The Indian auto industry voluntarily recalled 376,536 vehicles in 2021 till the month of August. This number is more than double of 2019.
Leading vehicle manufacturers in India like Maruti Suzuki India and Hyundai Motor India, among many others, are voluntarily recalling their vehicles. The recalls in 2022 essentially have been due to airbags, incorrect fitment parts, malfunctioning fuel bags, and quality checks and airbags that vendors might have missed.
While the figures and such news seem alarming, the auto experts view this as comforting and reassuring. Reason? Today, consumers are more aware and educated. Thus, original equipment manufacturers, aka OEMs, have become proactive while showcasing huge caution to keep safety in mind.
Traceability is emerging as a robust solution to this problem.
Tracking and tracing each unit comprising a sub-system in a car is known as traceability in the automotive industry.
The concept of traceability in the automotive industry is not new and has been around on the scene in one form or the other. However, now the automotive industry experts are talking about it in loud voices. Read on to know why it is creating waves now and how auto companies can ensure component-level traceability.
Understanding Traceability in Automotive Industry
To understand traceability in the automotive industry, let’s look at what it refers to. Traceability has been defined as a process where the genealogy of parts and subassemblies associated with a specific type of vehicle or even a range of vehicles is documented.
Earlier, the automotive industry tracked and traced various units of vehicles with direct marking on either mechanical or electronic components. The marking was done using 1D or 2D radio-frequency identification (RFID) or barcodes. Traceability was introduced as a defensive method to reduce vehicle recalls because recalls are not only expensive but also cost brand reputation.
Now things are different. Now traceability is more of a compliance mandate and there have been significant fines and penalties associated with non-compliance. Additionally, the Central Motor Vehicles Rules – the fifth amendment and the Union Road Transport and Ministry of Highway, announced a new policy. According to this policy, automakers must follow the quality standards stringently. Non-compliance with the policy can result in a penalty. The maximum penalty an automaker would have to pay in case of a mandatory recall of 100,000 four-wheelers, 600,000 two-wheelers, and 300,000 three-wheelers are Rs 1 crore.
Manufacturers are now strongly relying on traceability to bridge the gaps in the value chain and meet the end users’ safety requirements. Consumers have become more aware and educated. As a result, auto manufacturers have become stricter in abiding by the safety concerns in their vehicles and have welcomed the new recall policy from the government with open arms.
Benefits of Traceability in the Automotive Industry
As for the importance of traceability in the automotive industry, here are a few of the benefits.
Traceability helps auto manufacturers
- Reduce the impact of product recalls and returns
- Review their existing products, materials, and even processes
- Cut down on further chances of recalls in the future
How can the Automotive Industry Mitigate Third-party Risks?
Managing and monitoring entire third-party suppliers and vendors can be both time-consuming and costly. Any lapse in quality by any vendor or provider can be risky. The risk involves excessive recalls and component inconsistencies that could be dangerous for the customers and users. To ensure component traceability and mitigate third-party risks, manufacturers must implement end-to-end traceability for vendors and suppliers. And with new laws in place, Indian auto companies have made it their business priority.
With a comprehensive traceability solution including a vendor management solution and a warehouse management solution,
companies can –
- Leverage automation to improve operational efficiency and enable automatic GRN processes
- Use printing and sensing technology to achieve accuracy in material picking
- Reduce the occurrence of manual errors
- Accurately track material from vendors and enable back traceability
- Get data-driven insights into product tracking – without any human intervention
With end-to-end traceability, companies can mitigate third-party risks by focusing on the demands of their customers, the care and safety of their employees, and the risks involved in cash flow.
Wrapping Up
QodeNext, with its end-to-end traceability solutions, is well-positioned to help Indian auto manufacturers mitigate their third-party risks and help in reducing vehicle recalls.
QodeNext has a customized approach that includes an exhaustive deep dive into the current scenario. And based on that, they design a solution tailored to their customer’s demands and needs. The solutions are not only implemented but also maintained by their technical team of experts in-house.
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