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Volkswagen and Amazon: Cooperation to streamline production

Volkswagen with Amazon and Siemens
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Z Twelve brands and 122 factories, in which volume and premium cars, sports and luxury cars, electric and combustion models, motorcycles and trucks are manufactured, belong to the universe of the Volkswagen Group. One can only guess what a huge challenge it is to interlink everything in the best possible way in order to create a maximum of synergies and thereby save money. VW does not see itself in a position to do this on its own and is therefore now bringing the next IT giant to its side: the group will in future be working with Amazon Web Services (AWS).

Networking of all machines, plants and systems

Together, the two companies are building the Volkswagen Industrial Cloud. This 'cloud' is supposed to bring together the data of all machines, plants and systems from all factories. And not only that: in the future, the global supply chain with more than 1,500 suppliers and partner companies at 30,000 locations is to be integrated. The industrial cloud is therefore planned as an open platform. 'In the future we will be able to globally evaluate and control all key figures from production and logistics, regardless of their type,' says Martin Hofmann, who heads IT in the group. And in real time both in Wolfsburg, Chattanooga and Shanghai.

Today, IT on the production level of the VW Group is still a patchwork quilt. Because most of the locations are very different, some of them even differ. 'That doesn't make it easy to standardize and summarize data across the board,' says Hofmann. As a consequence, it makes production inefficient and therefore more expensive.

VW boss Diess calls for significantly better productivity

Volkswagen
The graphic outlines how the Volkswagen Industrial Cloud should work.

The cooperation betweenVolkswagen and Amazon is therefore one of the most important steps on the way to fulfilling a central demand made by CEO Herbert Diess. Diess wants the plants to work on average a third more productively by 2025 than they are currently. “We are slower and less productive than the competition in our factories and administration,” he said recently at a works meeting.

More efficiency and networking in production should of course save money and thereby increase returns, what is still one of the biggest challenges, especially with the VW brand. Cost savings are an important effect, says Gerd Walker, who has been head of Volkswagen Group's production since 2018. After all, large servers will no longer have to be operated on site in the future, which is why the number of IT employees within the VW Group is likely to decrease. 220 experts from both companies are currently working on building the industrial cloud.

'Faster, more transparent and more secure'

'But our main goal is to become faster, more transparent and more secure,' adds Walker. On the one hand, because the network bundles all information and VW in Wolfsburg can see what is going on in Chattanooga, USA, for example. For example, you know when unknown software is installed in a supplier's IT system. “And then we can quickly assess whether we need to sound the alarm,” says Martin Hofmann. In addition, security against loss increases because data and information are available multiple times and are centrally secured by VW. “It's like a safe deposit box: we alone distribute the keys. We decide who gets insight into our data and information, 'says Hofmann.

To outline the practical advantages of the Industrial Cloud, Walker gives an example:' If a truck is stuck in a traffic jam, a component is faulty or a machine breaks down, everyone involved knows immediately. ”For example, material flows and possible delivery bottlenecks could be better managed. Or, at some point, even control the systems automatically. This is exactly what Martin Hofmann means when he says: 'We are going live with Industry 4.0.'

Amazon is the global cloud market leader

Incidentally, with Amazon Web Services, VW has developed the cloud Market leader brought to the side; AWS is bigger than Microsoft or Google in this regard. Last year, this area of ​​the Amazon empire grew by about 50 percent. In addition to streaming services such as Spotify and Netflix, industrial customers have long been using Amazon clouds. And the company's roots shouldn't hurt the cooperation with VW either: If a company is familiar with the efficient control of supply chains, storage and logistics, then Amazon, the global giant of online retail.

At the end of the year the cooperation is to start with the cloud-based carrier architecture DPP going into operation.The starting shot will be given in Europe, and the other regions will gradually be integrated. For the time being, the partnership between VW and Amazon is set to run for five years.

Siemens is on board

In addition to Amazon, Siemens is also a cooperation partner for VW's Industrial Cloud. The traditional German company is to oversee and promote the integration and networking of different production plants and systems in the 122 plants of the Volkswagen Group. VW and Siemens want to jointly develop software applications and apps that suppliers can use to equip their machines and production systems online and update them regularly.

Oliver Blume, who, in addition to his role as CEO of Porsche, is on the board of Volkswagen AG for the division Production is responsible, explains: “We will shape our Volkswagen Cloud into a partner network whose digital functions will benefit all participating companies. With Siemens we are gaining a strong partner with outstanding digitization and industry expertise. '

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