OEMs who build machines for industrial end users are finding themselves at a crossroads. Should they maintain their traditional business model and continue to focus on making more powerful and faster machines, or should they take a step back to reassess how the industry is changing and how new technologies are shifting existing business paradigms?
Regardless of their decision, there are several major issues that are currently posing challenges to OEM competitiveness:
- Time-to-market – New machine speed of delivery has emerged as a big differentiator in an increasingly competitive marketplace. Common, traditional engineering design tools that have reached limits in terms of efficiency make it difficult to further reduce the time it takes to build, deliver and install new machines.
- Talent acquisition and retention – Many machine building experts are reaching retirement age and are taking their home-grown knowledge with them when they leave their companies. At the same time, the effort to recruit younger, talented workers becomes more intense as many of the incoming workforce seek opportunities where new digitized technologies are already in place.
- Machine productivity – Many OEMs who are attempting to increase the productivity of their current machines are faced with a high investment for little incremental return scenario. Traditional technologies are placing a constraint on any further productivity improvements. This is a critical consideration since increases in productivity are the principal driver for OEM business growth.
- Machine uptime – Downtime of machines in the field is both costly and time consuming for OEMs. However, end users view availability and reliability of the machine as a high priority and a key value driver. The ability to address reliability of machines in a more proactive manner is now emerging as a competitive advantage.
Most OEMs have succeeded in optimizing their mechanical designs through more powerful electrical equipment and drives as well as CPU-driven PLCs. However, much more can be done to streamline design, build, and support processes.
New enablers now make OEM digitization both practical and affordable
For those OEMs seeking to build competitive advantage, now is the time for executing on a plan that leverages the benefits of digitization technologies. Several new trends are converging that make digitization both affordable and easily scalable. The following four trends represent the key enablers:
- Connectivity –Today nearly every automation product (from a sensor, to a drive, to a controller) can be connected. “Connected” implies a machine or a device that is capable of linking to the cloud. Edge control and gateways make it easy to connect machines with very limited effort. In addition, built-in cybersecurity capabilities help to minimize the threat of cyber security risk.
- Mobility – Mobile devices allow access to machines and plants from anywhere at any time. This enables new applications such as augmented reality, which make it much easier and cost effective to service machines in the field both remotely and on site.
- Cloud – Cloud data centers store the vast amount of data that are collected by smart machines at a very low cost. Access to more data enables directed and precise analysis via information dashboards which help drive faster, more accurate business decisions.
- Analytics – Analytics leverage data to identify improvements, gaps and problems, and to increase process efficiency. Analytics capabilities also allow OEMs to adopt related artificial intelligence and predictive models to improve the performance of their machines
An open platform that provides a foundation for transitioning to digitization
New digitization technologies are mature and ready to deploy in field situations. Cost of entry is low for OEMs willing to invest as a framework already exists for linking the technologies. Schneider Electric EcoStruxure™ connects and integrates digitalized products in an open fashion, enabling new OEM productivity gains and end user support services. Those OEMs who manage the transformation to digitization earlier rather than later will position themselves for scalable growth and quickly differentiate themselves from their competitors. To learn more about how machine builders can grow digitization-related revenues, download our new e-guide “Machine Builder’s Guide to Mastering Digitization-Driven Business Growth.“