Introduction
| “The revenue pool of auto suppliers is projected to grow from 915 million to 1.26 billion euros between 2022 and 2030.”
– Statista |
An exciting news for automotive part suppliers; according to the above forecast, the revenue is expected to grow up to 1.26 billion euros for these suppliers, OEMs, and sub-suppliers. If you look carefully, this automotive manufacturing industry and its supply chain are more complex in nature, as the production volume is always high, whereas perfection is the minimal expectation. At the core of this complex nature of business, there have been many reasons, including innovations, product quality, product development risks, and more.
According to a study by Grand View Research, the global automotive aftermarket industry size is expected to grow at a CAGR of 3.9% from 2024 to 2030. It includes genuine, certified, uncertified parts for the automotive industry from OEMs, suppliers, and sub-suppliers. Interestingly, these expected growth figures are impressive yet highlight the lack of transparency at the OEMs (Original Equipment Manufacturers) level and their supply chain management.
Image Courtesy: Ascenten
Automotive manufacturers are highly dependent on OEMs and other parts suppliers to source parts, paint, spare parts, and other services. In short, now the suppliers are equally responsible for the time-to-market. To enhance automotive production and competitiveness, automotive part suppliers need to clearly understand their N-tier supply chain, assess its risks and production delays, and prepare contingency sourcing plans. And let’s be honest, the growing popularity of electric vehicles (EVs) and the transition of internal combustion engine (ICE) vehicles to electric vehicles (EVs) has pushed automotive OEMs and other suppliers to switch to sophisticated supply chain management solutions and other digital platforms.
| “Suppliers need one platform so they can quickly evaluate how every part of the organization conducts business, and apply best practices across the entire company.”
Rich Lindow Senior solution specialist at SAP Automotive Industry |
The Need for Digital Asset Management (DAM) in Automotive
Automotive experts know that the industry has moved from vertically integrated manufacturing to outsourced manufacturing, where they get everything from part suppliers. Going forward, the automotive aftermarket is also a crucial aspect of the part suppliers industry that facilitates the automotive service industry and insurance with spare parts, equipment, and vehicle repair and maintenance services. It supports the automotive industry with the necessary parts and equipment to keep the vehicles running for the long run. There is a dire need for an advanced digital asset management (DAM) solution for automotive parts suppliers to streamline processes, safeguard designs, and smoothen their delivery network.
The digital transformation of parts suppliers, component delivery networks, along with the global auto-part supplier groups, and introduction of online portal aftermarket components open doors for a potential market where the global market demand will be driven by digital means, connected car data, IoT insights, and other production forecasts. We can see that automakers, service networks, and insurance companies are shifting to digital platforms for a smoother customer experience across touchpoints. Continental AG, the German multinational automotive parts manufacturing company, adopted SupplyOn, a digital platform for automotive part suppliers to build a standardized, efficient, and transparent collaboration with suppliers.
The Role of Digital Asset Management (DAM) in Automotive
Just think of all the changes you’ve seen over the past few years due to digitalization – the dramatic pivot in efficiency, accuracy, and performance is really impressive. Automotive companies and their parts suppliers are already there to accept the change due to digitalization – Digital Asset Management or DAM is one of those revolutionary moves. It explains the use of technology and digital systems for managing the digital assets of automotive parts suppliers, including product images, spare parts designs, technical specifications, production workflows, marketing collateral, and vehicle insights. DAM helps automakers and suppliers to store, organize, manage, distribute, access, and retrieve their digital assets on a digital repository and streamline their production, supply chain, and logistics with an efficient service network.
Simply put, it means incorporating multiple teams, projects, and parts suppliers into a single DAM platform to store and access the digital assets of parts and components so stakeholders can quickly get to the latest version of desired part images, spare parts designs, videos, or documents. The automakers or OEMs define the automotive or car platform for all new models and then collaborate with the supplier community on contract-basis sourcing systems, parts, and components.
Understanding Build-to-Print (B2P) and Design-to-Spec (D2S) Models
We have two primary models in this component or parts production and manufacturing lifecycle: Build-to-Print (B2P) and Design-to-Spec (D2S) full-service.
Image Courtesy: Continental Automotive
- Build-to-Print (B2P) is a type of contract manufacturing for automotive parts where automakers or OEMs provide the parts, product designs, and drawings with exact specifications down to the millimeter details.
- Design-to-Spec (D2S) requires parts designed from scratch based on the automakers’ specifications, function, and size requirements.
In both cases, the designs and specifications are shared as digital assets that require a lot of communication, iteration, updates, and technical information exchange between automotive OEMs and suppliers. These digital assets require a Digital Asset Management (DAM) solution to seamlessly and secure access to each digital asset, save time, and keep consistency across all the production units.
Key Benefits of DAM for Automotive Suppliers
Digital Asset Management (DAM) has enormous benefits for part suppliers, such as easy access to digital assets like component designs, product drawings, electric part designs, etc., without wasting time searching and retrieving any specific files that are usually responsible for the delay or slower time-to-market.
Brand consistency is a crucial aspect of automakers; with DAM, you don’t need to invest much into keeping the consistency across brand products and collateral. Its centralized access to all the digital assets ensures all the approved designs, patterns, colors, marketing materials, and other digital assets showcase the same brand consistently. Automotives’ brand consistently results in brand recognition, trust, and reliability among customers, enhances their brand experience (BX), increases sales figures, and helps to earn customer loyalty.
The automotive industry is as dynamic as its vehicles; DAM enables real-time collaboration between stakeholders to access and contribute to digital assets from any location. It seamlessly connects stakeholders for collaboration, including product designers, engineers, production teams, suppliers, sales teams, and marketing teams, who can access the latest digital assets.
Let me tell you one of the exciting aspects of using Digital Asset Management (DAM) is that these systems usually have version control and access control features. You can define the access and permission to your digital assets so they can be used by the authorized person only to keep confidentiality intact. Intellectual property, concept designs, and other sensitive information are crucial aspects of the automotive world; the automakers want to keep sensitive information, like car design concepts, technology, and designs secure and safe from theft.
| “Jaguar Land Rover (JLR) was forced to take action in China against Jiangling Holding’s Land Wind X7, which copied the design of the Range Rover Evoque. Despite JLR’s reputation for build quality, performance and reliability, consumers were willing to opt for the Land Wind X7 based on its similar looks, despite it being a cheap replica. As automotive design evolves, the importance of protecting new designs from copying increases.”
– Lexology. |
Automotive designers need to protect and safeguard their concepts, sketches, models, and prototypes from theft and plagiarism, which can be easily possible with the access control feature of DAM. In case of a litigation appeal, this version control feature works as evidence to provide information about the different versions, edits, or updates in the digital assets by respective users. With DAM, parts suppliers and sub-suppliers who work with multiple OEMs can easily keep design assets safe and separated.
Digital Asset Management (DAM) is essential for resilient supply chain management for automakers, manufacturers, and suppliers’ pools. It enables more efficient operations, improved productivity, and better quality, and it minimizes risks and losses to help them earn more profits. Plus, we have ‘Supply Chain 4.0’ technologies for automotive suppliers and aftermarket; maybe we can discuss this in any of our following write-ups.
Final Thoughts
The automotive industry, including suppliers and sub-suppliers, should think about aggressively introducing Digital Asset Management (DAM) to streamline production workflows, foster better collaboration, safeguard and protect intellectual property, designs, and valuable digital assets, and brand consistency that untimely reflects and improves the overall brand experiences of customers. All and all, DAM is a damn add-on for automotive manufacturing, OEMs, suppliers, and even aftermarkets. Share your thoughts, and we are open to discussing the role of new-age technologies in transforming the future of mobility, brand experience, and automotive revenue models.
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Devansh Shah is a seasoned expert in digital commerce and transformation with extensive experience in driving innovative solutions for businesses. With a strong background in technology and a passion for enhancing customer experiences, Devansh excels in crafting strategies that bridge the gap between digital and physical retail. His insights and leadership have been pivotal in numerous successful digital transformation projects.
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