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Special Report: The Future of Manufacturing

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Creating a More Resilient, Collaborative Supply Chain

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7 Emerging Technologies Poised to Power the Factory of the Future

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How Digital Twins Are Revolutionizing Manufacturing

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Meet the Team Handling 2 Million IT Events a Day

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Behind the Wheel with Mercedes-Benz.io

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Porsche Informatik Adapts in an Industry on the Cusp of Technological Reinvention

Economies depend on flexible, resilient manufacturing. How can technology take manufacturers further faster to a real-time connected future?

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From Steady Change to Complete Disruption

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The toilet paper rush of 2020 was an eye-opening reminder to consumers that manufacturers keep the world supplied.

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Although varied in their specialties, manufacturers globally must continually respond to, adapt to, and accelerate change in near-real-time to meet demand. Whether they produce textile, wood, metal, chemical, petroleum, plastics, electronic, transportation, pharmaceutical, or food products.

Nearly every manufacturer for years has been undergoing some form of digital transformation to stay flexible and competitive. Among their primary goals: driving efficiency and productivity improvements spanning design and prototype development, supply chains, and factory floors—all while keeping employees safe.

But manufacturers’ slow and steady digital adoption met a test like no other when the industry was forced to respond to the global disruption caused by the COVID-19 pandemic.

<strong>Manufacturing is a large industry sector. International Standard Industrial Classification (ISIC) codes highlight the many subsectors, including:</strong>

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A survey at the onset of the pandemic by the <a href="https://www.nam.org/how-coronavirus-is-affecting-manufacturers-7417/" target="_blank" rel="noreferrer noopener">National Association of Manufacturers</a> of its member companies in February-March 2020 showcased the immediate, anticipated negative impacts of COVID-19.

IT modernization—including modern apps and cloud services—is becoming essential for real-time connected manufacturing operations. And not just modernization for modernization's sake. Leaders are looking to speed invention, sourcing, operations, supply chains, and ultimately, delivery. They want modernization that includes agile processes and innovative technologies that build in visibility and security while streamlining compliance and boosting agility. And of course, modernization that reduces time to market.

Today, manufacturers are not only doing more with less, they are counting on software, applications, and emerging technologies to lead the way in empowering employees, contractors, and suppliers as they strive to operationalize what <a href="https://www.cbinsights.com/research/future-factory-manufacturing-tech-trends/" target="_blank" rel="noreferrer noopener">CB Insights</a> illustrates as the factory of the future.

These are just some of the cutting-edge technologies helping manufacturers achieve impressive results:

And more emerging tech is gaining traction every day, including augmented and virtual reality, blockchain, machine learning, analytics, and wearables.

<strong>The Acceleration of Robotics</strong>

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The IFR predicts a rise in robot use in 2021 across the manufacturing sector. Here’s how:

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Because connected assets, factories, products and vehicles have the highest exponential value creation potential, manufacturers are moving quickly to embrace digital foundations capable of supporting these key initiatives:

Zeroing in on cybersecurity, there is still much that is secret about manufacturing design and processes. That makes data and information security a top priority for everything from company patents to workflows. With ransomware predicted to attack a business every two seconds by 2031, according to <a href="https://cybersecurityventures.com/global-ransomware-damage-costs-predicted-to-reach-250-billion-usd-by-2031/" target="_blank" rel="noreferrer noopener">Cybersecurity Ventures</a>, manufacturing IT teams must work hard to stay ahead of new attack vectors.

While continuous efforts to meet ever-changing consumer and marketplace demands steadily moved manufacturers toward digital, the pandemic has catalyzed digital transformation initiatives. Today, manufacturers are teaming with partners like VMware to digitize their operations top to bottom:

As consumers, we recognize the importance of manufacturers in our world and can’t wait to see how they supply us next.

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Global citizens increasingly want a better, more sustainable quality of life. For governments, that means building smart cities and nations.

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Special Report: The Future of Manufacturing | Trends

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Getting 100% transparency into physical assets around the globe is becoming a gamechanger for modern factory operations.

Digital twin technology is going mainstream at global manufacturers.

<a href="https://www.accenture.com/us-en/insights/technology/_acnmedia/Thought-Leadership-Assets/PDF-4/Accenture-Tech-Vision-2021-Full-Report.pdf">Accenture</a> envisions digital twins among the top five strategic technology trends to watch in 2021 and 2022.

The definition of a digital twin, according to the <a href="https://www.digitaltwinconsortium.org/initiatives/the-definition-of-a-digital-twin.htm" target="_blank" rel="noreferrer noopener">Digital Twin Consortium</a>, is "a virtual representation of real-world entities and processes, synchronized at a specified frequency and fidelity."

In plain language, this means a digital twin is an exactvirtual copy (or twin) of a physical thing.

The “thing” can be anything that has connected sensors that are capable of sending information to and from the virtual model.

For example, an automotive manufacturer could have a critical component in its assembly line sending continuous data about how quickly it’s processing materials back to a digital twin. The goal: without examining the physical component, workers can tell how it is performing—or will perform—by looking at the digital twin.

With digital twins, manufacturers hope to do any number of things better, such as:

Because it is wide-reaching technology, digital twins can be used throughout the entire manufacturing lifecycle—from engineering, to design, production and operations.

In manufacturing, organizations can create digital twins <a href="https://slcontrols.com/en/what-is-digital-twin-technology-and-how-can-it-benefit-manufacturing/">at various levels</a>:

Digital twin technology is being used in many ways. These are five of the most common applications and their benefits.

By monitoring and automatically responding to continuous data from sensors on the factory floor, teams can improve quality and dramatically reduce, if not eliminate, costly rework. Digital twins:

Continuous monitoring is much more effective than random inspection. Digital twins also allow teams to visualize products in use by real users in real time. Ultimately, this helps brands spot defects or anticipate issues before customers do.

Engineers that use digital twins as virtual prototypes during product design have low-cost, low-risk ways to perform simulations or proof-of-concept (PoC) templates before investing in solid material prototypes. This can dramatically reduce the number of physical iterations required to get the product into production, saving both time and money.

3.      Perform Predictive Maintenance

Sensors in a manufacturing component, device or process generate a plethora of data in real time. Teams then can use AI and advanced analytics to pinpoint potential issues and proactively address. This allows time to schedule preventive maintenance that is most convenient for operations, which in turn helps:

4.      Enhance the Customer Experience

Digital twins extend beyond factory walls, helping teams understand in real time how customers are using and enjoying products. Virtual prototypes collect a rich store of data that tells workers precisely how products are performing in the real world. With that data, design and engineering teams know what’s needed to improve customer experience, especially related to the user interface.

Manufacturers using digital twins can reduce risk in two ways. First, by iterating more often in testing and product validation. Secondly, by pinpointing potential process issues on the factory line before embarking on production. Teams can simulate different scenarios and disruptions, helping them mitigate any issues in advance. This greatly reduces production risk.

Digital Twin Insights Improve Business Outcomes

Digital twins are becoming critical “factory of the future” technologies. They provide insights into production lines, manufacturing processes and end-user experience. With a digital twin, workers can troubleshoot problems, identify future challenges and, ultimately, enhance customer satisfaction.

Getting 100% transparency into physical assets with digital twins innovation is a gamechanger for modern factory operations.

Getting 100% transparency into physical assets is becoming a gamechanger for modern factory operations.

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Manufacturers globally were making some progress to digitally transform before the pandemic. Pilots and scaling of emerging technologies like robots and machine learning (ML) were underway to build smarter, increasingly automated and more cost-effective factories.

Yet no matter where their initiatives stood, the disruption caused by COVID-19 accelerated manufacturers’ digital plans and drove progress toward the "factory of the future."

A full 94% of manufacturers surveyed for the Fictiv <a href="https://www.fictiv.com/ebooks/2021-state-of-manufacturing">2021 State of Manufacturing Report</a> said the pandemic portends long-term changes for their businesses. And according to almost all (95%), now completing their digital transformation journeys would be critical to future success.

These are the most popular emerging technologies being deployed today to build and run the factory of the future.

AI and its subfield, machine learning (ML), are gaining popularity in manufacturing. By infusing computer intelligence and self-learning into factory processes, AI and ML have tremendous potential to increase efficiency, flexibility and quality for optimized operations.

A Boston Consulting Group (BCG) <a href="https://www.bcg.com/publications/2018/artificial-intelligence-factory-future">analysis of AI</a> in the Factory of the Future found the right combination of AI technologies can reduce producers’ conversion costs by as much as 20%. Seventy percent of the=at reduction could come from greater workforce productivity.

According to <a href="https://d110erj175o600.cloudfront.net/wp-content/uploads/2020/09/Beyond-the-crisis_-How-interconnected-businesses-exhibit-leadership-and-resiliency.pdf">Oxford Economics</a>’ “Beyond the Crisis” report, more than one-third (34%) of manufacturers are already investing in AI to:

Manufacturing companies that adopt AI early will reap the biggest benefits. <a href="https://www.mckinsey.com/business-functions/operations/our-insights/lighthouse-manufacturers-lead-the-way" target="_blank" rel="noreferrer noopener">A McKinsey analysis</a> found a financial chasm between companies that adopt AI within the first 5-7 years and those that lag. AI “front-runners” will see a positive 122% cash-flow increase, whereas “followers” will see an only 10% boost in cash flow.

IoT is a critical foundational technology for many other factory of the future innovations, such as robotics, virtual and augmented reality (VR/AR), and wearables. All of these devices have embedded sensors to connect to and exchange data with each other and other systems over the internet.

Most of the value of deploying IoT in manufacturing comes from optimizing operations. IoT can radically reshape every aspect of product development and delivery—from the plant floor across the entire value chain. IoT provides real-time transparency into operations while delivering comprehensive information about the health of systems, down to the tiniest component.

VR and AR are already here—and quickly becoming more entrenched in manufacturing. Leading producers are using VR and AR for a wide variety of actions:

For example, in a sensitive manufacturing environment, a VR/AR device could automatically display temperatures, sound levels, user manuals and other critical information. This enables employees to understand all the components or equipment and how to best manage it.

<a href="https://www.statista.com/statistics/653390/worldwide-virtual-and-augmented-reality-headset-shipments/" target="_blank" rel="noreferrer noopener">Statista</a> reports that across all industries globally VR devices will hit 40.1 million units in 2021, and AR glasses will reach around 19.1 million units, for a total of 59.2 million units. 

One-third of manufacturers have either already adopted VR/AR or will within the next few years, found a pre-pandemic <a href="https://www.pwc.com/us/en/industries/industrial-products/library/augmented-virtual-reality-manufacturing.html" target="_blank" rel="noreferrer noopener">PwC survey</a>. 

<p>One-third of manufacturers have either already adopted VR/AR or will within the next few years, found a pre-pandemic <a href="https://www.pwc.com/us/en/industries/industrial-products/library/augmented-virtual-reality-manufacturing.html" target="_blank" rel="noreferrer noopener">PwC survey</a>. </p>

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Robots working on assembly lines go back decades. Today, less expensive, more flexible and more capable robotic technology is rapidly becoming embedded in manufacturing facilities around the globe. Two of the primary growth motivators are cost-efficiency and consistent quality.

The automation of virtually every factory function—materials, assembly, finishing, packaging—as well as completely “lights out” factories make robots highly attractive. There is no care and feeding required. Robots work 24x7x365. Robots also easily manipulate miniscule parts and complete complex joinings that humans are incapable of doing.

<a href="https://ifr.org/ifr-press-releases/news/top-5-robot-trends-2021" target="_blank" rel="noreferrer noopener">According to the International Federation of Robotics</a> (IFR), annual shipments of robots has more than tripled within the last decade (2010-2019), adding up to more than 381,000 units.

The biggest challenge for manufacturers: how best to use increasingly sophisticated—and intelligent—robots as they seek to move personnel to higher-value work while saving money.

As manufacturing IoT use increases—with sensors embedded into more solutions powering factory processes—wearable technologies are also on the rise. These smart devices—smartglasses, smartwatches or other diminutive accessories—can be used to both monitor and improve producer productivity, safety and efficiency.

Wearables overlap with AR and IoT in that they are designed to merge a continuous stream of real-time data into users’ working lives, so they don’t have to search for it when they need it.

The overall <a href="https://www.mordorintelligence.com/industry-reports/wearable-technology-market https://iteratelabs.co/the-future-of-wearable-technology/" target="_blank" rel="noreferrer noopener">global wearable market hit $27.91 billion in 2020</a>, including both consumer and industrial use. Wearables now outpace smartphone growth across all industry sectors.

<p>The overall <a href="https://www.mordorintelligence.com/industry-reports/wearable-technology-market https://iteratelabs.co/the-future-of-wearable-technology/" target="_blank" rel="noreferrer noopener">global wearable market hit $27.91 billion in 2020</a>, including both consumer and industrial use. Wearables now outpace smartphone growth across all industry sectors.</p>

On manufacturing sites, a smartwatch can measure body temperatures and postures, as well as falls in high-risk environments. This can boost worker safety and accident prevention in real time.

Manufacturers are deluged with real-time data. Not only from IoT sensors on assembly tools and production equipment but from computer systems and video surveillance systems. The challenge: how to best leverage it all for competitive edge? The answer: modern applications.

Manufacturers already deploying <a href="https://www.vmware.com/possible/in/home/modernapps.html">modern cloud-native applications</a> are:

Through predictive analytics, for example, manufacturers can prevent a critical asset from causing unplanned downtime.

And increasingly during the pandemic, manufacturers have looked to cloud computing to help them store and process more data. <a href="https://tanzu.vmware.com/">Modern apps</a> and a robust <a href="https://www.vmware.com/cloud-solutions/multi-cloud.html">multi-cloud</a> strategy, enabled by the simplicity of a single <a href="https://www.vmware.com/cloud-solutions.html">digital foundation</a>, are reducing operational complexity while boosting resilience.

A critical difference between old and modern factories is the continuous sharing of data. This is true for both operations and offsite locations across complex supplier, distributor and other partner organizations in the value chain. Traditional databases don’t work well in such environments. Blockchain does.

For manufacturers, blockchain is useful for sharing data within complex supply chains. As a distributed ledger that offers users a single and tamperproof source of truth, it creates an immutable (unchangeable) record of all transactions of interest to the participants. Blockchain also offers complete visibility and a single source of truth.

Imagine creating an immutable record of quality checks of parts flowing through the supply chain, eliminating inbound audits. That’s what a <a href="https://www.vmware.com/products/blockchain.html">trusted production blockchain platform</a> can do for manufacturers.

The Factory of the Future: Technology-Driven Resilience

Manufacturers around the world are increasingly adopting emerging technologies to thwart disruptions and downtime introduced by unknowns. They are driving toward greater resilience—prepared for whatever happens today, tomorrow and beyond—by innovating with factory of the future technologies now.

From VR to IoT and predictive analytics to robots, these seven technologies are driving the factory of the future.

From VR to IoT and predictive analytics to robots, these seven innovations are driving the factory of the future.

7 Emerging Technologies Poised to Power Factories of the Future

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Factory of the Future: 7 Emerging Technologies Powering Innovation

In the face of disruption, manufacturers look to digital technologies to help create more resilient and collaborative supply chains.

People count on successfully operating supply chains. We’ve always trusted manufacturing supply chains to deliver most everything we consume—from food to pharmaceuticals, computers to clothes, automobiles to air conditioning. So, it’s no wonder panic set in when pandemic-related lockdowns caused supply chains to suddenly, swiftly stall—or in some cases, completely stop.

A recent <a href="https://www.ey.com/en_us/supply-chain/how-covid-19-impacted-supply-chains-and-what-comes-next" target="_blank" rel="noreferrer noopener">Ernst & Young survey</a> of senior-level supply chain executives revealed all automotive and nearly all (97%) industrial products companies said the pandemic had a negative effect on their businesses.

In addition to health and safety issues, the pandemic also exposed vulnerabilities in complex supply chains. The <a href="https://www.forbes.com/sites/daveevans/2021/05/03/2021-state-of-manufacturing-digital-transformation-is-the-key-to-winning-in-the-next-normal/?sh=507ffb4c4405" target="_blank" rel="noreferrer noopener">2021 State of Manufacturing Report</a> from Fictiv illustrates top supply chain concerns.

What concerns do you have about your company’s existing supply chain?

Changing Strategies to Address New Realities

Once all-in on lean and just-in-time manufacturing, today’s supply chain executives have a new priority: architecting greater supply chain resiliency.

Already balancing cost and productivity investments, leaders are planning next-year and three-year-out efficiency and talent upgrades. And increasingly, manufacturers see digital technologies as the best way to accelerate success.

Manufacturing is historically slower to modernize than, for example, logistics and distribution companies because of risk concerns. But that’s changing.  Many in the sector are moving quickly to redefine operating models and double-down on digital.

According to the <a href="file:///C:/Users/karen/Desktop/2021%20MHI%20Annual%20Industry%20Report" target="_blank" rel="noreferrer noopener">2021 MHI Annual Industry Report</a>, 85% of supply chain leaders expect digital to be the predominant supply chain model over the next five years, with 49% already accelerating spend on digital technologies. 

<strong>MHI reported a notable increase in investments across:</strong>

To create an end-to-end digital strategy that both speeds growth and ensures resiliency, manufacturers must address more use cases and needs, as well as close vulnerabilities in their ecosystems. They will need to reassess workflows, considering not only technology investments, but talent, too.

To jumpstart efforts, manufacturers are boosting <a href="https://blogs.vmware.com/euc/2021/04/how-to-boost-supply-chain-resilience-through-digital-transformation.html" target="_blank" rel="noreferrer noopener">frontline employee experience</a>, giving workers Anywhere Workforce Solutions that optimize productivity while freeing team members to work from anywhere in the factory of the future. At the same time, IT maintains control of devices as supply chains increasingly rely on mobility to empower employees, contractors and suppliers working from everywhere.

An increasing number of <a href="https://www.vmware.com/radius/digitalizing-supply-chains-asia/" target="_blank" rel="noreferrer noopener">manufacturers around the world</a> are accelerating supply chain modernization efforts by combining data center, cloud and automation technologies on a <a href="https://www.vmware.com/solutions/industry/manufacturing/modernize-manufacturing-platforms.html" target="_blank" rel="noreferrer noopener">multi-cloud digital foundation</a>, such as VMware’s, to speed line operations and drive revenue. They are taking advantage of faster ways to rearchitect existing and deliver new, modern applications, such as those that predict machine downtime to better plan for maintenance windows. This is particularly important considering manufacturers can spend up to $260,000 for every hour machines are down, according to an <a href="https://www.machinemetrics.com/blog/the-real-cost-of-downtime-in-manufacturing" target="_blank" rel="noreferrer noopener">Aberdeen Research</a> report.

They are boosting supply chain productivity through the addition of emerging technologies—blockchain, AI, augmented reality, drones, machine learning and increasingly industrial IoT. These innovations help reduce manual, paper-based systems and accomplish more, faster across the value chain.

Because proprietary designs and data are critical to manufacturers and their operations, supply chain leaders are also incorporating technologies that ensure sensitive information is secured and stays protected wherever it travels and rests.

Manufacturing supply chain modernization will continue to be a work in progress. But one thing is clear: Manufacturers that accelerate digital transformation will move further faster to achieving their supply chain resiliency goals. 

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<p>The race for dominance in the semiconductor industry is fierce. Moore’s Law, globalization and our insatiable demand for technology created a <a href="https://www.wsts.org/76/Recent-News-Release">$433 billion industry</a>. For SK hynix, <a href="https://www.gartner.com/en/newsroom/press-releases/2021-01-14-gartner-says-worldwide-semiconductor-revenue-grew-7-percent-in-2020">the world’s third largest semiconductor manufacturer</a> after Intel and Samsung, staying at the forefront of innovation requires the entire company pulling together as one.</p>
<p>The IT team saw an opportunity to help the Korean company enhance its competitiveness and prove its value to senior management. This would reposition them from being perceived as a cost center to crucial business enabler. However, the team would only reach this goal by demonstrably proving newfound agility in the manufacturing process. They also needed colleagues to vouch for their value in helping drive innovation and competitive advantage.</p>
<p>“We have a lean IT team that is often pulled in multiple directions with requests for support and guidance on how to improve operations. Our ambition to add value provided the catalyst for change, and we seized the chance to radically rethink our approach to ensure IT was no longer a limiting factor in our progress,” said Byungsun Kim.</p>
<p>To put IT’s challenges into context, a single manufacturing plant could have two million events a day that need to be addressed. These events could range from new code being published to alerts and incidents that crop up along the manufacturing line. The team works to support everything from monitoring to data analytic decisions and commonplace troubleshooting. As such, there was no way that a lean engineering team could even begin to manage this workload manually. Prior to the revamp, the engineers had to check at least 10 screens manually, which was becoming unwieldy, increasing the chance for human error and incidents being missed.</p>
<p>Automation lay at the heart of their revolution. The team deployed the VMware vRealize suite of solutions, enabling them to launch 50 automation workflows. They also leveraged VMware cloud technology to enhance the existing cloud management platform.</p>


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<p>Especially now, organizations must be smart about how they consume cloud services to optimize costs and drive value. </p>

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<p>“Resource management was one of the biggest benefits of moving to a software-defined data center. We deployed a self-service portal where our teams can request resources, like virtual machines, for their projects. What used to take weeks to deploy now takes only a couple of days, meaning our developers can bring their products to market faster,” said Byungsun Kim.</p>
<p>For an organization the size of SK hynix, operations run 24/7. Automatically monitoring workloads, predicting future demand and quickly addressing urgent issues allowed the IT team to keep maintenance downtime to a minimum and eliminate unexpected system shutdowns. This accelerated manufacturing capabilities and proved to senior management the worth of investing in concerted digital transformation. And the IT team’s efforts are now being recognized by industry peers. In the recent <a href="https://translate.google.com/translate?hl=en&#038;sl=ko&#038;tl=en&#038;u=https%3A%2F%2Fwww.idc.com%2Fgetdoc.jsp%3FcontainerId%3DprAP46927620">IDC DX Awards for Korea</a>, the company took home 3-of-the-10 honors: overall digital transformer of the year, talent accelerator and operating model master.</p>
<p><a href="https://news.vmware.com/subscribe"><img loading="lazy" class="wp-image-24111 size-thumbnail alignright" src="https://news-editor.vmware.com/wp-content/uploads/2021/04/RADIUS-Digest-Square-CTA-150x150.png" alt="" width="150" height="150"></a>This newfound agility is starting to be reflected in the balance sheet with the company meeting <a href="https://www.straitstimes.com/business/companies-markets/sk-hynix-q4-profit-surges-four-fold-on-robust-chip-shipments">rising demand for its advanced chips</a>. And as the pandemic recovery continues, the shift to remote work will further drive demand for high-end premium devices, meaning back-end investment continues to be critical. The new technology foundation will also be essential in the coming years.</p>
<p>SK hynix recently launched a 10-year vision to leave a positive impact on the environment and the communities in which it operates. <a href="https://news.skhynix.com/sk-hynix-announces-sv-2030-a-long-term-vision-for-social-value/">Goals include</a>:</p>
<ul>
<li>Net-zero carbon emissions.</li>
<li>300% increase in water savings.</li>
<li>Knowledge sharing and training across companies, academia and the public sector.</li>
</ul>
<p>“We are aware of the leadership role we must play as one of the world’s foremost semiconductor manufacturers in addressing the planet’s most pressing challenges. We believe by committing to automation, we have given ourselves the best possible start to achieving both our business and societal goals,” said Byungsun Kim. “It was very rewarding for our team to be recognized by our leadership for our work. And we are excited about where we can take the technology to make our company even more agile and innovative.”</p>


Automation lay at the heart of SK hynix’s IT revolution. Their newfound agility is starting to reflect in the balance sheet, too.

Meet the Team Handling Two Million IT Events a Day

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<p>Born to transform. That’s the mission of the Mercedes-Benz.io tribe, who’s working hard to create exceptional digital experiences. We had the privilege of speaking with <a href="https://www.mercedes-benz.io/">Mercedes-Benz.io</a> CEO and Managing Director Sophie Seiwald about all things digital in the drive to change how people shop, buy and experience their cars.</p>
<h2>How did Mercedez-Benz.io begin?</h2>
<p>Six or seven years ago, no one really talked about digital. Especially what it meant to start from the customer and go backwards to building a solution. So the four of us started to learn what digitization truly meant. That led to a Mercedes-Benz historical first—the hiring of tech talent directly into the company.</p>
<p>It was quite a big change, yet Mercedes-Benz understood the value of doing things differently from the start. So, we created a joint venture between an agency and Mercedes-Benz to attract talent that could build our website, online channels, customer touch points and the like. Our organization brought in talent and gave those people the liberty to work in new and agile ways.</p>
<p>Today, we are in three locations with over 400 people. And we are building the Mercedes-Benz website globally and our online commerce platform, as well as parts of our Mercedes-Benz ecosystem.</p>
<p><iframe loading="lazy" title="Sophie Seiwald, Mercedes-Benz.io" width="500" height="281" src="https://www.youtube.com/embed/JnOYOUX0_dE?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe></p>
<h2>Can you talk more about customer touchpoints and demand for digital innovation in the car buying, leasing, owning and driving experience?</h2>
<p>Although much has and continues to change, one thing remains the same: Cars are an investment. Anytime someone spends a lot of money for an object, that person wants a thorough exploration of it. Our online platform had to become a place to explore our cars and help better inform consumers. And if we were successful in providing more of the right information, we believed people would spend less time on the retail transaction part.</p>
<p>Ten years ago, all of the details were only available in brochures from dealers. Now, catalogs and specification sheets are digitized as the only source of product information.</p>


<h2>Would you tell us about an online experience that your team built?</h2>
<p>Our car configurator is the most visited section on our website. People sign in to build the car of their dreams. Configuring how a G-<u>W</u>agen, for example, looks in a particular color and with specific features. Our internal stakeholders were skeptical. They said it was nice on the technology front-end, but too complex on the backend and would take years of engineering and documentation to deliver.</p>
<p>We weren’t dissuaded. We combined talent from the business about products with our world of technology and customer inputs. We were able to deliver different prototypes until we got to an extremely simplified car configurator. Now, it’s a great experience for exploring our cars.</p>
<p>Ultimately, we’re now able to extend the passion that people show for our brand by providing a luxurious and premium experience online.</p>


<p>Sophie Seiwald of Mercedes-Benz.io joins the popular podcast to talk about how our passion for cars is fueling digital car experiences.</p>

<h2>How did you use, manage and optimize data during that process?</h2>
<p>Everyone talks about data today. You hear people saying data is the new oil. But data is only effective if everyone can use it. Our industry has a long heritage of data—20 years of sales data and engineering data—to clean up because building on bad data can damage brand reputations.</p>
<p>A few years ago, I asked some of our engineers to provide insights about their products. Most said it was too difficult because they had to ask somebody else for the data. That got me moving on a data journey to democratize data in our organization.</p>
<p>Now, we have data analysts actively working together with engineers to design and implement points where we collect only the data we need. And we’re empowering all of our people—not just data engineers and data scientists—to deal with that data. That’s critical to how we design our applications because when you start pulling data, you need to do something with it to create the right stories and insights.</p>
<p>Data to actionable insights is a long journey. And we&#8217;re still working on it because we want to use data in smart ways to provide insights, create algorithms and more.</p>
<p><iframe loading="lazy" title="WeAreDevelopers Tech Leaders: Sophie Seiwald, Managing Director at Mercedes-Benz.io" width="500" height="281" src="https://www.youtube.com/embed/VzqnkgS-PDo?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe></p>
<h2>Is there another project—like the car configurator—underway that excites you?</h2>
<p>We’re working on a number of exciting projects around online car sales and apps. We now have Bertha, an app that’s a bit outside of our traditional space. Bertha helps people find cheap fuel stations nearby and pay for fuel at the pump through contactless transactions. It’s ideal for Europe, where people still have to go inside the shop to pay after fueling their cars.</p>


<h2>Is all car buying moving online?</h2>
<p>It really depends on where you live. In China, for example, yes, it’s pretty normal. People know they&#8217;re buying the same car they see every day on the street. The whole process is digitized. In Europe or U.S., it’s different. Shoppers can go online and configure a car, see the price, reserve the car and get it delivered to them, but they still typically go into a dealership for leasing contracts and the final transaction paperwork. I see that changing worldwide though as people get more comfortable doing complete transactions online.</p>
<h2>How has Mercedes-Benz.io partnered with VMware on your digital transformation journey?</h2>
<p>Pivotal and now VMware have been part of our journey for more than five years. That expertise in cloud-native development as a guiding principle—how we are applying Kubernetes, our development model, and where we check code—has helped us scale our software with a common standard and mindset, while providing some liberties as to how we’re approaching technology. The people we work are extremely reliable, and we have a really good relationship working together to solve problems.</p>
<p>The biggest benefit of teaming with VMware is helping us adopt new technologies fast enough, while making sure that our developer journey is as smooth as possible—and always ensuring we are adding value.</p>


<p>Find out how the luxury automaker is using modern software development and a cloud-native platform to better serve customers.</p>

<h2>What are your thoughts on security and privacy in our digital-first world?</h2>
<p>Thanks for bringing it up. Security is a big part of our development process from the very beginning. We don’t believe you can effectively add it once development is completed. What we’ve done is hire amazing security architects, who work together with our teams from the very beginning to design software in a secure way, including training and having a security mindset. Our lead over this effort reminds us all the time that “security must be in our DNA and that the word security doesn&#8217;t exist anymore in our language.”</p>
<p>Everyone needs to be aware. For us security, like cloud or cloud-native development, is built into the philosophy and design upfront, so everyone knows what we mean. The checking doesn’t take place after code is written, which is what happens in 90% of the applications in the corporate world using external developers. A good example are our continuous integration and continuous delivery (CI/CD) pipeline and development processes. Security is built in.</p>
<h2>Any final thoughts?</h2>
<p>I’m really pleased that we have a tribe here at Mercedes-Benz.io that is passionate about Mercedes-Benz and technology. Digital is changing everything we do. It’s now core to the automotive business. That means we have understand all of it—from tech principles to technologies to engineering culture and more. I believe technology is a gamechanger for the future.</p>
<p><em>This interview has been edited for length and clarity.</em></p>


Born to transform. That's Mercedes-Benz.io's mission as they build exceptional experiences for one of the world's most iconic brands.

"Born to transform." That's Mercedes-Benz.io's mission as they build exceptional digital experiences for their customers.

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Behind the Wheel with Mercedes-Benz.io | VMware RADIUS

In this podcast, explore how we’re blending our passion for cars with our passion for digital innovation.

People are passionate about cars. And auto manufacturers are shifting gears to electric and hybrid vehicles with even more automation, connectivity and comfort features.

The global automotive industry is expected to grow to just under nine trillion U.S. dollars by 2030, according to <a href="https://www.statista.com/statistics/574151/global-automotive-industry-revenue/">Statista</a>. New vehicle sales are anticipated to account for around 38% of this value.

Changing customer buying patterns and experience demands have automotive leaders and suppliers charting a new course. All in all, organizations are fast-forwarding digital innovation in cars.

Digital Powers Buying, Systems and Vehicle Changes

Six or seven years ago, Mercedes-Benz began seriously hiring tech talent. Today, that team is called Mercedes-Benz.io. And its people are passionate about translating input from customers into outputs of digital experiences.

Sophie Seiwald, CEO and managing director of Mercedes-Benz.io, describes the origins of one of the most popular sections on the company’s website: the online car configurator. It’s a way for people to see, customize and explore the brand’s vehicles.

“We combined talent from the business about products with our world of technology and customer inputs and were able to deliver different prototypes until we got to an extremely simplified car configurator,” Seiwald said. “We’re now able to extend the passion that people show for our brand by providing a luxurious and premium experience online.”

Suppliers are also navigating new digital frontiers. Sanjay Vishin, an expert in digital automotive platforms, talks about cars as computers on wheels. Today's teams have experts from a variety of backgrounds, such as software development and automotive engineering. And each focus on a variety of innovations, from infotainment systems to autonomous driving software.

Mercedes-Benz.io sees data as a digital accelerator. To overcome silos, Seiwald’s team began a journey to democratize data within the organization. The ultimate goal provides equal access for actionable insights.

Now, Mercedes-Benz.io data analysts actively work with engineers to design and implement innovations. Seiwald values “empowering all of our people—not just data engineers and data scientists—to deal with that data.” Ultimately, that's “critical to how we design our applications.”

For the people who say their favorite car is “the next one,“ there’s good news on the horizon. Vishin is excited about 5G and moving car connectivity beyond today’s link to the cloud.

“We’re also working on things where you connect...to an adjoining car,” Vishin explained. That opens up even more interesting applications—not only for cars, but also for smart cities.

All of the signals are green when it comes to driving innovation. There’s no doubt automotive innovators like Seiwald and Vishin are accelerating technology initiatives to make cars even smarter.

A practical invention is also a pop culture icon: the automobile. Listen to this new Pop Culture Tech episode.

What happens when you blend our passion for cars with our love of tech? Listen to this new episode, featuring Mercedes-Benz.io.

Cars Get Smart | Pop Culture Tech Podcast 2.1

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Cars Get Smart | Pop Culture Tech Podcast Season 2

Blakely Thomas-Aguilar

<p>It’s no surprise that COVID-19 changed—and accelerated—most organizations’ IT plans. As a result, technology executives are increasing their investments in digital technologies. They’re also speeding up what were once multi-year technology plans.</p>
<p>Conducted by MIT Technology Review Insights in association with VMware, <a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/microsites/cio-vantage/vmware-global-mit-executive-study.pdf">Digital Acceleration in the Time of Coronavirus</a><sup>1</sup> reveals how technology strategy contributed to business resiliency and growth. The survey showed that companies ahead of the digital curve were best positioned for success at the onset of the pandemic and in the uncertain times ahead.</p>
<p>In one of the first signs of changing priorities resulting from the crisis, companies quickly shifted to accommodate a surge in the remote workforce. Before COVID-19, on average, only 8% of workforces regularly worked remotely. During the pandemic, this shot up to an average of 27%.</p>
<p>Globally, 75% of respondents believe digital transformation efforts were accelerated by the pandemic. One-third anticipate budget increases for digital investments. Now, IT teams plan to address the shortcomings exposed during the pandemic by prioritizing:</p>
<ol>
<li>Cloud.</li>
<li>Modern apps and infrastructure.</li>
<li>Cybersecurity.</li>
</ol>
<p><img loading="lazy" class="aligncenter size-full wp-image-23544" src="https://news-editor.vmware.com/wp-content/uploads/2015/08/Survey_digital-transformation-accelerated-by-pandemic_VMware-RADIUS.png" alt="" width="936" height="152" srcset="https://news-editor.vmware.com/wp-content/uploads/2015/08/Survey_digital-transformation-accelerated-by-pandemic_VMware-RADIUS.png 936w, https://news-editor.vmware.com/wp-content/uploads/2015/08/Survey_digital-transformation-accelerated-by-pandemic_VMware-RADIUS.png?resize=300,49 300w, https://news-editor.vmware.com/wp-content/uploads/2015/08/Survey_digital-transformation-accelerated-by-pandemic_VMware-RADIUS.png?resize=768,125 768w" sizes="(max-width: 936px) 100vw, 936px" /></p>
<p>For many, COVID-19 challenged existing business continuity plans. Nearly two-thirds (63%) indicate they had business-continuity plans in place prior to the crisis. However, for many, these were oriented toward traditional disaster recovery. Fewer than half (46%) felt their plans were effective when attempting to cope with the shutdowns.</p>
<p><img loading="lazy" class="aligncenter size-full wp-image-23545" src="https://news-editor.vmware.com/wp-content/uploads/2015/08/survey_successful-business-continuity-plans_VMware-RADIUS.png" alt="" width="936" height="167" srcset="https://news-editor.vmware.com/wp-content/uploads/2015/08/survey_successful-business-continuity-plans_VMware-RADIUS.png 936w, https://news-editor.vmware.com/wp-content/uploads/2015/08/survey_successful-business-continuity-plans_VMware-RADIUS.png?resize=300,54 300w, https://news-editor.vmware.com/wp-content/uploads/2015/08/survey_successful-business-continuity-plans_VMware-RADIUS.png?resize=768,137 768w" sizes="(max-width: 936px) 100vw, 936px" /></p>
<h2>Global Industry Priorities</h2>
<p>Industry-specific themes also emerged across regions. Removing decades-long barriers, healthcare—more than any other industry—is accelerating digital transformation in response to COVID-19. In financial services, there’s evidence that mobile applications are becoming the foremost destination for customer service. Nearly all surveyed financial services leaders (98%) said they’re increasing or maintaining focus on digital-first customer experiences within applications.</p>
<h3>Healthcare</h3>
<p>More than half of healthcare organizations surveyed (51%) are increasing patient experience investments. The most critical is telehealth services worldwide, filling a much-needed gap in serving healthy populations as they care for the sick. Popular solutions include virtual desktops and wearables that can enhance care provider engagement and patient outcomes. To learn more, read the <a href="http://blogs.vmware.com/industry-solutions/2020/12/15/mit-technology-review-8-trends-shaping-health-it/">healthcare insights blog</a>.</p>
<h3>Financial Services</h3>
<p>Almost two-thirds of financial services organizations (65%) said they’ve expanded agile practices and continuous delivery (CD) methods in response to new modern app demands. Securing those apps is also being prioritized. More than half (53%) instituted “secure-by-design” application development. Both initiatives are critical to enabling apps to become the main customer experience destination for banking services. To learn more, read the <a href="https://blogs.vmware.com/industry-solutions/2020/12/15/mit-technology-review-impact-of-digital-investments-on-financial-services-organizations-throughout-pandemic/">financial services insights blog</a>.</p>
<h3>Government</h3>
<p>For government leaders, the number one priority and challenge is protecting against cyberattacks and securing data and information. Close to half of respondents indicate they’re allocating a “significant” share (defined as more than 25%) of their IT budgets to security and threat management.</p>
<p>Many are choosing solutions that build in security, rather than bolt it on, from data centers to multi-cloud and endpoint devices. At the same time, agencies increasingly look to boost agility and efficiency with public cloud and FedRamp Authorized cloud services that power and secure enterprise infrastructure and apps. To learn more, read the <a href="http://blogs.vmware.com/industry-solutions/2020/12/15/mit-technology-review-8-government-it-trends/">government insights blog</a>.<strong> </strong></p>
<h3>Telecommunications Providers</h3>
<p>Services delivered across networks will drive a more fully connected world. Telecommunications providers are enabling customers across all industries to reimagine application development and delivery. To help consumers and enterprises alike realize the potential of 5G, telco providers must first continue to invest in their own digital transformation—from core to edge.</p>
<h3>Retail</h3>
<p>During the pandemic, distributed work capabilities quickly turned into business continuity must-haves. When asked about the greatest employee experience challenge, most retail leaders cited providing employees with the physical equipment necessary to be productive remotely. This includes capabilities provided by the combination of personal devices and secure digital workspaces.</p>
<h3>Manufacturing</h3>
<p>Nearly three-quarters of manufacturing IT and business technology decision makers (73%) placed employee efficiency and workflow automation as the highest priorities. By achieving efficiency gains through modernizing infrastructure, cost-conscious manufacturers can keep improving IT operations.</p>
<h2>Becoming Future Ready</h2>
<p>COVID-19 work-from-home orders and shutdowns provided sudden, dramatic proof of the value of digital technologies. Now facing new business pressures, new enterprise technology priorities are emerging.</p>
<p>Future-ready organizations possess technologies that are highly flexible and capable of supporting remote operations and distributed workforces. And in these uncertain times, these enterprises are best positioned to succeed.</p>
<p>To learn more, download “Digital Acceleration in the Time of Coronavirus”:</p>
<ul>
<li><a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/microsites/cio-vantage/vmware-digital-acceleration-in-the-time-of-coronavirus-north-america.pdf">Outlook North America</a></li>
<li><a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/microsites/cio-vantage/vmware-digital-acceleration-in-the-time-of-coronavirus-europe.pdf">Outlook Europe</a></li>
<li><a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/microsites/cio-vantage/vmware-digital-acceleration-in-the-time-of-coronavirus-asia-pacific.pdf">Outlook Asia-Pacific</a></li>
</ul>
<p>And be sure to check out the <a href="https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/microsites/cio-vantage/vmware-global-mit-executive-study.pdf">Top 10 Trends Shaping IT Resilience</a> for a roundup of the most salient global insights from the study.</p>
<p><em><sup>1. Global survey of 600 C-level and IT executives, as well as in-depth interviews from public- and private-sector organizations in three regions—Asia-Pacific, Europe and North America—conducted between June-August 2020.</sup></em></p>


Global report shows that IT organizations with an existing digital-first operating model proved to be best-prepared for disruption. Explore the findings.

IT organizations with an existing digital-first operating model proved to be best-prepared for disruption. Explore the findings.

Global Survey Ties Digital Investments to Growth, Business Resiliency

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Survey Ties Digital Investments to COVID-19 Business Resiliency, Growth

<p>“The automotive industry has witnessed a drastic evolution. Electric cars, autonomous driving and the recent sharing economy require companies to adapt to technological advances. These new developments are increasingly relying on digital know-how. Failure to adapt to these new circumstances likely means the failure of the business.”</p>
<p>These are the words of Peter Friedwagner, head of infrastructure and common platforms at Porsche Informatik, a subsidiary of Porsche Holding Salzburg, which is under the Volkswagen Group umbrella. The organization develops the automotive trade software for wholesale, retail and aftersales (service), as well as parts of distribution and financial services essential to both Porsche Holding Salzburg and the Volkswagen Group. Porsche Informatik prides itself on being a trendsetter and driver of innovation. However, when Friedwagner joined in late 2017, the seismic developments in the automotive industry meant Porsche Informatik needed to apply some technological innovation to its IT Infrastructure.</p>
<p><div id="attachment_20355" style="width: 1060px" class="wp-caption aligncenter"><img aria-describedby="caption-attachment-20355" loading="lazy" class="size-full wp-image-20355" src="https://news-editor.vmware.com/wp-content/uploads/2019/07/Peter_Friedwagner_Porsche_Informatik-e1562174365493.jpg" alt="Peter_Friedwagner_Porsche_Informatik" width="1050" height="700" srcset="https://news-editor.vmware.com/wp-content/uploads/2019/07/Peter_Friedwagner_Porsche_Informatik-e1562174365493.jpg 1050w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Peter_Friedwagner_Porsche_Informatik-e1562174365493.jpg?resize=300,200 300w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Peter_Friedwagner_Porsche_Informatik-e1562174365493.jpg?resize=768,512 768w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Peter_Friedwagner_Porsche_Informatik-e1562174365493.jpg?resize=1024,683 1024w" sizes="(max-width: 1050px) 100vw, 1050px" /><p id="caption-attachment-20355" class="wp-caption-text">VMware’s Agents of Change initiative celebrates technology leaders who challenge the status quo. By harnessing the power of digital transformation, they create unlimited possibilities for their businesses. Here’s the next technology leader in the Agents of Change series: Peter Friedwagner, Head of Infrastructure and Common Platforms at Porsche Informatik.</p></div></p>
<p>When Porsche Holding Salzburg was founded in 1947, car development was concerned with engine innovation, aerodynamics and not much else. In 1950, electronics costs made up only 1 percent of the total cost of production. Today? These sit at close to <a href="https://www.statista.com/statistics/277931/automotive-electronics-cost-as-a-share-of-total-car-cost-worldwide/" target="_blank" rel="noopener noreferrer">35 percent</a>.</p>
<p>In fact, 90 percent of car innovations and new features are now driven by electronics — and this is only inside the car. Ridesharing and other mobility services are challenging the automotive market ecosystem. The fear is that personal car ownership will become an expensive luxury rather than a necessity. <a href="https://www.ey.com/en_gl/automotive-transportation/the-six-trends-driving-change-in-the-automotive-industry" target="_blank" rel="noopener noreferrer">Ernst &#038; Young predicts</a> that in the near-future, automakers “will need to find innovative ways to retain consumers’ loyalty.”</p>
<p>On joining Porsche Informatik, Friedwagner set to work driving digitization throughout its infrastructure, resulting in a flexible and reliable IT base. &#8220;Our goal is to reduce complexity, while building a solid <a href="https://www.vmware.com/content/microsites/possible/stories/build-your-digital-foundation-with-vmware.html" target="_blank" rel="noopener noreferrer">digital foundation</a>. This enables the fast integration of new technologies, and we’re already seeing the benefits,” he explains.</p>
<p>“Porsche Informatik is working with containers as a service, artificial intelligence (AI), big data and virtual reality. Within our IT infrastructure, we use machine learning-based monitoring tools to detect failures at an early stage and minimize the impact,” Friedwagner says.</p>
<p><img loading="lazy" class="aligncenter size-full wp-image-20356" src="https://news-editor.vmware.com/wp-content/uploads/2019/07/Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS.jpg" alt="Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS" width="1200" height="675" srcset="https://news-editor.vmware.com/wp-content/uploads/2019/07/Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS.jpg 1200w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS.jpg?resize=300,169 300w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS.jpg?resize=768,432 768w, https://news-editor.vmware.com/wp-content/uploads/2019/07/Porsche_Informatik_Peter_Friedwagner_Agents_of_Change_RADIUS.jpg?resize=1024,576 1024w" sizes="(max-width: 1200px) 100vw, 1200px" /></p>
<p>Organizationally, innovations can come from the top down or the bottom up. Friedwagner empowers his employees to be change agents internally: “A central element of our creative culture is our network of change agents. In addition, a product-oriented, autonomous team structure allows mobile working and innovative work environments. This gives employees the freedom to be creative, helping our business growth.”</p>
<p>Leadership is the key to driving this transformation, and Friedwagner places himself front and center. “Continuous innovation is the result of a constantly evolving organization and a constantly evolving culture. Executives play a key role. We must act as role models to shape the culture of the company,” he says.</p>
<p>When reflecting on the journey of change, Friedwagner thinks of himself driving a bus with his employees as passengers. His challenge: to get them all happily on board. His approach of stewardship, not ownership, allows him to motivate and engage them as he guides the bus in the right direction.</p>
<p>“Business challenges and sharp curves may threaten to throw you and your passengers off the road, and sometimes you need to shift down a gear, in order to guide the bus to the destination you desire,” says Friedwagner.</p>
<p><a href="https://www.youtube.com/watch?v=NRfHRDlHqso" target="_blank" rel="noopener noreferrer">Hear more from Friedwagner about Porsche Informatik</a>.</p>


<p>This article is the latest in the Agents of Change series, a look at how technology leaders challenge the status quo to discover new possibilities for their organizations.</p>

Adapt to digital disruption and be an agent of change. Learn from Peter Friedwagner, head of infrastructure and common platforms at Porsche Informatik.

Adapting to Digital Disruption of the Automotive Industry | VMware Radius

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