Machine in smart factory

Why one size doesn’t fit all for smart factory data processing

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Generating huge volumes of information isn’t a problem for modern industry; the key to justifying investment in new technology is getting it analysed in the right place.

A standout headline from recent research in which teknowlogy Group asked decision makers at more than 200 European manufacturing companies about the opportunities, progress and challenges around ‘smart factory’ technology was that only 45 per cent of those who have embarked on projects said they have seen a return on investment (RoI).

Taken out of context, that statistic might sound like a reason to hold back investment, especially given the macroeconomic headwinds that European industry has faced in recent years. The response to other questions offers a rather different view though.

For example, the fact that almost all the companies that achieved an RoI – 97 per cent – did so within three years suggests successfully deployed smart factory initiatives are a sound investment that pays off quickly. With almost three-quarters of businesses that are implementing smart factory technology (73 per cent) still in the planning stage or early phase of their smart factory initiatives, we can expect the proportion reporting an RoI will increase rapidly in the next few years as projects mature.

The full report is an enlightening read. One aspect of particular interest is the distribution of computing, an area of rapid change that is central to success. The teknowlogy Group research found that industrial companies analyse some 46 per cent of data in their own data centres and around 40 per cent in the Cloud. The remaining 14 per cent is handled at device or application level – ‘the Edge’ – where computing happens on the machine, line or remote application that is the data’s source.

This distribution is one that I expect to see change, a notion that is borne out by the response to a question that asked respondents where they expect data to be analysed in the future. More than a third – 35 per cent – said they want to be doing this at the Edge within five years.

While the growth of Edge computing might not make too many headlines in a wide-ranging study that looks at the overall adoption of smart factory technologies, it could well be the most important consideration, especially when it comes to return on investment. RoI, especially in the long-term, is inextricably linked to making better decisions based on contextualised data and is quite literally the ‘smart’ element of a smart factory. Creating data in modern industrial processes is not a problem; securely and simply analysing it to make better decisions is the challenge and holds the key to sustained improvement.

A hybrid approach is best for most enterprises. It’s not about choosing which computing basket it’s best to put your eggs in – whether that’s Edge, data centre or cloud – but about deciding on the balance of a hybrid approach that provides flexibility, control and insight.

The Cloud offers huge processing power that can crunch large datasets and reveal value in historical, trend-based and deeply contextualised data, but it’s not fast, and it requires transmitting data over the internet. Back on site, instant decisions based on live data can be made at an operator level with Edge computing solutions that can also work closely with enterprise management data in the data centre to contextualise data with other operational considerations such as energy consumption or enterprise resource management.

All locations, then, offer different advantages and can be used concurrently to achieve the best outcome as users become more experienced in how smart factories operate. In turn, while companies may not see immediate RoI benefits as they begin to incorporate new Industry 4.0 technologies like blockchain, artificial intelligence and quantum computing, they will in the future.

It’s clear from the teknowlogy Group research that manufacturers believe smart factory technologies are central to the sector’s future. Whatever internal or external drivers are cited, the true RoI will play out over a generation or more and will likely shape the biggest shift in industry of our lifetimes.

Greg Hookings is head of business development, digitalisation with Stratus.

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