Rethinking Smart Manufacturing on a Sustainable and Global Platform

Sormeh McCullough, ESG Senior Manager, Digital Realty
November 16, 2022

Helping Rethink the Future of Smart Manufacturing

Smart Manufacturing is reshaping the future in data infrastructure. This is a response to fragile supply chains, elevated inflation, and competition for talent that are colliding to form an ugly storm.

Amid that storm, the future of Smart Manufacturing is raising concerns around security, costs, and navigating regulatory and legacy architecture constraints. This is where sustainability can be leveraged to support stable profit margins, reduce the environmental impact, and increase community awareness.

Smart Manufacturing is no longer just about checking the ESG box. Forward-looking leaders now see evolving supply chain as a risk that ESG initiatives could provide new levers to control. Especially when the future of Smart Manufacturing is not only about fixating on short-term earnings, but also about planning for the mid- and long-term risks to profitability that require strategic investment today.

A Smarter Factory Ecosystem

Over 70% of companies with revenues of $1B+¹ are planning to add at least six to ten new data locations in the next two years. This explosion in data and locations can’t be supported by current backhaul infrastructure. Especially since Smart Manufacturing is requiring data exchanges to communicate across multiple internal and external platforms while running analytics across global points of presence. This is forcing a new architecture that inverts traffic flow and brings users, networks and clouds to a secure and neutral meeting place.

Connected Data Community Approach

Through 2024, global 2000 (defined by Forbes’ annual ranking of the world’s 2000 largest public companies) Manufacturers will face an acceleration of Data Gravity Intensity which is expected to increase by a compound annual growth rate of 144% globally². This will come from more connected devices enabling direct-to-consumer services, tracking across supply chain, and improved quality control in real time. There is going to be an increased emphasis on gaining insights from this newly created data in a time-sensitive, performant, and compliant manner.

With data aggregated, Manufacturers and partners will gain the ability to predict upstream challenges before they arise. Data compliance becomes less of a chore for everyone. Over time, this connected data community approach leads to reduced waste and increased resilience to solve for Data Gravity.

Escape the Energy Inflation Rollercoaster

Many Manufacturers have been enduring the pain of volatile and inflationary energy costs. This has led to challenging decisions when it comes to pricing and profitability. 73% of Manufacturing leaders in PwC’s Pulse Survey expect to raise prices³ in response to increasing energy costs, along with other parts and components. Energy-induced price increases can risk reduced orders and customer churn, while the failure to raise prices risks thin margins.

The future of Smart Manufacturing involves leveraging Industry 4.0 technologies to enhance sustainability. The Industrial Internet of Things (IIoT) will provide reductions in energy consumption by providing the data and aggregating it into usable analytics. Examples include using simulations through High Performance Computing (HPC) to optimize consumption vs. usage costs.

Digital Realty has achieved 100% renewable coverage⁴ for its US colocation and European portfolios. This includes 910 MW of new solar and wind projects under contract in the US. And across multiple European locations and now parts of the US, waste heat is being recycled⁵ to heat homes and buildings. The future of Smart Manufacturing also includes leveraging Artificial Intelligence (AI) and Virtual Reality (VR) thermal optimization software to analyze complex airflow and cooling inefficiencies.

Together, investments like these and countless others like them are yielding a more resilient and sustainable digital transformation. These investments will change how Manufacturing companies create and deliver value to best serve customers, partners, and employees across channels at multiple points of business presence.

Elevate Sustainability Values Important to An Increasingly Younger Workforce

The labor cost obligations accepted as part of the ongoing labor shortage squeezes already thin margins for many leading Manufacturing companies, which in turn threatens workforce reductions. The smart factory needs more sustainable options for attracting and retaining talent in addition to the labor bidding competition.

According to a Deloitte report, Gen Z has the most consideration for sustainability when searching for jobs⁶, more than any of the previous generations. Now, a more sustainable data-centric infrastructure alone will not be enough to convince employees you are serious about sustainability. But smart factories powered by even smarter platforms can be optimized for positive environmental impact. You can offer a vision for making more of what the world needs while reducing the impact on environments through connected data communities. And you can pursue that vision with a secure and neutral meeting place that is transforming how Manufacturers create and deliver value in the digital economy.

Conclusion

The future of Smart Manufacturing needs connected data communities to make smart factories and Industry 4.0 sustainable and efficient.

To help you in this journey, we have compiled a library of cutting-edge resources based on our PDx™ methodology for optimizing data exchange.

Developed by expert Solutions Architects, the Optimizing Manufacturing Data Exchange PDx™ Solution Toolkit includes:

• Pervasive Datacenter Architecture (PDx™) Solution Brief
  A codified strategy and solution approach to data-driven digital transformation
• Pervasive Datacenter Architecture (PDx™) Blueprint
  Three-step integration and hosting solution process to achieve target state architecture
• Pervasive Datacenter Architecture (PDx™) Design Guide
  Plan, identify, map and deploy methodology that shows real value impact

Sormeh McCullough is a Senior Manager on the ESG Team at Digital Realty. She supports development of the company’s strategy and global targets and helps oversee the implementation of the company’s Environmental, Social, and Governance (ESG) programs. Sormeh manages the company’s annual ESG reporting and supports the company’s renewable energy, energy efficiency, water conservation, and diversity, equity and inclusion (DEI) efforts.

1. CIO. (n.d.). Global Data Insights Survey 2022 - CIO insights. Digital Realty.
2. Digital Realty. (n.d.). (rep.). Data Gravity Index DGx.
3. Anderson, D., & Murray, M. (2022, February 16). Inflation, supply chain snarls and the incredible shrinking margin: What do manufacturers do now? PwC.
4. Sustainability objectives. Digital Realty. (n.d.).
5. Johnson, D. (2014, September 30). Amazon’s Innovative Use of Data Center Real Estate [web log].