ERP Insights >> Magazine  >> August - 2020 issue

What Does It Take For Manufacturing Sector To Be Real Digital?

Author : Piyush Rajpal, Director - Marketing & Strategy, Schneider Electric
Thursday, October 22, 2020

Piyush Rajpal, Director - Marketing & Strategy, Schneider Electric

Piyush, a creative & strategic business manager, specializes in marketing management, product management, business integration, channel management, strategic marketing, P&L and Digital transformation areas.

It all started this summer when I met with a couple of manufacturing giants & realized that I had to speak on digital customer journey to ensure we connect well, the present & future of manufacturing. The convergence of naturally built & digitally built infrastructure has brought-in lots of possibilities in shaping the future of industries of the future. While we have seen manufacturing industries working on strategic intent more from business or marketing side, suddenly, maintenance & planning has taken a big leap on defining the future, along with digitization in supply chain and demand chain management respectively.

As the cost of sensors moved south, the intent of manufacturers to implement digital strategies in various functions have promised varied outcome that enhances bottomline in the end. For example, improving on predictive maintenance has improved ~20 percent of productivity in terms of output of the organization and digitizing a hazardous process utilizing augmented reality has impacted on productivity of an Indian Steel major (yet to be quantified). The fully digital factory can be a catalyst for a real fillip to gains in productivity, per formance and hence market share. The factories also see the benefit of improved controls, improvement in safety and rightsizing of global organizations. But where do the industries start the digital journey?

“No manufacturing unit can go cent percent digital in one go, and while personas invest individually to reap the benefit, most of digital spends don’t come with tangible return on investments”

Let’s take a step back and see how functional key result areas impact the investments on digitization, and how they vary across the functions. While the front office functions would talk on better time to market & digital twin to ensure end customer confidence, while specifications of assembled product may differ & dynamic screens needs scalable future, the maintenance team would be more convenient with real time analytics using the right algorithm in the machine learning with historical data churning, to predict the breakdowns of machine associated to improve productivity overall. Production team will be more concerned on overall equipment efficiencies (OEE) of the machines, supply chain team would efficiently digitize the warehousing & fleets managing the end mile shipments. All of the personas work on an individual necessity, but who shall work on ensuring we deliver a digital outcome to our stakeholders including lower carbon footprints & cost effectiveness, that makes the organization ready for the future? Digitization is a journey towards achieving sustainability goals of an organization, a few aspects how we ensure this are:

Understanding the Technology Well: Most of the impact comes from small automation of machines and takes a long way to implement ERP level changes in the organization for flexibility across the value chain. The manufacturers must see what exists right now, that can be connected & brought together to build a base layer of connected devices. The existing ones at times need smaller maneuver, and new ones can adopt the technological edge for faster turnaround.

Include the Obstacles to Remove Them: The obstacles on digitization exist from physical devices, approach of workforce & understanding frugal innovation. I have personally seen organizations not adopting digitization due to non existence of infrastructure and workforce who aren’t open for digital change. Smaller steps towards digitization while working towards creating a digital culture for ablest workers to be more data conversant, and upskilling the rest to reap better benefits of digital in processes & building a strategic intent together.

Recognize the Capability Needs: The capabilities vary from shop floor to the top floor, and driving digitization is a DNA shift, where inability to scale beyond a project might derail the overall intent. The capabilities (both digital & physical) must come from the onsite team that can connect the dots between data & processes. The project must be designed to scale, and individual KPIs must be assigned well for regular readiness understanding.

Start with a Small Proof of Concept (POC): No manufacturing unit can go cent percent digital in one go, and while personas invest individually to reap the benefit, most of digital spends don’t come with tangible return on investments. We must see the ROCE model how we start with a smaller proof of concepts on use cases and realize the benefits of shared goals and then move to higher levels of digital journey

Achieve the Goal of Digitization for Customization: The final part is on being scalable & flexible at the same time, and with digitization in processes, all manufacturers look forward to the cost that adds-up on customization projects, and here comes the benefit of technologies like digital twin, paving way to a flexible manufacturing environment, reducing the overall cost and enhancing profitability for the organization.

I wish I could rate the impact of above efforts, but the life of a manufacturer is not static, rather it’s a journey from Point A to Point B. Sure, implementing a few of them is better than implementing none, but the goal is to define how we can see a digital India in manufacturing that’s a key for economic development & International competitiveness for Indian Industries.