Industry and manufacturing leaders recognize the trend to the next step in the evolution of enterprise effectiveness and success. The industrial digital revolution is an overnight sensation that has been 30 years in the making. We began with digital controls then adding human interface and then information handling.
Internet of Things with its proliferation of sensors and other smart edge devices, IP networking, data science, and advanced analytics (business intelligence) combined take us to a whole new level of enterprise effectiveness.
The trite question from marketing people often goes, “What’s keeping our customers awake at night?”
Well, are executive worried about the capability of technology?
Two research reports just came my direction recently from a couple of my go-to sources for what’s happening with the thinking in the industrial/manufacturing executive suite. One is from PwC, What’s Next in Manufacturing: Building an Industrial Digital Ecosystem, and the other from Accenture Digital Skills Gap Slows Manufacturers’ Push to Build Digital Factories.
No, it’s not technology that worries them. First it’s people and culture. Are there sufficient people with digital skills? Will the culture make the transition? Then, of course, they worry about how large the investment might become and what the return will be. It’s people and economics.
PwC Digital Industrial Survey
In this report, PwC shares results from a survey of global industrial products companies, shedding light on what manufacturers are doing now to build out their digital operations and what bottom-line benefits they expect to yield through those efforts.
Buying into digital: manufacturers plan to ramp up investments
In the last two years, US manufacturers invested an average 2.6% of their annual revenue in digital technologies. In the next five years, they expect to lift that investment to 4.7% of revenue—for an estimated $350 billion in investments in digital operation technologies across automotive, industrial production and manufacturing industries alone.
Venture capital funds flowing, too
Since 2011, some $3.6 billion has poured into VC-backed start-ups across a selection of digital technology sub-sectors, with investment rising at a 47% clip–more than double the annual growth of total VC funding (18%) in all sectors over the same period.
“Digital deals” have comprised 15% of all US M&A activity since 2012
According to a PwC/Strategy& analysis, more than $6.0 billion has been invested on “digital deals” in North America alone since 2012, comprising some 15% of all M&A deals over that period.
The greatest challenge to a “digital vision” is cultural
In the context of embracing digital operations technology, three of the top 10 challenge areas identified by surveyed companies relate to organizational readiness and financial concerns. Some companies anticipate high investment requirements with unclear return on investment, and lack of digital standards and issues related to data security and intellectual property are also noted.
Monetizing digital operations sought through cost reductions, revenue generation
Nearly two-thirds of manufacturers expect that adopting digital manufacturing technologies will translate into lowering operating costs by at least 11% mostly via efficiencies through automating processes and production. Meanwhile, over half of these manufacturers expect such adoption to boost revenues by at least 11%.
How digital technologies drive bottom-line results Manufacturers are just scratching the surface of monetizing digital manufacturing. Some key drivers to achieving cost-cutting and revenue uplift from digitization with the introduction of smart, connected manufacturing technologies and products and services include:
- Lowered “price of variability” across production and processes
- Moving from analogue products to “connected, digital products”
- Manufacturing data…and new business models
- Software-enabled upgrades to products
- Pay-as-you-go model
Building a digital manufacturing strategy
Building a digital strategy requires a thorough self-assessment to determine a company’s “current state” of its digital evolution—and, just important, defining its “target state”. This means tailoring digital operations solutions to a business’ assets and making the right moves at the right time—from ramping up data analytics capabilities, to monetizing product data to considering a “digital deal”.
PwC concludes, “The future of digital manufacturing holds many “what-ifs”. But, if it unfolds as dramatically as our survey indicates, most all manufacturers will be altered to some degree. And, for every “what if”, there are choices manufacturers ought to consider.”
Accenture Researches Industrial Digital
Take a look at some of the results of Accenture’s research. Although the majority ofmanufacturers have implemented digital platforms, more than half (51 percent) lack the skills to operate digital factories. The more successful manufacturers have advanced talent strategies in place to digitally enable the workforce of the future.
Cracking the Code on the Digital Factory, a report based on a global study of 450 manufacturers, found that a growing skills gap is one of their biggest concerns – a situation that has worsened in recent years as manufacturers have transformed their operations using new technology, analytics and mobility capabilities.
Fifty-five percent of manufacturers, up from 38 percent in 2013, reported a skills gap among skilled trades laborers, who need to operate increasingly advanced digital machinery and equipment, such as 3D printers or modeling and simulation tools on the plant floor. Likewise, 60 percent of manufacturers, up from 31 percent in 2013, cited a shortage of maintenance workers skilled in the use of predictive maintenance analytics that leverage data from embedded sensors in a machine-to-machine environment.
“For manufacturers to realize the full potential value of digital factories, they need to redesign their workforce to include new manufacturing skills, such as analytical reasoning and data-driven decision support,” said Russ Rasmus, managing director, Accenture Strategy. “Developing a comprehensive talent strategy inclusive of new digital skills is an imperative for today’s manufacturers.”
Digital Factory Leaders
The research identified a small group of manufacturers (8 percent) that outperformed their peers by increasing production and profitability by more than 10 percent since 2013. These “leaders” are more likely than their peers to understand which new skills they need for future growth and success, and have a more effective strategy to attract, develop and retain this new breed of manufacturing talent.
A majority of these leaders (73 percent) more frequently reported already having the requisite digital skills, as compared to 49 percent of other manufacturers, and they were nearly 50 percent more likely to report a higher degree of visibility into what skills they needed. That has allowed most of the leaders (81 percent) to achieve greater internal workforce mobility in roles involving digital, enabling them to match employees with managers who need those skills.
Barriers to Success
While these digital factories are enabled with rapidly developing technology innovations, the technological aspect of their implementation is not the top barrier to success. Seventy-five percent of the deployment challenges cited by survey respondents are related to skills, organizational change or structure, and the talent within the organization.
Chief obstacles that hinder manufacturers’ digital adoption.
“Manufacturers must aggressively manage these non-technical barriers as they deploy their digital factory capabilities. These include the ability to create new processes, lead teams made up of workers and machines, and constantly update training programs,” said Rasmus.
Hannover Messe was all about Digital Manufacturing this year. One place I could not make in person was a demonstration by Accenture and Dassault Systèmes. This just goes to show the great convergence of digital technologies improving manufacturing processes.
The companies built a proof of concept (PoC) to show how digital technologies can improve efficiency and create more agile manufacturing in industries such as heavy industrial equipment and aerospace.
Working with a large industrial equipment company, Accenture and Dassault Systèmes are building and implementing a three-phase solution that harnesses digital technologies to create a link between engineering and the manufacturing shop floor for non-repetitive manufacturing companies. The adaptive solution provides a new level of continuity for product assembly including the sequence in which parts are built, and provides a better level of insight into the process for engineers and the assembly staff.
The first phase of the agile manufacturing solution creates the theoretical assembly sequence required to build a product such as a train, airplane or digger. Phase two helps create, optimize and re-plan quickly an operational plan and schedule for each worker on the shop floor. The third phase creates a digital display of the schedule for each worker so they are able to refer to it. These three phases use Dassault Systèmes’ solutions.
Replacing what has often been a paper-based process, Accenture and Dassault Systèmes are creating a solution that provides a new digital link between the engineering team and the shop floor, allowing for real-time changes in the schedule. The agile manufacturing solution can also provide insight and risk assessment into any proposed changes to a product or the assembly schedule before they are made, greatly reducing downtime and creating more agile manufacturing.
“Many companies struggle to improve manufacturing flexibility and sustain unexpected commercial or technical changes when production issues, missing parts or engineering modifications occur,” said Eric Schaeffer, senior managing director and head of Accenture’s Industrial practice. “A dedicated agile manufacturing solution will provide flexibility for configuration management and the ability for local plants to personalize products, as well as support for maintenance services.”
“The Industrial Internet of Things and other digital concepts are allowing manufacturers to embark on a new era of productive, sustainable and cost-effective processes that result in a better experience for their customers,” said Laurent Blanchard, Executive Vice President, Global Field Operations (EMEAR), Worldwide Alliances and Services, Dassault Systèmes. “We are extending our long-standing collaboration with Accenture to drive agile manufacturing in the age of experience. Companies can benefit from Dassault Systèmes’ expertise in virtual manufacturing operations and data management applications and Accenture’s best practices in integration services, business process re-engineering, change management and deployment.”
[This article is updated as of 10/30/19. I received information that noted Google’s Tango has been shelved, but that there is still work being done on the platform. Thank you to Luke Pensworth of Daily Wireless.]
This news is a little outside my usual commentary, but it does reflect a trend. Augmented reality developments have grown steadily for many years. I first wrote about it before it had a name in the late 1990s regarding maintenance applications. Potential applications now are growing faster than the imagination right.
This “first-of-its-kind mobile augmented reality solution” creates a life-size 3D, virtual vehicle to enhance the car buying experience.
Fiat Chrysler Automobiles (FCA) unveiled a prototype of an immersive car sales application at Mobile World Congress designed and built by Accenture Digital using Google’s Project Tango developer kit. The prototype demonstrates how augmented reality can revolutionize the shopping experience for consumers by allowing them to view and interact with a full-scale virtual version of the object – or car – they are considering buying.
The prototype allows car buyers to hold a device and, using the integrated sensor technology and motion tracking, area learning, and depth perception from Project Tango, view, walk around, look inside and configure a life-size virtual car. On the Accenture demo, doors can be opened to reveal a realistic and detailed interior, where changes to upholstery colors or dashboard styles can be made with a tap on the device screen.
Project Tango technology gives mobile devices the ability to navigate the physical world similar to how we do as humans. Project Tango brings a new kind of spatial perception to Android devices by adding advanced computer vision, image processing, and special vision sensors. A Project Tango device maps the 360-degree environment around it, meaning that as it is moved it navigates and views the changing environment in the same way as a person would. As the car is viewed through the device, the virtual car moves in relation to how the user moves.
The first commercial Project Tango device is expected to be available in summer 2016 and this application will be previewed to attendees of this year’s Mobile World Congress. Accenture Interactive, part of Accenture Digital, has worked with FCA to create an application for this new technology that will transform the process of buying and configuring a new car.
Untethered Augmented Reality Experience
Users of the FCA car configuration solution will be able to walk freely around a full-scale vehicle in almost any environment because Project Tango enables an untethered, handheld experience that does not rely on external tracking technology such as markers, beacons or GPS.
“Project Tango is a new, unique technology that is set to become standard functionality in the next generation of mobile devices,” said Matteo Aliberti, Digital Innovation lead for Accenture Interactive EALA. “Accenture has been experimenting with Project Tango and potential business uses for as long as it has been in development, creating a range of potential applications, including this one for the automotive industry.”
Accenture’s design-led development of this solution means that the process of making decisions about cars will be completely transformed with the new generation of mobile devices. FCA is the first automotive brand to use this type of digital car configuration tool. Today’s car configurators are essentially flat, so with this tool FCA customers could have a more interesting and immersive experience.
This work is the latest collaboration between FCA and Accenture that aims to deliver a new and unique digital experience for FCA customers.
“Augmented reality is set to transform the way car-buyers choose and configure vehicles through the provision of immersive technology because it provides an enjoyable, delightful experience for customers,” said Luca Mentuccia, senior managing director and head of Accenture’s Automotive practice. “We believe dealers and car buyers will be quick to embrace this enhanced way of buying a car as the new devices become readily available, taking advantage of the 360-degree mapping environment to create this unique experience.”
Engineering collaboration tools. Old, yet new? Most of the news and trends I’m seeing center around increased use of the cloud. We have seen tools coming for several years. Now there seems to be a critical mass where engineers and managers can find increasingly powerful collaboration tools for a variety of functions.
This report just arrived from Accenture. It has launched a digital portal that helps product developers such as engineers accelerate delivery of products to market at lower costs through greater efficiency.
The Accenture Enterprise Product Information and Content (EPIC) Portal consolidates large amounts of product development data from multiple enterprise systems in a single, organized view, reducing the time needed for product developers to search for this data by up to 95 percent. Leveraging this portal, these professionals can use analytics to anticipate and solve problems, as well as develop insights and make better-informed decisions.
Accenture developed the EPIC portal for companies that design, engineer and manufacture complex products in the aerospace, automotive, consumer products, electronics, industrial equipment, high-tech and life science industries. The portal features pre-defined integration with product lifecycle management, enterprise resource planning and a range of other applications used in product design and production.
“Throughout large, complex companies, product developers grapple with data scattered across too many siloed databases, complicated system user interfaces, and cumbersome access to analytics and product data reports,” said Kevin Prendeville, a managing director in Accenture’s Product Lifecycle Services business. “The EPIC portal equips engineers with one integrated source to identify risks and speed product deliveries whenever they need to, wherever they are, which increases efficiency and lowers costs.”
For example, a supply chain procurement engineer with an automotive manufacturer could use the EPIC portal to more rapidly ascertain the engineering status of automotive parts and avoid delays delivering products to market. Knowing this status also benefits numerous other corporate groups, including engineering, sourcing, quality, marketing, manufacturing and operations.
“Accenture’s product information portal addresses a common product innovation pain point,” said Jeff Hojlo, IDC program director for Product Innovation Strategies. “The product lifecycle management (PLM) portal encompasses all product innovation content in an organization ranging from PLM, enterprise, quality or compliance systems. These capabilities are not meant to replace PLM provider capabilities; rather, they are meant to complement them and extend PLM information to the global team.”
This is going to be quite the competitive landscape in the near future. That will be good for everyone.
Some old issues were addressed in new ways by Rockwell people at Rockwell Automation TechED in San Diego Monday (June 1).
- IT/OT Convergence (or not)
- Connected Enterprise
- Mobility (or the breakdown of silos—finally)
We continue to talk about the coming Armageddon of baby boomer retirements and domain expertise walking out the door. This conversation has been ongoing for more than 10 years. We’re still talking.
One proposal here at Rockwell is to increase use of the technology that Millennial generation understands. That suite of technologies and devices are integral to Rockwell’s Connected Enterprise vision.
Another solution comes through the training/workforce development business. That group has begun to provide training and education beyond traditional (to Rockwell) electrical, motor control, and automation. It offers basic math, leadership, mechanical crafts, and more.
Once again training comes to the front. Partnering with Cisco, Rockwell has developed a specialized class beyond the Cisco CCNA certification—CCNAI. This training goes beyond traditional enterprise networking to include networking crucial for manufacturing and production.
The target market for this training is also non-traditional. It includes those presently working in enterprise IT. The hope is that this training will bring together information technology and operations technology (IT/OT) people and finally move the needle on this sticky organizational problem.
My meeting with a representative of this initiative is set for later this morning. However, I’ve already had many conversations and attended a “Super Session” on the topic.
Connected Enterprise at this point reflects the Internet of Things and is the vision pointing to smart manufacturing. According to an Accenture study about 84% CxO executives see potential revenue streams from IoT, but only about 6% doing something about it
The Rockwell mantra for this conference is Intelligent Assets Controlled by Intelligent Software.
Mobility for Rockwell goes far beyond just adding a few visualization tools to smart phones and tablets. It actually reflects the breaking of silos within the company. I’ve seen this developing for several years—especially with the current executive management team.
So, mobility becomes a cross-division effort so that all the various product groups come together so that there is a Rockwell app, not a drives app, a motion app, a control app, and so on.
Mobility also leads to the next age of automation—management by exception. Steve Gillmor of the Gillmor Gang, a popular tech conversation (podcast), talks often about the power of notifications. Notification leads to management by exception. That is where Rockwell is heading.