After leading the early automation revolution at the beginning of the 20th century, manufacturers are once again seeking a technological edge. A whopping 72% of manufacturing companies plan to significantly increase investment into digitization efforts in 2020. These manufacturers’ combined financial commitment is expected to reach $907 billion in 2020, roughly 5% of revenues according to PWC.
2019 marked a critical inflection point for wide scale roll out of digital transformation via Industrial IoT (IIoT) tools in the manufacturing segment. As a result, many companies are now looking to benchmark their state of digital operations and progress towards their digital transformation goals. As digital journeys converge and mature, four milestones have emerged as early indicators of success.
1. Identification of high-value use cases
To realize the most compelling business outcomes for potential digital transformation projects, enterprises must identify and prioritize which use cases are most critical to overall digital transformation success and deliver the highest ROI. While a large number of use cases have been identified and put into production, four use cases have emerged as the most common.
Scalable production management. Comprehensive orchestration of enterprise systems and factory operations ensures efficient transformation of raw materials into finished goods. This includes maximizing production forecasts, uptime and throughput, optimizing production for changing recipes and operating conditions, ensuring high product quality, improving OEE KPIs, and more.
Asset optimization. Real-time asset health monitoring and predictive maintenance insights substantially reduce production downtime while maximizing asset performance, utilization, and useful life. Maintenance, equipment and repair costs are reduced, while mean time to repair and first-time fix rates are improved.
Real-time operational intelligence. Introducing real-time visibility, actionable insights, and powerful analytics into factory operations reduces costs and increases performance and efficiency. It also enables standardized KPIs to measure operational consistency and gains across multiple lines and entire operations. Further gains include reducing scrap and improving inventory turnover.
Digital workforce productivity. Skills shortages, labor costs, and rising production complexity are critical challenges all industrial organizations face today. Digital workforce productivity solutions including augmented reality ensures workers are properly trained/re-trained, improve productivity and safety, and deliver substantial impact on labor costs and overall operational productivity.
2. Integration of OT/IT capabilities and data
Connecting real-time and historic OT (operational technology) data from legacy systems with new layers of IT infrastructure delivers new levels of insight for better business decisions. Integration between OT and IT also is the key to accelerating innovation and achieving productivity gains at scale.
With OT and IT teams integrated, industry organizations have an improved understanding of overall factory operations, leading to a significant reduction in machine downtime, improved yield, and more. This requires new tools developed specifically for OT/IT integration, including asset and system auto-discovery (what some call OT “smart tags”), data model sharing and re-use, integrated analytics and augmented reality (AR).
As an example, in the auto industry, where a single unit may travel through plants in several countries before being fully assembled, integrated IT and OT allows production managers to maintain unified visibility as each component makes it way through the supply chain. Data from factory equipment is fed into IT systems that can analyze and predict how individual changes will impact overall production.
3. Implementation of full-stack IIoT solutions
With digital transformation, it’s critical to understand how IIoT technologies and ecosystems interoperate and evolve with the industry and keep organizations on the cutting edge for years to come.
Full-stack IIoT solution partners, which support the entire IIoT ecosystem from ground-level connected assets through network control systems to cloud computing capabilities, provide integrated design, deployment and support that not only makes the initial deployment easier, but also allows manufacturers to adapt innovative new technologies such as edge computing, AR and digital twins.
Selecting a partner that provides full-stack solutions is critical to deploying a digital transformation project at scale, as well as for the lifetime of the factory. Unlike consumer IoT, which has a lifespan of a few years, IIoT needs to match the unique needs of enterprise organizations in durability and lifespan.
The ideal partner will not only have the technical expertise but will also understand the unique needs of manufacturing in a vertical context, as key to ensuring long-term success. It’s important to understand if the system can scale globally, how updates are introduced and how much support can be expected when something goes wrong.
4. Embrace augmented reality functionalities
Approximately 27% of the manufacturing workforce is over the age of 55. The expertise honed by decades of experience is an invaluable asset to manufacturers, which emerging technologies, such as AR, can help preserve and scale to train to the next generation, close the labor gap, and improve worker efficiency.
By 2020, Gen Z will make up as much as 20% of the multigenerational workforce. More than any generation before them, these workers will be looking for high-tech jobs that provide consistent and effective upskilling to ensure they remain relevant in a fast-changing job market. A whopping 80% of Gen Z also prioritize working with cutting-edge technologies, and 91% say that technology would influence their job choices.
Employers integrating innovative technology, such as augmented or mixed reality, through full-scale digital transformation will have a strong advantage in recruiting, developing and enhancing human capital from Gen Z to Baby Boomers.
Conclusion
The key to successful digital transformation in the IIoT era is understanding its full potential, both today and 20 years in the future. By implementing unified, targeted and flexible IIoT solutions, industrial organizations can undertake digital transformation in a way that delivers fast time to value today and is a sustainable strategic competitive advantage in the future.
Keith Higgins is Vice President of Digital Transformation at Rockwell Automation
