Software at the Heart of Auto Industry's Lost Mojo

There was a time when auto makers ruled the world of manufacturing and engineering.  That time coincided with the market share struggles between Japanese auto makers disrupting Detroit’s Big Three. At the time, companies like Toyota made strides by adopting and adapting Edward Deming’s quality production methods on the path to capturing ever-larger shares of the North American market.

Those were stirring times with back and forth quality claims and certifiable improvements in product quality among all auto makers.  But the advances and the competition and the excitement of those days is now gone and along with it a lot of the auto industry’s mojo.

This topic was in the front of my mind this week as I attended the GenIVI Alliance All Members Meeting in Paris.  The GenIVI Alliance is a Linux implementation forum for automotive infotainment applications.  The organization was originally founded by General Motors, BMW, Intel, Delphi, PSA Groupe and a handful of other industry representatives.

While most of the work of the forum is organized around deploying Linux in dashboards, the group’s meetings bring together suppliers and developers of a wide range of technologies including providers of simulators, software testing and validation systems and even regular old software developers.  It is a home and a focal point for software engineers and code writers in an industry that revolves around mechanical and electrical engineers.

The predominance of mechanical engineers in industry leadership positions is a decades-old legacy of the production-focused heart of the automotive industry.  It is no surprise, then, that the battle between Toyota and GM culminated in their collaboration in the creation of the New United Motor Manufacturing Inc. (NUMMI) production facility in Fremont California.

According to Wikipedia “GM saw the joint venture as an opportunity to learn about lean manufacturing from the Japanese company, while Toyota gained its first manufacturing base in North America and a chance to implement its production system in an American labor environment.”

At that time, the automotive industry's mojo was all about quality and just-in-time production techniques.  Toyota’s lean manufacturing system, also known as the Toyota Production System or Toyotism, advanced well beyond Deming’s original principals and ultimately integrated a range of elements that constituted an advanced vision for manufacturing. 

The industry's high profile failings of the past two years, though, have undermined all of that progress.  The once innovative NUMMI plant in Fremont is now churning out Tesla’s Model S and neither GM nor Toyota is claiming industrial leadership after humiliating vehicle failures in the form of unintended acceleration problems (Toyota) and ignition switch failures (GM).  These twin failures and other tragic embarrassments (Takata airbags, Volkswagen emissions) have car makers facing an existential crisis.

Something is fundamentally askew in the industry and in spite of record sales and impressive profits, there is an uneasy sense that the industry has lost its way.  We read in Automotive News how GM has turned to Amazon to better understand logistics.  We see Toyota turning to Microsoft, MIT and former DARPA executives to better understand artificial intelligence and automated driving.  The National Highway Traffic Safety Administration has turned to the National Aeronautic and Space Administration and the Federal Aviation Administration to find better ways to manage and guide safety investigations and regulations.

It all reflects the fact that the auto industry fell asleep at the wheel even as it was surpassing sales milestones.  Car makers have lost the mojo that set them apart as exemplars of industrial automation and innovation.  Today car makers are collectively nothing less than an industrial laughing stock.

What went wrong?  How did this reversal come about?

The auto industry has effectively been “looking the other way” as software became an increasingly important element of vehicle design, development, production and operation.  Mechanical engineers rule the automotive world and software engineers continue to be held in low regard – even as the hiring and recruiting of software engineers and programmers proceeds at a fever pitch.

Industry leadership remains firmly in the hands of the mechanical engineers most of whom really don’t understand the fundamental nature of what has become a greatly changed business.  Some car makers such as Ford and PSA Groupe have turned to the aerospace industry for leadership with some success.  But the doors need to be opened wider to software expertise – car makers actually deploy more code than almost any other industry. 

After viewing dozens of presentations and reading hundreds of reports we all now know that there are more lines of code in a luxury car than there are in a commercial airline, a fighter jet or a spacecraft.  All that code needs to be written, compiled, tested, and maintained.  And those processes never end.

The car has become a living thing.  As an industry we can no longer ship it and forget it.  The software tsunami that has quietly swept through the automotive industry has rewritten the rules while auto makers have tried to soldier on oblivious to the fundamental shift in the process of designing, building and maintaining cars.

Tesla may feel it doesn't need dealers to service cars with fewer moving and high-maintenance parts, but the software code in a Model S is a living thing.  That code must be maintained and it is clear that Tesla takes that responsibility seriously, converting it into a marketing and product enhancement opportunity.

It’s not only a question of millions or, rather, hundreds of millions of lines of code, it is the requirement to test and validate that code for bugs, vulnerabilities and intellectual property, while also establishing and preserving compatibility with other applications and operating systems.  A tiny fraction of cars today, mostly from Tesla, provide for over-the-air updates to correct bugs or vulnerabilities without the need for a visit to the dealer.

Few if any cars on the road today have the ability to notify their manufacturers of malicious software intrusions or imminent system failures.  The automotive industry as a whole has completely missed the boat. 

Today car makers find themselves not infrequently testifying before Congress or making public apologies for flaws or failures that might have been prevented with greater attention to the demands of an increasingly software-defined process.  Mitsubishi is only the latest car maker to be caught falsifying a test, in this case regarding fuel efficiency.

The strangest thing of all is the very nature of the problem.  If you look at the elements of the Toyota Production System each of the elements of that system could be applied as they are already defined today to the process of creating the software being deployed in Toyota vehicles.  This does not appear to be the case – especially when investigators looking into the unintended acceleration failures in the Toyota Prius found what they described as “spaghetti code” – in other words, poorly written software.

Sorely missing here is the “continuous improvement” and other processes associated with the “Toyota Way.”  But it’s not just Toyota.  It’s the entire industry.

The time has arrived for car makers to:

• Review compensation plans for software developers and programmers
• Elevate software engineers to leadership positions
• Implement and adapt the same quality control and testing processes associated with mechanical and electronic systems to software systems
• Upgrade cybersecurity programs, strategies and internal organizations
• Deploy over-the-air software update technology capable of preserving the integrity of all vehicle system code for the life of the vehicle

The industry inattention to the importance of software is directly responsible for the recent spate of vehicle hacks and many of the latest and most embarrassing vehicle recalls.  To get its mojo back, the industry needs to embrace the challenge of cleverly managing software development as a core industry competency critical to the future reliability, safety, and integrity of all automobiles.

Roger C. Lanctot is Associate Director in the Global Automotive Practice at Strategy Analytics.  More details about Strategy Analytics can be found here: https://www.strategyanalytics.com/access-services/automotive#.VuGdXfkrKUk