Why AI and app stores will power Volkswagen factories in North America

The technological changes that have turned cars into software-driven machines have begun to apply to the factories that build them too.

Backed by an estimated $1 billion investment in electric mobility and digitalization in North America through 2025, Volkswagen plans to roll out technologies such as cloud-based industrial software, new intelligent robotics and artificial intelligence throughout the factories in its North American Region. The goal? A 30 percent improvement in productivity by 2025 – and a chance to ensure the footprint and manufacturing jobs for years to come.

Johan de Nysschen, chief operating officer of Volkswagen Group of America, and Susanne Lehmann, Senior Director Production, Volkswagen de México, answered a few questions about how these technologies could work, and why they embrace them:

Q: How is the digital transformation in the North American region of Volkswagen expected to change its factories? What makes Volkswagen’s digital push different to what its competitors do?

SL: The digital transformation is massive. We are connecting our factories to a cloud-based industrial IT platform, the Industrial Cloud. This helps setting the foundation for the digitalization of not only our manufacturing, monitoring, and daily operations, but also our supply chain management across North America. We’re developing tools, for example, that help us manage manufacturing performance, control inventory, and maintain visibility down our virtual pipeline to understand supplier performance and track production. Ultimately, the Industrial Cloud is steered by the global Volkswagen Group, and has a global approach with other sites in the global production network.

JdN: In a digital world, where all manufacturers are anonymously linked – removing any bias against us or others – suppliers are given full transparency into the various needs and demands of all their customers around the world. This is a crucial piece for suppliers to better understand capacity planning, where they need to invest in production equipment, and how to price their goods to synchronize their operations to meet real-time supply and demand. Over time, this could bring more far more efficiency, reliability, and lower costs for everyone.

Q: What impact could these advancements have on workers today, and those Volkswagen seeks to recruit in the future?

SL: For our workers on the shop floor, certain aspects in car manufacturing can be labor-intensive yet tedious processes, but technologies like cobots, cloud-based apps and artificial intelligence can reduce this because of their ability to anticipate problems and provide instantaneous feedback. In turn, our teams can better focus on training and more valuable, enriching tasks – all of which can lead to better personal opportunities and a more efficient and safe workplace overall. By digitalizing, we are not only moving our assembly lines forward, but supporting our people, too.

Q: What’s the ultimate vision for this transformation? What will it enable for the North American region of Volkswagen?

JdN: Embracing technological change is a given, but more importantly, we need to be shaping the landscape for tomorrow if we want to drive true innovation and differentiate Volkswagen from our competitors. Generally speaking: Digital technologies shouldn’t solely focus on our core products and customer experience, but frankly, be designed with other upstream areas such as production, design, and development in mind. The North American region of Volkswagen is part of a much bigger global network, and we’re in this for the long-game.

Q: Outside of manufacturing, where else can digitalization play a big role in transforming how Volkswagen does business?

JdN: I’d say: Everywhere. When Volkswagen develops a vehicle, there are hundreds of factors between design and concept, customer profile, pricing, manufacturing, up to shipping and selling it.  And most of these factors are, ultimately, trade-off decisions that require collaboration all across the organization. Technology enables a level of collaboration that we have never had before. From a fully virtual design process to predictive pricing and purchase models, highly advanced manufacturing and state-of-the-art marketing, digitalization will be, no doubt, a game changer and how Volkswagen does business worldwide.