Manufacturers need to decide which path to take, and define how they’ll get to where they need to be
When we conducted a survey of German manufacturers in association with PAC recently, we were heartened to find that 90% of them were clear that digital transformation was not just necessary, but would have a big impact on their business model. Though, knowing something is different to acting on the information. The same survey showed that only one third of those manufacturers have detailed strategies or individual roadmaps to make the most of the opportunity.
That’s strange because all the evidence shows that manufacturers do understand how technology can forge new business models and new ways to offer smart services that can reach far beyond the production line. But they’re not ready to make the most of the opportunity. Our new whitepaper, Transforming Manufacturing: Co-creating the digital factory, looks at attitudes across the sector and highlights what we’re doing at our ‘smart factory’ in Augsburg where we are not only taking advantage of new technology, but also showcasing what’s possible.
One of those exciting possibilities is the ability to achieve Lot Size 1 production at a cost that’s close to mass production. That means manufacturers can be more closely aligned to end-user demand. They can reap the benefits of both customer service and cutting the costs related to everything from production to inventory to materials and so on. But that’s only part of the story because the product’s lifecycle only just begins when it leaves the factory.
A good example would be, for instance, a professional coffee machine
It’s equipped with IoT enabled sensors which gather the data needed to forecast potential problems. That means predictive maintenance can keep the espressos and lattes coming and boost customer satisfaction. Any part that’s about to fail can get swapped for a new one before the restaurant or café opens. A manufacturer can then offer the restaurant 99.9% availability or a pay-per-use model.
The data the machines installed across many venues can be analyzed to improve the product more effectively and efficiently than ever before. You can discover patterns that can reveal, for instance, a link between time of day and type of coffee ordered. That, in turn, enables you to lower power usage to save energy. You can even link external data, such as the times of movies in the cinema across the road from a café; the machine is always ready to do a brisk trade when the movie ends. So, the cups are warm and there are enough beans to keep up with demand. The sensors in the cinema collect data which can be bought by restaurant and café chains and linked to their IoT estate.
There’s a lot more you can do – and imagine – but to achieve it you need to get to a state where you can deliver those new business models, and make those goods for the most affordable price whatever the lot size. And that’s where the ‘evolution’ part of my title comes in. Yes, technology is revolutionizing manufacturing, but it is not doing it overnight. In a highly capital-intensive sector like manufacturing, revolutions are scary. Evolution works best. It won’t work if there isn’t a plan. When we use the word ‘evolution’, we’re modifying its true meaning. In nature, evolution is blind. In business it must be planned and guided. Which is what manufacturers need to do.
How? By going into detail about how IT can be aligned perfectly with OT. That takes a strong strategy that has been approved across all stakeholders. The modern, seamless manufacturing model can’t work if there are siloes. There needs to be fluid communication across departments and functions to deliver a strong, singular vision of where you want to get to. IT and OT must work in perfect synch. Not just in terms of technology but with a focus on processes, people and products too.
It is being done. It needs an ecosystem. No manufacturer is an island: they need strategic partners, consultants and suppliers, as well as constant contact with customers. Our new whitepaper talks about how you can achieve that evolution in the most important areas of your business. It’s worth a read.