Volkswagen and Amazon Web Services are partnering on an industrial IoT cloud — and it highlights how automakers could become more efficient (AMZN, VWAGY)

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Volkswagen (VW) and Amazon Web Services (AWS) announced a multi-year agreement to build an industrial digital production platform, the VW Industrial Cloud, to connect and manage the automaker’s manufacturing plants and supply chain.

Drivers That Led IoT User to Seek Out Solutions

The new platform will integrate data from more than 30,000 facilities, including VW’s 122 manufacturing facilities and 1,500 partners in its supply chain.

Through the deal, the German auto giant can use AWS’s cloud computing and IoT services to increase facilities’ efficiency, improve production flexibility, and increase vehicle quality.

Here’s what it means: Connecting and tracking production lines and supply chains will allow VW to identify issues or opportunities for efficiency in real time and quickly address them.

The VW Industrial Cloud will aggregate real-time manufacturing data to assess performance and identify friction points using AWS IoT services. The cloud will use AWS's group of IoT offerings — Greengrass, Core, Analytics, and SiteWise — to collect, process, and analyze data from plant floors. It will also be used to track parts and vehicles. Equipped with data and analytics from across its facilities, VW will be able to more easily identify what production or supply chain segments need improvement and more quickly take corrective action.
Amazon's SageMaker service will allow the automaker to quickly build, train, and deploy machine learning models for plant equipment using an edge-based system. VW can use SageMaker to assist in making its production machinery more efficient and adaptable for a wider array of tasks. For example, a robot sorting parts could learn to perform its task faster over time or be trained to weed out defective parts.
VW will deploy AWS Outposts on-site to offer a consistent experience for latency-sensitive applications. AWS Outposts bring native AWS services, infrastructure, and operating models onto factory floors in order to provide seamless functionality between devices and the cloud. With AWS Outposts in VW’s facilities, IoT devices will be able to communicate with infrastructure in close proximity instead of with a distant server, which can lead to lower latency.

The Bigger Picture: Large, complex manufacturers, such as those within the auto industry, face countless efficiency issues that can be addressed with IoT solutions.

Manufacturers operate under tight margins and must eliminate inefficiencies to drive greater profits. Workflow automation and optimization are the top drivers pushing companies to adopt IoT solutions, according to Business Insider's Global IoT Executive Surveys. To achieve efficiency objectives in plants and supply chains, companies like VW are increasingly looking to evolving technologies like IoT, AI, machine learning, and 5G.

For example, in August 2018, networking and telecom company Ericsson announced a partnership with automaker Audi to explore using 5G technology to enable faster data transmission between equipment on the factory floor. While the VW Industrial Cloud is still nascent, manufacturers should look to it as a model to replicate, even if only in part, as they seek to widen their profit margins by shrinking inefficiencies.

More to Learn

Business Insider Intelligence is keeping its finger on the pulse of the ongoing IoT revolution by conducting our third annual Global IoT Executive Survey, which provides us with critical insights on the most pivotal new developments within the IoT and explains how top-level perspectives are changing year to year. Our survey includes nearly 400 responses from key executives around the world, including C-suite and director-level respondents.

Through this exclusive study and in-depth research into the field, Business Insider Intelligence details the components that make up the IoT ecosystem. We size the IoT market and use exclusive data to identify key trends in the connected devices sector. And we profile the enterprise, governmental, and consumer IoT segments individually, drilling down into the drivers and characteristics that are shaping each market.

Here are some key takeaways from the report:

We project that there will be more than 64 billion IoT devices by 2025, up from about 10 billion in 2018.
Blockchain within the IoT is still generally the provenance of startups, and they're populating the marketplace with products that take advantage of the technology's characteristics. It's not going to upend the IoT, despite the technology’s much-ballyhooed potential. And respondents to our survey of IoT providers seem, for the most part, to understand this. Just a small percentage think that blockchain will become a universal standard in the IoT. The vast majority said that blockchain will either be a tool that most companies employ at times, or a niche product that only certain solutions use.
Lightning-fast 5G networks will change how telecommunications shapes business and will also offer new and transformative possibilities in the IoT space. The new standard will further increase the appeal of cellular solutions in the areas where it's available. And that’s why nearly half of IoT providers said they’re planning to introduce support for 5G networks to their solutions within the next two years.
The report highlights the opinions and experiences of IoT decision-makers on topics that include: drivers for adoption; major challenges and pain points; deployment and maturity of IoT implementations; investment in and utilization of devices; the decision-making process; and forward- looking plans.

In full, the report:

Provides a primer on the basics of the IoT ecosystem.
Offers forecasts for the IoT moving forward, and highlights areas of interest in the coming years.
Looks at who is and is not adopting the IoT, and why.
Highlights drivers and challenges facing companies that are implementing IoT solutions.

Interested in getting the full report? >> Purchase & Download It Now

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