Unlocking the power of data

Danial Norjidi

Manufacturing companies will collaborate in hyperconnected value networks to increase productivity, develop new customer experiences and have a positive impact on society and the environment in the near future, according to a study by the World Economic Forum (WEF) and Boston Consulting Group (BCG).

The report released on January 14, titled ‘Data Excellence: Transforming Manufacturing and Supply Systems’, features insights from a community of over 40 manufacturing organisations and leading academics and public sector representatives.

“To realise this vision, manufacturers will need to employ a large variety of data and analytics applications, such as predictive maintenance, advanced robotics, and tracking and tracing in supply networks. Data will be the lifeblood of these applications, becoming an imperative for the successful transformation of manufacturing and supply systems,” the study said.

Value from data-and-analytics applications can be categorised into three main areas: productivity increase in manufacturing and supply systems; enhanced customer experience through improved products and services; and positive impact on society and the environment.

“Depending on the type of application and enterprise, companies can unlock value from many applications themselves using only internal data.”

Such applications include tracking and tracing within a factory or navigation of automated guided vehicles used in logistics.

“More sophisticated applications often require the exchange of data beyond company boundaries to effectively train artificial intelligence (AI) algorithms and to support collaboration in complex networks that require full transparency.”

“Consequently, data sharing is a key enabler of multiple advanced data driven applications in manufacturing,” the study stated.

However, many manufacturing companies lack the organisational and technological foundations to implement data and analytics applications both internally and at an ecosystem level. Nearly three-quarters of 1,300 surveyed manufacturing executives consider advanced analytics to be critical for success and more important today than three years ago, according to the study.

Only a few companies capture the full value that data and analytics can unlock to address manufacturers’ most pressing challenges. “Less than 20 per cent of surveyed participants prioritise advanced analytics to promote either short-term cost reductions or longer-term structural cost improvements.

Only 39 per cent have managed to scale data-driven use cases beyond the production process of a single product and thus achieve a clearly positive business case.”

Surveyed manufacturers cited various challenges that impeded their efforts to further scale and implement data-and-analytics solutions within their plants and across networks: they struggle to prioritise the right value-adding use cases from a broad range of applications; they have not put in place technological enablers, such as data security or advanced algorithms; they lack critical organisational enablers, such as skills and capabilities and effective internal governance.

To successfully implement data driven applications, the report states that decisionmakers should focus on six organisational and technological priorities.

These priorities are: define a data to value strategy and roadmap; incentivise internal and external ecosystem partners; build capabilities to capture and use data; technological priorities: implement an open platform to unlock data silos; enable connectivity for low-latency, high-bandwidth data flows; and ensure data security and privacy.

“To help accelerate the development of globally connected manufacturing data ecosystems, the WEF’s Platform for Shaping the Future of Advanced Manufacturing and Production and community is developing a Manufacturing Data Excellence Framework. This framework comprises value adding applications as well as technological and organisational success factors.”

Companies will be able to use this framework to assess their current maturity and define a path towards the development of successful data ecosystems. This community also encourages the incubation of new partnerships and the dissemination of learning through the exchange of best practices, according to the study.

Head of Shaping the Future of Advanced Manufacturing and Production at the WEF Francisco Betti said, “These findings will help accelerate our journey to support companies in devising a path forward to reach the next level of data-based manufacturing excellence, build trust among manufacturing, suppliers and customers, and unlock new value through the development of new data-driven ecosystems.”

Meanwhile, Managing Director and Partner of BCG and a report co-author Daniel Küpper said, “Manufacturing is on the verge of a data-driven revolution. But many companies have become disillusioned because they lack the technological backbone required to effectively scale data-and-analytics applications. Establishing these pre-requisites will be critical to success in the post-pandemic world.”