Cloud is the core driver for Industry 4.0. It is the catalyst that is triggering a mind-shift to ensure manufacturers can get more out of their existing assets across their entire supply chain. From the source to the end customer, the cloud is the most powerful tool to drive perfect order performance and reduce order cycle times. Manufacturers now can use cloud to create data flywheels to deliver significant value for shareholders and customers.
What is a data flywheel? It can be best explained by looking at American electric vehicle and clean energy company Tesla. The company has collected vast amounts of data from the billions of miles its vehicles have travelled, which it uses to improve its cars. This gives Tesla a three-year head start over its competitors and drives vehicle sales, which allows the company to collect even more data and further increases its competitive advantage. This cycle creates a flywheel effect – Tesla’s customers keep delivering data and as the data improves the product, more users are drawn in. Tesla now has hundreds of thousands of data flywheels collecting millions of miles’ worth of data a day, which has enabled it to grow from a boutique start-up car manufacturer to global data juggernaut in just 10 years.
Manufacturing companies are now at the precipice of building these data flywheels for themselves and those that embrace cloud to become data companies will ensure success well into the next decade.
Cloud-based solutions offer manufacturers capabilities for cost-effective data storage, cybersecurity, predictive analytics, machine learning, artificial intelligence and augmented reality, providing them with access to data and processing abilities that are not possible with traditional on-premises computing. Sensors and other technologies connected to the cloud also mean that data can be tracked in every step of product creation, manufacturing and delivery. Meanwhile, machine learning can be used to intelligently automate tasks, such as identifying and correcting flaws mid-production.
Manufacturers have reported various benefits of cloud-based solutions, including accelerated order cycle times; automated safety, compliance and risk across the entire supply chain; real-time tracking and increased uptime performance; improved product launch success; and perfect order performance.
When manufacturers are using cloud-based, data-driven processes, it does not matter which plant or supplier produces a product because all the data will be transferred from the shop floor to the cloud. Consequently, operations become stateless and companies are able to scale up or down to meet regional or international demand across their ecosystem, all while enhancing product quality, reducing costs and increasing uptime, safety and security across their supply chain.
For example, one oil and gas operator has implemented AVEVA’s cloud solutions to operate seven facilities on three continents via the same data model. It can now share data about equipment, operations history and maintenance across the company, creating an information flywheel. Employees can now access real-time and reliable information about plant equipment, so more of them use it, which is generating an increased volume of data. Over time, the data will become better and the cycle will continue, driving operational efficiency, improving performance and increasing safety. This has had an impact across the entire supply chain, and the customer has now achieved a double-digit improvement in order cycle times.
Meanwhile, an industrial battery company was able to use the AVEVA cloud to launch an entirely new operation in China but collect service data at its facility in the US. Today, it aggregates data from operations in both countries, which has improved the company’s ability to predict potential issues and increased uptime. More customers are using the service, which is generating more data to enable the company to further improve the service, creating the quality data flywheel.
As these examples show, there is a clear correlation between a company’s ability to collect data and its ability to build a data flywheel. Manufacturers that embrace cloud now and build valuable flywheels will drive significant value to both shareholders and customers.
Patrick Pando is vice president of cloud at AVEVA
This article was originally published in the Spring 2020 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.
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