Digital operations for a global automotive supplier
Automotive, Digital company transformation, Operations management

Transforming automotive suppliers’ operations into digital

One of the current key questions for a supplier’s CxO suite is where, when and how to invest in which digital enhancement of their operations. The bandwidth of potentially relevant technological applications is huge and further increasing. Selecting and implementing the right digital-operations technologies, such as cyber-physical systems, internet-connected machines, and additive manufacturing, is a complex task – the risk of burning cash is enormous, as is the risk of doing nothing. Arthur D. Little‘s experts helped a leading automotive supplier define and navigate its digital-operations transformation by combining industrial, functional and digital expertise.

Corporate program to strategically enhance and digitize the value chain towards new levels of performance


Challenge

How to transform a supplier’s operations into digital


Our client, among the top 25 automotive suppliers worldwide, with a 2-digit billion revenue and >100 plants worldwide, wanted to benefit from the opportunities emerging digital technologies offer, and be at the forefront of digital value creation within its supplier segment. 


Key challenges included defining which technologies created the most value, and with which sequence of technology implementation to start the transformation, in order to ensure a consistent implementation was applied worldwide, to make sure the appropriate capabilities were built up, and to mitigate investment risks as much as possible.

Approach

A proven five-step approach to become a digital operations leader


First, Arthur D. Little’s experts combined a solid understanding of the client’s operations technology and processes and the proprietary Arthur D. Little digital-operations technology database to identify and describe concrete technological applications for individual step-change operations. 


The resulting functional target pictures were translated into transformation path, and concrete pilot transformations were launched with a seed investment – with very short payback times building up a self-financing transformation program.

External capability networks were defined and initiated to support the required new way of operations innovation, including an adjusted governance model.

Value

A self-financing transformation


The value of this transformation program is increasing year by year – as technologies are rolled out consequently, leading to a reinforced USP, and steadily increasing operational savings.

Transformation is organized in a way that is already available, and high-value technology applications with short amortization timelines are prioritized – leading to a recurring stream of savings. These are used to launch the next transformation topics, leading to an almost self-financing transformation project.

$90M – annual savings after rollout of 1st transformation phase