Leading Commercial Vehicles Manufacturer Embraces Industry 4.0 to Achieve Smarter and Leaner Operations


Headquartered in Gurugram, a city located about 30 kilometers southwest of India’s national capital New Delhi, VE Commercial Vehicles Ltd. is regarded as the most successful joint venture in the Indian commercial vehicle industry.

In 2008, two leading players in the commercial vehicle business – Volvo Group and Eicher Motors – joined forces with a common vision of driving modernization in the commercial transport business in India. Volvo Group brought in global expertise, leadership in product technology, well-defined processes, and a brand respected all over the world. Eicher Motors, a leader in the light and medium vehicle segment, contributed with frugal engineering, considerable after-sales infrastructure, and cost-effective operations.

VE Commercial Vehicles Ltd. (VECV) is comprised of six business verticals: Eicher Trucks and Buses, Volvo Trucks India, Eicher Engineering Components, VE Powertrain, VECV Engine Business, and Volvo Bus India. The company includes the exclusive distribution of Volvo Trucks in India, engine manufacturing and exports for Volvo Group, non-automotive engines, and the Eicher component business. A multi-brand, multi-division company backed by innovative products and services, VECV is recognized as a leader its industry today.

Mastering Highly Complex Assembly Processes at Minimum Cost

Commercial truck manufacturing involves highly complex assembly operations due to the large number of variants, the thousands of parts being assembled, and the many types of tools and machines that are required.

On top of this, VECV faced several challenges:

  • Shortage of skilled manpower that made it extremely difficult to maintain quality and high productivity at minimum cost
  • Inability to track and trace its assembly operations
  • Considerable training effort was required for new operators as there was no system to guide operators on assembly processes while performing operations
  • Suboptimal line efficiency, machine utilization, and operator productivity resulted in lower quality and higher rework due to lack of process controls and error-proofing
  • Lack of data connection on the assembly line which did not allow any meaningful insights to improve process quality

Paving the Way to Industry 4.0 and Smart Manufacturing

VECV needed a solution that would enable real-time monitoring of its entire manufacturing supply chain processes to:

  • Gain meaningful insights to increase overall line efficiency, productivity, and quality
  • Achieve cost savings by standardizing operational processes and equipment
  • Create standard operating procedures to guide new operators and reduce time for operator deployment on assembly lines
  • Reduce operator errors and drive efficiency by making assembly operations 100% traceable
  • Decrease costly downtime by implementing predictive maintenance for critical machinery

Embracing Industry 4.0 principles, the vehicles company decided to adopt smart manufacturing processes by implementing Industrial Internet of Things (IIoT)-based solutions from SAP to bring shop-floor visibility to the top floor. This enables faster decision-making and provides meaningful insights to improve overall line efficiency, productivity, and quality.

Fostering Smarter and Leaner Operations with Impressive Results

VECV introduced SAP Manufacturing Suite, which is comprised of a number of digital manufacturing solutions that helped meet its objectives. The solution was deployed on all 10 assembly lines, each comprised of about 150 assembly stations, where over 200 machines are used to assemble about 3,000 parts.

This means that:

  • Assembly operations’ standard operating procedures are now displayed in real time. Assembly machines are connected to capture more than 400 critical process parameters, ensuring tight process controls and error-proofing.
  • Automated part selection guarantees correct selection and traceability for all 3,000 parts. The RFID integration through SAP Plant Connectivity eliminates manual interventions and manufacturing execution system (MES) screens on assembly stations optimize efficiency.
  • A defect capturing and feedback system improves product quality and reduces errors.
  • A 100% labor tracking improves operator efficiency.
  • Overall equipment efficiency calculations enable predictive maintenance of critical machines. Real-time reports provide meaningful insights and enable faster decision-making. Vibration sensors installed on six key critical machines capture data into SAP Manufacturing Integration and Intelligence (SAP MII) via SAP Plant Connectivity software. Data is analyzed to create an algorithm in SAP MII to predict machine failure.

SAP Manufacturing Suite enabled the company to standardize operational processes, equipment, and activities, leading to cost savings in operations and faster gains in productivity and quality. With 100% tracking and traceability of all assembly operations, troubleshooting time was significantly reduced. Tight process controls and error-proofing increased overall product quality, reduced mistakes, and improved productivity.

As Sumit Goyal, senior manager IT, Digital Manufacturing, explained, “SAP Manufacturing Suite has brought many tactical and strategic benefits to VECV. It has helped improve productivity, lower operating costs, and increase quality and compliance. By gaining real-time visibility into the entire manufacturing supply chain, we are able to accelerate root-cause analysis by making fact-based decisions.”

And the numbers speak for themselves. VECV has seen:

  • 15% productivity improvement
  • 30% process quality improvement
  • Reduction in field failures
  • 20% improvement in manpower utilization
  • Significant reduction in non-value-add activities through automation
  • 40% error reduction
  • 100% tracking and traceability of critical process parameters and assembled parts
  • Zero compliance issues

And from an IT perspective, VECV now has:

  • A single platform capturing data from different sources to ease system maintenance
  • Reduced infrastructure and operational costs by removing standalone, third-party solutions used to capture data from different systems
  • 95% of machines connected with line controls and improved process quality by 20%
  • 30% reduction in unplanned downtime
  • 15% improvement in OEE (overall equipment effectiveness) management and OLE (overhead line equipment)

Want to learn more about how innovative organizations utilize Industry 4.0 to improve manufacturing processes? Check out the “Building Intelligent Factories with Industry 4.0” report and read the Business Transformation Study.

Karin Fent is senior director of Global Customer Success Digital Supply Chain at SAP.