The Untapped Potential of Industrial Digitization

 

McKinsey Global Institute (MGI) has said that that by consistently exploiting the value of their data, manufacturing companies can reduce product development costs by up to 50 percent, operating costs by up to 25 percent, and increase their gross margins by a third. However, McKinsey also said that manufacturers have achieved only 20 to 30 percent of that potential.

 

These MGI findings were published in December 2016, but Id say the picture has not dramatically changed since then. Based on our own experience in the field, Id divide industrial companies into three categories:

 

1. Companies that do not systematically capture their data or are not able to unlock their data silos
2. Companies that do have access to a rich stream of industrial data, but dont use it to optimize and transform their operation and business model
3. Companies that have the data and have driven initiatives to capitalize on that data - but are disappointed by the results

 

Approximately 70 percent of our customer engagements in the manufacturing and distribution industries are with companies in the third category. Why? These are companies who have understood the value of their data - but they have also understood they need a partner like HPE to close specific gaps in their approach to unlock this value.

 

So, which are the gaps that HPE can close? What is HPEs role in industrial digitization? In short, we provide capabilities that help industrial companies turn their raw data into intelligence and make that available at the right place, at the right time to fuel the entire value chain from product design to sales, from production to service.

 

This week at Hannover Messe, the worlds largest fair for industrial technology, HPE will showcase solutions, services and technologies that help customers make that happen.

 

Provide actionable insights at the right place, at the right time

 

A key challenge for many industrial firms is that apps and data are spread all over the place, closed off in heterogeneous operational technology (OT) and information technology (IT) systems and networks.

 

A large portion of the apps and data lives at the edge, i.e. in places outside of any data center or cloud in factories, oil rigs, plants and power stations. Gartner says that currently around 10 percent of all enterprise-generated data is created and processed at the edge. By 2022, Gartner predicts this figure will reach 50 percent. Latency, bandwidth and security are among the reasons why data must be processed directly at the edge and cannot be transferred to a remote datacenter or cloud for processing.

 

This means capturing the value of industrial data firstly requires converged systems which integrate industrial networks, industrial data acquisition, and OT control based on standard IT architectures - we call this software-defined OT. And secondly, these systems must be available in form factors that fit into a machine or factory and are protected against humidity, dirt and fire.

 

From edge to core to cloud

 

But thats only one part of the story. While it makes no sense to transfer raw data from the edge to other locations, we must transfer selected processing results to make the intelligence from one location available everywhere its needed.

 

This in turn means we need corporate datacenters or clouds to aggregate, correlate, analyze and learn from the data provided by many other machines, factories and plants.

 

Think of a manufacturing company that is running machine learning algorithms on edge computers near their production lines to enable agile automation based on sensor data. It sends selected data to powerful high-performance computers in a central location where it does deep learning to continuously optimize the algorithms, and then sends it back to the edge computers running at the production lines.

 

Thus, to realize the potential of their data, industrial companies need a hybrid infrastructure that provides actionable intelligence from edge to core to cloud. Thats exactly the value we provide for industrial digitization. We simplify hybrid IT, we empower the intelligent edge - and we provide the expertise to make that happen on a global scale, with 25,000 HPE Pointnext services experts.

 

Industrial digitization is a partnering game

 

But we dont do that alone. No one single company can provide end-to-end solutions for industrial digitization. Therefore, partnering is crucial for our approach, and its a key value we provide to our industrial customers. We help them by bringing together and integrating OT and IT solutions from a huge partner ecosystem.

 

Accordingly, we came to Hannover Messe with a whole range of partners. Our booth includes exhibits with partners including ABB, ACP, Bechtle, CANCOM, DXC Technology, OSIsoft, PlusServer, PTC, Schneider Electric, Techsoft and The unbelievable Machine Company.