How the VW Industrial Cloud Gives Celonis the Potential to Optimize the Entire Automotive Industry

A bold move by Volkswagen has given us a glimpse into the future. With the launch of its Industrial Cloud, it will be possible to optimize entire production chains - and Celonis is playing a key role. 

Keeping the assembly line running at an optimal speed at all times is a mantra for the automotive industry - with tier one automotive suppliers even facing fines from the manufacturers if they are the cause of a slowdown or stoppage. 

And ever since Henry Ford pioneered the moving assembly line in 1913, auto manufacturers have been aware that valuable production time lost due to stoppages equals lost revenue and can never be recovered. Bottlenecks mean reduced output, and ultimately, have a negative impact on the bottom line.

The Volkswagen Group is looking at new ways to change that. VW is one of the world’s largest automotive manufacturers and requires approximately 200 million parts per day to produce 11 million cars per year, at a total of 124 plants around the world. And since today’s consumer expects to be able to order a car that’s personalized across a wide range of options, color schemes and equipment levels, that’s a staggeringly high amount of complexity. It also presents an enormous number of opportunities for Celonis to optimize processes.

An end-to-end ecosystem for the entire automotive supply chain

The VW Industrial Cloud is intended to create a seamless end-to-end ecosystem for the OEM (Volkswagen Group) and its suppliers – running in the AWS cloud, where all production-relevant data is stored. Once up and running, suppliers will get their orders and be able to check inventories exclusively via this cloud.

Together with leading industrial partners, Volkswagen wants to create an ecosystem of the future for digital production and logistics – an integrated platform to replace the currently fragmented supply chain. It is a pioneering concept and we’re delighted to be one of the technology partners.

However, just introducing the ecosystem does not automatically improve productivity. And that’s where Celonis comes in.

We first started working with the VW group last year, when one of its premium brands called on us to tackle a bottleneck that was slowing down production and reducing the number of cars produced daily. Despite various attempts to solve the problem, it persisted, and production output stubbornly refused to increase.

Celonis gets to the root cause of the issue

The problem was that the factory in question was unable to identify exactly the root cause of the slowdown. This is where Celonis is able to help improve all-round performance. We started by creating a replica, or digital twin, of critical parts of the production process. Celonis was quickly able to put the spotlight on under-performing parts of the process, so that the manufacturer could then take action. 

Celonis is one of the first 11 software firms that are making their applications available via the VW Industrial Cloud. This means our process mining wizardry is now available to help VW and partners to optimize production processes – from inbound logistics, to production and process planning, and the entire manufacturing cycle – components, the press shop, the body shop, the paint shop, assembly and process logistics. Then there’s also quality assurance and outbound logistics.

 A blueprint for the automotive industry

VW’s Industrial Cloud is a first – and could be a blueprint for the entire automotive industry. Its initial goal is to interconnect all of Volkswagen’s factories around the world and its global supply chain, and to facilitate data interchange between systems and plants. 

What’s particularly interesting is how Celonis now has a unique opportunity to add value to the entire automotive supply chain. All members of the VW Industrial Cloud have the chance to tap into Celonis insights to help identify and resolve process bottlenecks before they become a business-critical issue. Through optimizing processes for automotive suppliers, Celonis can help production lines to run in the most efficient way. This adds enormous value to Volkswagen’s entire automotive supply chain by enabling data sharing between suppliers and the manufacturer itself.

It also makes life easier for the exception handling teams at automotive OEMs – whose job it is to identify and resolve potential production bottlenecks. And for aspiring providers, becoming part of the automotive supply ecosystem is a time-consuming and complex process. Our vision for suppliers is that Celonis can provide valuable peace of mind - an assurance that all their effort in qualifying as an official supplier to the VW Group - or any large-scale automotive supply chain - is not wasted by simply overlooking a small glitch in the supply chain that turns into a bigger issue, with a domino effect along the entire production process.

For the consumer, this means a reduction in the lengthy wait for the delivery of a build-to-order car, since manufacturing plants will be able to work at their optimal capacity, without the dreaded unplanned stoppages.

Let us know if you would like to find out more about how Celonis could uncover and help fix possible glitches in your end-to-end processes.

Jakob Maier

Industry Lead Solution Engineering at Celonis