ICDP
Automotive distribution and retailing research, insight, implementation
digital+disruptors.jpg

ICDP's blog

Our blog

News and views from ICDP

Omni-shambles

A recent article in Automotive News highlighted one of the downsides of the everything-connected world of omni-channel retailing; that when something goes wrong in one place, its impacts are felt throughout the network and across a range of partners.

Over the weekend of 17th August, extremely hot weather in Denver, Colorado, caused a power outage, which in turn knocked out a data centre hosting Nissan’s communications network and systems for the whole of the USA, Canada, and Mexico.  As well as bringing production to a halt at the company’s factories in Smyrna (Tennessee) and Canton (Mississippi), the outage also affected the NNANet system used by Nissan and Infiniti dealers to order cars and parts, manage warranties and recalls, and, as it turned out, quite a lot more besides.  New customer finance approvals and monthly payments for existing customers could not be processed because the integration to the captive finance company (Nissan Motor Acceptance) was not working.  Online service bookings were reportedly lost in the ether and had to be rescheduled, and some ignition keys could not be reprogrammed by service receptionists.  Dealers (around 1,300 in the USA alone) were unable to report their sales, just as they headed into the usual month-end busy period, and were concerned as to when they would receive their incentive payments.  Full service was not restored until 5 days later.

From a systems perspective, the post mortem investigation will inevitably need to focus firmly on resilience, and on how a power outage in one location could take down such a business-critical international infrastructure for such a long time, especially as backup systems were also reportedly disabled at the same time.

But from the retailing and distribution perspective, this unfortunate incident also serves as a reminder of just how interconnected manufacturers, dealers, finance companies, and other partners are nowadays, with that connectivity rapidly extending into the cars themselves.  In this environment, the network is only as secure as its weakest link, and so the responsibility for spotting and closing down vulnerabilities must be a shared one.

This implies a need for greater shared understanding of the systems linkages and dependencies that join manufacturers to dealers and others, but also of the data that flow backwards and forwards across the network; what they are, and what purpose they serve.  At a time when lobbying battles are being fought for access to in-vehicle data, and manufacturers and dealers are clashing over clauses in new dealer contracts covering the ‘ownership’ of customer data (a wholly misleading term from both a legal and moral point of view), what is needed in the automotive sector is more openness and transparency over both infrastructure and the stewardship of data.  Lessons from other sectors where systems integrity and data security are critical, such as banking, may be instructive too.  Whilst we can never rule out the possibility of a lightning bolt hitting an electricity sub-station, we can do more to ensure that weaknesses or failures are contained, that data are preserved, and that agreed fall-backs are in place to enable customer-facing processes to continue to function during times of disruption.