Data takes pole position as it powers physical operations
- Philip van de Wilt of Samsara explains why traditional industries are at a tipping point as data takes pole position.
Traditional industries — everything from transport and logistics to construction and manufacturing — are the backbone of our global economy, accounting for more than 40% of global gross domestic product (GDP). It’s a sector defined by vehicles, machinery, engines – and armies of people to keep everything working. But things are changing.
If the story of the last 100 years has defined industrial sectors in terms of traditional engineering powered by fossil fuels, the next century surely belongs to a narrative dominated by computer science fuelled by data.
It may be early days, but forward-thinking businesses that understand the power of information technology are already seeing cost savings, efficiency gains, and business insights that are created when data powers a business.
This situation becomes clear in a new research-led Samsara report — The State of Connected Operations — which surveyed more than 1,500 operations leaders from eight countries, including firms in the US, UK, and across Europe.
Tapping into a range of industries including manufacturing, transport, construction, food and beverage, and retail, the report’s authors conclude that the whole sector is on the cusp of irreversible change.
Data is the fuel to power a new industry
“Today we are at a tipping point,” says the report. It continues:
The new industrial workforce is demanding easy-to-use tools and systems that are in line with the modern technologies they use every day. And as advances in technology make it possible to capture more data from more assets and connect it to the cloud, we are seeing physical operations digitise and transform into connected operations.
These organizations are gaining competitive advantage and operational stability by achieving end-to-end visibility across their operations, which delivers greater efficiency, sustainability, and safety.
One operational leader who has already experienced the transformative power of data is Farrukh Rafiq, Chief Procurement Officer and VP of Fleet, at US firm Artera, a $2bn turnover-a-year provider of integrated infrastructure services to the natural gas and electric industries.
When asked about the impact detailed business analytics made to the business, he said:
With real-time operational data, we can make smarter business decisions that directly impact our bottom line. For example, we recently sold $10 million of underutilised equipment, freeing up cash flow to invest in areas that matter—like new equipment we really need.
Artera’s on-hand experience of connected operations is just one of a truckload of reasons why firms from a sector that has, for the most part, been ignored by the technology industry are now embracing data. Wherever you look, manual processes and paper-based jobs are being replaced by digital and AI-enabled systems to make their jobs easier.
It may still be early days, but elsewhere, fleets of diesel and petrol-powered vehicles that are used to transport people and goods are beginning to be replaced by modern electric vehicles (EVs) or hybrids that are cheaper to run and do far less damage to the planet.
And thanks to a host of tried and tested technology including high bandwidth cellular technology, asset gateways and telematics, the industry is beginning to implement new ways of working that makes it more resilient to economic shocks — leading to more robust and profitable businesses.
Data and the changing face of connected operations
Digging deeper into The State of Connected Operations report, more than nine in 10 (95%) businesses agreed that digitizing their operations had improved their ability to weather economic disruptions such as the ongoing supply chain issues.
Digitization is creating more agile, resilient businesses, further backed up by 91% of operations leaders agreeing that their organization’s investments in digital technology have increased net profit.
Even those at the beginning of their digitization journeys reported that initial investments in digital technologies have paid off (86%) — a clear indication that ROI can be achieved even in the early stages of implementation. And for those further down the road to digitization, almost all (99%) of operations leaders agreed that consolidated data “improves their cross-functional agility”.
Legacy issues are a challenge – but not a roadblock
Despite the upsides, the report points to some issues that need to be addressed. Namely that the flipside to an ever-greater dependence on data exposes the shortcomings of legacy systems that are holding them back.
Add in the perennial problems of siloed data and it is, perhaps, not surprising that nine in 10 (89%) companies complained that disjointed technology and data negatively impact their bottom line.
As a result, companies are pushing ahead with their plans, with 84% of operations leaders saying that updating legacy technology was a “high priority” or “critical priority” in 2022. Coupled with tried and tested vehicle hardware and telematics, which are relatively inexpensive and easy to install — plus efficiencies in cloud computing and storage paving the way for artificial intelligence (AI) and automation — the result is that technologies become even more accessible and affordable.
Which all goes to underline the notion that the sector is at a ‘tipping point’, not just in the acceptance and recognition that data is essential to this highly industrialized sector, but that firms are ready to invest in the technology to make it work.
The sector may revolve around trucks, lorries, vans, diggers, tractors—and all manner of assets attached to an engine—but make no mistake, this is a tech story.