Team CVF had a brief tête-à-tête Mr. Lokesh Payik, the Chief of Business – Industry 4.0 at Bosch Engineering and Business Solutions.

Refer below to the Q&A session for his perspective on CV industry developments.

Q: With the industry starting to feel a shift in thought from upfront cost to total cost of ownership of a vehicle – how will this change the game play for premium players?

A: Traditionally total cost of ownership was calculated by including the upfront cost of acquisition of the vehicle, maintenance costs etc. However, that trend is changing with availability of platforms such as digital workshop offered by Bosch, wherein the vehicle is tracked closely on a real-time basis and the customer is regularly informed on the health of the vehicle. This results in management of the vehicle as an asset, by the customer.

For example, earlier the customer got the tyre changed at the end of the estimated useful life provided by the manufacturer. However, in the case of digital workshop, the customer is informed on the health of the tyre on real-time basis, leading to more accurate estimate relating to the running costs of the vehicle and regular preventive maintenance of the vehicle to minimize breakdown etc.

IoT applications and introduction of such innovative concepts initially obviously in the more premium variants, then across the board will lead to more accurate estimation and management of the cost of the vehicle.

Q:  With the brand lines (product ranges) going deeper and deeper to satisfy the differing needs of consumers, how does this impact the business model from a cost perspective?

A: Gone are the days of ‘one size fits all’. Today, when a customer walks into a dealership he has the option of choosing from 50-60 customized options (for e.g. variants in cabins, engine displacement, tyre etc.) The conventional model of products being pushed in to the market is being replaced by the new norm of ‘Co-Creation’ where customers have a very collaborative role in design of products & services. It is important to evolve at a business model that is relevant to this approach.

The addition of features obviously adds to the costs, however, beyond a certain point you can’t pass the costs onto the consumer, as India is a price conscious market. Due to the high cost pressure due to the increasing features, there is a need to adopt a business model which is flexible. Commercial vehicles need to move from a one-time-buy model to more of a service model, wherein the cost of acquisition is spread over the life of the vehicle, which is monitored through vehicle tracking mechanisms.

Q: What innovative process engineering techniques should be followed to keep a check on cost as well as the meeting the desires of consumers (i.e. more and more variety)?

A: Adopting advanced, innovative manufacturing technologies has become a qualification to be in the game. For example, Digital Manufacturing is a combination of physical with the digital, which is marrying of virtual data analytics with the physical aspect of production to bring about efficiencies. So, introduction of technology driven concepts like Augmented Reality assisted maintenance, digital checks on the health of the vehicles etc., leads to time savings, reduction in instances of breakdown, better preventive maintenance etc. Needless to say, improved productivity results in increased profitability. 

Use of digital can result in substantial savings, to give more examples:

In place of running hundreds of physical safety crash tests on vehicle – this can easily be moved to digital with the use of only a few physical safety crash tests and rest being carried out digitally

Prototyping of vehicles, certain features etc. can be carried out digitally and perfected instead of doing physical reproductions

Q: How is digital impacting the commercial vehicle industry? Is there an uber like disruption waiting to happen in CV industry? How will it impact the CV players?

A: Disruption is already underway with different models being employed by different new age companies and not just limited to the Uber model. For example, I heard of an organization wherein they have improved truck utilization by employing drivers across locations so that the truck never sits ideal and when one driver completes his shift another takes over to ensure that the vehicle is always plying. This leads to more efficient utilization while lowering ownership costs for operators and is all done digitally.

Also, with telematics & big data, each vehicle can be monitored and serviced based on its specific needs, as opposed to the traditional predefined maintenance routines. This not only drives cost reduction, but also helps optimize usage and maintenance.

Q: How important is after market in the overall game play, especially in a country like India? Should this be one of the critical pieces to be answered/assessed while the product is still on the drawing board?

A: Yes, absolutely. ‘And why is that?’, you would ask. Well, for its tracing and tracking. Currently, various departments at a CV manufacturer operate in silos. In the journey towards smart and sustainable manufacturing, to reap the benefits of a complete value chain transformation, industries are required to not only digitize essential functions within the internal vertical operations, but also integrate with their horizontal partners along the entire value chain.

With that in mind, advanced tracking and tracing capabilities could be incorporated within every part of the commercial vehicle. The data collected can be analyzed and shared with various departments including aftermarket.

Q: Supply chain has always been considered extremely important in this space. What recent changes has the supply chain process been undergoing, keeping changing product lines and consumer preferences in mind?

A: Across all aspects of the customer journey, advanced digital technologies are creating new opportunities for innovation and growth, and creating novel ways to enhance and customize the customer experience. In terms of our solutions, we have many interesting products which help in efficiently managing the supply chain process while keeping in mind the evolving industry dynamics as you mentioned. For example, we have a yard management product which helps in tracking each truck manufactured, once it is off the assembly line. It provides the commercial vehicle buyer updates akin to what you would get if you bought a product online. For example, let’s say a customer buys a truck, then he/she get automatic updates as to the status of their order in terms of when it is assembled, dispatched, delivered, ready for pickup etc. This not only helps in managing the supply chain efficiently at the OEM’s end but also improves customer satisfaction by providing real time updates and making them feel special.