One of the most interesting trends today to watch is how all companies are transforming into technology companies. Manufacturing companies are transforming these days and becoming… software companies. Is Tesla a tech company figuring out how to build cars? Is GM an automotive company learning how to become a tech company? Companies need to change both how they build things and they need technologies to compete and thrive.
The greatest example of how a tech company can become the most valuable company in the world is of course Amazon. Building on top of their experience in logistic, Amazon allows people to order goods and ship it to them in 2 days. Amazon is applying what they learn to other businesses – e.g. how to run massive data centers and providing cloud computing service (AWS).
What will happen if companies from multiple domains will combine their effort? This is an interesting question. My attention was caught by Amazon and Volkswagen partnership announcement earlier this year.
The companies announced Wednesday that they are undertaking a project to combine data from all machines, plants and systems from 122 Volkswagen plants around the world. The project could eventually connect the carmaker’s entire global supply chain, which includes 1,500 suppliers and partners at over 30,000 locations. The value of the deal was not disclosed. Amazon Web Services, the cloud computing division of the US tech giant, will provide Volkswagen with a team of developers and data scientists who will examine data from the project and make recommendations. The goal is to make Volkswagen’s operations more efficient — for example by adjusting delivery times, reducing waste or identifying gaps in production. The system could launch before the end of the year.
Although my favorite passage from the press release is this one:
With its Industrial Cloud, Volkswagen intends to open up new possibilities for further improving the efficiency and flexibility of production. The combination of data from all plants will provide new prospects for process optimization. These include more efficient control of material flow, the early detection and elimination of supply bottlenecks and process disruptions, and the optimized operation of machinery and equipment in all plants.
In addition, the cloud-based platform with its simplified data exchange is an essential prerequisite for Volkswagen to provide new technologies and innovations rapidly across its various locations. These include smart robotics, and data analysis functions to analyze and check shopfloor processes from plant to plant. With the cloud-based platform, new applications, for example in IT-security for shopfloor systems, can be scaled up direct to all locations throughout the world. Volkswagen will leverage AWS innovation best practices to become more agile and react faster on industry trends.
This is how Amazon-Volkswagen’s industrial cloud looks like in VW marketing advertising.
This is something that touches my PLM nerve because it is directly related to PLM businesses and intertwining information from engineering downstream. PLM industry and vendors made huge progress for the last 5-7 years moving from ignoring the cloud-based systems to adopting them. Nevertheless, for most PLM technologies, the cloud is the way to host their existing old SQL based technological stacks. The integration of data between multiple silos is one of the fundamental problems for most of PLM technologies. And most of PLM vendors are just learning what is multi-tenant data management and micro-services that can allow scaling their products into an online service that can run globally using infrastructure such as AWS.
The question – what PLM vendors are ready for Amazon-Volkwagen cloud is the one that I’m looking for to answer. According to this publication, Volkswagen is taking Siemens into this Amazon (AWS) partnership – VW taps Siemens, Amazon Web Services to link factories to the cloud.
The goal of having all production data in one place is to improve manufacturing efficiencies: identifying slowdowns or other bottlenecks, material distribution of materials and even track delivery vehicles. Because the Industrial Cloud is an open platform, VW plans to eventually enable some of its 1,500 suppliers to be integrated into the system.
The other half of the Industrial Cloud announcement is VW’s partnership with Siemens, which will work on networking the machines and equipment at the automaker’s 122 plants. Siemens’ Internet of Things and industrial automation tech will be what connects the cloud with physical machines. The company also says that its MindSphere technology can predict when machines will need maintenance proactively and schedule it accordingly. VW intends to put Industrial Cloud into action before the end of 2019.
Some articles are mentioning Mindsphere as one of the technology for the integration of VW into AWS cloud. However, Teamcenter technology was not mentioned.
What is my conclusion? Manufacturing companies are transforming and they will look for pieces of technologies that can be integrated into their industrial platforms. This means companies will be moving from old-fashion on-premise SQL database based PLM systems to platforms that build for IaaS infrastructure, capable to scale and adapt to new manufacturing reality. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.