3 Lessons in Innovation from the Auto Industry's Transformation

by Ryan Lynch | Tue, Mar 10, 2020

auto-industry-transformationSince the auto industry has close ties to the industrial forklift and material handling space, we continually watch their innovations and apply learnings to our business where appropriate.  Both arenas have had similar levels of slow innovation for decades, but in the past 5 to 10 years, there’s been enormous acceleration in improvements that benefit the world and the end customer.

With this in mind, let’s examine three of the most prominent ways you may want to rethink your material handling power approach and how they mimic recent auto industry innovations.

1. The Subscription Model

Owning a car was once not only a necessity for most Americans, it was also a way to express individuality. However, that view is starting to shift. Millennials, who have a lower rate of car ownership than other generations, tend to view cars as functional items, instead of as strategic investments or personal statements. That development has spurred options beyond ownership like hardware-as-a-service, aka a subscription model. Sharing-economy start-ups like Lyft, Uber, and Zipcar make it easier to forego owning a car and simply hailing one whenever it's needed.

As a result, even traditional car manufacturers have begun to modify their sales models to keep up with consumers' wishes. For example, many now offer subscription services, so that, instead of purchasing or even leasing a car, you can subscribe to one on a monthly basis. The all-inclusive subscriptions include the vehicle itself as well as the insurance, registration, roadside assistance, and warranty. If you don't need a car for a while, cancel your subscription and turn in your keys. You can take out a new subscription when you need a vehicle again. There are no surprise costs and no additional worries for the user.

  • Industry Learnings
    It may be time to change your outlook about ownership. Most companies are beginning to view their material handling assets the same way today's drivers view their vehicles: functional, but not a strategic asset. Remember, these assets don't add to your core business beyond getting products out the door on time.

  • Concentric Learnings
    We believe these subscription models. Promising more hands-off, all-inclusive service, are going to become more common in virtually every industry. That’s the premise behind our Guaranteed Power Model, which ensures material handling assets have the battery power they need when they need it. Like a vehicle subscription service, these all-inclusive subscription services for material handling assets provide all the assessments, installations, repairs, and optimization for one monthly price.

Is your forklift power system optimized so that your facility has the most  uptime? Find out now!

2. Proactive and Adaptive Systems

There’s no question that electric car company Tesla is known for innovation. One of its most groundbreaking advances is its proactive and adaptive systems. In simpler terms, Tesla stays in contact with its vehicles, keeping information flowing back and forth. That way, if Tesla identifies an issue with their vehicles, it can remotely deploy an update. Drivers don't have to lift a finger, even to press a button -- yet their cars stay up-to-date with the latest and greatest software. The cars also use machine learning to improve performance. That means the vehicles are proactive, instead of reactive, like the other cars on the road.

For instance, during Hurricane Irma, Tesla actually modified the energy consumption of cars in the path of the hurricane, making it easier for owners to evacuate without having to recharge as often. That’s as proactive as it gets!

  • Industry Learnings
    To be a world-class company that competes with Amazon, your systems need to be proactive, not reactive. If you’re not using data from your operation to build systems to help you anticipate needs, you’re already behind. For example, using data to build patterns, you should be able to proactively predict spikes in your market. Then you can increase the number of workers, power, and equipment to meet increased consumer demands. That will prevent you from reacting to the market and scrambling to keep up.

  • Concentric Learnings
    We put this lesson to work in our Remote Automated Asset Management System (RAAMS). This system collects and updates battery and charger data, then sends it to our database. Our system then scans the data and identifies opportunities where we can extend battery life and increase performance for our clients. This even includes charge profile adjustments. This proactively reduces the fleet number and maximizes uptime. We don't react to downtime; we preempt it by putting the data to work for us.

3. Internet of Things (IOT)

In the last point, we talked about Tesla’s data-driven cars, but imagine if, all of a sudden, the data stopped reporting. That would mean the Tesla cloud couldn’t see what problems were happening with the car because, as we mentioned, Tesla uses data collection technology and sensors that keep data flowing in real time. 

This “last mile” of gathering and using can sometimes be the hardest part.  You can have all the great adaptive controls in the world, but if that data flow stops working, Tesla and the owner are in for a world of hurt.  This is not only preventative and proactive, it takes the risk away for the owner, who doesn't have to worry about maintenance unless there's an issue and doesn't worry about breaking down on a road in the middle of the night. 

  • Industry Learnings
    Your material handling system should take the burden of data collection off of you just like Tesla removes that burden off of their drivers. This is where material handling operations will need to innovate. Data collection is often low on the to-do list when in reality, it could be a gold mine for innovation in technique and productivity.

    For example, many fleet managers deploy sensors on their trucks or batteries in an attempt to collect data only to give up on it after a year or two. Why? It's too much hassle. The warehouse manager has enough to worry about without making sure sensor systems run for the rest of the life of the asset. What’s more, most facilities have limited data access and let’s face—material handling is often given low priority. It can feel overwhelming, if not impossible, to get the access you need.

    Your vendor should collect and manage the data to improve processes, so your company can concentrate on your core business.
  • Concentric Learnings
    Ensure data is accessible and useful, as opposed to overwhelming. Concentric creates data-driven action plans by collecting and filtering data from our customers. What’s more, each company dictates the level of data that works best for them. If a company wants all the data, it’s theirs. More often, customers prefer a "big picture" look at their uptime. Whatever the preference, the end result is data collection that benefits the client without impeding their work. 

We hope these innovations and the corresponding takeaways have helped you think about the material handling industry from a new perspective.

If you’d like another way to get a fresh take on your business, download our Material Handling Scorecard. It only takes five minutes and lets you know if you’re being reactive or proactive.

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