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Volkswagen partners with Amazon subsidiary to improve operational efficiency

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German automaker Volkswagen Group and Amazon Web Services (AWS), part of (NASDAQ: AMZN), announced a multi-year global agreement to create the Volkswagen Industrial Cloud, a cloud-based industrial digital production platform.

Volkswagen’s primary motive is to streamline data coming from its different manufacturing and logistics processes, create actionable information through machine learning and data analytics, and use that information to increase factory efficiency and uptime, improve production flexibility and increase vehicle quality.

Though Amazon is primarily known for its ecommerce platform, the company has been continually expanding its services beyond online retail. AWS generates a significant portion of its revenue today. Initially, AWS was envisioned as a platform to help Amazon standardize and automate its retail computing infrastructure. However, over the years it has evolved to provide virtual servers as a service to businesses.

For the Volkswagen Group, it makes sense to centralize all the data it derives from its operations by pushing it to the cloud. Real-time data fed into the cloud from 122 manufacturing facilities around the world will help Volkswagen manage the overall effectiveness of assembly equipment, while also tracking parts and vehicles.

“The Volkswagen Group, with its global expertise in automobile production, and AWS, with its technological know-how, complement each other extraordinarily well. With our global industry platform we want to create a growing industrial ecosystem with transparency and efficiency bringing benefits to all concerned,” said Oliver Blume, a member of the board of management of Volkswagen Aktiengesellschaft.

AWS comes with a variety of Internet of Things (IoT) services that include IoT Greengrass, IoT Core, IoT Analytics and IoT SiteWise. The Amazon statement explained these services can “detect, collect, organize and run sophisticated analytics on data from the plant floor.” Using these solutions, Volkswagen can understand operational trends, identify gaps in production and streamline processes to reduce waste.

Andy Jassy, CEO of AWS, stated that Volkswagen’s industrial cloud would reinvent its manufacturing and logistics processes, and the automaker’s collaboration with AWS will have a profound impact on efficiency and quality of production throughout Volkswagen’s global supply chain.

Apart from Volkswagen, the BMW Group is also using AWS for its connected car application, using the cloud to collect sensor data from BMW Series 7 cars and to give drivers dynamically updated map information. BMW’s car-as-a-sensor (CARASSO) service leverages AWS tools to adapt to rapidly changing load requirements that can scale up and down as needed.

Going forward, cloud services like AWS may be an integral part of vehicle manufacturing, as original equipment manufacturers (OEMs) are inching towards a vehicle-as-a-service outlook. Automakers will be able to offer continued services to consumers even after the vehicles are sold.

The development of autonomous driving technology will also need cloud storage as driving data will be required for machine learning algorithms to get better at understanding real-time driving environments. Even after full-fledged automation is commercially deployed, cloud technology will be necessary to streamline and make sense of all the data for a seamless transit experience and to protect the vehicle from hackers.