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Daimler: Championing Digitization

Chulanga Perera, Chief Information Officer, Daimler India Commercial Vehicles elucidates how new technologies and techniques are being adopted at Daimler to take the business forward.

What is the operating model of Daimler and how does technology drive this business?

Daimler is a global organization that is segmented into multiple units. We have passenger cars, we have vans/trucks and we have financial services. When you look at the operating model for trucks that are falling into the commercial vehicle segment, we have different organizations across the world. India falls under Diamond trucks Asia, which is headquartered out of Japan. In r India, we are based out of Chennai.


The way the operating model works is that there is a lot of independence but we also work together with one another on larger scale projects. But here we are very specific towards catering to the Indian market. So when you look at our operations, at how we structure our manufacturing bounds, it is based for products that are made specifically for India. We also have an export segment, but our main focus is to make sure that the plant is up and running for the trucks we produce and the buses we produce for the Indian market segment. So when we look at technology, per se, we work very independently to operate the plant here in Chennai.

What are the key technology solutions used by Daimler and what are their use cases?

We do not have one specific key solution. The way we approach here in India is to look at the problem at hand and identify what is the right technology that solves the problem. If  you do it the other way around, where you have vast majority of technologies that could solve problems, you end up in a bit of a predicament because you might not know which problem to address with which technology. So we look at the problem or the process that needs to be optimized. Then we look at it from a cost perspective and also implementation, and also what makes sense for this market. And we bring in the right technology to solve that specific problem.

But when you look at our end to end spectrum, we have a lot of the technology that are already up and running. When it comes to advanced analytics, AR/VR, or even when it comes to doing proof of concepts in the area of blockchain, all cutting edge technology is evolving and have been integrated in some way or the other, either in the plant here in India or when we have to work across other organizations, let’s say in Japan, NAFTA or even in Europe. There is no one specific key technology that we use, but we use all of them that are available can benefit us.

How are digital technologies helping Daimler tide over the current COVID-19 crisis?

If you look at the current situation, every organization= whether it’= is manufacturing or any other industry, is facing one of the biggest crises the world has ever seen. If you look at the economic impact, the geopolitical situation, the social economic impact there is undoubtedly a lot of things we need to consider. A lot of the organizations have been adopting technology because the way the world has evolved you cannot live without technology. If you look at your surroundings, what this COVID has opened our eyes and shown us what was in the past seen as impossible that a lot of organizations who have started working from home. So adoption of technologies and accepting these technologies got expedited due to the COVID. What we have now also realized is that there is going to be a lot of emphasis on remote working or looking at eCommerce platforms. A lot of app based solutions and a lot of automation will happen in production lines.

If you look from that perspective, in Diamler we want to make sure the quality of our products are maintained because that is what we stand for here. At the same time we also enable our employees and want them to become better, smarter, and re-skill them. We also make their work a little bit more efficient in whatever it is that they do that is enabled by technology. And the cherry on top of this entire cake is the analytics that we do, which is giving us a lot of insights. The COVID scenario has shown us that even though we are not co-located, there are a lot of activities that are not location dependent which can help us still run the business and accept these technologies. That is how at least we are embracing it for our organization and also make sure that all our employees are very well enabled and equipped to re-skill themselves to accept these technologies. Bringing technology is one thing, but if your organization does not have the capacity to accept it, then it becomes very difficult to see the benefits of it.

How are you enhancing your customer and employee experience through technology?

The thing is a lot of the customers, at least in the commercial vehicles segment, are looking for a competitive advantage. Customers are looking to use our products and benefit their businesses, but also give something to their customers. We in the commercial vehicle segment area B2B business and the way we want to cater to our customers is by giving them a vehicle that is able to provide a lot of insights as to how the vehicle works. There is a connectivity solution that is helping them understand how their truck is running better. It is helping them understand the concepts of TCO. We also want to make sure that they can benefit from a lot of the reports and analytics we provide through the connected vehicles, not just from a fuel efficiency standpoint, but how their fleet is performing over a period.

We also give them a solution which they can use sitting in one location to run their entire business across the country. For example, we came up with an eCommerce platform where they can order parts online and get it delivered. They can figure out when a truck is failing at a certain given location and then coordinate with our customer support and our dealers to make sure this truck is brought to the nearest service station and the parts are made available. We have recently looked at launching an application to connect more with our customers directly so that we hear their requirements and can tailor make the products to meet those standards better. When you look at how technology is evolving, we are a lot closer to our customers, we are hearing them a lot more and they are also able to understand their products a lot better through technology. This is coming in the form of apps, a lot of reports that we generate and closely interacting with them on a regular basis.

What do you think are the key pillars of your digitalization strategy?

There is no one key pillar that eill make us all successful. We have to first assess where each organization is and which part of our digitalization journey you’= are in. Each digitalization journey should have a few pillars. The first is you need to have a strong foundation in terms of infrastructure, as well as skills and also the appetite to adopt technology within the entire organization. This I call as the foundation. Then on top of this you need to have a sound strategy. Speed can be one, free and open source can be another, which we look at within Diamler.

Cyber security is very important in today’s day and age. COVID has shown that with a lot of people working remotely and also we look at this from a very holistic perspective where we say return on investment is very important. Any organization at this point in time with the current pandemic that’s there, investments are cut off or curtailed. Does that mean you should not invest? I believe that is not the right way to approach it. Investments have to be made now because that’= is when you will get a competitive advantage. So just making investments for the sake of it does not really reap benefits. That’= is why my organization, within India, look at an ROI and in the past if we had an ROI of 15 months, we now have curtailed it down to about 8-9 months. We have a self funding mechanism. So that  is another key pillar looking at our return on investment.

The next thing is we always say data is the new oil and building on that how can we utilize data better? We want to monetize the data and can we drive value internally through internal efficiencies with the data we have? Can we make business decisions based on data? We want to connect everything. We call this the connected X strategy where we go to the extent of connecting even tools. We have variables which are giving insights onto how we work on a day to day basis. Our tools are connected, our machines are connected and of course our trucks and buses are also now connected with a large amount of data. This is one key pillar connecting everything, analyzing it with data, looking at an ROI and also the most important thing is re-scaling your people and educating them to embrace technology. When each and every individual is contributing then digitization will flourish. So with the foundation if you have these key pillars, I think then any organization will flourish.

What challenges you faced in your digital transformation journey and how did you meet these challenges?

I would be lying if I say it was not challenging but Iam a firm believer that with challenges and with problems at hand, you always find a solution and for us it was about finding that right equilibrium. One thing we made sure to not push technology or the digitalization journey just for the sake of doing it. We took a very staggered approach. We made sure the entire organization was moving along and it was not just an IT driven thing and we have the feeling that our digitalization journey has just started and there was a lot more that we have to accomplish. So when it comes to change management, I think it was more about involving the business partners within our organization, from the get go, because they understand the business processes best. We educated them of the possible technologies that could help and then together we implemented this. That means it was not us pushing down technology just for the sake of it, but it was an actual problem. And they were able to understand through the journey how this technology is going to help them. The change management became a lot easier because they have been involved from the beginning itself. At the end of the day, for an IT department or for my organization it becomes a lot easier to push things but then the sustainability sort of evades us when the business partners are not able to see that.

The second thing is in change management we look at it from a holistic perspective where we need to close the loop. Because if you look at one problem,you only attack that problem. You will realize that this solution is going to stop at a certain point purely because there are other portions or other strings that you have not considered. So when we looked at internally our digitization journey, we looked at it end to end. When we looked at supply chain or digitization in the supply chain, we also considered production planning, R&D, finance and controlling, and try to see how each of these segments can be converged together so that we do not leave any loopholes. That also helped us bring in the right solution and get it adopted.

The second and most important thing is we wanted to reduce the redundancy. If you look at Daimler globally, a lot of solutions are made across the spectrum and we wanted to see if can we leverage the capabilities we have within other Daimler organizations, their learning and borrow them probably and implement them here and vice versa. If you have something successful here, we share it too. That collaboration also helped with the change management because we were able to learn about the pitfalls and loopholes that we might run into with the help of our other Daimler entities. These were some key areas that helped reduce the problems at hand. It did not eradicate them all but it is an evolving journey. We are a young organization in India and we are learning every day.

How are newer technologies like AI, analytics and AR/VR, RPA or IIoT being used in Daimler and in the auto sector overall especially in the current situation?

The adoption of these technologies will get expedited now in the current situation. I will use one example of AR/VR. A lot of our R&D activities on product engineering and design happens not just within India, but also with Japan and other entities. So we have been in the past using augmented reality and virtual reality to collaborate a lot better and this now has become more and more prominent in the current situation. What we have now also done is thinking a little bit ahead where we look at the social norm in the future. If it is going to be working from home, we have VDI of course for employees to work from home. But can we also supplement that with more AR and VR, with more individualistic solution that is catered so that they can collaborate more without having to be collocated?. That is a use case that has really what helped us in the past and will help us now.

And then if you look at AGVs:-the utilization of this to make the employees become more efficient has become more prominent now. When we look at, let’s say transporting parts from our warehouse to our assembly line, these AGVs are enabling thisa lot and the way we look at it from my point of view is that we use the core technology of AGVs to automate further. If you look at image recognition or localization of AGVs, we are using this technology to automate our forklifts. Maybe within the plant have an autonomous forklift. We are trying to improvise with these technologies.

Then the last part is  “Make in India: for India. Localization is increasing. So if you look at 3D printing, this is increasing rapidly and with the supply chain shortages that we have had due to the lock down we have started evaluating and doing extensive research and study on how we can use 3D printing for certain components on our production lines. This is something that a lot of the automotives will adopt sooner rather than later.

Then the final portion is everything that we produce has to go out to the customer. Digital marketing and then these apps that I spoke about, earlier eCommerce platforms, all these are getting really expedited very quickly. We have been able to consolidate these. But these add on a lot of complexities, your IT landscape becomes more and more complex. It becomes much harder to run. And what most people do no’t consider is the run cost of this. You accumulate a lot of data, but that is a huge stress on maintaining this and you do not want to create redundancies in terms of your applications. You have to be very careful how to integrate all of them, bring them onto one common platform and that is where that key competitive advantage lies. The guys who are able to figure out how to keep this lean, how to always make sure that we give something back to our customers but also re-benefits to us, will always be the front runners. Sooner rather than later, you will see cutting edge technologies in every area. So for us, it is important now to build that foundation.

Not just the COVID-19 and lock down challenges, but how can digitization help address the slowdown challenges through optimizing processes and enabling solutions to work more efficiently?

Within Diamler India the last year and the years before, we have been talking a lot about going paperless, how we can contribute a little bit more to the environment and this has again a lot of benefits. It’s not just the reduction of paper, but also the efficiency and the insights we get to the data that we collect. When it is in paper, analyzing this becomes very difficult. If you look at it from that aspect, automating even in using simple RPA became a day to day task for my department.

We look at any and all processes that we can automate, any and all ways in which we can reduce paper and become a paperless factory and then tie this all with advanced analytics. How can we use this analytics to make sure that we supplement the business to drive business decisions? The one last point here is you can do all three of these things but what is important is you have to think about sustainability. What we are going to implement in India is a sustainable model where we have trained the trainer to achieve more speed and to have champions in each of the departments. For example educate our employees a little bit more because everyone is interested in learning about cutting edge technology. So we train the trainer for example in dashboard creation so that they can automate even the simple processes and will not have to depend on a central IT team to do it for them. So they create their own BI dashboards and automate simple things and that makes them more efficient and we get speed because then it  is a multi-vector approach rather than us taking one department at a time. This has built the sustainability and is bringing more new ideas within each of the departments. We are also able to then move from the base to the advanced technologies. RPA has played a very key part combined with advance analytics.

How are techniques like lean manufacturing, additive manufacturing being used in Daimler and in the auto industry?

We have implemented variable devices a lot but also 3D printing, 3D scanning and then of course, digital twin. A lot of the times we do a lot of our simulations there. When you talk about lean manufacturing and also factories of the future, one discussion that comes into the equation is condition monitoring. Conditioning monitoring is very good but you also have to see if it at all makes sense. We can connect our machines, we can tap into the PLCs, we can extract the data and predict when a certain part of that machine is going to fail. It makes economical sense and there is a payback in doing that because you  are collecting large amounts of data and we in Daimler anticipate that without connected vehicles and our connected factory, at least a petabyte of only IoT data is generated.

Now you are talking about large amounts of data, which is again costly to maintain from not just from a storage perspective but also crunching and then processing this data but you need to check whether it makes sense. When we talk about lean paperless, it is not just supplementing it with tabs and having digital checks or removing the paper, automating a lot of the processes and understanding, but it is also understanding if it makes economical sense. That is one key area we hve looked at.

When you talk about IOT, right now we have something called the factory of the future concept, which means how do we envision our factory in the future. Just in time sequence, in terms of our supply chain, we look at a full automated inbound and outbound logistics as well as a warehouse. Warehouse management is very important because that is tied in with your having an optimal inventory where you have your safety stock properly calculated and your forecast, more on and more accurate. This is backed by the analytics portion that we have.

These are some key areas where we have looked at and will also look in the future or in the coming months. We are also planning to do proof of concept on AR and VR for the factory area. I spoke about AR and VR in R&D for product engineering and designing, but also for factories just to see if we can meet the standards and also look at improving our processes in the assembly and production line with the shortages that you have in travel. Earlier we used to have experts come from Germany and other parts of the world, and we usually have knowledge sharing. But now since that is also limited to a certain extent in the current situation, we are looking at how can we remotely work on this sort of deviating from the remote diagnostics that we have for trucks.

The complexity of technology makes it hard for engineers and R&D people to operate from remote locations because technical development needs close discussion. How is Daimler managing this challenge?

We have provided a lot of tools for better communication. So if you look at some of the platforms and because we are a global organization, a lot of the collaboration is not new to us. So cross border collaboration kept happening. What we have done is we have made them a little bit more efficient and better. We have optimized it a lot more now and they are able to communicate irrespective of where they are located. A lot of the communication tools have evolved, and we have adopted them.

We have enhanced the cyber security aspect of it because as you can imagine, the communication mechanisms are the easiest ones for most people to tap into. We have also increased awareness of how to protect your organization purely because you are not in the one central area where you are protected by a cyber team. You are in different areas so that education became important.

But the AR /VR concepts for collaboration is something that we have really tried over the years especially to work with the athletes in Japan. The AR/VR solution for better collaboration, and VDI is what we enabled during this pandemic very quickly to make sure that we did not lose any efficiency in the work we had to do. Overnight we had to transition into making sure that all our colleagues were able to work from home. We have to ensure that that their networks were met so that they have the state of the art technology in terms of hardware. VDI was set up, awareness was created. They were given networks as backup and proper communication tools to make sure that their interaction with cross border teams happened in a seamless manner backed by what we already had existing in terms of AR VR solutions for collaboration. That puts the entire picture together for Daimler India.

Auto companies have to rely on physical testing and validation for ensuring the quality of the output. How is Daimler handling this situation?

We have not deviated from the actual process and because Diamler prides itself in the quality of our products and that is very important. The safety of the people who use the product is our utmost importance and testing is a very important part. So under any circumstance, we do not deviate from the actual process that is there and we adhere to all regulations. We have not deviated from that.

What we have done is we have backpacked with a lot of technology for simulation to help enable and get more insights onto how certain conditions are met and how we can optimize the product to become more safe but also make it more reliable as well than it already is. The testing, it is going on and we are working with the authorities to get the right authorization to do the testing. When it comes to the physical testing, we use test facilities within the plant. We have a standardized testing facility to make sure that those regulations are met. And then we enable this with a little bit of technology to improve the simulation aspect of it. We do a lot of simulation testing before we actually do the physical testing of our product. Overall the situation has not had any impact, though certain things are often delayed, but that is something we all have to accept. But we stand by our moral and ethical values of making sure we put the best products out into the market.

How is Daimler incorporating more AGVs in its production line to ensure productivity in the absence of manpower?

We look at it differently, rather than looking at it from an absence in manpower. We look at if we can enable a full workforce. For example, we become more efficient with our AGVs carrying multiple parts at one time to reduce the attack time. We have looked at from our warehouse to assembly lines. How many AGVs can supplement the existing work that we do and also if there ever comes a situation where we have to look at a reduced man power then can these AGVs work in tandem?

At the moment, it is transporting of parts from the warehouse to our assembly lines here. In the future, we will look at again within our factories if it can have a longer or further use cases. But of course with all AGVs the biggest issue is the localization and the investments you have to make. For us, this is work in progress at the moment. We will further evaluate and see how this will play out in the coming months. Not just the auto sector, but in all manufacturing and in a lot of other industries AGVs will play a very important part and you can see that because the technology is available. If you look at autonomous vehicles. even it is using the base foundation of this technology. Machine to human interaction is increasing with artificial intelligence and AGVs are the core foundation of that.

How does the connectivity situation in India allow auto manufacturers like Daimler to use more technologies for automated remote production?

There are things that are in our control and there are things that are not in our control. the partners we work with to provide the network facilities  are doing their level best to make sure that our network has uptime at more than 99%, which has already been proven. But also we are taking all the necessary precautions to make sure that we internally maintain our network uptime. We have segregated or are going to segregate a plant network with our internal network to make sure that there is no dependency on each. If you look at our connected machines or a factory of the future initiatives, we are receiving a large amount of IOT data, which has a huge train.

If we have one common network this makes it very difficult for employees to work, and so we look at measures of segregating this. Another thing is we have looked at backups. We’ have provided dongles to a lot of employees who are working remotely in areas that have a low connectivity. We have given them increased data sizes so that they can connect better even using their handheld devices. We are looking in the future to provide smart tablets that have been integrated with inbuilt connectivity so that they do not have to depend on Wi-Fi or local networks at their homes. These are few things that we have internally done but again because that is not our core business, we are dependent on our partners who are enabling this. This is an area where I also firmly believe that India, even though it has good connectivity, in the coming months will expand drastically with the new norms of working from home. To sum it up, we have not had major connectivity issues because we took necessary precaution upfront. And we looked at it from all possible scenarios to make sure that we minimize the lack of efficiency due to poor connectivity or low network.

For starting back Daimler’s manufacturing here in India,how did you access your supplier base on their readiness and risk?
I think the region has a good understanding of this area but the risks are ever evolving. For us it was more about assessing and working together with our supplier base. If you look at the tier one, tier two, tier three suppliers, they are at different stages in terms of how digital they are and also the journey. So when we looked at this situation, we did not just think from an internal perspective, but we also thought on a larger scheme of things. How can we integrate them to make sure that they are a little bit more efficient and they are working in tandem with us?

One thing we have also started doing is partnering with them a lot more to build technologies or solutions that are mutually benefiting.We looked at a 50-50 investment where they can leverage that technology and we can implement this as well. So supply risk is something that is very prominent in the industry and we cannot eradicate or completely move away from it. But what was important for us is to make sure that we minimize it. So just in sequence is something that we have looked at, a lot of the times production full cost and our systems at least interacting a little bit more frequently from both sides. So we have looked at technologies that are enabling and bridging this gap a little bit more. We have also looked at how can we work together with them not just to localize more but also create a scenario in which they are working with us to improve the quality and the availability of certain parts for us.

Real Time Dash Boards / Reports through Analytics Server are emerging in the current industries where UI/UX are also adding up to the reports and ease down Sr.Management’s Governance / helps makes decisions. What all are your thoughts for implementing Analytics Server and UI/UX to your Sr. Management Reports?

When we look at automating our reporting, there are a few things. One is the awareness we create first of all, and for me having reports or dashboards where you plug in your Excel sheets into BI in terms of Tableau RBI dashboards is not going to give you all the benefits you are looking for. That will just visualize your data better and still give you the same. When you look at it from a UI/UX perspective, or you look at dashboards for management purposes, we want to attack this a little bit with analytics. In order to do that we need to have clean data. We build automated data pipelines that is going to give us accurate data on a day to day basis because again, the way the world is moving, knowing what has happened is only going to help us so much. We are moving into a world where our prediction is giving us basis on running businesses. The way we look at our dashboards is can it give us some sort of description, can it predict and be prescriptive at a certain stage? And in order to do that, we wanted to make sure our data is stored in a central location. So we have a whole data lake concept, the data is clean so that it is not garbage in-garbage out and then the dashboards for us within India become beneficial.

We have moved away from just automating excel sheets or standalone data sources because that for us is just a better visualization of data we already have. We have gone a little bit further and we are already starting to see a lot of benefits out of that. Thisjourney is just starting and we have to see now with more and more data that we get, how can these KPIs really add value in the future?

 

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