The Strategist

WEF: Profit from data exchange in industry may reach $ 100B

01/14/2020 - 07:48

Although new technologies, such as artificial intelligence and in-depth analytics, are transforming the global industry and creating new opportunities, companies alone are unable to take advantage of these advantages due to a lack of relevant data, according to an analytical report from the World Economic Forum (WEF) and the Boston Consulting Group (BCG). At the same time, according to their assessment, data exchange between companies can bring the industry more than $ 100 billion only in the field of optimization of production processes.

Nic McPhee via flickr
Nic McPhee via flickr
Researchers identify five main areas where data cooperation can have the greatest effect: improved asset optimization (about $ 40 billion), product tracking ($ 40 billion) and process conditions ($ 10 billion), improved digital product features ($ 10 billion) and confirmation origin ($ 5 billion).

In the first case, the researchers are talking about data exchange between users of one type of equipment: this will allow building more efficient algorithms for predictive maintenance (forecasting failures and preventive repairs), as well as to improve product quality. This should benefit small and medium-sized companies that have no opportunity to accumulate large amount of data by ourselves. The second is about the transparency of the entire value chain: it will allow companies to improve planning, respond quickly to unexpected events, reduce inventory and optimize logistics.

Although most manufacturers already use RFID tags to track products and components, only creating a single system for all companies involved in the chain will help achieve the required transparency.
By monitoring suppliers' process compliance, manufacturers can also increase confidence and better meet stringent regulatory requirements. Continuous recording of all stages of production will allow suppliers to use these records as evidence in warranty disputes. Examples of such alliances are already in the food industry and pharmaceuticals, according to the WEF. Sharing product characteristics, such as form or composition, can also help manufacturers optimize production. For example, an equipment manufacturer may share a “digital double” of a product with a supplier to eliminate the need for quality checks. Finally, proof of origin, including using distributed ledger technology, will help meet the growing consumer demand for transparency and authenticity of goods.

According to a BCG survey of about 1,000 businesses, 72% of respondents consider sharing data.
Among the success factors, the WEF calls a clear understanding of advantages and goals of such cooperation, its mutual benefit, technology reliability and common standards. SOme of the possible model of cooperation could be the exchange of data by manufacturers using a solution developed by a third party, the exchange between direct suppliers and the manufacturer within the same chain, as well as the exchange between manufacturers through the mediation of the equipment supplier. A direct exchange of product data between manufacturers is considered unlikely due to competition and compliance problems. Researchers divide possible barriers to the development of data collaboration into confidence problems (fear of information leaks, loss of competitive or negotiation advantages) and technical (risks of data leakage and loss, issues of their availability and interoperability, different digital maturity of companies and the need for technology change costs).