PIRELLI D01 12663 Morning Future
Imagining The Case 23 April Apr 2018 0833 23 April 2018

After the first few skids, Pirelli gets smart manufacturing firmly on the track

How data analysis and digital training of employees has arrived and changed the working approach of one of the best known brands in the world. The path that led to revolutionary changes, which got off on the wrong foot.

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What does smart manufacturing mean? How do you create a data-driven culture? And one more thing, how does the digital transformation change processes and products inside a large company? To answer these questions, rather than theorising it is better to take a close look at a world player such as Pirelli. Some financial data will help us to understand the dimensions of this colossus with head office in the Bicocca district of Milan: the Group closed 2017 with revenues of 5,352.3 million euros, growth of 7.6% over the same period last year (+7.9% organic growth) and a net profit of businesses in operation jumping by 60.5% to 263.4 million. The net financial debt decreased dramatically to 3,218.5 million from the 4,912.8 million of 2016.

Initially we made many mistakes, the first of which was to accumulate an enormous amount of data to which, however, we were unable to give any value

Richard Allbert, Head of Smart Manufacturing Pirelli

Annual production is approximately 70 million tyres per year, almost all in the top end of the market: prestige and premium. "Every tyre implies the successful outcome of about one hundred processes with a total of 100,000 information items," explains Richard Allbert, Head of Smart Manufacturing, a section active since 2016 which works to the Pirelli Digital function where about 500 people are employed today. "As you can easily imagine, the risks of variability within such a complex process generate costs that should be reduced to a minimum," explains Allbert. And it is here that digital transformation card should be played. But in order for it to be successful "it is necessary to consider both poles of the digital transformation, something that we have started to do over the last two years".

"Initially here at Pirelli we made many mistakes," admits the English manager, "the first of which was to accumulate an enormous amount of data to which, however, we could not give any value". He went on to say: "Digital alone is not enough, we also want the transformation that creates added value for the company: but if you want to initiate this process then creativity is needed". Alright, but what significance has this paradigm shift had in the context of Pirelli? "For us it meant entering the factories and training people who knew how to handle the data in real time so as to create applications capable of making the work in the establishment more efficient” explained Allbert. So far the competence centre of the Smart Manufacturing has trained 200 people. In this ​way 70 applications "all developed inside the factories” were created.

Another important side of Pirelli’s digital restyling was the creation, also in 2016, of the Data science and analytics transformation team led by Monica Gargantini, a group of 18 people across the board from the various divisions responsible for "creating opportunities to improve the performance of colleagues through new technological tools". "We aspire to the principles of the agile manifesto", said Gargantini, "and we work with our eyes fixed constantly on the demand: i.e. the needs of our clients'. The transformation team was also the way into the company for new professional figures, less tied to engineering curricula which for Pirelli were traditional. "We have introduced statisticians, economists, physicists and computer experts” added the manager.

We aspire to the principles of the agile manifesto, working with our eyes fixed constantly on the demand: i.e. the needs of our clients

Monica Gargantini, Date science and analytics transformation team Pirelli

The biggest obstacle to this kind of innovation? We asked Luigi Staccoli, Executive Vice President of Pirelli Digital. "Without doubt," he replied, "changing the work approach of a company with 145 years of history: the technology is there, they will learn to use it and as explained by Allbert they will also learn how to produce it in-house but a more difficult task is changing the way people think. Those who work at Pirelli must stop wondering “What is the best thing for Pirelli?" and start asking themselves "What is best for the client?". "I am convinced that in the future," concludes Staccoli, "progressively fewer tyres will be sold while sales of services related to the experience and the use of the tyres will increase constantly: the technology and the new professional profiles that we will acquire in the future must be functional to this logic". This translates to: innovation is determined by people more than by technology.

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