Dr. René Deist (pictured) is leading a transformation of Faurecia’s global IT systems and processes to digitalize the supply chain and develop products faster – as well as to support new business models. By Christopher Ludwig
The automotive industry faces clear challenges in a slowing global economy, geopolitical risks and technological disruption. Across the supply chain, manufacturers are adapting themselves to this new reality, while consolidation continues apace, especially among suppliers seeking greater scale and efficiency.
For those with IT skills, however, Dr. René Deist thinks there has never been a better time to get into the industry. As manufacturers integrate more software, artificial intelligence and digital interfaces into vehicles and processes, he sees a value chain increasingly underpinned by IT innovations and services.
“The whole industry is the place to be right now, and that includes production processes, logistics up to product creation and sales,” he says. Whether apps, digital twins or voice assistants, automotive companies are doing it all. “This is the hottest market possible.”
The description applies well for Faurecia, a global supplier of clean mobility, interiors systems and seats headquartered in France. These opportunities go across the company, and not just in product development. The company’s global IT department – which Deist leads as chief information officer – is playing a critical role in increasing speed and connectivity across Faurecia’s supply chain, from development to delivery.
Deist and his team are involved in a number of critical projects that are key to Faurecia’s digital transformation. These include enterprise system initiatives, such as product lifecycle management (PLM) harmonization and cloud computing. Deist is actively expanding skills and applications for artificial intelligence and data science at the company. Faurecia is also running an active pilot to use blockchain in program management.
IT workers are also playing a role in corporate venturing initiatives. Faurecia’s newly created Digital Services Factory, part of a partnership established last year with Accenture, is developing many ventures and prototypes in connected and autonomous vehicles, including human machine interfaces (HMI) and user experience (UX) technologies. In 2019, the ambition is to grow staff working across all digital initiatives to more than 700 people.
Deist himself has even founded a tech company in Israel that will provide cybersecurity components to Faurecia’s future products.
The IT team is also playing a key role in Faurecia’s future by capturing, securing, processing and interpreting data. For example, sensors in the cockpit can register passenger behavior, whether related to driving decisions or comfort, which allow the vehicle’s assistant system to make recommendations or improve well-being. Whilst the IT department will not develop such services, the department’s data science and security teams will help to deliver them. As part of this focus on data, Deist recently hired a chief data officer.
“To reach this, we need strong IT architecture and data governance,” he says. “That is achieved collaboratively between the IT and product worlds.”
As exciting as these developments are, René Deist remains humble. Initiatives in blockchain and digital services will take time to have significant impacts, he admits. And despite many market promises, an AI-driven solution to improve production efficiency will not be found or implemented easily. In fact, not too many problems in production and logistics, for example, necessarily require ongoing AI solutions.
“Once a problem is identified, our experts simply solve it and AI is no longer needed,” admits Deist.
Nonetheless, these innovations point to an exciting future for IT and the supply chain. As Deist often says, “In several years, everyone will work in IT in one way or another”. By this he does not mean they will all work in a central IT department – in fact, fewer may, as the skills in the central team are better aligned with business units. However, more people will work in an “HMI world”, he says, with seamless integration of compute power and AI-driven tools. That could include using voice assistants to call up market reports, or access real-time location and status information from virtually anywhere in the supply chain.
“In five years’ time, I predict that AI, HMI and UX will be seen as ‘normal’. The industrial internet of things will not be ‘IIoT’ anymore. It will be part of a connected CPU [central processing unit] power, with logic integrated on a small scale everywhere rather than just sensors. AI will be driving the power of innovation.”
A reliable architecture, open to innovation
If the future supply chain will be AI driven, it will require a secured IT architecture that allows the seamless flow of data and which will be open to micro-service innovation. Building this backbone has been an important task for Faurecia’s IT. By the time René Deist joined the company in April 2017, it had spent several years migrating all of its global purchasing, planning and production processes across one single SAP enterprise resource planning (ERP) system.
Off this global ERP, Faurecia has installed an on-site manufacturing execution system (MES) in every plant for production and logistics operations. It enables just-in-time deliveries and just-in-sequence call-offs. Deist calls it “kind of a Leonardo before Leonardo existed” – a reference to SAP’s business process tool that manufacturers use as an MES.
The system disentangles shopfloor logistics from the global ERP, working both as a security measure in case the global system should go down, as well as to synchronize and manage digital control locally, such as electronic Kanban boards, visualization screens, tablet-based order picking and quality monitoring. The plant-based information is collected and fed into a global data lake.
The system has allowed for smoother operations across the supply chain. However, Deist sees a change happening that will have an impact on IT for future production and logistics. Up to now, the key achievement has been in getting all processes from a multitude of systems to one single ERP. But increasingly, with new innovations and apps, that backbone does not carry out all functions, and may do less in future.
“We are asking to better understand what the order intake will be through AI, or to optimize flows through production using a digital twin. We do not do this necessarily in SAP anymore. It is not that SAP loses importance, but others gain some,” he says.
“That is why I would say to logistics people: hey, do not hire only SAP experts – you should hire also AI experts.”
Harmonizing PLM for digital twins
Faurecia is also in the midst of a major enterprise system overhaul for its product lifecycle management tools. Up to now, the company has run different systems and processes across its business divisions, mainly because of specific requirements for each. The bill of materials and production for a seat, for example, with its metal frames, foams, leather and high levels of assembly, is very different to that of exhaust systems, which includes more bending and welding of iron and aluminum.
Despite these differences, Faurecia wants to take advantage of digital twinning capabilities across all its products, in which designs can be simulated to see exactly how they would fit into a certain plant, allowing for a more efficient shopfloor and assembly line layout, material flow and line-side delivery.
“That is why we started an initiative to harmonize all PLM into one system. It is a project equal in size to ERP, as it will cover all of our engineering,” he says.
The integration of the new system is ongoing, with further rollouts occurring this year and in 2020. Faurecia will gradually discontinue legacy systems as the new PLM comes online.
“This is challenging, but I expect major savings once we have the full flow, and it will help us to shorten the product cycle time,” he says.
In five years’ time, I predict that AI, HMI and UX will be seen as ‘normal’. The industrial internet of things will not be ‘IIoT’ anymore. It will be part of a connected CPU [central processing unit] power, with logic integrated on a small scale everywhere rather than just sensors. AI will be driving the power of innovation.
Rene Deist, Faurecia CIO
Waiting for an AI breakthrough
Currently, Faurecia has dabbled with artificial intelligence, or ‘AI-like’ processes in its plants. For example, using edge computing, the company collects sounds during production, such as in welding processes, in efforts to identify patterns that might indicate potential faults in machines.
A data visualization project also brings together information from all connected machines on one large board to identify patterns and potential quality issues via AI. In another test, AI will also be used to predict just-in-sequence call-offs based on a history of demand.
However, René Deist admits that he has yet to see “the big breakthrough” that will change how logistics or other parts of production work. Most of the problems that manufacturers identify are not necessarily recurring based on the seemingly random, hard-to-detect patterns in which AI might help. Instead, these issues are usually identified and fixed.
While Deist expects AI to play a more critical role in future, Faurecia is currently using other applications in production and logistics with increasing success. Faurecia established a partnership with an industrial robotics firm earlier this year to rollout for autonomous mobile robots for intra-logistics. The company plans to use gamification to measure how much energy workers consume in production cells based on movements, providing feedback and incentives encouraging more efficient and healthy steps.
Augmented reality is also becoming more common in plants, a technology Deist thinks is underestimated. Current applications include light guidance systems for production processes, while Faurecia has also introduced smart screwdrivers that guide workers during orders and stop turning when not properly used.
“It is pretty easy to implement, especially since some workers can get dizzy wearing headsets,” he says. “But workers like the guidance technology.”
Blockchain in action
René Deist is a self-described “blockchain evangelist”, convinced that the digital ledger technology will revolutionize how data flows across economies and supply chains. He has even predicted that blockchain could be just as, or even more revolutionary than AI.
In 2018, Faurecia started a pilot project with one of its OEM customers and one of its suppliers to test blockchain during program management of engineering design for parts. It is designed to support the processes linking design, engineering, suppliers and production. The aim is to avoid backlogs of unusable inventory following quality holds.
Blockchain allows for a seamless, trusted exchange of information in real time. It means that a change in parts engineering would be shared instantly between R&D, a supplier plant and assembly locations, allowing for real-time visibility with faster decision-making and validation. For example, plants and suppliers would stop building obsolescent inventory immediately or much sooner.
The proof of concept has been a success, according to Deist, increasing transparency whenever there are changes in the program and, ultimately, saving money.
The possibilities for blockchain run much further than this, including tracing the location of materials throughout the logistics chain, contracting and accountability among suppliers, and for transactions in vehicles. Its real potential also comes in wider collaboration: the more companies participate, the more transparency is gained and latency reduced.
René Deist admits, however, that the pilot, whilst still active, remains limited to just one part of the program following investment cuts, and is unlikely to be expanded to other parts or suppliers until later in the year, at the earliest.
Despite this slowdown, blockchain itself remains of high importance and will be a “game changer”, says Deist. He points out the emergence of various organizations and consortia as further proof of the progress being made.
“It is an alive and kicking ecosystem, and is and will be developed,” he says. “It takes time. Digital photography was invented long before, but Kodak held it off until the compelling event came. Blockchain will be the same.”
Innovation from the outside in
Faurecia, already one of the largest automotive suppliers with €17.5 billion ($19.97 billion) annual revenues, has been growing further by acquisition. Recently, it acquired infotainment supplier Parrot, and Chinese electronic firm CoAgent. In March 2019, Faurecia’s tender offer for Japanese infotainment firm, Clarion, was successful. The company has established a new electronics business group based in Japan to gather these recent additions.
For IT, such acquisitions mean systems integration work, especially in terms of transitioning the new entities to its ERP system. Whilst challenging, René Deist says that this work is “bread and butter” for his department.
“It is work that we love, because by now we are the masters in rolling out our SAP in a short time, thanks to a very experienced team,” he says.
More strategically, René Deist sees the development in electronics and software products as a mean of increasing Faurecia’s IT and digital skillset. That is particularly important as the company grows its digital service offers.
Faurecia is also in partnership with other companies to expand its digital base, part of a process that Deist calls “outside-in innovation”. For example, the Accenture agreement for the digital services factory is set to last at least five years. The company has also established strategic partnerships in high-tech areas, including on lighting with Hella, safety and cockpit technology with ZF and hydrogen fuel cell technology with Michelin.
Specifically, for IT, the company has a partnership with SAP for intelligent enterprise, whilst Deist and his team are discussing agreements with a number of cloud-computing providers with the aim of deeper integration into Faurecia’s processes. “We think, in technology, one plus one is more than two,” he says.
Faurecia is furthermore collaborating with universities to encourage students in IT and tech to intern or take apprenticeships. Its corporate venturing arm is scouting tech talent globally in product innovation as well as for automation of processes, whether in purchasing, production or logistics.
A fast pace, but a long path
René Deist describes his IT department as being “on the way to transformation”, which also suggests that the change is not complete. The department’s current processes, with domain leaders who work on IT projects with each business area together with local IT resources and support staff, is not different to how the company operated a decade ago.
However, Faurecia continues its path towards a more agile strategy, whether integrating augmented reality or adding digital twin simulations for material flow. For Deist, one of the biggest roles for IT now is to scale innovation and deploy new ideas quickly and securely across the supply chain. Data management and analysis are essential, one of the key reasons the company brought in a chief data officer.
“It is up to us in IT to industrialize, find the backflow savings, and, increase automation,” he says.
He also admits that, despite successful proof of concepts and pilots, it is slower to achieve technology goals than one would hope or anticipate. Blockchain is a typical case. “A year ago, I would have predicted that it had come further, that it would have taken off by now, but things are getting harder to predict in IT.”
Nevertheless, he believes it is worth persevering. The only thing certain about the future supply chain is that it will experience dramatic changes – from HMI, from AI, from voice assistants. However, even if it is a marathon and not a sprint, René Deist thinks IT talents should continue to run fast into the automotive industry.
Faurecia – partnering in the supply chain
May 2017 Partners with ZF
October 2017 Partners with Mahle
November 2017 JV with Jiangxi CoAgent
January 2018 Partners with Accenture for digital services
October 2018 Acquires infotainment supplier Parrot Automotive
November 2018 Partners with Hella on lighting
March 2019 Acquires electronics supplier Clarion
March 2019 JV with Michelin on hydrogen fuel cell
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