I wrote an article that Aftermarket Technology published July 5 of this year, which was titled “Disruptive Technologies: Opportunities or Threats.” I told readers that the AASA Technology Council (ATC) was planning to have presentations on emerging technologies and discussions of their impact on aftermarket suppliers and the entire supply chain during the organization’s annual Fall Conference, which was held in October.
Following is a summary of the presentations and the subsequent spirited discussions among conference attendees. It was one of those moments we’ve all experienced in which we think, “I sure wish the rest of my company or my other trading partners could be here to hear this and provide input.” The sessions were just that good.
The discussions were facilitated in breakout sessions, with each of six groups developing a list of five opportunities or threats for one technology and no more. Groups reported to the entire collection of attendees their five threats or opportunities. Results are highlighted after each technology described below.
Autonomous vehicles
Dr. Andy Brown, Vice President & Chief Technologist for Delphi, provided a detailed picture of the direction the autonomous vehicle is taking. We learned that there are five levels of driverless cars, with Level 0 having no automation and Level 4 having full self-driving automation. We also learned that the Google Cars on the road are only Level 3 (limited self-driving). Dr. Brown showed a video depicting “platooning,” which utilizes connected-car technology to enable a line of vehicles to follow each other closely. Platooning offers the potential to reduce accidents and highway congestion. The two primary technologies/areas that will drive true driverless vehicle implementations are sensors and connectivity.
Opportunities – New product sales, i.e. aftermarket safety devices (ASDs), retrofit safety devices (RSDs), range and detection sensor kits, by-wire actuator kits, etc.; ongoing data services; branding for aftermarket suppliers with technology products/services.
Threats – Self-driven transportation, i.e. autonomous taxis could reduce the number of vehicles on the road; liability from technology-based safety issues; challenges in IAM repairing high-tech systems; alternate means for distributing new technologies/parts/data to repair community bypassing the traditional channel.
E-tailing
A presentation on E-tailing Success Strategies for Suppliers was delivered by Paul McCarthy, Vice President for AASA. He summarized the highlights from a recent AASA-Booz & Co. report on the growing channel and recommended strategies for taking advantage of it. DIY represents the majority of online purchases, and the majority of the purchases are for light maintenance parts. Penetration of e-tailing in the aftermarket is predicted to grow 15 percent per year to $8 billion by 2018. Recently we learned of plans for same-day and Sunday deliveries by online retailers very soon and possible 30-minute deliveries by advanced technologies within five years. BYOP (Bring Your Own Part) model expansion is a real possibility, even though several technician and shop owner panels AASA has facilitated over the past three years have indicated reluctance for shops to participate in a BYOP model on a large scale.
Opportunities – Brand building, deliver rich content, educate consumers, fast feedback from consumers, no-boundary marketplace, streamlined supply chain, slow mover liquidation.
Threats – Lower margins, increased returns and challenges in managing returns, channel collapse, lack of IP control.
Additive manufacturing
Greg Elfering, Vice President of Sales, 3D Systems, described the latest innovations in additive manufacturing, of which 3D Printing is the most recognized subset technology. 3D Printing is moving from a low-cost method for producing prototype parts to low-volume contracting manufacturing to the emergence of higher volume production of parts. 3D scanning of existing parts promises to enable widespread distribution of where parts are manufactured. Component consolidation was presented as a major game changer for complex parts that currently require multiple suppliers of sub-components. Automotive components that have been successfully produced, albeit not necessarily manufactured for long-term use, include seat frames, engine manifolds, duct housings, door panels and fan blades / air foils.
Opportunities – Speed to market, elimination of tooling, reduced prototyping costs, end-of-life cycle part production, manufacture hard-to-find parts.
Threats – Counterfeiting, loss of control over quality, liabilities due to someone else using manufacturer’s drawings to print parts, industry and brand loss of integrity, distribution changes / collapse of supply chain.
As one can clearly see, these types of discussions are greatly needed among aftermarket stakeholders. Companies cannot afford to take a passive approach to emerging technologies and must engage in internal and external conversations regarding how to prepare for and take advantage of them. The ATC is providing an excellent forum and leadership for these discussions. Watch for more to come in 2014.
Chris Gardner is vice president, programs and member services, for the Automotive Aftermarket Suppliers Association (AASA). He is the executive director of the AASA Technology Council (ATC), which provides leadership and a forum for technology leaders from supplier companies to exchange best practices, identify leading technology trends and address technology issues in the aftermarket.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
