Zebra Technologies supports seamless communication between suppliers & automotive OEMs
The supplier industry in Germany
The automotive industry is by far the economic sector with the highest revenue in Germany. No other individual sector employs as many people as the automotive industry. Approximately one third of all employees in the automotive industry work for suppliers. Worldwide, the total turnover of the 100 largest automotive suppliers is approaching the 900 billion mark; however, growth is also noticeably slower.
The factors influencing this are complex. Consulting firms assume that the financial situation of numerous suppliers must be better than satisfactory due to the economically successful years from 2010 to 2018. This gives them the scope to invest in research and development as well as in IT and infrastructure. Without these investments, the path into the future will be an enormous challenge.
Analysts all over the world agree that it will be difficult for suppliers who have fully specialized in the manufacture of components or development services for all aspects of combustion engine technology to find a solution.
Daniel Dombach, Director EMEA, Industry Solutions, and Alexander Honigmann, Sales Director Industry and Logistics, Germany, both from Zebra Technologies in an interview with RFID & Wireless IoT Global.
GTL: A label for global application
Seamlessly coordinated communication between suppliers and OEMs is the basis for modern delivery processes for supplier parts – whether at individual part level or in transport packaging. In order to achieve this goal for all companies involved in the supply chain, the VDA working group 'Structured Information and Data Exchange (SID, formerly KIT)' has developed and approved recommendations for the standardization and harmonization of these communication channels.
The VDA published Recommendation 4994 in 2018 in order to efficiently manage the flow of goods within the automotive supply chain not only across company borders but also across national borders.
The specification is based on those of the Global Transport Label (GTL V3.0), which was developed jointly by Odette International, the European umbrella organization of national automobile associations and organizations, as well as the North American Association (AIAG) and
Labels according to VDA 4994 can thus be used in national and international transport processes in the supply chain. The recommendation for the use of the GTL is the conclusion of a series of VDA recommendations for communication in the supply chain. The term VDA label is commonly used as a synonym for the label of the transport packaging of supplier parts.
The information printed as plain text and 1D/2D barcodes and optionally stored in an RFID transponder integrated into the label also originates from the database for the shipping notifications (DESADV, VDA 4987) and for the accompanying transport documents (shipment documents according to VDA 4939).
Quo vadis automobile production? And what does this mean for the supplier industry?
Suppliers re-position themselves in the direction of CASE
In terms of economic success, Bosch is the number one German automotive supplier – with sales of more than 47 billion euros in the mobility sector in 2018, Bosch left the companies Continental and ZF Friedrichshafen in second and third place respectively. The German suppliers are in demand worldwide: Bosch and Continental are leading not only the national but also the global Top 100 list – and have been doing so in exactly the same way since 2016.
The companies have recognized that change is taking place in the automotive industry. CASE – which stands for Connectivity, Autonomous driving, Sharing, and E-mobility – requires new developments. Along these top trends, the suppliers who are economically in a place where they can re-position themselves are beginning to do so. Bosch alone is said to have filed around 1,000 patents in the field of autonomous driving.
The downside of this medal is that investments in CASE technologies do not pay off immediately. Suppliers must now and in the coming years master the balancing act between conventional technologies and future-oriented solutions. The impact this will have on the entire supplier industry cannot yet be reliably estimated.
However, changes will be fundamentally different. It is certain that companies that have their own logistical processes under control and meet the logistical requirements of OEMs will significantly improve the initial situation for coping with future challenges.
Two main trends influence supply chain processes
Electrification – disruption or evolution?
In the past, German automobile manufacturers in particular were said to have missed the trend towards electromobility in part, but companies such as Volkswagen, with market power and engineering know-how, are rapidly catching up. According to experts and market participants, e-mobility could reach a broad audience by 2030. This will have an impact not only on the automobile manufacturers themselves, but also on their suppliers and technology development partners.
The component landscape will change fundamentally as soon as the number of e-car units increases in 10 to 15 years. The production facilities themselves, which are developed and built by suppliers and integrated by OEMs, will also undergo a change.
Apart from the revolutionary development towards electromobility, conventional vehicles with combustion engines are still being built in large numbers. The trend towards individualization continues unabated. The features that a customer can select for his desired vehicle at a surcharge fill page-long lists. As a result, no two vehicles are the same, even if they come from the same series.
The first automobile manufacturers are testing the production of the entire batch size 1. This means that in addition to individualized vehicles of one series being produced on one production line, different series are also being produced on the same line. Depending on the order intake, an SUV can be followed by a station wagon, then a limousine can be produced immediately afterwards.
Where are the opportunities for all those involved in the value chain?
The automotive industry is currently on the threshold of one of the greatest challenges in its 120-year success story. "Automotive companies – just like almost all companies in other sectors of the economy – are facing the challenges of digital transformation. To do so, they now need innovative, technological solutions," says Daniel Dombach.
He explains: "In order to be able to operate successfully on the market in ten years and beyond, companies are now intensifying their projects to fundamentally redesign logistics and production processes. The use of wireless IoT technologies in RFID or RTLS applications will be a decisive component of sustainable solutions. The resulting digital transparency on the individual part or packaging level supports flexible and sustainable production."
The target? The digital twin
Be it a component, vehicle or a complete production line – a digital image enables optimized planning for the use of resources and manpower.
Alexander Honigmann expects to overcome the first hurdles of digitalization in 2019: "With a view to the requirements for parts tagging with RFID, manufacturers have created facts for suppliers. At the same time, activities in the automotive industry are clearly shifting towards the field of scanning. The possibilities of 'Direct Part Marking' are also being taken into close consideration – indestructible barcodes that are lasered or needled into plastic and metal parts. A third sector is the entire range of locationing applications that are strongly linked to RFID – active and passive – in Zebra's solution portfolio."
Qualified solutions for all requirments in the automotive industry
Solutions from Zebra Technologies are wellestablished in automotive production. With the increasing demands of OEMs toward suppliers to provide item-level tagging of components, the need for RFID-enabled printers and hand-held readers is increasing.
"In cooperation with two renowned RFID system integrators, two process-secure RFID thermal transfer printers were qualified for the requirements of German OEMs. The same was achieved with two hand-held devices. With this hardware, the 600+ suppliers who are now being asked to implement itemlevel tagging can now optimally prepare for current and future challenges," says Alexander Honigmann.
Daniel Dombach adds: "Printing VDA-compliant Global Transport Labels is also possible – at high speed and with consistent, reliable quality".
Every supplier profits!
RFID is more than a service that automotive OEMs are increasingly demanding from their suppliers.
"Manufacturers of supplier parts benefit from the use of RFID, as do their customers. Recognizing the potential in his own processes allows the supplier to see the costs for RFID integration not just as a service for the OEM but rather as a range of benefits for the company itself due to more transparent internal processes", explains Alexander Honigmann.
Cost savings through increased transparency in the container inventory
Less is more: If all transport containers are marked with an RFID tag and an RTLS is implemented, internal container movements become visible in detail. Fewer containers have to be reordered, as complete visibility is given in the container pool.
Reducing storage times and storage areas
Shorter logistics times on the basis of increased transparency in the material flow reduce both the general costs in logistical processes and for maintaining storage capacities in particular.
Accelerated incoming goods
If a supplier receives tagged goods or parts in tagged load carriers in accordance with VDA recommendations, the manual workload for inbound goods is reduced.
Optimized control of outgoing goods
RFID gate or tunnel solutions for outbound goods help to ensure that automatic loading lists are generated. Errors during the loading of goods onto the possibly wrong truck are significantly reduced.
Smooth communication with suppliers and customers
If all participants in the value chain rely on RFID, media disruptions are a thing of the past and the effort for manual communication is significantly reduced.
The VDA recommendation on container labeling is in its initial stages
Whether ESD-SLC or a foldable box – the VDA is working on the adoption of a recommendation for the permanent, RFID-based labeling of containers. If this comes into effect, the result will be an enormous gain in transparency for all partners in the supply chain.