5 Ways Big Data Is Changing the Auto Industry
Big data was an interesting concept a decade ago, and now it’s an ubiquitous feature of modern businesses. Data is fundamentally valuable; depending on what you gather and how you use it, data can give you better business insights, help you change direction, and guide you in learning how and why your business works the way it does. When that data is collected on a massive scale, its benefits grow even further.
Each industry is capitalizing on the spoils of big data a little bit differently, and those new abilities, ideas, and processes are reshaping the industries in new and exciting ways. The automotive industry is a perfect example; from concept to ongoing customer service, big data is fundamentally transforming the auto industry.
The Auto Industry
The auto industry is bigger than you might realize. There are big-name auto manufacturers, who design and assemble vehicles for the masses, but you also need to consider the wide network of suppliers they rely on to create and ship the individual parts necessary for those vehicles. There are also distributors responsible for relocating and selling those vehicles, and don’t forget departments like safety and customer service. The auto industry is far-reaching, and it uses big data at almost every level.
Big data is improving the auto industry in multiple different dimensions:
- Value analysis. First, big data is helping companies understand the real values of their cars. This is useful when designing new vehicles, but even more useful when valuing old cars. Valuation services like those provided by Kelley Blue Book are more precise and more efficient than ever before, and vehicle recyclers like the Clunker Junker can offer vehicle owners a more precise sum for their old junkers.
- Supply chain management. One of big data’s most important applications is dissecting the value and flow of specific processes across multiple organizations; in the auto industry, this analysis is applied to supply chain management. Companies need to know what parts they’re getting from where, how much they cost, how efficiently they’re being provided, and how those actions affect the profitability of the company overall. Complex data processing allows insight into these dimensions for the first time, and companies are optimizing their strategies accordingly.
- Cost reduction. Big data in the auto industry is driving overall costs down. Big data analysis allows companies to understand when one material is substantially beneficial over another, and helps them discover new procedural changes that can improve efficiency or maximize productivity. Ultimately, that means companies are capable of putting together vehicles far less expensively, and consumers are seeing the benefits. Consumers end up paying less for vehicles, and vehicle manufacturers still get to maximize their profits.
- Safety improvement. Companies are also using big data to delve deeper into analyzing vehicle safety. After collecting millions of data points from both test crashes and simulated scenarios, companies are able to make hundreds of additional improvements to their vehicles to increase their capacity to survive immediate events and long-term wear and tear. This, again, is advantageous to both companies and consumers; consumers get to enjoy a safer vehicle, and companies have happier customers and lower insurance costs. It’s gradually making our roads safer as well.
- Consumer understanding. Finally, automakers are using big data to better understand what their customers want and need. This allows them to design more attractive, more practical vehicles for the masses (which gives consumers more of what they’re looking for and increases sales for the manufacturer). It also gives automakers key insights that they can then use to create more specific advertising and marketing campaigns, saving money by increasing efficiency and still maximizing exposure for their most important brands.
If you own a car or plan on purchasing one in the near future, big data is already benefitting you. Thanks to big data and predictive analytics, our vehicles will grow increasingly inexpensive, safe, and tailored for our individual needs. Complete those customer surveys if you get the chance, and keep contributing to the vast wealth of data that these companies need to keep improving.