Digital Transformation Report
For the past fourteen years, LNS Research has published its biennial research findings in partnership with MESA International. These reports covered the full range of data related to and used in manufacturing. LNS Research analyzed industry-relevant information to see how companies are undergoing digital transformation. There is a lot of talk in the industry and startup community about the Industrial Internet Of Things (IIoT for short) and the applications that run on it. However, there is less talk about the data itself and using it to improve the entire company’s performance. When I say “entire,” I mean the area from the boardroom to the production floor. See what digital transformation is.
Little time for change
One very important point emerges from the LNS Research and MESA report. As companies pair their strategic goals, they realize that they must undergo digital transformation. These companies believe that these changes must occur within 3 to 5 years of initiation to remain competitive. Companies that are not yet digitized believe that the first essential step toward digitization is to collect data from SCADA (a computer system that oversees the flow of a technological or manufacturing process) to build their own IIoT platforms.
It is also worth noting that the changes in manufacturing companies are most often implemented by senior management. In the corporate sector, the following are responsible for such tasks:
- CEO – 22%;
- Plant management – 19%;
- Chief Digital Officer – 18%;
- and Chief Information Officer – 14%;
When it comes to analogous functions in manufacturing plants, the leaders of change are
- CEO – 16%;
- IT-Leaders, Plant management, and Analytics department – 15% each equally;
For startups that pivot in the IIoT sector, this is a clear signal to whom they should target their offerings and sales efforts.
What it’s for
The most popular spaces that companies are pinning their hopes on changing during digital transformation are:
- production quality;
- forecasting;
- operational excellence programs;
- manufacturing process improvement;
- customer service and support.
Less popular areas include social networking or the ability to compare data between different manufacturing plants.
About one-third of manufacturers use descriptive and diagnostic analytics. Interestingly, just as many use data to predict – whether in manufacturing, supply chain finance, or engineering. The report’s creators say this level of interest means that companies are pushing hard to increase their analytical skills. This correlates with data showing that 37% of companies believe they have enough analysts on board.
A great many companies are also experimenting with IIoT implementations. They are only focusing on collecting data, which they then allocate to use current-generation AMP (Asset performance Management). However, IIoT offers much more possibilities. It allows you to measure data in real-time and collect it over a longer period of time. Devices can check what is happening in the factory, on the production line, but also outside it. The possibilities of using IIoT in logistics or customers’ homes is a potentially unlimited source of data for analysis, prediction, and implementation of continuous improvements.
Companies that have a well-rounded, comprehensive offering or are able to combine all the pieces into one well-functioning system have a lot of room for improvement these days. Not only startups and technology companies but also experienced software houses can help manufacturing plants enter the world of digital transformation. If they have already carried out some activities, go a step further with them. By opening themselves up to external innovation, these factories give themselves a chance for much faster development and a breath of fresh ideas.
Data in the cloud
One of the trends that have been with us for several years is cloud computing. First, this innovation was followed by businesses themselves, but now the innovation is gaining popularity among manufacturing plants.
As the chart shows, corporate finance departments are least interested in this solution. Startups that offer solutions in this area may have trouble convincing decision-makers to implement their cloud-based projects.
Data and its analysis
When we look at charts that illustrate how manufacturing companies are using IIoT devices, we can see that remote management and energy efficiency are the most popular topics.
Companies use analytics data from these devices to, among other things:
- improve manufacturing quality;
- better forecast data in manufacturing plants;
- implement operational excellence programs;
- maintain production continuity;
- improve processes;
- improve customer service and support;
- better forecast sales.
What is noteworthy is that companies are afraid to automate analytics in such a way as to connect applications to their manufacturing equipment. There is a great fear that the analytics software will take over the control in the manufacturing plant.
It’s worth mentioning that a company can only really benefit from change if the implemented, new analytical methods are processed in such a way that they provide new process data. Then, in turn, it must be enough to transfer this data back to the processes themselves so that they can spontaneously influence the production line.
Recommendations for analytics and digital transformation
The report’s authors emphasize that undergoing a true digital transformation is essential for manufacturing companies to survive and succeed in the market. This thesis applies not only to the distant future but also to the current situation. Analytics capabilities are rapidly growing in strength. The number of companies and startups selling IIoT platforms and analytics applications and tools is growing rapidly every year. The report’s creators emphasize that manufacturing companies should prioritize:
- set ambitious goals;
- create a dedicated digital transformation team led by a top operations manager;
- make sure that the continuous improvement and operational excellence processes put in place are well represented;
- try out new IIoT platforms, focusing their efforts on analytics and applications that will make a real difference to plant processes;
- introduce long-term planning.
The entire report is available at: https://www.lnsresearch.com
