The transformative potential of AI in the manufacturing industry
By Sanjay Ravi, Managing Director, Worldwide Discrete Manufacturing, Microsoft on September 25, 2017
Filed under Discrete Manufacturing
Every year on the first Friday in October, we join thousands of companies to celebrate the origins, innovation and future of the manufacturing industry with Manufacturing Day in the U.S. This year, on October 6, it is our opportunity to reflect on the incredible digital transformation that’s happened over the last few years and to show the world the exciting innovations that are coming.
AI is what’s next
Just as our industry has seen great advancements in terms of automation, cloud computing and IoT, we are now engaged in the next manufacturing breakthrough: artificial intelligence, or AI, to enable the smarter machine, the smarter factory, the smarter ecosystem—and even the smarter car.
This new era of AI is driven by the combination of almost limitless computing power in the cloud, the digitization of our world, and breakthroughs in how computers can use this information to learn and reason much like people do.
By applying advanced AI technologies such as machine learning and cognitive services against the data coming in from the manufacturing process, you now have a value-added layer of insight into your data. This allows you to improve operational efficiencies, speed production, optimize equipment performance, minimize waste and reduce maintenance costs.
Advancements in AI are also opening up a hybrid workforce where people and machines work together. According to IDC, by 2020, 60 percent of plant floor workers at G2000 manufacturers will work alongside assistance technologies that enable automation, such as robotics, 3D printing, AI, and AR/VR.
Pioneers will prevail
While we hear from manufacturers that they believe AI is critical to enabling competitive advantage, not all feel ready to put a strategy in place.
Boston Consulting Group and MIT Sloan Management Review recently interviewed more than 3,000 executives and technology experts in the manufacturing industry about their AI ambitions. They found that the gap between ambition and execution is large at most companies: only about one in five companies has incorporated AI into some processes. Forrester says that 58 percent of business and technology professionals are researching AI, but only 12 percent are using AI systems.
However, industry pundits expect an increasing number of enterprises will adopt AI as capabilities become more adaptable and ubiquitous. Those in the manufacturing industry who start now can expect to see a strong return on their AI investment. IDC estimates that the AI market will grow from $8 billion in 2016 to more than $47 billion in 2020, when 50 percent of mature supply chains will be using cognitive computing/AI and advanced analytics for deployment-based planning and to eliminate sole reliance on short-term demand forecasts.
According to a recent Infosys report, global business decision makers expect to see a 39 percent average increase in revenue by 2020, alongside a 37 percent reduction in costs with an AI deployment. Accenture predicts that as AI-powered machines eliminate faulty machines and idle equipment, manufacturers will experience consistently rising rates of return, resulting in equally dramatic profit increases of 39 percent by 2035.
As Microsoft helps the industry move to a new world that is going to be made up of an intelligent cloud and an intelligent edge, we are one step closer to realizing the promise of AI in the manufacturing industry. Our approach to AI is about harnessing the explosion of digital data and computational power with advanced algorithms to enable collaborative and natural interactions between people and machines that extend the human ability to sense, learn, and understand.
The Microsoft intelligent cloud platform offers manufacturers a compelling partnership in your journey to adopt AI. Our business solutions allow you to use AI to drive transformation and automation with accelerators and practices. Our intelligent applications are infused into Microsoft products and services that are core to your productivity, communication, and business processes. Cortana Intelligence helps you to turn data into intelligent action and iterative learning. Our investments in machine learning are transforming Azure into one of the most strategic analytics platforms for manufacturers.
For developers, we offer powerful AI tools and services through our collection of powerful Cognitive Services APIs that enable your apps to intelligently interpret the world and naturally engage your users. The Microsoft Bot Framework makes it easy for you to create new experiences and reach your users at scale. The Microsoft Cognitive Toolkit trains deep learning algorithms to learn like the human brain.
Manufacturers of all sizes are already leveraging the power of AI and the cloud to accelerate performance. Honeywell is a great example of a company that is bridging the physical and virtual worlds with AI to shift the value drivers from Honeywell’s flagship devices to the data and insights they generate.
Jabil is using machine learning to detect and predict manufacturing failures of their circuit boards early in production. As a result, errors can be corrected prior to adding expensive electronic components, resulting in reduced scrapped materials and warranty costs, and an increase in customer satisfaction.
AI is helping the manufacturing industry move from mere predictive maintenance to a new level of predictive intelligence that allows manufacturers to maximize efficiency in a way that equipment rarely—or never—fails. We’ve seen manufacturers such as Rolls Royce and thyssenkrupp leading with these AI-powered preemptive capabilities.
Security is another important application for AI. Uber is using the Face API in Cognitive Services to ensure that its one million drivers using the app match their accounts on file.
We believe humans and machines will work together to not only boost productivity, but also to create new jobs that are enhanced by AI. Microsoft is focused on infusing computers, equipment, and systems with the ability to reason, communicate, and perform with humanlike skill and agility. These applications span anomaly detection to cobots—autonomous robots capable of working together with humans in an office environment. Deep Microsoft investments in the field are advancing machine intelligence and perception, enabling computers that understand what they see, communicate in natural language, answer complex questions, and interact with their environment.
AI has the potential to make workers safer and more productive, but it doesn’t replace people. People are essential. They manage factory floors and highly skilled tasks. They drive innovation and ingenuity. People solve challenges and they are still the most important front “customer service” line.
Over the past several years, customers such as Comau and Sandvik Coromant have reimagined their approach to manufacturing and are already seeing benefits from combining human and digital intelligence. These advancements include being able to better predict potential failures, keeping plant equipment running efficiently with longer uptime, and providing employees with better tools to manage quality across the manufacturing process.
Between collaborative robots, intelligent bots, drones, and augmented reality, we’re only scratching the surface of what AI and human collaboration can help the manufacturing industry accomplish.
As we build intelligence into everything we make, Microsoft is collaborating to lead a growing global conversation around AI’s transformative potential in the manufacturing industry and beyond. We will continue to drive groundbreaking research in AI capabilities and grow our partnerships with top thought leadership organizations to advance the industry.
Our focus is on democratizing AI. That means we’re working to make it easy for you to build and grow your own intelligence capabilities. At Microsoft, our goal is to ensure everyone can and should benefit from the promise of AI.
As we celebrate Manufacturing Day 2017 on October 6, we take note that the AI opportunity is now—and its potential, catapulted by things like cloud and IoT—is transformative.
The Industry 4.0 revolution that is happening in our industry is cumulative. One breakthrough drives the next, and these innovations continue to build on one another. It’s important to have a strong digital infrastructure and strategy in place so you are ready to capitalize on what’s coming next.
Please visit our Microsoft AI site to learn more about how we can help your business get started with AI today.