Now that the age of big data is really here, manufacturing companies have truly game-changing opportunities to increase operating efficiency and productivity — and even explore new “digital” business models taking advantage of the Internet of Things. However, a big obstacle stands in their way: manufacturers’ extraordinarily data-rich and complex global supply chains are generating digital data at an unprecedented — and frightening — pace. And to a large extent that data is not standardized, not necessarily secure and inherently complex when integrated with existing data. Most manufacturers simply can’t make sense of it all, so important business insights are obscured or, in some cases, simply wrong.
Yet the opportunities are large enough to make clear that “winners” in the big data age will be those manufacturers that can master currently out-of-control data proliferation and then analyze their data for important business insights. This is part of the impetus for EY to create an alliance with GE Digital to help manufacturers put to good use the data generated by the emerging industrial Internet of Things (IIoT) networks.
Here are manufacturers’ big-data-age opportunities as EY sees them:
• First, the latest and most advanced sensors, networks and big data analytics make it possible for manufacturing companies to know when their equipment is running well and can even predict when it is likely to break down. Preventive maintenance can be directed precisely where and as it’s needed, enabling new streamlined and lower-cost operating models.
• Second, the same sensor networks and predictive analytics make it possible to enhance the efficiency of industrial capital assets in action. Case in point: adjusting the angle of turbine generators blades and the structure’s orientation in real time can significantly increase electrical generation over simply “pointing the machine into the wind.”
• Perhaps most valuable will be the entirely new kinds of business opportunities that deep analysis of large data sets makes possible. Think about the impact of spreadsheets, which at first simply made financial record-keeping more efficient by replacing pen and paper. But once we had these spreadsheets, we could create formulas and run what-if analyses; that spawned modeling, which led to major change in many industries. The IIoT is about to sweep in at a similar magnitude and offers the chance for true business innovation for manufacturers.
And yet … nearly every company I talk to tells me they are being held back because of their inability to manage the rising mountains of data. Low-cost cloud storage solutions are encouraging them to save all the data they can find, regardless of whether its business utility is established. Consequently, data is driving complexity, cost and risk, and actually inhibiting a manufacturer’s ability to engineer the connected and insightful digital supply chain ecosystem they need to realize value.
According to IDC, as of 2014, we were creating data at the rate of 1.7 megabytes of new information, every minute, for every person on earth. In the same report, IDC says the cumulative total of the world’s digital data reached 4.4 zettabytes by the end of 2013 and, by 2020, we will be creating 44 zettabytes of new data every year (one zettabyte equals a trillion gigabytes).
Manufacturing executives reading those numbers may well find them frightening. The report, Digital supply chain: it’s all about that data, finds that rising data complexity may well present an existential challenge to manufacturers and their supply chains. The sheer volume of data they produce, and its growing complexity, actually inhibits executives’ ability to access the right business insights at the right time to empower better decision-making.
