The manufacturing industry is facing major challenges driven by rising customer expectations, the need to keep up with technological evolution, fierce competition and, most recently, the global pandemic. Producers both large and small are being forced to respond to changes faster. The ability to quickly collect and analyze data and then make decisions based on the result is fundamental. Although manufacturers are on the right track, there is still work to be done in the area of digitization. How can manufacturers make the most out of digital innovations like industrial internet of things (IIoT)? How can they profit from better data exchanges with their supply chain partners and how does this help them respond better and faster to customer requirements?
Translating interconnection into opportunity
The global number of IIoT connections is forecast to increase from 17.7 billion in 2020 to 36.8 billion in 2025—an overall growth rate of 107%, according to Juniper Research[1].
As many manufacturers are increasingly investing in IIoT technologies, artificial intelligence (AI) and machine learning, they are experiencing a fast-growing flood of data.
This data needs to be transported, analyzed and stored somewhere. The public cloud is being heavily adopted for this purpose. Depending on the setup, however, it is also causing a substantial increase in OPEX.
As a result, more manufacturers are realizing the need to re-architect their IT and experience the benefits of interconnection–—direct, private connectivity between supply chain partners—which is an indispensable support for them.
Transform your manufacturing IT with interconnection at the edge
Learn how manufacturing leaders can tap into the power of interconnection to enhance manufacturing IT and business agility in this guide from Equinix.
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How a manufacturer responds to changing market demands
A manufacturer of capital-intensive machinery was facing challenges when its customer base demanded OPEX-based models like pay-per-use and leasing instead of buying outright. Naturally, the machine manufacturer wanted to facilitate this and added a leasing model to its portfolio. To minimize unplanned downtime and maintenance costs, it applied numerous sensors to the machines to collect data and derive predictive maintenance insights.
However, this change brought challenges to the IT environment. The IT architecture was initially designed to support production facilities and sales offices. Now, there was a need to also support all the remote machines sending back sensor data.
To work together and deliver better insights, these sensors would need to be dynamically integrated with networks, clouds and digital ecosystems via fast, secure, low-latency interconnection.
Legacy IT holds Manufacturers back
Traditional IT infrastructures simply can’t deliver the agility demanded by today’s manufacturing operations.
Smarter interconnection leads to savings and opportunities
Exchanging data between the remotely operating machines and the headquarters-based data center proved to be costly.
After some analysis, it became clear that a distributed approach leveraging interconnection could dramatically reduce IT expenditure for data transport and cloud connectivity. By shortening the distance between users and services applications and establishing direct connections with network and cloud providers at the edge, costs were significantly reduced.
This distributed infrastructure enables a manufacturer to communicate more effectively with local dealers—while offering better services— creating a ready-made opportunity for growth.
Increased flexibility of connectivity, improved network optimization and reduced cost of connectivity were the top interconnection benefits as highlighted by digital leaders across the globe in Equinix Global Tech Trends Survey 2020-21.
Digitization is not optional
Business drivers are pushing changes. A robust, distributed digital infrastructure with interconnection possibilities among supply chain partners is now a precondition for seizing opportunities.
Take an IoT initiative, for example. Find out who is present in your ecosystem and with whom you could have a direct digital connection. A direct connection enables you to have access to real-time insights and provides you with faster reaction times in a more cost-efficient way.
Think of AI linked to IoT. Data collection and analysis via IoT equipment, combined with high-speed connections, provides more insights into the production process. Through sensors and cameras connected to the network, manufacturers get interesting insights from real-time interactions between machines, systems and other endpoints.
Don’t wait—the time to start is now
The Global Interconnection Index (GXI), an annual market study published by Equinix, tracks shifts in the digital economy and their impact on digital business.
The study predicts that between 2019 and 2023, the installed interconnection bandwidth* capacity in EMEA will grow by 45% annually, while the manufacturing industry will see an average annual growth rate of 36% globally and 40% in EMEA.
Ensuring connectivity to solid manufacturing ecosystems means that you, as a manufacturer, will continue to thrive. Otherwise, you will be left behind. The advantages of having a distributed infrastructure at strategic locations and being able to exchange data with your supply chain partners in real time are huge. And if you don’t do that for yourself as a company, a competitor will take the lead.
Tomorrow’s competitive advantage starts with digital infrastructure today. Download our Manufacturing How to Guide to learn how industry leaders can tap into the power of interconnection to enhance manufacturing IT and business agility.
* the total capacity provisioned to exchange data between organizations
[1] Industrial IoT: Future Market Outlook, Technology Analysis & Key Players 2020-2025, Juniper Research, 2020
[2] Internet of Things (IoT) Market Size, Share & COVID-19 Impact Analysis, Fortune Business Insights, 2020
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