Hey car, activate autopilot mode! Explore the future of driving

The roar of the engine is fading, replaced by the hum of innovation. The automotive industry is undergoing a revolution, powered by cutting-edge technology. Buckle up as we shift into high gear and explore how advancements in electrification, connectivity, and artificial intelligence are reshaping the way cars are built and driven. We’ll dive into the latest tech trends and hear from Vinod Khode, Group Chief IT Officer, Varroc, a leading auto parts manufacturer, about how they’re using these advancements to stay ahead of the curve. In conversation with Minu Sirsalewala, Executive Editor, Dataquest.

How do you view the convergence of technology and industry leadership in the context of Varroc?

Convergence of Industry leadership and technology leadership is like a beautiful symphony.

In the dynamic automotive arena, Varroc stands at the pivotal intersection where technology and industry leadership converge. For over 30+ years, we have proudly held the mantle of tier 1 auto component leadership, consistently adapting to technological shifts to maintain our preeminent position.

Our multifaceted approach encompasses a wide spectrum: Electrical electronics, EV solutions, Polymer, Metallic components, Exterior lighting, and Safety in mobility. These facets collectively orchestrate our journey towards progress.

Varroc’s leadership exemplifies an unyielding commitment to innovation, financial growth, and strategic vision—a driving force that propels us forward.

The workforce, accustomed to established processes and familiar tools, was slow to adapt to the changes, which added to the project timeline and realization of benefits.

As a seasoned Tier 1 automotive components manufacturer, we have led the traditional realms—crafting precision transmission gears, sculpting metallic valves, and illuminating roads with our headlamp artistry. Yet, amidst these, we embrace the avant-garde—the electric of EV solutions, a comprehensive range of fully localized 2W & 3W EV products, and the cutting-edge Hi-tech ADAS. Our melody now resonates across highways and horizons, bridging craftsmanship with innovation.

In the realm of automotive components manufacturing, how pivotal is the creation and meticulous execution of IT strategies and roadmaps that are aligned with Varroc Engineering’s overarching business goals? Can you share instances where this alignment has resulted in tangible business outcomes?

In the dynamic landscape of automotive components manufacturing, the strategic alignment of IT initiatives with overarching business goals is akin to fine-tuning a high-performance engine. Varroc Engineering, a global leader in this sector, exemplifies the significance of meticulously crafted IT strategies and roadmaps. Let’s delve into how this alignment has translated into tangible business outcomes.

a) Modernizing Infrastructure for Agility and Efficiency (2020-2021)

In 2020, Varroc set its sights on modernizing its SAP infrastructure and migrating its data center to the cloud. These strategic moves were not mere technical upgrades; they were pivotal steps toward enhancing agility, scalability, and cost-effectiveness. By executing the SAP modernization to Microsoft Azure, Varroc streamlined its operations, enabling faster decision-making and smoother collaboration across teams. Simultaneously, the implementation of Master Data Management (MDM) within SAP ensured data accuracy and consistency, a critical factor in achieving business goals. The result? Improved supply chain visibility, optimized inventory management, and enhanced customer satisfaction.

b)  Leveraging Emerging Technologies (2021-2022)

Varroc’s commitment to innovation extended beyond infrastructure upgrades. In 2021, the company embarked on a Proof of Concept (POC) journey, exploring Robotic Process Automation (RPA) and Chatbots. Later in the year, this successful POC for RPA was adopted for Account Payable automation. These AI-driven solutions transformed routine tasks, increasing accuracy to positively impact cash flow, freeing up valuable human resources for strategic endeavours. Additionally, the adoption of an Internet of Things (IoT) tool allowed Varroc to monitor equipment health, predict maintenance needs, and optimize production processes. Conversational Business Intelligence (BI) further empowered decision-makers by providing real-time insights through natural language interfaces. These technological leaps translated into reduced downtime, increased operational efficiency, and cost savings.

c) Scaling Up and Ensuring Compliance (2022-2023)

As Varroc expanded its global footprint, it faced complex challenges. The migration of the Romania plant to the Varroc SAP ecosystem and the integration of the Romanian network into the main infrastructure exemplified the company’s commitment to seamless operations. Simultaneously, achieving ISO 27001-TISAX certification demonstrated Varroc’s dedication to information security and compliance. The implementation of PTC Windchill for Product Lifecycle Management (PLM) streamlined product development, while SuccessFactors transformed human resource management, adoption of the supplier portal increased the supply chain resilience and efficiencies. The cherry on top? Varroc’s Business Unit (BU) dashboards, powered by AI and ML, provided actionable insights across finance, operations, inventory, and costs. These strategic moves not only aligned with business goals but also positioned Varroc for sustained growth and competitive advantage.

In summary, Varroc Engineering’s strategic IT roadmap, meticulously executed over the years, has been the driving force behind its success. By aligning technology initiatives with business imperatives, Varroc has not only weathered industry disruptions but also accelerated its journey toward excellence. As the automotive landscape continues to evolve, Varroc’s commitment to strategic IT remains unwavering—a testament to the power of synergy between vision, execution, and tangible outcomes.

What are some of the key challenges faced by Varroc Engineering in implementing and executing IT strategies amidst rapid technological advancements?

As technology evolved at an unprecedented pace, organizations needed to stay agile and adaptable. The challenge lies in keeping up with emerging trends, evaluating their relevance, and swiftly integrating them into existing systems. Varroc faced constant pressure to assess new technologies, such as cloud computing, AI/ML/NLP, RPA, Low Code – No Code, Modern BI solutions, enhanced security tools like EDR, DNS, NAC, DLP, etc, and the Internet of Things (IoT), and determine how they aligned with business objectives. Talent Acquisition and Skill Development: The demand for skilled IT professionals who understand cutting-edge technologies remained high. Varroc faced the challenge of not having talent with expertise in areas like cloud architecture, cybersecurity, data analytics, and automation. Upskilling existing team members to bridge the knowledge gap was essential, but time-consuming. The learning curve associated with new tools and methodologies could impact project timelines and outcomes.

Legacy Systems & Integration: Many established companies like Varroc had legacy systems or used unsupported versions, that had served them well over the years. However, integrating these systems with modern technologies proved complex. The challenge was to strike a balance between leveraging existing investments and embracing innovation. Ensuring seamless communication between legacy systems and newer platforms was critical for efficient operations and keeping the application on the latest version was important from a compliance and information security point of view.

Security and Data Privacy: With increased digitization, the risk of cyber threats grew exponentially. Varroc had to safeguard sensitive data, protect against breaches, and comply with data privacy regulations. Balancing innovation with robust security measures was crucial.

Change Management and User Adoption: As Varroc Engineering embarked on integrating new technologies, we encountered another hurdle: the human element. The workforce, accustomed to established processes and familiar tools, was slow to adapt to the changes, which added to the project timeline and realization of benefits.

Smart factories leverage technologies like the Internet of Things (IoT), artificial intelligence (AI), Digital Twins, and robotics to enhance efficiency and quality.

From your perspective, what are the most significant emerging trends and technologies shaping the future of the automotive industry?

The automotive industry is undergoing significant transformations, driven by emerging trends and technologies. There are many but let’s explore some of the top 5 key trends from my perspective:

a) Electrification: The adoption of electric vehicles (EVs) is gaining momentum. Manufacturers are investing heavily in improving battery performance and expanding charging infrastructure. EVs are poised to revolutionize transportation by reducing emissions and dependence on fossil fuels. Varroc is proud to be one of the FIRST 100% localized EV component manufacturer for 2-wheelers.

b) Autonomous Driving: While the development of autonomous vehicle technology has slowed down somewhat, manufacturers continue to focus on refining electric vehicles. Although fully autonomous vehicles may take longer, advancements in assisted driving systems, and ADAS are already enhancing safety and convenience. Varroc is also ready with its Video Telematics, ADAS, And DMS offerings.

c) Connectivity: Vehicles are becoming more connected, enabling features like real-time navigation, remote diagnostics, and over-the-air software updates. The integration of 5G cellular networks and improved cybersecurity ensures seamless communication between vehicles, infrastructure, and other devices. Varroc is one of the few to develop a fully localized Telematics Control Unit (TCU) and CarIQ, a fully owned subsidiary that helps to analyze driving behaviour.

d)  Energy: The industry is embracing sustainable practices, including renewable energy sources for manufacturing and operations. Green energy initiatives contribute to reducing the environmental impact of automotive production. SEBI’s proactive approach aims to enhance transparency, accountability, and sustainable practices within the Indian corporate landscape through robust ESG reporting requirements.

e) Digitalisation of manufacturing: Digitization, automation, and data-driven processes are transforming manufacturing. Smart factories leverage technologies like the Internet of Things (IoT), artificial intelligence (AI), Digital Twins, and robotics to enhance efficiency and quality.

In summary, the automotive industry’s future will be shaped by a combination of electrification, connectivity, and sustainable practices. These trends will redefine how we move and interact with vehicles in the coming years.

What strategies or initiatives have you implemented to ensure high levels of motivation and engagement among IT personnel at Varroc Engineering?

At Varroc Engineering, we recognize that motivated and engaged IT personnel are essential for driving innovation, productivity, and overall organizational success. To achieve this, we have implemented several strategic initiatives.

We prioritize assigning challenging projects that directly impact the company’s top line or bottom-line. These assignments provide a sense of purpose and lead to recognition from management. By working on such projects, our IT professionals continuously learn new technologies and develop business acumen.

Additionally, we hire lateral talent to accelerate the adoption of new technologies. This approach ensures knowledge transfer from experienced professionals to our existing team members, enhancing the learning environment within the organization.

Furthermore, we conduct regular training sessions on emerging technologies and relevant business topics. These sessions empower our IT personnel to stay updated and apply their knowledge in real-world IT initiatives, contributing to their professional growth.

Moreover, instead of always seeking external hires, we follow a “hire to develop” principle. When there’s a need for additional manpower, we consider existing staff members for new roles. This approach fosters loyalty, and motivation, encourages skill diversification, and provides growth opportunities within the organization.

Effective communication and feedback play a crucial role. Regular team connects, and monthly, quarterly, and yearly updates ensure transparency and alignment with organizational goals. Lastly, we actively seek feedback from our IT personnel, even when it’s critical. Constructive criticism helps us identify areas for improvement and drives positive change. Creating a culture that values feedback promotes continuous learning and growth.

With the increasing digitization of automotive systems, cybersecurity becomes paramount. How does Varroc Engineering stay ahead of potential cyber threats while embracing interconnectedness and data-driven processes?

Varroc Engineering, a global automotive technology company, navigated the digital era with a strategic approach to cybersecurity. Recognizing the importance of robust cybersecurity in an industry increasingly reliant on interconnected systems and data-driven processes, Varroc developed a multi-year phased approach to protect its assets.

The first phase involved laying the groundwork with a long-term vision for resilience. This included modernizing SAP infrastructure, migrating data center operations to the cloud, conducting external security assessments, implementing access controls (MFA & SSO), and training existing teams on information security principles.

In the second phase, Varroc focused on strengthening protection through a layered defense. This involved implementing DLP (Data leakage protection) upgrading to advanced endpoint protection solutions (EDR), adopting network and device security measures (DNS & NAC), establishing a 24/7 Security Operations Center (SOC), and enforcing strict USB policies.

The final phase involved advancing resilience beyond the basics. Varroc fine-tuned its defences, prepared for contingencies, and sought industry certifications. This included network segmentation, operational resilience measures, SDWAN upgrades, fine-tuning of security policies, ISO 270001 certification & TISAX and ISM lead auditor training, and global integration of network security practices. As the automotive landscape evolved, the company remained committed to securing the future, one strategic step at a time.

Vinod Khode

Group Chief IT Officer, Varroc

By Minu Sirsalewala

minus@cybermedia.co.in