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Monday, October 30, 2017 10:50:29 PM
Manufacturing: Harvesting Data For Efficiency and New Revenues
The value of data to firms whose revenue derives from advertising is apparent, even if there’s no consensus on analytical methods to assess their value. But many investors don’t consider the value of data to manufacturers of consumer goods and capital goods.
Social media and providers of internet-based services are digital natives whose business models came into existence at the same time as the internet, so they have had a natural affinity for data.
Modern industrial manufacturing, on the other hand, grew up before the digital revolution. Therefore, there have been hurdles to cross in recognizing, harvesting, and exploiting sources of data-based value in manufacturing. Those hurdles are now being crossed thanks to some of the major technological trends that have been on everyone’s lips for years: the internet of things and artificial intelligence. “Software is eating the world,” as Marc Andreessen famously said six years ago -- and it is finally the turn of manufacturing to be served up for the feast.
The Digital Factory Is Now Technologically Feasible
According to Morgan Stanley’s analysis, manufacturing globally generates 2,000 petabytes of data annually. That’s two million terabytes. (Imagine a ten-mile-high stack of hard drives.) Until recently, most of those data were not captured -- manufacturing was not set up to capture them, because the tools to do so did not exist.
Now, those tools do exist: exponentially cheaper and more powerful processors, sensors, and data storage. We have often called the digital revolution a “new industrial revolution,” and this reality will be embodied fundamentally in a shift of the focal point of manufacturing from the assembly line, to the data. That in turn will re-shape techniques of manufacturing and the relationship between designers and the factory floor. Software will be what holds the new structure together.
https://www.equities.com/news/investors-pay-attention-manufacturing-will-change-radically
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