Stefanie Naujoks (Research Director, Manufacturing Insights Europe)

Back in 2019, Volkswagen (VW) announced its plan to connect more than 120 plants across all its brands globally via an industrial IoT platform, working with Amazon Web Services (AWS) and Siemens. COVID-19 doesn’t seem to have affected its ambitious plans — it still hopes to have more plants in Europe connected by the end of this year, and in July it announced that it aims to open up the platform to its ecosystem of suppliers and partners.

VW Industrial Cloud — Advantages and Challenges

I think it makes sense for VW to invest in a platform that helps to improve efficiency and productivity in its globally distributed production facilities. Opening up the platform to suppliers and partners will help to scale industrial process innovations faster than it would be using a siloed approach, with every plant manager, line operator, or machine OEM trying to optimize industrial processes on its own.

Despite the advantages of the project, such as improving process efficiency and faster scaling for process innovations, there are also some obstacles:

  • The VW Industrial Cloud has two domains at different maturity stages. The Digital Production Platform (DPP) — VW’s internal-facing platform — has been the company’s focus so far and is therefore at a much more mature stage than the outside-facing VW Industrial Cloud (IC).
  • It remains to be seen whether VW will manage to stick to its cloud and Internet of Things (IoT) architecture and successfully implement it globally, given regional preferences for some cloud providers or individual supplier preferences and requirements.
  • Data ownership is a challenge for VW’s Industrial Cloud as machine suppliers (i.e., OEMs) and VW itself is interested in utilizing this data for analysis. This will therefore likely require further coordination between VW and its suppliers to reach an agreement.
  • Time will tell whether solutions in the VW Industrial Cloud — particularly those based on artificial intelligence (AI) or machine learning (ML), such as predictive maintenance or predictive quality solutions — will be able to scale, and to what extent, across different plants or assembly lines that work under different conditions.

Open Manufacturing Platform Initiative

VW considers its VW Industrial Cloud to be a truly open platform, which means it is also potentially open for other automotive OEMs. This currently seems a bit too ambitious, considering that VW’s focus is on the internal-facing DPP and that car maker BMW is currently driving its own Open Manufacturing Platform (OMP) initiative with Microsoft Azure. It will be some time, therefore, until we see how the future of global and networked automotive production evolves.

IDC acknowledges that the VW Industrial Cloud project is still in a very early stage. Therefore, more life has to flow into the project — connecting more plants, onboarding more suppliers, for example — before we see if it develops as planned by VW and if the intended goals are reached.

Do you want to discover more about this topic? Please have a look at this recently published report. To share your thoughts, please contact Stefanie Naujoks or head over to https://uk.idc.com.

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