Digital Transformation

How software is redistributing manufacturing

Alexandra Baleta, Sr. Director EMEA Industry & Manufacturing / Automotive Lead, VMware

Our expectations of products and services have changed. It is no longer enough to simply manufacture and sell a product – digital experience, corporate ethics and sustainability are now key factors in purchasing decisions. Today’s consumer expects a seamless online connection between buying (and using) a product and receiving related services. And they want this to be done in a sustainable way, by a business that aligns with their values and (ideally) ethically sourced materials and recycled products or parts of it at the end of the life-cycle.

It’s a scenario that is re-writing what it means to be a manufacturer. Because of the size and scale of operations and global movement of goods, manufacturers are held to a higher account than other sectors when it comes to delivering against these evolved expectations. Keeping up requires considerable changes to how they do business, which is the focus of this two-part blog series. The first part of which can be found here.

A new age of manufacturing

For a start, manufacturers face challenges with pre-existing operational technology (OT). Complex and often fragmented legacy infrastructure and applications need to co-exist with modern Industry 4.0 technologies, while integration needs to be done seamlessly as the transition is made into a connected factory. Combine this with the fact that facilities often rely on third-party contractors for maintenance and troubleshooting and you have the ingredients for a difficult shift from platform to platform, let alone from one era to another.

In manufacturing, more than in almost any other industry, it is essential that each cog is properly interlocked with the others. If one component falters, the entire process is affected and massive failures occur.  Here it is more important than ever to have a properly functioning IT system that can be managed uniformly and centrally across all locations and at the same time is so flexible that capacities can be flexibly scaled-up and down at any time.

It is giving rise to a new age of manufacturing. One defined not by machines but by software.

The pendulum is swinging to software

In this regard, it is irrelevant what is being manufactured. It could be a washing machine or bicycle seat. The important part is everything is connected and digitized so software can permeate universally. It’s not something that can be introduced part of the way through the supply chain or for some machines or locations and not others. Its foundational, all-encompassing nature is the very element that makes the sum of the parts greater than what they are. This simply cannot be done with the old approach to hardware.

The challenge manufacturers face in moving from the old world to the new is that they are, understandably, not software-focussed businesses. The people in the business are not software engineers and the processes of producing goods are not founded in software. Bringing this all together requires more than a hit-and-hope strategy because everything has to align in order for it to be effective.

Defining characteristics of the modern, smart factory

The convergence of information technology (IT) and operational technology (OT) is one of the defining characteristics of the modern, smart factory. Bringing physical equipment into the digital sphere has allowed manufacturers to integrate disparate teams and technologies – and revolutionise the way they turn data into intelligence, increase agility and accelerate time to market of innovations. And for those manufacturers that have yet to adopt and operationalise IT/OT convergence, getting their promises to be truly transformative and a game changer for the entire organisation.

Bringing more compute capabilities into the OT environment helps manufacturers accelerate automation and increase intelligence across the value chain by deploying artificial intelligence (AI) and machine learning (ML) technologies to bring speed, agility, and resilience to their operations. Being able to move applications and software packages close to the machinery or locations where they are required, as well as the ability to manage where these applications best fit, is delivering tremendous value for manufacturers. It offers flexibility to deploy, manage and actually develop software capabilities exactly where, when and how is required. This is where the sector is heading.

Example: BMW

The BMW Group recently implemented a Digital Factory Solution together with Nvidia; a solution that allows BMW to simulate different factory layouts and changes of production processes and set-ups. Through digital twin capabilities, they are able to assess the impact of changes on their workforce, health and safety, process improvement, throughout and other important factors BEFORE any changes are put in place and they would incur any cost of change. Through such new levels of digitization at operations level and the use of AI/ML and data sciences, the automotive OEM is not only expecting more than 30% more efficiency in planning processes, but also a new level of data consistency across all process chains and ease of application implementation at any production site. BMW is one of several lighthouse manufacturers across Europe who are embracing the latest technology to build their future manufacturing on software and data capabilities.

Workloads growing everywhere

Our own research found that 580 million modern workloads are expected to run on diverse, distributed environments spanning public cloud, on-premises, edge, telco clouds and hosted clouds by 2024. They are increasing everywhere and manufacturers must not be bound to an environment that doesn’t offer real-time insights from the factory floor in milliseconds. All that real-time data from the machines to the cloud is loaded with tons of valuable data and being able to capture and act on it will separate the great from the good in the coming years.

A big area of concern for manufacturing – especially in times of uncertainty and economic turmoil – is the protection of intellectual property (IP). In such a fiercely competitive environment it must be guarded at all costs, which is why the sector has historically been reticent on an over-reliance on public cloud. Evolving to a hybrid model, where IP is hosted in a private environment, while the organisation is simultaneously leveraging capabilities in the public cloud is the new baseline. This makes it possible to cover the entire value chain with real-time features—from production on the store floor to the products themselves to complete ecosystems—in conjunction with innovative business models and new opportunities for value creation. Companies in various manufacturing industries can thus leverage current market trends and opportunities and drive forward new business areas in a flexible manner.

The redistribution in manufacturing

The goal for manufacturing companies is to modernise their IT infrastructure and operations to not only reduce ongoing costs and increase revenue, but also scale with great flexibility, develop new business models and accelerate the path towards net-zero. As the author, William Gibson, said 20-years ago, “The future is already here – it’s just not evenly distributed”. Well, when it comes to manufacturing, not only is the future here, but we’re seeing the redistribution take place before our very eyes.

You can read the first part of this blog series here. For more information on how VMware can help or to see examples of how we have helped our customers on this journey, please visit us here at Keep the world moving, no matter what.  . Or please come visit us at Hannover Messe from April 17th to 21st in Hall 15, Booth F59.


Leave a Reply

Your email address will not be published. Required fields are marked *