"Why ship atoms when you can transmit bits?"
Nicholas Negroponte, co-founder of the MIT Media Lab and the first investor in WIRED magazine, asked that question in his 1995 best-seller, Being Digital. At the time, Blockbuster rented videotapes (atoms) at its 9,100 stores worldwide. Today, the company is gone and Netflix, which initially mailed CDs to its customers, adapted to the market's digitalisation, streams bits, and has a $223 billion valuation.
While the likelihood that your industry goes the way of videotapes is slim, the pandemic proves that massive swings in demand for your products will occur at any time. With these swings comes the need for an agile blend of digital and physical capabilities that is now a prerequisite for success.
Regardless of what you make, everything in your operation that can become digital must become digital. Only then can you transmit bits internally and externally, using cyber-physical systems to convert the bits into atoms when, where and in the quantities needed.
According to the National Institute for Standards and Technology (NIST), "Cyber-Physical Systems (CPS) comprise interacting digital, analog, physical, and human components engineered for function through integrated physics and logic. These systems will provide the foundation of our critical infrastructure, form the basis of emerging and future smart services, and improve our quality of life in many areas."1 In turn, engineering technology (ET), operational technology (OT), and information technology (IT) form CPS' foundation:
- ET enables the design, manufacture, or purchase of the equipment and systems used within your factories
- OT hardware and software detect or cause manufacturing adjustments through direct monitoring or control of equipment, processes, and events
- IT software integrates the data generated by production systems into your business and financial management platforms.
But how to manage the resulting computing and storage requirements? With more than 100 million members worldwide who watch 125 million hours of TV shows and movies every day, Netflix uses Amazon Web Services (AWS) for nearly all its computing and storage needs, leveraging more than 100,000 server instances on AWS.2 Access to elastic computing assets means Netflix has turned its IT hardware requirements from capital costs to operating expenditures. While your IT needs may not be as enormous as Netflix's, a cloud infrastructure and platform service may still be necessary.
Similarly, your manufacturing equipment requirements may be met by the 3D print technology providers and printing companies who offer managed services. Clients leverage the vendors' services when they have capacity constraints, accessing the necessary production elasticity to overcome the shortfall in 3D print output. However, the worst situation is when the conditions are not anticipated, negatively impacting your customers. Smart manufacturing provides the means to synthesise your cyber-physical systems in a manner that improves your operations and alerts you to changing supply and demand factors.