Why the VW scandal makes cloud-based MES all the more important

Changes to automobile manufacturing are likely to come as a result of the Volkswagen scandal.

Why the VW scandal makes cloud-based MES all the more important

The recent scandal involving Volkswagen and the ensuing resignations of several high-ranking company officials will serve as an eye-opener to the entire automobile manufacturing industry. A high-quality manufacturing execution system is more important than ever, but so is regulating the MES to ensure it is following federal safety and environmental guidelines. Having a modern, cloud-based solution can give auto manufacturers the confidence they are saving money while still producing high-quality work.

With manufacturing costs expected to rise in the wake of the VW scandal, an advanced MES is a top priority. Auto manufacturers that lack a strong understanding of the changes that could take place and the impacts they may have on a business will be left behind. Tests on emissions and safety will be more strict than ever, and having a system in place to oversee all of that is a necessity for those within the industry.

Grasping what VW did that was so wrong, and how it impacts manufacturing moving forward, highlights the need for a cloud-based MES solution.

From the top to the bottom
In the first half of 2015, Volkswagen was the largest automaker in the world. From January to June, the company sold more than 5 million vehicles, according to USA Today. The top spot had long been a goal of CEO Martin Winterkorn, so to achieve it was a landmark moment for the company.

Less than three months after that news was released, Winterkorn resigned. It was revealed in September that the company had used a program to help its diesel cars cheat on vehicle emissions tests. Nearly 11 million cars around the world – many of which were in the U.S. – were equipped with technology designed to fool tests, allowing it to pass U.S. anti-pollution benchmarks despite using more diesel fuel than regulations allow.

Though Winterkorn said he had no knowledge of the illegal technology, he still stepped aside in the wake of the scandal. Several other high-ranking officials also left the company.

“I am shocked by the events of the past few days,” Winterkorn said in a statement. “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”

Volkswagen emissions test cheatVolkswagen’s CEO resigned following news the company cheated on vehicle emissions tests.

Impact felt by all
The result of the scandal could mean stricter emissions tests for every automobile manufacturer. Regulators will be taking a closer look at all cars to ensure nobody else is attempting to pull similar scams similar to the one that VW attempted. To do this, the way cars are tested is likely to change.

Emmanuel Bulle, an analyst for corporate credit firm Fitch Ratings, told The Los Angeles Times that vehicle testing in the future will be done less in labs and more on the road. That will give the manufacturer less of a chance to influence the car’s emission performance.

“The whole transportation sector could be affected if this emission test crisis fundamentally affects consumers and regulators’ attitude toward cars, driving and pollution,” Buelle said.

The impact of these changes will likely mean higher costs for manufacturers. Rigging the emissions tests brought new issues to light, including how these certifications are done and who is evaluating the cars. Increased spending on the enforcement of the laws and the rising costs for testing could raise the overall amount a vehicle costs to build.

Those changes would impact the entire industry’s profits, unless the price of new cars also goes up, in which case customers would feel the greatest hit.

Cloud solutions are needed

“Automobile manufacturing companies may have to adjust their business practices.”

As the changes begin to take place, automobile manufacturing companies may have to adjust their business practices. New testing and updated laws will impact every step of the process on how vehicles are made, and having a cloud-based MES can help everyone within a business be on the same page. VW is expected to face serious fines – along with potential jail time for executives – and future violators of the law could face even harsher punishments for trying to rig the emissions tests.

MES programs can help a company gather and collect data to evaluate how vehicles are performing and where any changes need to be made. As adjustments are made to regulations, a manufacturing business can ensure their products are staying within the guidelines of what is allowed. And with a focus on quality processes, a cloud-based solution can oversee that every step of manufacturing is taking place correctly.

A primary benefit of cloud-based MES is that the system measures and monitors excellence within a business. When a company knows what it is doing correctly, it is in a better position to make adjustments if laws change. Having an advanced system to monitor manufacturing helps companies maintain their excellence and avoid the problems that VW recently found itself in.

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