Recent Google Cloud research highlights how 76% of organizations in the manufacturing sector have adopted data analytics, cloud and AI technologies, in order to take on the challenges presented by the COVID-19 pandemic. The findings also state how almost two thirds of manufacturers rely on AI to assist in day-to-day operations, with a quarter already allocating half or more of their overall IT spend towards AI.
This provides the context for Google Cloud's Digital Manufacturer Summit, which kicks off today and can be accessed here, where we heard from CEO Thomas Kurian and leading automotive manufacturer Porsche about some of the digital drivers across the sector.
COVID-19 has impacted all sectors of the economy, but manufacturing in particular has faced some intense challenges. Supply chain disruption, increased demand and an increased shift towards engaging directly with consumers have all resulted in a renewed emphasis on digital investment.
Google Cloud CEO Thomas Kurian outlined during his keynote at the Digital Manufacturer Summit some of the key trends that the vendor is seeing from its customers in the sector. He explained:
In the past few months we have seen just how resilient manufacturers can be, as they plan for recovery from the pandemic. In March, US factory activity grew at its fastest pace in 37 years. While in Europe, manufacturing has expanded more rapidly since the middle of 2018.
This strong recovery has been fueled by innovation, as manufacturers have embraced digital technology. We at Google have seen this in three specific ways. First, manufacturing companies have shifted to hybrid work by using productivity and collaboration solutions, like our Google Workspace.
Second, manufacturers have moved to digital commerce and are engaging customers directly through the use of the Internet and activities like e-commerce, to meet increased demand and to create new personalized customer experiences.
And third, by using data and artificial intelligence, manufacturers are now looking to increase visibility, improve productivity and degrees of automation across their supply chain, and their operational environments.
As outlined previously, the investment drive has largely been driven by manufacturers becoming painfully aware of their supply chain risk during the pandemic, with visibility into how products are sourced, and where they are at any point in time, being critical to supporting operations.
Equally, in order to gain more control, manufacturers are increasingly turning to insourcing and reshoring operations. This has meant a renewed focus on automation, as there is an entirely different labor factor cost.
Kurian outlined the top priorities for manufacturers at the moment as follows:
Delivering exceptional customer experiences
Optimizing product development and operations
Accelerating digital transformation
And he added that Google Cloud is making investments internally to support customers in the sector. Kurian said:
We've invested heavily in manufacturing specific teams with deep domain expertise and established a global ecosystem of partners to really support your needs, deeply. For instance, Renault Group right now is digitizing its production facilities and supply chain to improve efficiency and production quality by using our cloud, our smart analytics, and our artificial intelligence solutions to understand deeply - and improve operations on its factory floor.
Driving Porsche towards digital
One of the Google Cloud customers speaking at the Summit was internationally recognized luxury automotive company, Porsche. CMO Robert Ader and CIO Mattias Ulbrich shared some insights into how the company is thinking about its digital investments - both from an internal process perspective, but also in terms of how it engages with its customers.
Ulbrich said that Porsche is focusing on how it can bring that same luxury physical experience that its customers expect from its cars, into the digital sphere. He explained:
We are investing heavily in software competence and really developing software components that are serving the customer needs, as an ecosystem around the car.
Porsche stands for real customer experience - that means you can smell the leather, you can feel the exhilaration, you can see the design, you can hear the sound. And that is what we are taking right now to the digital world. This is very important for us, so we are investing heavily in the digital ecosystem.
Technology alone is not a solution. It hasn't any real value. People are the value, people are using technology and bringing the best solution for the customer.
With this in mind, Porsche has created Porsche Digital, which it describes as an ‘open and global innovation network', that consists of approximately 200 experts working across nine locations worldwide. The aim of the subsidiary is to find and scale new digital business models as well as optimize existing products and services.
Some of the work that Porsche Digital has been doing includes the reaction of ‘Sounce', which is a software-as-a-service solution that enables automatic detection of unwanted noise in real-time. This is largely being used in quality assurance or in component qualification, as noise provides essential information about product and process quality. The tool uses deep learning and documents, visualizes and summarizes noise findings in a web application.
Porsche CMO Robert Ader also outlined some work that the company is doing to blend the physical and digital world of car sales. He said:
We're also investing in physical experiences, for example in our retail environment, where we want to turn our retail formats from point of sale, to point of experience. And we're also investing heavily in our omni-channel experience. We are doing it together with our dealers…and we're connecting the digital sales channel with the physical retail channel for a seamless customer experience.
Porsche Digital is also aiding this work by creating an online marketplace for vehicle sales, giving customers the ability to reserve their desired car with greater convenience. CIO Ulbrich said that AI and smart partnerships will help Porsche drive innovation in the future. He explained:
[For us] innovation has two different areas. First of all it's AI. We have already started a lot of different initiatives and have good solutions within the car, in retail, as well as in our processes. We think this is just the beginning. AI will change everything that we are doing right now.
The second thing is collaboration - having the right partners on board, like Google Cloud, for example. But we're investing in startups as well, because we believe the best solution will be in a combination of different solutions.