Welcome!

Cloud Expo Authors: Scott Bampton, Anne Buff, Gilad Parann-Nissany, Elizabeth White, Pat Romanski

Related Topics: Cloud Expo, SOA & WOA

Cloud Expo: Blog Post

Big Data Highlights from McKinsey: Part 2 - Production, Supply, and Logistics

Big Data will have a large impact on manufacturing value chains

For the second post on the McKinsey report on Big Data, we take a look at the impact of Big Data on production, supply, and logistics. When we discuss Big Data, there’s often an implicit assumption that it has to do entirely with IT functions. However, Big Data actually will have a large impact on manufacturing value chains.

While the manufacturing sector has historically been a driver of GDP and employment for many developed economies, globalization has made it a global activity with extended supply chains made possible by advances in information and communications technology as well as reduced transportation and market entry costs. This has resulted in incredibly complex and fragmented webs of globe-spanning chains, and increasing country specialization in specific changes of the production process. Manufacturers, in turn, have assembled global production and supply chain networks for cost advantage.

Where does Big Data come in? McKinsey argues that manufacturers will need to leverage large datasets in order to continue achieving large levels of productivity. The “raw material” is also very much available:

Manufacturing stores more data than any other sector—close to 2 exabytes of new data stored in 2010. This sector generates data from a multitude of sources, from instrumented production machinery (process control), to supply chain management systems, to systems that monitor the performance of products that have already been sold (e.g., during a single cross-country flight, a Boeing 737 generates 240 terabytes of data).  And the amount of data generated will continue to grow exponentially. The number of RFID tags sold globally is projected to rise from 12 million in 2011 to 209 billion in 2021. IT systems installed along the value chain to monitor the extended enterprise are creating additional stores of increasingly complex data, which currently tends to reside only in the IT system where it is generated. Manufacturers will also begin to combine data from different systems including, for example, computer-aided design, computer-aided engineering, computer-aided manufacturing, collaborative product development management, and digital manufacturing, and across organizational boundaries in, for instance, end-to-end supply chain data.

McKinsey forecasts the biggest applications of big data will be in Research and Development, Supply Chain, and Production functions:

  • The collaborative use of data can enhance product lifecycle management, using customer data to create better design to value, and better enable open innovation through sorting of high-value ideas.
  • Manufacturers can use data to improve demand forecasting and supply planning, but can also use big data to integrate reams of data from various sources in near-real time to adjust production.
  • Big data can also revolutionize the production process by creating “digital factory” simulations to better uncover optimal production layousts, sprinkle sensors throughout the supply chain and production process to reduce waste and cut operations and maintenance costs.
  • Marketing and sales/after sales support can also use sensor data and analytics to make customer service more reliable. As the report notes, “a repair technician can be dispatched before the customer even realizes that a component
    is likely to fail.”

However, the report goes on to note that Big Data may pose some cultural challenges for typical manufacturing organizations. One telling anecdote from the report described oil refineries that rely on managers with spreadsheets instead of algorithms using data collected directly from machinery. In order to reap the benefits from Big Data, manufacturers will have to develop capabilities and human resources up to the task of getting the best use out of the vast amount of information potentially available to them.

Read the original blog entry...

More Stories By Bob Gourley

Bob Gourley, former CTO of the Defense Intelligence Agency (DIA), is Founder and CTO of Crucial Point LLC, a technology research and advisory firm providing fact based technology reviews in support of venture capital, private equity and emerging technology firms. He has extensive industry experience in intelligence and security and was awarded an intelligence community meritorious achievement award by AFCEA in 2008, and has also been recognized as an Infoworld Top 25 CTO and as one of the most fascinating communicators in Government IT by GovFresh.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SYS-CON Events announced today that Stratogent will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Stratogent is a custom managed services organization based in San Mateo, California. We design, implement, and support mission critical infrastructure 24x7 on premises, in datacenters and in the Cloud. Since 2005, we have acted as an extension of internal IT teams, achieving a customer reten...
SYS-CON Events announced today that Harbinger Systems will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Harbinger Systems is a global company providing software technology services. Since 1990, Harbinger has developed a strong customer base worldwide. Its customers include software product companies ranging from hi-tech start-ups in Silicon Valley to leading product companies in the US a...
SYS-CON Events announces a new pavilion on the Cloud Expo floor where WebRTC converges with the Internet of Things. Pavilion will showcase WebRTC and the Internet of Things. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices--computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will con...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, has been named “Bronze Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Cloudian is a Foster City, Calif.-based software company specializing in cloud storage. Cloudian HyperStore® is an S3-compatible cloud object storage platform that enables service providers and enterprises to bui...
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual C...
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at Internet of @ThingsExpo, Andrew Bolwell, Director of Innovation for HP’s Printing a...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at Internet of @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., will show what is needed to leverage the IoT to transform...
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurri...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace. ...
Seagate has a strong track record of collaborating with others to develop better cloud solutions. The Seagate Cloud Builder Alliance program, for example, leverages the company’s knowledge of storage and cloud-optimized solutions to give cloud service providers the customized, flexible and scalable server and storage solutions to meet the high levels of service their customers demand. Seagate also is a member of the OpenStack Foundation and Open Compute Project to help define and promote open-so...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
What process has your provider undertaken to ensure that the cloud tenant will receive predictable performance and service? What was involved in the planning? Who owns and operates the data center? What technology is being used? How is it being supported? In his session at 14th Cloud Expo, Dave Weisbrot, Cloud Business Manager for QTS, will provide the attendees a look into what it takes to stand up and stand behind a highly available certified cloud IaaS.
SYS-CON Events announced today that Gigaom Research has been named "Media Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Ashar Baig, Research Director, Cloud, at Gigaom Research, will also lead a Power Panel on the topic "Choosing the Right Cloud Option." Gigaom Research provides timely, in-depth analysis of emerging technologies for individual and corporate subscribers. Gigaom Research'...