How Digital Transformation Is Driving Ashok Leyland Forward

*This is in partnership with BQ Prime BrandStudio

Ashok Leyland is the $2.3 billion flagship company of the Hinduja group, with a footprint in over 50 countries and the fourth largest manufacturer of buses in the world. The automotive giant is India’s second largest manufacturer of commercial vehicles and is at the forefront of India's manufacturing promise and potential. Successfully navigating pandemic-driven disruption to now managing the challenges caused by high inflation, cost pressures, global volatility and labour and material shortages stemming from supply chain issues, Ashok Leyland is delivering quarter-on-quarter market share increases.

Backed by a deep understanding of the customer experience when it comes to large commercial vehicles and how transportation and logistics companies use them, digital is revolutionising the entire organisation and the vast network of Ashok Leyland partners. While traditional thinking about vehicles was centred around their engineering, in the era of digital, vehicles no longer exist in their own dimension. What really matters is the customer experience.

On the one hand, digital aims to make the automotive industry more efficient and productive, reduce cost and errors, and enable better data insights for faster decision-making. But, on the other hand, digital is also expected to accelerate disruption in the transportation industry. So how has Ashok Leyland leveraged cutting-edge technology and business transformation frameworks to drive digital transformation and meet customer expectations?

Mr Gopal Mahadevan, Director and Chief Financial Officer at Ashok Leyland states the company has a careful capital allocation to ensure that it invests rightly into growth businesses. The company spends every possible rupee on customer acquisition, enhancing its capability and ensuring competency is built on product development or differentiation. In addition, the company has undertaken significant investment to ensure they keep innovating and building for tomorrow’s needs. One such investment includes updating technology to meet the marketplace's changing needs by utilising the latest EV technologies to create value.

Sharing some of the challenges faced by the organisation, Mr Mahadevan believes the current disruption in the transport industry is an opportunity which can be leveraged with agility, flexibility and innovation. He explains, “At Ashok Leyland, we are pursuing growth with effort to ensure that we get more than our share of the customer's wallet and attention. We are seeking potential opportunities to conquer more customers in newer geographies, not only within India but outside India.”

The data produced through digital also lends Ashok Leyland a unique advantage. Mr Mahadevan explains, “We know the needs of our customers better than any other manufacturer, which allows us to plan and build, innovate and deliver. Our move towards connectivity, vehicle tracking, analytics and greater ease of digital processes will boost customer engagement, boost conversions and ultimately deliver greater speed and consistency to Ashok Leyland's growth plans.”

Ashok Leyland embarked with Accenture on a zero-based transformation programme to reimagine the business, reset the cost base and invest in new strategic priorities towards growth, profitability and sustainability. “Adopting a zero-based mindset (ZBx) helped Ashok Leyland unlock significant savings to accelerate growth and pivot to new digital business models. In addition, the approach gave us deep visibility into spending and savings opportunities across all cost segments to allow reinvesting into high-growth areas,” says Mr Mahadevan.

With a zero-based transformational approach, Ashok Leyland created cost efficiencies and enabled new growth areas while also embracing the ability to scale to meet future growth. The process has helped the company identify ways to share more value across all areas of the business and realise the true value of spending. “We have always strived to exceed customer expectations and become the preferred choice of our customers. Zero based transformation has helped us significantly improve productivity while also accelerating new product development and introduction,” says Mr Mahadevan.

Mr Mahadevan illustrates this by explaining how there has been a sea change in the product development process at Ashok Leyland. Cost transformation in the company has not been a slash-and-burn exercise. Instead, it has been about redeploying resources, capabilities and investments to drive growth and clearly understanding good and bad costs. Digital transformation, in his view, is not just about technology but extends far beyond. It's about building digital fluency in the organisation and seeing the entire organisation's functions transform to create digital and analytics capabilities.

“Earlier, there was no formal value chain. The OEMs like us had a very distant relationship with their customers. Today, OEMs are collaborating and developing end-to-end solutions,” he says, all of which keep the customer front and centre. For instance, Gro Digital Platforms, an Ashok Leyland subsidiary, has created a marketplace for used vehicles and a whole ecosystem of lending to the customer and the driver, providing solutions far beyond the vehicle itself.

Mr Mahadevan adds, “Vehicles today are far more complicated. With new opportunities for manufacturing, we have not even touched the tip of the iceberg. 3D modelling, tracing how a vehicle is manufactured, how a vehicle will be serviced, etc., is now done virtually when designing the vehicle.”

In terms of manpower productivity, thanks to digital, the company is now looking to optimise the number of personnel deployed to service customers—how many are directly involved in customer acquisition, and how many are involved in support services. “Are support services productive enough? Can we improve productivity? There's a whole wealth of data available, and that is how we've also started robotic process automation initiatives within the company. We're trying to drive RPA because a lot of the functions today can be done by machines and deployment of chatbots,” Mr Mahadevan explains, while adding that even the finance function has leveraged RPA.

Many OEMs are now targeting India, which offers the opportunity of a digital ecosystem. For that, Mr Mahadevan feels that the industry should look at three dimensions:

· Connectivity — The most important aspect is to build a network and ecosystem. Ashok Leyland is collaborating with various technology companies and working on our own solutions and capabilities.

· Automation — In the transportation space, Ashok Leyland has worked on several AI and robotics solutions for daily operations to enhance internal decision-making capabilities, monitor their operations, and help ensure zero defects.

· Data — Use data and AI to improve business decisions and lead to better customer experiences. For example, data can help enhance predictive maintenance and identify customer demand patterns or potential use cases for new services and business opportunities.

Mr Mahadevan says with this transformation Ashok Leyland is no longer just an OEM but an enabler for its customers. He explains, “India's market is poised for transformation, and Ashok Leyland is very well positioned to benefit from it. We have said that our products will always remain our core strength and connect our customers, but we are also taking strides to become an innovator in new technology, and to create the right ecosystem to serve our customers and ensure digital transformation is driving Ashok Leyland forward.”

When asked about its direction, Mr Mahadevan feels that we are going through a period of change in the industry and the world. "This is a year in which the world is being defined by artificial intelligence, big data and the Internet of things," he says. He feels that to leverage these new technologies, the focus should be on investing, leveraging the available information, and staying ahead of the curve.

Ashok Leyland plans to do this by staying ahead of its competitors, keeping its R&D investments at the required optimal levels, and leveraging its international portfolio. Mr Mahadevan also feels that customers are ready for this and would like to be served by a partner who can help solve their problems and adapt to new customer demands. “Driving customer empowerment is key to our growth strategy. The power of digital, artificial intelligence, analytics and robotics is having a profound impact on the way we work, interact with our customers and contribute to our products. These technologies are enabling us to anticipate and meet the needs of our customers, as well as the needs of our manufacturing plants. Ashok Leyland is already powering the transformation to digital,” he adds.

With a holistic view and a commitment to serving the customer, Ashok Leyland is looking at becoming a true digital enabler. Mr Mahadevan concludes, “Ashok Leyland sees customer empowerment and their expectations of us increasing significantly. We have embarked on a journey to enable customers to get the best from us through the use of the technologies we have in our solutions. Ashok Leyland's intention is to democratise digital transformation by giving customers greater control over their businesses. We want to drive the pace of innovation and we are actively pursuing this journey.”