{"id":6912,"date":"2021-10-19T16:44:34","date_gmt":"2021-10-19T20:44:34","guid":{"rendered":"https:\/\/blogs.sw.siemens.com\/thought-leadership\/?p=6912"},"modified":"2026-03-26T12:15:12","modified_gmt":"2026-03-26T16:15:12","slug":"automotive-industry-and-the-impact-of-covid-the-future-car-on-e-e-systems-ep-2-transcript","status":"publish","type":"post","link":"https:\/\/blogs.sw.siemens.com\/thought-leadership\/automotive-industry-and-the-impact-of-covid-the-future-car-on-e-e-systems-ep-2-transcript\/","title":{"rendered":"Automotive Industry and the impact of COVID \u2013 The Future Car on E\/E Systems \u2013 ep. 2 Transcript"},"content":{"rendered":"\n

Welcome to the second episode in the Future Car podcast series, discussing E\/E systems through a series of podcasts on the automotive industry from the perspective of the electrical and electronic systems, networks and software.

Please enjoy the transcript, below, or listen to the\u00a0audio podcast<\/a>.<\/p>\n\n\n\n

Read the transcript<\/strong><\/h3>\n\n\n\n
\"Conor
Conor Pieck, Writer – Global Marketing<\/figcaption><\/figure><\/div>\n\n\n\n

Conor Peick:<\/strong> Hello and welcome back to Automotive E\/E Systems Revolution, a podcast from the Integrated Electrical Systems group of Siemens Digital Industries Software. I\u2019m your host Conor Peick. In our last episode I talked with Doug Burcicki and Dan Scott, two of Siemens\u2019 resident experts on automotive electrical systems. We discussed some of the large-scale trends currently affecting the automotive industry. In episode two, we continue that discussion with a focus on the impact that the COVID-19 pandemic has wrought on the auto industry. We also talk about the growing importance of partnerships to automotive OEMs. Doug and Dan offered much insight on these questions, so let\u2019s jump into our conversation. \u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

I feel it would be almost impossible to discuss the industry today, without mentioning the impact of COVID. And Doug already hinted at this, of course, but this has driven a lot of companies to change how they\u2019re working. And so, that must have some impact on plans \u2013 what they\u2019re developing currently and what they plan on developing in the next couple of years. I\u2019m just curious what your comments are on that situation?<\/p>\n\n\n\n

\"Dan
Dan Scott, Marketing Director \u2013 Integrated Electrical Systems Division<\/figcaption><\/figure><\/div>\n\n\n\n

Dan Scott:<\/strong> Yeah, thanks. I think it\u2019s an interesting one, in terms of the massive impact on how things can be developed. For sure it will have an impact on what\u2019s developed and the scope of things that can be developed, but again, it feels like, as people are more working from home, as there\u2019s less of physical face-to-face time ongoing, there are challenges in the organization in terms of communication and developing products in a coherent way. Also, there are engineer-to-engineer communication challenges. From a business point of view, it\u2019s a really challenging time. And we\u2019ve often seen the full extent of that kind of unwind in the economy with the impact of COVID and its knock-on effect. But, inevitably, you\u2019re already seeing organizations focus more on efficiencies, needing to be more efficient, do more with the employees that they have \u2013 and inevitably, that\u2019s causing them to reflect on the ways they work. Changes which were previously not imperative are now being addressed due to a compelling event, so there is an absolute need for making the most of the resources that they have. Therefore, there is a focus on collaborating more efficiently, more effectively, within tools and within processes across multiple sites. Again, it\u2019s that push towards digitalization \u2013 I think it\u2019s going to be a challenge. Organizations are now able to do this from a process, product, tool and cultural point of view. I think those are the ones that are going to really thrive.<\/p>\n\n\n\n

\"Doug
Doug Burcicki, Global Director Automotive & Transportation \u2013 Integrated Electrical Systems<\/figcaption><\/figure><\/div>\n\n\n\n

Doug Burcicki:<\/strong> I would agree with everything Dan said. He hit most of the things that I think the companies have struggled with initially and are figuring out how they\u2019re going to deal with long term? And one must wonder for all these companies, that one of their biggest expenses is real estate. So, if they found that they can be efficient remotely with workers working from home, it\u2019s only common sense they\u2019re going to reevaluate their utilization of real estate, right? If they can save some of that cost, they\u2019re going to do that. So, I expect, as we all do, that there\u2019s going to be a much greater proliferation of remote working, which drives a greater need for effective collaboration tools, which we can all attest to with our experiences using collaboration tools online over the last six months, both good and bad. Many tools that are out there right now have some limited capabilities in that regard, but probably not to the extent that every engineer would like, based on their new reality. So, those are areas that I think we\u2019ll be focused on, as well as industry and improving and shoring up capabilities. We already enable real-time design reviews. But there\u2019s going to be a greater need for collaboration across these domains. So, it\u2019s not going to be merely engineers on the same team or same project, but also on the same program, interfacing with engineers for a period, working in the same region geographically. All those aspects are important.<\/p>\n\n\n\n

Doug:<\/strong> Another issue that we can have a direct contribution to is the manufacturing layout and efficiencies of some of our customers. They\u2019re physically building products based on our designs, or designs based on our tools. We can help analyze their assembly process and utilization through that same data set to make their production process as efficient as possible to eliminate the number of heads that they have, and hopefully space those heads out to meet both the workplace and product level requirements. These are areas that many manufacturing companies are going to be challenged to overcome in the coming months, and potentially years, depending on how things go.<\/p>\n\n\n\n

There\u2019s a lot of unknowns, but I\u2019ve been encouraged to see the capabilities from both us and our customers. From a business perspective, I am also impressed that we haven\u2019t had a full-scale economic meltdown. Unfortunately, we have had customers that have been negatively impacted, but from an OEM development or design perspective \u2013 no slowdown. It\u2019s the opposite. It feels like they\u2019re putting their foot on the gas. They\u2019re trying to accelerate their developments so that when people are ready to start making purchases again, they have the latest and greatest product out there in the dealerships for them to come, review and buy. So, I haven\u2019t seen the OEMs really backing off or slowing down, which I think is very encouraging for us over the next five to ten years, as we move out of this phase that we\u2019re currently in.<\/p>\n\n\n\n

Conor:<\/strong> It\u2019s been so interesting to see how people have made these adaptations in their own personal habits and lives, continuing to work at a high level, even though they\u2019re not in the office.<\/p>\n\n\n\n

Doug:<\/strong> One of the points that Dan made was, many times people don\u2019t make hard decisions until there\u2019s a compelling event \u2013 it\u2019s human nature, right? You don\u2019t change until you\u2019re forced. Well, like he said, efficiency \u2013 efficiency of the workforce, efficiency of operators in the plant \u2013 those all have a direct impact on headcount. And that\u2019s obviously a very big concern for any company these days. So, that\u2019s an area that we can have a direct impact, and for many of our customers, they have homegrown tools solutions that they\u2019ve developed and maintained over the years. They did it for good reason. Because there wasn\u2019t a product out there, or they were subject matter experts and had the expertise to develop solutions based on what their needs. And these homegrown solutions get combined with out-of-the-box configurations. So many of these companies that we are hearing about over the last three to four months is are trying to be more efficient to maximize headcount, and they don\u2019t want to spend money investing and developing and maintaining tools that are readily available from third-party vendors. I am seeing a shift there too, where more companies than in the past are like, \u201cYou know what? We don\u2019t have the headcount, the bandwidth, and strategically, it\u2019s not in our vision to continue to develop and maintain software tools that we can procure and be supported through subject matter experts.\u201d So, that\u2019s another significant shift I\u2019ve seen as well.<\/p>\n\n\n\n

Dan:<\/strong> Yes, I think that\u2019s quite an interesting one, Doug. People are now thinking about decisions around tooling. And you\u2019re right. I think it comes from that strategic imperative, where the companies are having to really think about where do we add value<\/em>? What\u2019s the value that our organization can bring?<\/em> Is it in the tools that help us develop this stuff, the intellectual property of the harness manufacturing or the actual vehicle software and features and the knowledge? And so, I think you\u2019re right – I think it is those sorts of decisions that they\u2019re beginning to reevaluate, whereas in the past, this was not necessarily the case. They were happy with some of the inefficiencies, because there\u2019s a discomfort in change. Obviously, we all know that. However, there\u2019s now a real doubling-down saying, let\u2019s really ask the hard questions:<\/em> What is the core value propositions that we have as a business? What are the core differentiators? How do we make the most of those? We\u2019re going to need to partner with someone, or we\u2019re going to need to get external support, rather than trying to do everything ourselves.<\/p>\n\n\n\n

Doug:<\/strong> I think you\u2019re exactly right. It\u2019s really a byproduct or another example of the evolving value stream. We talked about the business models changing, and the value stream, with the business relationships between tier twos and tier ones \u2013 tier ones to OEMs is changing as well. You know, some tier ones are becoming full-system integrators and essentially providing out-of-the-box or off-the-shelf-solutions to any OEM that wants to integrate it. And that entirely changes a business model. However, other OEMs don\u2019t want to rely on a tier one, but to develop that capability 100 percent in-house, even down to the silicon. So, there are changing business models out there and that\u2019s causing the suppliers and the constituents to evaluate their value-add. And for a tier one and wire-harness supplier, it\u2019s not for developing software that enables them to create and design the harness. It is providing the harness itself in a cost-effective, timely manner. So, these discussions are occurring, and that\u2019s a natural byproduct of companies trying to focus on where they can provide value, because that\u2019s where they garner their profits and differentiate themselves. I agree with you 100 percent.<\/p>\n\n\n\n

Conor:<\/strong> Given this shift, or perhaps a focus on where they can add the most value, what do you think companies should be looking for in their tools?<\/p>\n\n\n\n

Doug:<\/strong> This is about a word or phrase we haven\u2019t talked about it at all today \u2013 the digital thread. OEMs clearly are trying to leverage and repurpose data wherever possible because it saves time, it\u2019s efficient, it ensures quality and reliability. So, I think you\u2019re going to see an extension of digital threads within OEMs as they continue to evolve. In other words, using the same data set throughout the development process. And some of them are better than others at it right now. Others still move data from one tool to another as they go through their development process. But I think that will become less as we move forward. Especially if you look at the context of what we refer to as a software-defined vehicle, where you\u2019re essentially separating hardware and software, from a sourcing perspective, and developing a timing perspective. There are various groups developing different things that converge at exact pieces or points in time. So, must work from the same data set. This will extend into manufacturing, and into service, because many of these business models for new OEMs don\u2019t have dealerships in their networks. The technicians come to your house \u2013 leverage the digital data set all the way into the field once the vehicles are out and being driven around by the customers.<\/p>\n\n\n\n

All that data is going to be derived from a common architecture, upfront, from the requirements and specifications and constraints of that particular vehicle. Whether they\u2019re government and regulatory, or determined by market penetration, feature implementation, there\u2019s always a set of constraints for vehicle design. These are the challenges that companies are going to focus on. But I\u2019m not naive enough to think they\u2019re going to buy a solution that does all that from end to end. It\u2019s always going to be a myriad of tools and vendors. Therefore, from an OEM perspective, integration, is huge for them. Also, ease of integration, interoperability between different tools based on the same data sets. At the end of the day, ease of use, right? We don\u2019t want to spend time learning how to use a tool, but time using the tool to make engineering decisions and design improvements.<\/p>\n\n\n\n

Dan:<\/strong> Yes, I absolutely agree with everything that Doug said. I have a few things to add. One is people looking for this comprehensive digital twin. This is a whole discussion in itself, of what that means, but really a digital representation of every aspect of their product and the development process, manufacturing and service \u2013 the entire digitalization of an organization. Suppliers are wanting to partner with organizations that can really work with them \u2013 developing tools that have a future and a breadth. But like Doug says, they don\u2019t lock you into having to use every single tool from them. So, I think that whole openness is important, to integrate tools from different domains and various parts of the development flow \u2013 being able to play an active role in an open ecosystem. People want tools that they can fit into their ways of working, rather than you must change how you work and fit yourself to the tool. It is the element of flexibility \u2013 an openness \u2013 a philosophy of underpinning, a foundation of how tools are built to serve the engineers. Ultimately, it\u2019s the engineers and it\u2019s the people developing these products that bring the innovation, the creativity, and the new designs into these businesses. And what you want is for these tools is to augment them \u2013 make that process easy for them. So, I think organizations are looking for companies that can partner with them to provide tools that help them do just that, working with them and putting them first.<\/p>\n\n\n\n

Doug:<\/strong> That\u2019s great! I just want to reiterate that Dan used the following word twice \u2013 and I don\u2019t think you can state it enough \u2013 partner<\/em>. It\u2019s a partnership. He\u2019s spot on. They don\u2019t want a supplier; they don\u2019t want someone to sell them something \u2013 they want a partner to work with because one of the beauties of the landscape that we deal with is it\u2019s constantly evolving and changing, and you\u2019re never done developing these tools because their needs are constantly evolving. So that\u2019s why they want a partnership. They don\u2019t want a vendor. And that\u2019s what we offer.<\/p>\n\n\n\n

Conor:<\/strong> So, I wanted to touch on the topic of partnerships in the automotive industry and how they are becoming potentially more critical to success in the future. Please share with me why partnerships throughout the value chain, and even between stiff competition, are becoming more frequent and important.<\/p>\n\n\n\n

Doug:<\/strong> The one word that could summarize it is \u201cnecessity.\u201d I think that it’s highly unlikely, and in most cases impossible, for any company to take on all their respective challenges. It\u2019s a different world these days, with challenges coming at them from all angles, whether they’re internal or external from a competitor, it’s just a matter of staying on top of product development life cycles and matching those with consumer desires, needs and trends. So, you see all this happening because it’s needed financially. Companies can\u2019t invest in technology, so they find technology partners. In some cases, those technology partners are also financial bets. Some of the OEMs have invested in technology partners that benefit them. So, it\u2019s broadening their portfolio in a different sense. Business models of companies change, and it’s not uncommon for OEMs to have venture capital funds and investment firms that are dedicated towards investing in partners and technologies that could benefit their broader portfolio. And there’s also partnerships with academia. Many of these technologies are cutting edge, but they’re not ready to be commercialized or take to market \u2013 they’re still in their true R&D phase.<\/p>\n\n\n\n

Also, companies are investing in universities and academia to perform much research because they don’t have the means and wherewithal, whether it’s technical or knowledgebase to do it themselves. There is a greater prevalence of that going on these days. And it’s paying dividends as well. At Siemens we don’t want to just treat our customers as customers where it’s a transactional based relationship. But the companies that leverage and benefit from our capabilities the most are the ones that continuously work with us. Our product is unique in the sense that it addresses multiple aspects of vehicle and electrical architecture development. But it’s not a finished product and it’s never used the same in any two applications. So, we evolve that product based on customer needs and use cases. And we tremendously value customers that can provide insight and guidance on those use cases just as much as they value our incorporating that guidance into the product roadmaps. Again, our best relationships are the symbiotic ones, working together with customers as true partners, not as customers and suppliers.<\/p>\n\n\n\n

Dan:<\/strong> In the world context we’re kind of in now, in partnering with Siemens, it does go back to companies wanting to focus on where they add the most value. And this is not necessarily developing software to develop their products, which are cars, or, you know, whatever heavy equipment or whatever it happens to be. The nature of business relationships is changing. And I think people are wanting longer-term kind of partnerships where there is mutual trust, where there’s a sense of, \u201cWe’re not just here to sell you stuff and see you later.\u201d<\/em> They\u2019re looking for tools and support with processes. They’re looking for consulting and services. They’re looking for, \u201cCan you help us deploy things?\u201d<\/em> And that’s not just for our products. They want companies that have a bigger picture and greater vision to support or can support companies across not just the electrical or embedded software, but into simulation, manufacturing and service. And, into all the different test aspects that we support: mechanical design and the various bits and aspects which Siemens is able to support. I think, even if companies don’t buy every single bit of software that Siemens has, the benefit of working with somebody like Siemens is that we at least have an understanding of that big picture of how all of this interconnects. We integrate that better into a full flow so that customers can get the best value out of it. That is one aspect of partnerships. The other one is the pace of change of technology is so fast that it\u2019s difficult for companies to stay on top of it using inhouse skills. So, there’s an inevitable kind of need to partner more and be better at partnering with different companies, universities, startups, and various actors within the entire space. All this kind of makes it a dynamic and interesting time for automotive.<\/p>\n\n\n\n

Conor:<\/strong> I was just trying to think of maybe a real-world example \u2013 an analogy for a good partner, like a relationship with a good barber \u2013 except, in this case, your barber is also a personal trainer, accountant and a life coach. They help you to improve in all aspects that are relevant.<\/p>\n\n\n\n

Doug:<\/strong> Yes, I think that’s right. Analogy aside, I think the discussions we have with many of our partners is where are they struggling the most at that point in time? What are their biggest challenges? We can focus on those and often rectify them, or if not, tremendously improve that aspect of their workflow or process. Partnerships hedge your risk. You’re distributing the process amongst a broader team of subject matter experts, resources, knowledge, financial or capacity, theoretically make all the parties stronger. But as we all know, they don’t always work out, so that’s the challenge in figuring out who to partner with and who not to.<\/p>\n\n\n\n

Some OEMs have been very aggressive in different areas. Some OEMs have been very aggressive as of late. And they’ve basically invested in multiple areas, and in a very short order, they’ve closed technology gaps, business model gaps or go-to-market gaps that they didn’t have to invest organically and create from the ground up. So, if you look at a technology field, such as autonomous vehicles, a tremendous amount of research and development and pure engineering groundwork makes it a reality. But it’s still unproven what the financial return is. These companies don’t exist to have fun. I mean, they want to enjoy what they’re doing, but they’re out there to make money, and they’re there to make money for their shareholders in most cases.<\/p>\n\n\n\n

So, how do you invest billions of dollars in an area or technology, as you may not see any revenue or return for a decade or more, and that’s a hard ask especially for someone who has shareholders that are expecting returns immediately. Therefore, one way is to go out and invest or buy technology, thus developing technology that prevents you from having to do that. But still, even when you make those big investments, you expect a return on it. We have seen many partnerships evolving over the last five years, with most of those tech tie-ups in the auto space industry of autonomous vehicles. Now, it’s almost flipped 100 percent where you hear more about the EV and electrification tie-ups because there is revenue attached to it. So, you’re seeing those investments shift right now, a bit. But again, it’s all predicated on the partnership topic that you brought up.<\/p>\n\n\n\n

Dan:<\/strong> It’s like a marriage. Maybe that’s a better analogy. It’s kind of a long-term legal agreement that you can’t get out of. You know, in terms of the partnerships, I was thinking about just the cultural aspect to it. Some partnerships work, some don\u2019t work and some dissolve, while others are going great guns. Going back to that, having a cultural fit with organizations, and aligned goals that you’re wanting to achieve, including aligned timescales, compatibles of resources. You can imagine an analogy of it being like dating and trying to find someone that you actually mesh with. It tends to be those ones that are successful and an underlying better cultural fit in all aspects, and a technology angle to it as well. But it is back to those organizational things we were talking about in the last episode, or a couple of episodes ago.<\/p>\n\n\n\n

Conor:<\/strong> It involves knowledge as well, right? I mean, who has the expertise, if you’re looking for a partner, you want an expert in whatever area you’re trying to either improve or to bring into your realm of capabilities.<\/p>\n\n\n\n

Doug:<\/strong> A true partnership makes both parties stronger. It should be complementary and fill value gaps that the other one would not have without the two of them working together. And if you can have them structured successfully, those types of partnerships \u2013 that’s where you’re going to have the most success. Doesn’t do any good for one partner to dominate a relationship. Long term, it doesn’t. Short term, normally. But then it just becomes transactional, and it’s not a partnership.<\/p>\n\n\n\n

Conor:<\/strong> As if a once-in-a-generation upheaval in automotive technology and business models wasn\u2019t enough, 2020 has also brought the immense challenges of a global pandemic to bear on the industry. In this episode, we talked about how these challenges have affected automotive manufacturers, as well as some of the steps they can take to respond. Doug and Dan both hit on the importance of building a comprehensive digital twin during vehicle development, and of fostering partnerships with technology companies, suppliers, and even other OEMs. These strategies are not only helpful for adapting vehicle development and manufacturing to the constraints of COVID-19; they also provide key advantages for companies as they develop the advanced vehicles of tomorrow, whether they are gas or electric, autonomous or human driven.<\/p>\n\n\n\n

In the next episode, Doug, Dan and I will take a more detailed look at how automotive product development is changing. Until then, this has been Automotive E\/E Systems Revolution. Doug, Dan, myself and the whole Integrated Electrical Systems team would like to thank you very much for listening, and hope you join us again next time.<\/p>\n\n\n\n

\n\n\n\n

Siemens Digital Industries Software drives the transformation to enable a digital enterprise where engineering, manufacturing, and electronics design meet tomorrow.<\/p>\n\n\n\n

Xcelerator<\/a> is a comprehensive, integrated portfolio of software, services and an application development platform. The portfolio accelerates the transformation of businesses into digital enterprises. It unlocks a powerful industrial network effect \u2013 essential requirements to leverage complexity as a competitive advantage, no matter the industry or company, to transition seamlessly to create tomorrow\u2019s complex, efficient machines.<\/p>\n","protected":false},"excerpt":{"rendered":"

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