Big data to redefine value

Posted on 14 Sep 2012 by The Manufacturer

Leveraging Big Data innovatively could redefine manufacturing profit centres explains Professor Andy Neely of the Cambridge Service Alliance.

Speaking to TM ahead of the Cambridge Service Alliance’s annual industry conference Prof Neely says that there is a growing awareness and interest in how to apply Big Data for commercial benefit.

About the Cambridge Service Alliance

The Cambridge Service Alliance is dedicated to researching new ways to provide, implement and employ complex service systems in a variety of industry settings.

The Alliance was founded by the University of Cambridge, BAE Systems and IBM in 2010. Caterpillar joined as a key industrial partner in 2011.

Explaining the key drivers between the explosion of Big Data onto the corporate agenda Neely says, “As we automate processes we find that more and more commercial activity, for both consumers and businesses, is done online. In addition the proliferation of individual ‘smart’ devices means that there is a new level of granularity to the data being captured.”

While it is easy to assume that consumer facing organisations and industries are well ahead of the game in leveraging this granular data for commercial benefit, Neely says that some manufacturing companies are showing that Big Data is far from irrelevant to their industry.

“A presentation from the wind turbine manufacturer Vestas at the Cambridge Service Alliance Conference next week is a great example of just how valuable Big Data can be to manufacturing if it is leveraged cleverly.”

Vestas has spent 12 years collecting data on global wind streams explains Neely. “They gathered this data from global weather stations. Some of the data was in the public domain and some had to be purchased. But the company now has an ability to tell customers exactly where to position turbines to capture the steadiest wind flows.”

“The question for Vestas now,” says Neely, “is that if they are creating more value through their ability to advise customers and allow them to get the most out of the turbine, then has turbine in fact become a commodity. Do they still want to manufacture it themselves?”

As a word of caution to manufacturers excited by the possibilities that Bid Data might open up for them, either in terms of maximising the effectiveness of their current business or innovating new value-add revenue streams, Neely has a word of caution however.

“The more we push the boundaries in the use of Big Data the more we see potential moral and ethical concerns arising,” he says.

While Neely admits that, so far, these concerns have mainly been met in consumer facing organisations where customers become uncomfortable with “how much a company knows about them,” he also says manufacturers should not assume they are exempt from this dynamic.

“It is less clear at the moment where the moral lines will be drawn for manufacturing,” he sums up. “But as we experiment more with capturing and exploiting data, sourced both directly from organisational transactions, but also increasingly from beyond the boundaries of a single business, we will no doubt see them emerge.”

Related articles:

Read what Peter Thorne, managing director of analyst firm Cambashi and chair for TM’s ERP Connect 2012 event has to say about chosing when and how to leverage Big Data in Big Data: Big headache or big opportunity.

Also see:

Big Daddy applies big data to manufacutring