager headcount across vehicle models is much more than the number of software development managers. These two sets of teams need to ensure alignment of vehicle launch dates with software releases.

End-to-end visibility for timely alerts

To address these gaps, automotive manufacturers must implement new ways of working, processes, integrations, and partnerships. Here's how they can realize those objectives:

• Software development toolchain integration. Software tool chains are interconnected tools used in sequence for development. By integrating them, companies unify value streams across the product lifecycle, from design to launch. This integration acts as a bridge between physical manufacturing and software development processes.
• Create alignment between teams. Establishment of shared performance metrics and encouraging better alignment among internal, external, cross-functional teams helps establish clear channels for collaboration and communication to ensure that stakeholders work toward shared goals and objectives.
• Synchronize production with market demands. Ongoing synchronization of the digital and physical dimensions of automobile manufacturing with the evolving demands of the market requires responsiveness to market fluctuations of the highest levels to enable organizations to be prompt in meeting customer requirements.
• Cycle time and efficiency improvement. Optimizing cycle time and efficiency creates engineering and development cost savings. It also allocates resources to other programs at completion of each development phase. The Automotive Software Process Improvement and Capability Determination (ASPICE) model has been developed to aid automotive software development with the overall vehicle development (see Figure 1). Collaboration is the glue between ASPICE elements and is the essential element required between the software and vehicle hardware development.

Figure 1. ASPICE v-model for automotive software, integrated with vehicle development

Source: Infosys

Implementing visibility across production

Efficient software delivery demands a strategic approach to minimize complexity and streamline operations, and real-time status indicators at all stages of software development are important to achieve this goal. These indicators are complemented by reporting mechanisms that identify potentially risky areas. On the shop floor, manufacturers use visual tools like Andon boards to consolidate live status information from across the shop floor and quickly raise alerts. Dashboards consolidate status updates and display them in charts such as trend lines, even for software development.

Simplifying effort to develop and maintain software can decrease its complexity. The number of features and versions can be limited while promoting software component reuse. The review process should address the four major questions for software: what is developed, where, how, and incentives (metrics).

Aligning software delivery schedules with vehicle launch dates can prevent expensive setbacks and improve resource allocation. Resources are wasted when schedules don't align, especially in manufacturing plants where assembly lines may grind to a halt if software isn't ready on time.

Software status updates are critical, and information gaps should be attacked and eliminated. AI and automation advancements complement software consolidation, which is a fundamental step and valuable for record-keeping and traceability. Automation tools tackle the right problems promptly and accurately, with increasingly minimal human intervention.

Poor integration in the development process creates fragmentation, with disjointed components due to multiple teams using their own architecture, approaches, and tools. This cascades into compatibility, maintenance, and efficiency issues. Fragmentation is reduced by standardizing the software development lifecycle, tools, and approaches across teams. This especially benefits OEMs and their suppliers, where new product launch success depends on software component integration. Limiting the number of automobile platforms for software deployment is a means to reduce fragmentation.

Further, governance and data consolidation improve speed and efficiency. This enables Companies to expedite processes and respond more effectively to market requirements. This results in more rational decision-making, based on reliable and verifiable information, and consolidated through governance mechanisms.

End-to-end visibility enables companies to identify bottlenecks and areas for improvement, to improve resource allocation and focus efforts on value-added activities. Visibility allows distinguishing between value-added and non-value-added work. Timely insight into scalability requirements is essential to adapt to the auto industry's dynamic landscape. This includes timely anticipation of demand, technology, or market dynamics changes to adjust operations and methods accordingly.

The pandemic and the need for remote work elevated the need for centralized coordination of new product introduction. Centralizing work and control was a means to implement visibility instead of relying on multiple teams across business units and regions. Cloud computing evolved as the natural fit for centralized teams to operate this process: The Infosys Cloud Radar study reported new product introduction as one of the most popular cloud use cases, followed only by visibility into shop-floor quality.

The following recommendations can help automotive leaders address software and related integration challenges and improve visibility:

• Consolidate software development performed by multiple teams to one central repository to eliminate black holes, blind spots, and delays.
• Implement real-time status indicators and reporting dashboards.
• Align software delivery project plans with vehicle launch timelines.
• Adopt AI with humans-in-the-loop for exception handling and automated record-keeping and traceability.
• Minimize code fragmentation in development processes to enhance their integration.
• Enhance end-to-end visibility to assist decision-making.

By implementing these recommendations, automotive manufacturers can simultaneously streamline their manufacturing and software operations. These efforts enable OEMs over time to be agile, move faster at scale, mitigate risks, and increase the potential for the timely release of new products for revenue generation. OEMs should extend visibility from the physical shop floor to include updates from virtual software development happening in the offices above.