October 27th update: Scroll to the bottom of this post for an audio recording of a followup interview with Minarcin.
At a recent visit to the new Omron Automation and Safety facilities in Hoffman Estates, Ill., (where facility personnel were in a comical battle with a skunk family also residing at the location) I got the chance to hear the perspective of Monika Minarcin, marketing manager for the semiconductor and automotive industries for Omron in the Americas. She sees automotive-semiconductor convergence on the horizon.
A voice of pragmatism on the Industrial Internet of Things (IIoT), Minarcin believes that a lot of development still needs to happen before connectivity in industrial settings delivers on its promises … especially for what some call mass customization of large-volume product. Safety and security are lingering concerns. That said, Minarcin sees the IIoT already changing the nature of automotive designs. Traditional automotive OEMs are spurring a steady manufacturing transformation to replace legacy setups.
What’s more, there’s a plummeting cost of entry to the automotive market as electric vehicles overtake internal-combustion designs subject to much more testing and verification regulation.
“Cars that don’t consume gasoline or any other fossil fuel have far smaller certification burdens than traditional internal-combustion vehicles,” said Minarcin. “The average vehicle takes millions of dollars to get to certification —and that’s for every combination of loaded vehicle weight class, transmission class, and basic engine. Compare that with the cost of certifying an electric car, which is one-fifth the cost on aggregate. This lets new players come into the market.”
There are several examples of the industry’s rising tide of radical transformation.
• Regulatory compliance is a major factor in vehicle innovation. Current regulatory standards mandate an average fuel economy in the United States of 35.5 miles per gallon (mpg) for the 2016 model year and 54.5 miles per gallon (mpg) for the 2025 model year. Automakers are stepping up development through electrification and the use of lightweight materials.
• Today’s vehicles are more electrified than ever, driven by regulation but also by the need for connectivity, active safety and assisted driving. According to Omron’s own research, the total cost of electronic parts relative to the total cost of the vehicle is well over 50% and in 2017 is expected to be 70%. By comparison, in the early 2000s, it was less than 20%.
• The pervasive popularity of connected mobile devices and their apps has led consumers to expect vehicles to contain advanced electronic and entertainment systems that integrate seamlessly with personal devices. As connectivity and electrification becomes more important in the vehicle, new automotive supplier entrants, particularly from traditional semiconductor and commercial electronics industries have started to edge out more traditional automotive supplier players as automakers look for a competitive edge.
• Toyota announced this year that it’s abandoning its well-known Production System for a more modular form of production architecture (a system some manufacturers already use) by 2020.
• Greater adaptability and increasing pace of innovation in vehicle design means greater complexity for manufacturers. There’s been a move away from the automotive-supply Tier System an emergence of contract manufacturers who act as “super tiers” or Tier 0.5s. These Tier 0.5s can manufacture almost the entire vehicle themselves with the automaker supplying the branding — or what Minarcin calls the new automakers. Though not common in the U.S. yet, as automakers start to position themselves as transportation solutions providers, more large-scale subcontracting of the vehicle will become prevalent as automakers move to kit-assembly production architectures to service their new roles.
As an automotive manufacturer in this new ecosystem, investment in IIOT and flexible automation will be key critical to survival as well as the ability to compete and grow. Omron’s connection here is that their Centralized Controller Architecture (part of Omron’s Sysmac Automation Platform based on the idea of One Controller, One Software, One Connection) provides a complete solution for integrated Input, Logic and Output (ILO) portfolio …
… and lets new players in the automotive industry — those most likely to adopt kit-style production architectures — get setup faster.
Here, integrated and intelligent machinery takes the lead. More after the jump.
As a related effort to stay relevant in the automotive industry, Omron is trying some new things itself. Recently, Omron created a new group focused along industry divisions to complement their product groups. “We recognize that the traditional boundaries of manufacturing between automotive and semiconductor are starting to erode – so you really need to look at both to see the whole picture.”
“We have increasingly started to analyze, join, and support standards and industry organizations with a like-minded and futuristic grass-roots outlook on the new automotive industry,” said Minarcin.
“This has included participation at recent Hybrid and Electric Vehicle Technology Show in Novi, Mich., and we continue to look to new venues to foster conversations. The convergence of cloud computing, big data, connectivity, and electrification truly make it to be one of the most exciting times to be in the automotive and semiconductor industries — particularly on the factory floor.”
During our meeting, Minarcin mentioned another trend she sees: “Fostering collaboration between the semiconductor and automotive industries to some extent is important to us; but we see that a lot of automotive manufacturers want to bring semiconductor and electronic manufacturing in-house when they know little about it.”
However, the real wow news from Minarcin is that she sees a coming disruption of the automotive industry that will outsize the Japanese automakers’ disruption on the industry during the oil crisis of the 1970s.
According to Minarcin, Apple’s investment in battery technology and Google’s self-driving car are just a couple examples of how electronics companies are making inroads into transportation and automotive design.
In fact, at a meeting earlier this year, Erik Berkman, President of Honda R&D Americas essentially declared the 2015 Consumer Electronics Show an auto show at its core … scroll to the bottom of the page for a video … and more important that the North American International Auto Show.
“So cars are the new supercomputers,” said Minarcin. “The average luxury vehicle today has over 100 microprocessors containing tens of millions of lines of code connected with miles of cables, and they all must be assembled into the vehicle,” she added.
October 27th update: In a follow-up interview over the phone, we got to ask a few more detailed questions about her thoughts on automotive and semiconductor trends. Listen in on the lively conversation by clicking on the SoundCloud bar below, and then tell us what you think.