Original article promoted on CNBC on April 27, 2018.
The era of digital transformation is impacting every industry — and manufacturing is seeing cutting edge innovation delivering some impressive results. Employing the Internet of Things technology to improve connectivity, productivity and efficiency are vital to any business competing in this digital economy. And while companies born in the digital age are thriving, many legacy companies are finding it hard to keep up. For traditional businesses to thrive, they need to be flexible, agile and open to digital opportunity.
Why embrace digitization?
How essential is digitization for the growth of the manufacturing industry?
In a recent report, IDC predicted that by 2020, 60 percent of top manufacturers will depend on digital platforms to support as much as 30 percent of their overall revenue. Furthermore, the research firm predicts that by 2021, 20 percent of these companies will rely on embedded intelligence, using the Internet of Things and the blockchain to automate processes and increase execution times by up to 25 percent. The potential benefits are clear, but how can companies not currently enjoying these rewards ensure they do so from this point onwards?
The two core ingredients of digital innovation
There are two core aspects to succeeding in digital transformation, no matter the stage of the adoption. The first is greater integration of software. The second is increased connectivity of data. Harnessing these two core aspects of digitization are key to driving new opportunities for growth.
- Leveraging integration of software
Whether your business is a manufacturing disruptor or adapter, increased integration of software can make a significant impact on efficiency across the complete value chain of a business.
Companies are now leveraging technology to create digital twin capabilities i.e. building a replica model in the engineering project phase, using data from asset and plan designs. This model can then harness augmented reality (AR) and virtual reality (VR) technologies to evaluate and test scenarios across the entire value chain — from design and build, to operations and maintenance, without any significant cost.
SOMIC, specialists in end-of-line packing systems for small products — in this instance coffee capsules — face continuous advances in packaging design and short production lifecycles which require fast machines and retooling. This manufacturing firm had to innovate to ensure its systems were smart, adaptable and efficient — resulting in shorter time to market. SOMIC used a digital twin to build the prototype of a coffee capsule machine that enables simulation of the real, improved performance without having to lift as much as a screw driver. This was all possible thanks to employing Schneider Electric’s smart controller and EcoStruxure Machine Expert.
The results were impressive. The new machine has set a performance benchmark of nearly double the current performance for a carton machine. Schneider Electric’s augmented reality application, EcoStruxure Augmented Operator Advisor, also allows SOMIC to quickly and easily maintain their machines virtually without operators having to stop production. Furthermore, the machine’s footprint has been reduced by almost 50 percent. This means that the existing factory space can now be used more efficiently.
- Connectivity of data and personalization
Digital connectivity is delivering more data from manufacturing processes than ever before. This data can be used to open new possibilities for efficiencies and revenue growth. Industrial companies can also leverage the explosion in data, combined with their own expertise, to offer new services to their customers.
Cyril Perducat, EVP of IoT & Digital Offers for Schneider Electric, says connected devices alone are not enough “to accomplish true digital transformation.” “You need to develop a seamless ecosystem of humans and machines, performing optimized, end-to-end processes. And you’ll need to be able to turn connectivity into true business value, by understanding the information that connected operations provide and by being able to act on this information efficiently and effectively,” he said.
Bühler, a leading developer of equipment for processing foods and manufacturing materials, is harnessing more data thanks to greater connectivity while improving operations. As part of its digital transformation, Bühler has also incorporated Schneider Electric’s augmented reality application. It piloted these augmented reality systems to provide personalized digital information to the users of its machines, based on customer needs.
Dr Holger Feldhege, COO Manufacturing, Logistics and Supply Chain, says “the speed of the resulting display on the terminal is greater than what we could previously achieve using routing slips, or other paper or electronic records.” As a result, Bühler and its customers are reducing downtime, speeding up operations and maintenance, and reducing human errors.
Three steps to benefitting from the industrial internet of things
Adoption of the digital tools for greater integration and connectivity is easy and affordable. There are three routes a company can take to accelerate its digital journey: 1) connect what was unconnected, 2) leverage data for new digital services and 3) modernize its technology.
Digital transformation begins by literally connecting what was unconnected. This is achieved by simply connecting more devices such as voltage breakers, transformers, sensors, small PLCs (programme logic controller) and drives. It also involves connecting to other third-party business systems to ensure more agile, risk-free production.
It is equally important to leverage the data from these connected devices, allowing businesses to develop new digital services and improve operational efficiency. Companies can either do this on their own, or they can rely on vendors, start-ups and developers to deliver a value-added service.
And finally, a company must modernize its existing technologies and assets. Most industrial companies can do this simply by adding a layer of connected products and software on top of existing assets — rather than having to “rip and replace.”
More and more companies foresee how leveraging digital technology now will keep them competitive and lead to a substantial return on investment in the future. Schneider Electric aims to digitally transform 100 of its facilities by 2020. The company successfully renovated its first European plant in Le Vaudreuil — without disrupting the factory’s high-speed production of contactors, of which it produces 12 million annually.
This factory, with its 100 percent automated assembly lines, implemented new software modules and the Industrial Internet of Things (IIoT) with numerous benefits. It now employs augmented reality to boost maintenance productivity, connected objects to set up predictive maintenance and integrated building management systems to save energy. Peter Herweck, Executive Vice President of Industrial Automation at Schneider Electric, states that the augmented reality maintenance tool alone “delivers between 2 percent and 7 percent gain in productivity.” Le Vaudreuil is a leading example of how legacy companies can be unobtrusively updated and benefit from implementing smart manufacturing technologies.
Digitization is driving truly revolutionary business opportunities. New business models and revenue streams are available to all companies willing to embrace digital tools and strategies. This is reaffirmed in recent research by IDC (“The Value of IoT for Manufacturers“) which reveals that “in manufacturing, 63 percent of businesses currently see IoT as a ‘strategic’ path to help them compete more effectively with products and services.” This figure is set to rise as more companies appreciate the clear rewards that the internet of things technologies can bring to businesses — right now and in the future.