Mercedes-Benz as Pioneer of the Digital Transformation: From Car Manufacturer to Networked Mobility Service Provider

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The Mercedes-Benz Concept IAA (Intelligent Aerodynamic Automobile) is two cars in one – an aerodynamic world record holder with a cd figure of 0.19 and a four-door coupé with a fascinating design. The study, which will be premiered at the IAA in Frankfurt, automatically switches from Design mode into Aerodynamic mode upwards of 80 km/h, altering its form with a large number of active aerodynamic measures.

FRANKFURT -- Sept. 15, 2015: The automotive industry is changing fundamentally, things are speeding up. Alongside “globalisation”, another megatrend is “digitalisation” – also known in an economic context as “Industry 4.0”. Mercedes-Benz is a pioneer in this development. The inventor of the automobile is actively driving forward the transition from automotive manufacturer to networked mobile mobility service. Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes Benz Cars, explained the strategy and the current status of development on the eve of the 2015 Frankfurt International Motor Show (IAA). Presenting the “Concept Intelligent Aerodynamic Automobile”, known for short as “Concept IAA”, Zetsche showed a concrete example of the fascinating opportunities offered by digital product development.

Digitalisation has been a central strategic issue in all areas of Mercedes-Benz for many years. Technical innovations like driveline electrification and autonomous driving, in particular, would be unthinkable without the digital transformation. The same applies to production, where the brand with the three-pointed star likewise plays a leading role. In parallel, the progress of digitalisation in the area of marketing & sales means Mercedes-Benz is taking into account altered customer expectations and the associated transformation in communication patterns and behaviour.

“It’s about nothing more and nothing less than the complete networking of the entire value chain – from research and development, through production to marketing and sales,” said Zetsche, speaking on the eve of the show. “This digital transformation is in full swing at Mercedes-Benz. We are transitioning from car manufacturer to networked mobility provider, whereby the focus is always on the individual – as customer and employee. This is how we will continue to develop the company and thereby ensure our future competitiveness.”

Digital prototype – more speed, more precision, more diversity

Digitalisation at Mercedes-Benz is particularly advanced in the area of research and development. By way of comparison, computer renderings with around one thousand elements were possible in the 1970s. One decade later, this had risen to 25 times as many. Today, the figure stands at up to 80 million elements and rising.

Digital prototyping accelerates the development of new generations of cars – but more than that, it also raises their quality and offers opportunities for increased diversity. The car of the future is being simulated and optimised as a digital prototype from the earliest stages of its development.

“With the aid of digital prototypes, we are also improving the passive safety of our vehicles – faster, more precisely and more efficiently than ever before,” said Prof. Dr. Thomas Weber, Member of the Board of Management of Daimler AG responsible for Group Research and Mercedes-Benz Cars Development. Another particularly impressive example is aerodynamics. “The key term here is Big Data, the evaluation of large quantities of data from a wide range of sources,” continued Weber. “Before we let a new car anywhere near our wind tunnel, it has already successfully passed a barrage of digital tests as a complete data model.”

The opportunities and potential this unlocks for production development are not difficult to imagine. One example is that current Mercedes-Benz production cars are already aerodynamic world champions in virtually all classes. The opportunities presented by digitalisation are already being used to the maximum by the Formula 1 team. From add-on parts such as aerodynamic features, through to new engine and drive components, the route from computer data model to race track is often impressively short and fast.

Production – shorter innovation cycles and better ergonomics

Production, too, is becoming more flexible and efficient thanks to digitalisation. The aim is intelligent production, notable for its transformability, resource efficiency and better ergonomics for workers. Dr. Zetsche: “The more diversity we have in the market, the more flexibility we need in production. The key here, too, is digitalisation. Plants will become smart factories, where equipment and components are seamlessly networked. And what’s even more important – people and robots will work harmoniously together in the smart factory of the future.”

Robots are already omnipresent in automotive production today – especially where the work would be particularly strenuous or even ergonomically harmful for people. Nowadays, an assembly step is generally completed either by workers or by robots, the latter still being enclosed in protective cages for safety reasons. This is set to change, with people and robots interacting directly with one another in future.

Man and machine work hand-in-hand

Combining the cognitive superiority and flexibility of human beings with the power, stamina and reliability of robots not only increases quality, but also leads to significant improvements in productivity. And at the same time, it offers a whole array of new possibilities when it comes to ergonomic and age-appropriate work – also and particularly in respect of demographic changes in society.

Markus Sch�fer, Board Member responsible for Mercedes-Benz Cars Production and Supply Chain Management: “The intelligent cooperation of people and robots plays a central role for us. To state it clearly, the use of new types of robots is not a matter of ‘man or machine?’ We are committed to an intelligent teamwork approach.”

Wilfried Porth, Member of the Board of Management of Daimler AG responsible for Human Resources: “The experience, creativity and flexibility of our colleagues cannot be replaced by robots – now or in future. There will, however, be less seriously strenuous, heavy work. This is what we see as the ideal division of labour between people and robots.”

Production planning – increasing flexibility and precision

Through digitalisation, production equipment and installations can be designed to be highly flexible in future, enabling construction, expansion and adaptation without major delays. This not only improves the prerequisites for long-term planning, but also enables faster response to short-term shifts in the market.

One example of this transformable production is the so-called object-coupled assembly system, whereby mobile robot systems can be used in production in a variety of different ways, without the need to technically modify or stop the production line. The robots can dock onto the respective bodyshell on the production line, carry out their work and switch to the next vehicle while the line keeps moving. Daimler is also using digitalisation in quality assurance, involving the cooperation of entire installations. Smart factories, holistic automation and control technology, company-wide standard modules and new, network-based working models will enable detailed dialogue between individual plants in future. This will see the global network of Daimler AG grow closer together and lead to greater efficiency in production and sales.

This efficiency will also carry through to suppliers – problems with a production system can be identified, analysed and resolved via remote diagnostics. Such networking with other companies also enables faster and more efficient processes within those companies and raises the quality of cooperation in general.

Marketing & sales – more individuality through digitalisation

However, the digital revolution does not end when a vehicle leaves the production line. Mercedes-Benz is also using the opportunities presented by digitalisation in marketing & sales. Within the scope of Best Customer Experience, Mercedes-Benz is working with the multi-channel approach that flexibly interlinks a large number of innovative marketing & sales formats and digital elements. Major emphasis is being placed on the digitalisation of all channels – in communication as well as sales and service. Online stores are enhancing existing sales outlets and making it possible to order or lease a vehicle at any time.

Greater focus is being placed on digital interaction in the real world, too. The Mercedes me stores are equipped with a wide array of digital design elements. Prospects can configure exactly the car they want easily and conveniently at multi-touch monitors and plasma screens. In addition, more than half a million people are interacting with Mercedes-Benz every day via the brand’s global social media platforms – more than with any other car maker.

The easiest access to the personalised brand world is offered by the Mercedes me online portal, where Mercedes-Benz is accessible at any time. The spectrum ranges from electronic appointment booking for classic customer service, through individual networking with a customer’s own vehicle to the offer of personally configured financial services. Customers can also find products that are not restricted to their own car. This includes mobility services like car2go and information on lifestyle activities and entertainment offerings.

Mercedes me was launched one year ago, enabling customers across Europe to connect with their vehicles anywhere, anytime. Customers of not-yet networked vehicles will also soon be able to enjoy the pleasures of conveniently networking their vehicles – with the Mercedes connect me adapter. A total of 24 car model lines dating back to 2002 can be retrofitted to enable secure access to vehicle information. Mercedes-Benz will begin this connect me offensive in early 2016, with successive implementation in European markets where connect me is also offered.

Mercedes me – digital access to the personalised world of Mercedes

“Mercedes me always places the customer front and centre, enabling him or her to access the brand anywhere, anytime, regardless of whether they need a service, require entertainment or want remote control of vehicle functions,” said Ola K�llenius, Member of the Board of Management of Daimler AG, responsible for Marketing & Sales Mercedes-Benz Cars.

Mercedes me innovations include the new Lifestyle Configurator, which enhances the classic vehicle configurator. The customer can use it to enter their individual preferences in furnishings, travel destinations or sporting disciplines and, on the basis of their selections, is suggested a vehicle that would be the best match for them.

Ola K�llenius: “You can use the Lifestyle Configurator to search for a new Mercedes-Benz in exactly the same way you would search the internet today for, say, fashion – simply, interactively and without having to be a technology buff.”

Dieter Zetsche: “In Marketing & Sales, digitalisation brings us first and foremost the opportunity to address our customers’ desires even more individually. The new Lifestyle Configurator shows us that the digital and real customer worlds will continue to merge at Mercedes.”

Vehicle communication and data protection

The rapid development of communications technology is still opening up completely new perspectives. Experts assume, for instance, that a 5G mobile communications network will be up to 100 times faster than LTE. Comprehensive updates to the car’s software, for instance, can then also be handled online in just a matter of seconds.

Due to this in particular, data protection is especially important to the company. Dieter Zetsche: “The opportunities are enormous; as is our responsibility to protect our customers’ private lives and to ensure that personal information does not fall into the hands of third parties. This responsibility also means our vehicles must be secure against manipulation from outside. It is therefore our duty and our aim to make our cars as secure as possible. We are working incredibly hard on this.”

The digital transformer – “Concept IAA”

At the Frankfurt International Motor Show, Mercedes-Benz is showing what digitalisation can mean for the car as a product in real terms, with the “Concept IAA” (Concept Intelligent Aerodynamic Automobile). The increase in speed and efficiency through digitalisation is impressively demonstrated in figures. Design development, which alone would previously have taken up to two years, was achieved in less than eleven months.

The Mercedes-Benz Concept IAA is two cars in one – an aerodynamic world record holder with a c_d figure of 0.19 and a four-door coup� with a fascinating design. The study, which will be premiered at the IAA in Frankfurt, automatically switches from Design mode into Aerodynamic mode upwards of 80 km/h, altering its form with a large number of active aerodynamic measures. Inside, the Concept IAA carries forward the design lines of the S-Class and S-Class Coup�, offering new, touch-based functionalities and a highly emotional, digital operating experience. At the same time, the interior provides a glimpse into the interior of a business sedan of the near future. Outside, the rear lights are a particular highlight evocative of the stardust or glow of a jet engine. These lights with their “stardust effect” will celebrate their premiere in a production model in early 2016.

The Concept IAA is also the perfect example of the technologically fundamental changes in the automotive sector driven by digitalisation. For Mercedes-Benz, a fully digital process chain from research and development, through production to sales, logistics and services is far more than science-fiction. Dieter Zetsche: “What’s definitely clear to me is that this car here and the outlook for Mercedes Benz have one thing in common – they both look damn good.”