Leader: Vijay Sethi, CIO & Head CSR, Hero MotoCorp in conversation with Sachin Nandkishor Mhashilkar, Director Community Engagement, CIO&Leader on the state of IoT in the automotive sector
How do you see the automotive sector in India and what are the most important elements for growth?
Automotive sector in India has seen a decent growth over the last few years. Now, the automotive sector comprises three major categories: commercial vehicles, passenger vehicles and two-wheelers. At this point, the penetration of two-wheelers in India is very less. I expect two-wheelers in India will continue to grow and the automotive sector in India will observe a promising future.
What’s your view on IoT for automotive sector?
From a two-wheeler perspective, IoT can be of two major types: product related and operations related. We are working on both of them and feel that both of them can deliver a huge amount of value to the organization, customers and stakeholders.
Let’s take the first category: product. First of all, when you are producing a bike (focusing on the two-wheeler perspective), you can add a device that is IoT-enabled, pick up data related to the device (the two-wheeler), analyze it, and give feedback to the person riding the bike, the service station or the organization that will help us improve the product. Second, for all bikes already in the market, you automatically have a fit-up. You can always put up a device, pick up the data related to driving habits, product performance and give feedback to the rider, organization, and dealers. You can also provide the data to insurance companies, for example, the moment I know someone’s driving habits, I’ll know the kind of insurance premium I need to pay a person. The penetration of mobile devices is really increasing in the country. Putting up this device and using this data is easy.
The second piece of IoT is within the organization. For example, we have hundreds of machines that are IoT enabled. It can pick up data related to the performance of those machines, related to the product, the tolerance and other quality parameters. We can analyze that data in order to reduce the defect rate, failure rate and take real-time actions before the product moves to the next stage. That’s where IoT plays a key role. We are convinced that IoT will give huge value to the company, the ecosystem and our customers.
How do you choose the best IT solution provider or vendor?
You first need to decide why you need partners. There are times when you need a partner to be a reseller. You are buying licenses and sometimes, that’s your only transaction with them. And the biggest criterion is to check whether the partner is authentic or not. Then, there is another type of partner with whom you either buy or sell a solution. Price is not the first criteria. It is the quality of manpower, domain experience, and innovation. Above all, there is one criterion that plays an over-riding factor - integrity.
Almost everytime, there is a multi-vendor scenario. There is no single vendor who only comes in when you buy a very specific product.
It is the experience that the partner brings to the table and that is most important. The second part is when you want to work with startups and considering their experience in the enterprise is zero, but you want to value the idea, innovation, and passion that play a huge role.
How do you align IT with business?
IT is part of business. You need to align the activities, priorities and the deliverables that a CIO gives. Are these in line with what my business wants? Are my priorities in line with the objectives of the sales department? Are my activities and priorities aligned with what my business wants? Can I come out with something which will help achieve business objectives?
Say, for example, plant heads. These guys say, ‘How do we reduce parts per million (PPM) defect rate?’ One is that you pick up the data, do the analysis and say, these are the errors that you want to reduce. That is one conversation.
The second conversation is you get into a root cause analysis, that is, why are these errors happening? Maybe there is a defect in the machine, the input going through is wrong, the guy working on the machine is at fault, etc. So then you come to a joint solution which maybe, can I develop an e-learning solution or can I put an IoT solution which can analyze data? Then, you come up with a solution. It is not that you are aligning with the production department but both business and IT jointly come up with a single objective of using the PPM.
Now, take the example from the customer perspective, such as sales and marketing. I know that most of the customers in today’s times are mobile savvy. So how do I improve the experience of my potential customers who come into the showroom or for an existing customer, how do I improve the lifetime experience? When we look at these things, we tend to think, can we create an app which will have this kind of information, this is what he/she wants and then you jointly evolve the app, etc. In such cases also, the priorities of the customers have to be aligned.
Tell us about some business critical IT deployments done in last one year.
All the deployments are business critical. One of the mistakes that the CIOs commit is doing deployments and upgrades for the sake of technology, and not because of business criticality or business value. Those projects which are done for the sake of IT do not actually take you anywhere beyond a point. It is only for short-term. If I’m moving to cloud, is it because my business wants it or it enhances my organization’s value or it is a fun thing to do. Recently, we did e-material flow (emf). Now, supply chain for any automotive industry is the most complex thing. It also gives you a competitive advantage. Most of the companies run ERPs, SAP-ERPs, etc. So we utilize what is important. There is a concept called KANBAN, a pull system. Pull is basically a vendor with an g inventory and you have the option to pick what you want from it.. So we went a step further and introduced a minute-to-minute planning in our workflow. We have created a collaboration system with our vendors to reduce our overall cost.
Further, I play a role beyond Hero MotoCorp. I’m also the Chairman - IT for the Society for Indian Automotive Manufacturers (SIAM). Over there, we look at the total supply chain inefficiencies in the automotive sector— not just with OEMs— but in entirety. There, I am responsible for all the transactions taking place between the OEM, that is, Hero Motocorp and its suppliers, Bajaj and its suppliers, Tata Motors and its suppliers, can I enable it on a single cloud platform. This means all my transcription errors go to zero, transaction costs reduce to 90 to 95%, everything is standardized and ready for GST. This is the big transformation process that I started on six years ago. This is the first time in India that such a comprehensive project is being carried out. Over 300,000 transactions are being done on the system on a monthly basis. This is a huge cost-saving to the entire industry. It helps customers also after getting passed onto them.
What are some of the qualities that CIOs must exhibit in a boardroom?
You need to deliver to the business. If you can’t deliver, there is no respect at all. The second is how you take the various teams along with you. It will help you find out whether all guys at various levels, CMOs, CFOs, etc. are working collaboratively or on their own. The third is integrity. The board also wants no ethical issues in the organization. Also, humility, speed of action, quality of deliverables, etc. can be considered but are secondary to quality, collaboration and integrity.
In your view, what are some of the Tech Trends for 2017? Moreover, what is your one advice for NextGen CIOs?
2017 will be a very different year from an IT perspective. Take for instance, mobility, a tech trend that is swiftly being adopted by organizations. Cloud is stable. When you have an infrastructure of which cloud and mobility are a part. IoT is mature and you have enough partners, you start utilizing that. You go beyond Big Data analytics and get into predictive analytics, use IoT to improve customer experience within your organization, reduce your costs, etc.
From a manufacturing perspective, there are a two more technologies that could play a huge role in 2017. One is 3D printing, which will become mainstream in the near future. Second is Augmented Reality which will also play a huge role in2017. It will be a good year for CIOs to experiment and do lot of stuff from technology perspective.