From the Harvard Business Review, March - April 2024 edition:
Combining digital and analog machines will upend industrial companies
Summary.
Until recently most incumbent industrial companies didn’t use highly advanced software in their products. But now the sector’s leaders have begun applying generative AI and machine learning to all kinds of data—including text, 3D images, video, and sound—to create complex, innovative designs and solve customer problems with unprecedented speed.Success involves much more than installing computers in products, however. It requires fusion strategies, which join what manufacturers do best—creating physical products—with what digital firms do best: mining giant data sets for critical insights. There are four kinds of fusion strategies: Fusion products, like smart glass, are designed from scratch to collect and leverage information on product use in real time. Fusion services, like Rolls-Royce’s service for increasing the fuel efficiency of aircraft, deliver immediate customized recommendations from AI. Fusion systems, like Honeywell’s for building management, integrate machines from multiple suppliers in ways that enhance them all. And fusion solutions, such as Deere’s for increasing yields for farmers, combine products, services, and systems with partner companies’ innovations in ways that greatly improve customers’ performance.
For more than 187 years, Deere & Company has simplified farmwork. From the advent of the first self-scouring plow, in 1837, to the launch of its first fully self-driving tractor, in 2022, the company has built advanced industrial technology. The See & Spray is an excellent contemporary example. The automated weed killer features a self-propelled, 120-foot carbon-fiber boom lined with 36 cameras capable of scanning 2,100 square feet per second. Powered by 10 onboard vision-processing units handling almost four gigabytes of data per second, the system uses AI and deep learning to distinguish crops from weeds. Once a weed is identified, a command is sent to spray and kill it. The machine moves through a field at 12 miles per hour without stopping. Manual labor would be more expensive, more time-consuming, and less reliable than the See & Spray. By fusing computer hardware and software with industrial machinery, it has helped farmers decrease their use of herbicide by more than two-thirds and exponentially increase productivity.
Deere gathers data from all its modern farm equipment, including the See & Spray, as it’s being used. In total the company collects billions of measurements on soil, crop, and weather conditions from about 500,000 machines on more than 325 million acres of land. That data goes into Deere’s cloud-enabled JDLink system, where it’s analyzed and used to generate immediate and future improvements to the equipment and farms. Feeding all that information into machine-learning algorithms and AI enables Deere to create a portfolio of combined digital and analog services for optimal seed, fertilizer, and weed management.
Deere is one of the companies leading the way in the industrial sector. Until recently, incumbent manufacturers of construction and mining equipment and other heavy machinery didn’t use the most advanced software in their products. That’s no longer true. Today, using generative AI and machine learning, they extract insights and trends from structured and unstructured data—including text, high-resolution 3D images, voice interactions, video, and sound—and create complex designs in seconds.
Having studied industrial companies for more than 40 years, we’re fascinated by the way they’re now fusing analog machinery and advanced digital technologies. The smartest firms have come to realize that the deepest insights, rather than the most valuable physical assets, will separate the winners from the rest of the pack. But achieving success isn’t as easy as installing a computer in a tractor. There are many things to consider first.
The process starts with developing what we call fusion strategies, which join what manufacturers do best—creating physical products—with what digital businesses do best: using AI to mine enormous, interconnected data sets for critical insights. Industrial firms will have to figure out how to connect hardware and software, steel and silicon, and humans and machines. In this article we’ll describe four kinds of fusion strategies and how to execute them. They all require reimagining analog products and services as digitally enabled offerings and learning to create new value from the data generated by combined physical and digital assets. Just as crucially, industrial firms will need to partner with other companies to create ecosystems with an unwavering focus on solving customers’ problems.
How Fusion Strategy Differs from the Internet of Things....
....MUCH MORE
