One only has to look at the current semiconductor chip shortage to see how nearly every manufacturer worldwide is still dealing with the long-lasting impact of the global pandemic. The automotive industry exemplifies how disrupted the supply chain is—analyst predictions show a production shortfall of almost 8 million vehicles by the end of 2021 as the chip shortage continues.[i]
The pandemic has spurred companies to adopt a digital-first strategy to address these types of challenges and accelerate their business transformation via digital infrastructure. As reported by the Global Interconnection Index (GXI) Volume 5, digital leaders are moving 4.5x farther ahead, whereas businesses locked in legacy IT and networking architectures are falling behind. According to the GXI, “Organizations that fail to leverage cloud, SaaS or partner digital ecosystems have shown two to three times slower growth over the past two years.”
The following examples of digital-first use cases demonstrate how manufacturing leaders are enhancing their competitiveness in the industry.
Build the right digital infrastructure for smart manufacturing
In this brief, read how the right infrastructure allows manufacturing organizations of material, industrial, technology and consumer goods to achieve their digital transformation vision.
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Digital-first means digital services at software speed
Manufacturing organizations must efficiently deliver technology as a service with software speed by leveraging cloud, network and industrial ecosystems and smart manufacturing innovations, such as the industrial internet of things (IIoT) and artificial intelligence and machine learning (AI/ML). By deploying and interconnecting digital infrastructure at strategic core, ecosystem and edge locations, manufacturers can more quickly:
- Modernize hybrid IT systems by deploying data-intelligent core systems to optimize resilience and efficiency, while leveraging data for improved automation and service monetization.
- Enable supply chain optimization by integrating cloud and SaaS applications and open industrial ecosystems to scale collaboration, accelerate innovation, and be a first mover into emerging data monetization marketplaces.
- Extend infrastructure to scale smart manufacturing capabilities, including sensor and remote device monitoring, robotics, AI/ML, inventory automation, intelligent decision-making to support new services, and closer engagement with customers and markets.
The following diagrams illustrate digital core, ecosystem and edge reference architectures:
Digital Core Architecture
A digital core is where organizations establish their digital presence and optimize their adjacency to digital ecosystems (e.g., cloud, network, SaaS). This is where manufacturers can scale their on-demand resources and capacity to develop and grow new digital services and business models. It is in core locations where leading manufacturing organizations deploy hybrid multicloud—a “smart cloud” architecture that allows manufacturers to deploy corporate applications at scale with flexibility, modernize manufacturing BCP/DR operations, and accelerate R&D activities with powerful insights into aggregated customer data. A properly designed digital core allows manufacturers to use data to constantly improve resilience, efficiency, automation and service monetization.
Digital Ecosystem and Edge Architecture
Digital ecosystems level the playing field by capitalizing on interconnected digital and industry marketplaces—driving gravity, density and value for every participant. Manufacturers can enhance and expand their digital capabilities and services through secure, low-latency connections to industry-specific, API-based data marketplaces. They can also exchange their “digital value” to create new business models, including monetizing data. Digital ecosystem participants benefit from scaled collaboration with optimized supply chains that integrate cloud/SaaS solutions and open industrial ecosystems, suppliers, tech giants and consumers.
At the digital edge, manufacturers can geographically gain proximity to centers of revenue and operations, leveraging low-latency connectivity and AI/ML analysis to derive valuable business intelligence from massive amounts of data and multiple sources. At the digital edge, real-time transacting and decision-making happens for shop floor (e.g., robotics), service and maintenance operations. Proximate, direct and secure interconnection optimizes and scales collaboration with ecosystem partners and customers, enabling manufacturers to customize real-time interactions.
Adaptable interconnection is the foundation of smart manufacturing
Private interconnection is key to integrating digital core, ecosystem and edge deployments and building end-to-end digital infrastructures. According to the GXI Vol. 5, interconnection bandwidth in the global manufacturing sector is expected to grow annually by 41% between 2020 and 2024. The GXI enterprise benchmark shows that manufacturers (on average) connect to 27 partners in core manufacturing locations, such as Silicon Valley and Frankfurt, and 14 partners in edge manufacturing locations, such as London and Tokyo.
Manufacturing companies that deploy more agile digital infrastructures in a distributed manner improve the user experience by bringing edge resources and services closer to employees, partners and customers. Digital infrastructure built using an Interconnection Oriented Architecture® (IOA®) strategy, eliminates the distance between IT services and users and optimizes the data exchange among various entities across clouds and networks over secure private interconnections.
By leveraging IOA best practices, manufacturers can:
- Realize immediate gains across real-time industrial processes and from supply chain optimization
- Create an intelligent factory and a smarter business
- Converge operational technologies and integrate design-manufacturing
- Modernize IT systems, applications and data backup
- Leverage multicloud agility and flexible network options
- Perform in-depth processing and analytics
- Reduced time to connection and market
Smart manufacturing requires an agile hybrid multicloud infrastructure platform
In today’s digital world, manufacturers require data-enabled innovations (e.g., IIoT devices/sensors) and a tailorable hybrid multicloud infrastructure platform—with distributed, low-latency interconnection—to more directly collaborate with supply chain partners and customers, and dynamically integrate IT infrastructures with networks, clouds and digital ecosystems. Equinix provides a global, scalable platform for manufacturers to build and interconnect digital infrastructure that collects, stores, processes, analyzes and manages manufacturing and supply chain data securely, where it is most needed.
For example, CELSA, a global steel manufacturer, wanted to revitalize its corporate WAN to improve user experience, lower application latency and reduce network cost. Utilizing the design concept of digital core, ecosystem and edge on Platform Equinix®, the manufacturer deployed a hybrid multicloud architecture with Equinix Fabric™ as an integral part of its global network backbone. This architecture allowed CELSA to directly and securely connect multiple public cloud platforms, such as AWS, Microsoft Azure, and Google Cloud, and access its SAP ERP environment. As a result, CELSA’s network infrastructure cost was reduced by 40%, latency was lowered by 10x, and workload migration to the cloud was made easier.
To learn more about how Platform Equinix is supporting smart manufacturing, view the presentation below on Smart Manufacturing at Software Speed.
You can also read the Smart Manufacturing Solution Brief.
[i] Consumer Reports, “Global Chip Shortage Makes It Tough to Buy Certain Cars,” October 4, 2021.
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