To effectively navigate the digital transformation journey, there are several key topics that manufacturing companies should consider. Enterprise Resource Planning software and manufacturing solutions offer a broad spectrum of manufacturing planning, execution, and integration, making them great models to consider for digital transformation.

1. Change management enables teams to thrive in change

Efficient change management is necessary to ensure a smooth transition to new ways of working, manage supply chain disruptions and implement new business models, and support employees to thrive with change and navigate ongoing uncertainty.

Change management has become more critical since COVID-19 because the pandemic has significantly transformed how businesses operate, and companies have had to adapt quickly. All operations are in the hands of humans, and no matter how good technology is, execution will fail if individuals do not work as a team to support the company’s mission.

Manufacturing companies can best manage organizational change by setting up and managing a change management program and a change management organization. Specific methodologies to develop, deploy, and build a change management program are integral components in the digital transformation project for the respective project, and system integrators are helping with best practices and deploying them.

2. Business process management is key to digital transformation

Effective process management and a business process management organization as an endpoint for digital transformation are crucial because it enables organizations to optimize their business processes, improve efficiency, and achieve better outcomes.

Process management involves mapping and analyzing business processes, identifying areas of inefficiency or waste, and implementing process improvements. Organizations can reduce costs, improve quality, and increase productivity by optimizing business processes.

Related: Sustainability is the Key 2023 IT Trend

3. Sustainability – A new perspective for manufacturing

Sustainability is the third area of focus, driving digital transformation from both ends. It has emerged as a new initiative, pushing digital transformation forward. As a beneficiary of digital transformation, it gives manufacturing companies an entirely new world of data to measure sustainability goals such as carbon footprints or product lifecycle analysis to assess the impacts of products and what can be done.

Digital transformation to support sustainability for manufacturing is fundamental, considering the potential environmental effects of manufacturing processes, potential cost savings, reputation and branding, compliance, and innovation by adopting sustainable manufacturing practices.

Sustainability is still relatively new for most players in the general ERP space. However, the demand has never been higher than today. Managing sustainability goals can be challenging, requiring data availability, data quality, standards, frameworks, resources, investments to implement, and agreement on stakeholder expectations.

However, as with other areas in digital transformation, specific methods, and best practices are applicable.

4. The cloud is here to stay

The manufacturing industry may have been hesitant to adopt cloud computing due to concerns about data security, privacy and potential disruption to existing systems. However, as the benefits of cloud computing are more apparent, more and more manufacturers are beginning to adopt cloud-based solutions.

Security and privacy are a big concern for many; however, unless the manufacturing applications are entirely sealed off, the industry consensus is that security and privacy are a matter of managing policies rather than actual physical access issues. If done right, the cloud gives customers more control over privacy and security than traditional on-premises solutions.

Manufacturers today face a critical challenge – ensuring round-the-clock manufacturing operations with zero interruptions. Any potential disruption can have significant consequences with ramp-up and ramp-down processes requiring uninterrupted functions. However, manufacturers already offer cloud solutions with substantial development in this regard.

5. Cybersecurity challenges in manufacturing companies

In the age of digital transformation, cybersecurity is a critical concern for manufacturing companies. With increased reliance on interconnected systems, IoT devices, and cloud computing, the risk of cyber threats and data breaches is higher than ever.

Manufacturers must prioritize robust network security protocols, regular vulnerability assessment, and secure access controls to protect valuable assets. Implementing advanced intrusion detection and prevention systems, real-time monitoring, and incident response capabilities is essential for prompt threat identification and mitigation. Employee awareness and training programs also play a crucial role in preventing cyber-attacks.

By addressing these challenges, manufacturing companies can maintain operational integrity, protect sensitive information, and build customer trust. Cybersecurity must be fundamental to their digital transformation strategy for a secure future.

How to drive digital transformation

The points above highlighted the various aspects of digital transformation. However, the question that arises is how to tailor it to support the organization’s progress. The digital transformation process can be complex as it integrates new technologies, processes and data throughout the organization.

Adopting a strategic approach that aligns technology with business goals is necessary to prioritize digital transformation in the manufacturing industry. This can be achieved by following these key steps:

• Define business objectives: Identify the critical business objectives that digital transformation can help achieve.
• Evaluate current capabilities: Assess the current state of technology, processes, and data across the organization to identify areas of improvement and potential opportunities.
• Develop a roadmap: Chart a digital transformation roadmap, detailing the steps to achieve the identified business objectives
• Prioritize investments: Prioritize technology investments based on their potential impact on the business objectives identified in step one.
• Foster a culture of innovation: Encourage employees to experiment with new technologies and processes, thereby cultivating a culture of innovation.

Alexander Paulus is a Senior SAP Professional and SAP Project Manager with 15+ years of experience in various project roles, mainly in global ERP Implementation projects and Solution Architecture and Delivery & Operations Management. He is Managing Director at CNT Management Consulting Inc. and one of the key digitalization subject matter experts.

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The expansion includes products in select Industry Cloud base licenses. Salesforce says the new offering with enable businesses to complete more tasks with fewer resources, boost efficiency and deliver better customer experiences at scale.

With companies facing uncertain economic times with inflation, supply chain disruptions and labor shortages, any new efficiency helps, says Salesforce. Industry-specific automation can replace tedious, manual tasks.

At least 86% of senior IT leaders say the experience an organization provides its employees and customers is as important as its products and services. Meanwhile, four out of five senior IT leaders agree that improved customer-facing and employee technologies are critical for their organization to compete.

A study from Salesforce’s MuleSoft and Vanson Bourn showed that 91% of organizations say they they need automation technology, but only 23% have fully implemented automation across business functions.

Salesforce Flow for Industries

Users of Salesforce’s Flow for Industries can create intelligent process automation unique to their specific industry. According to Salesforce, these new tools help customers with the following:

• Create better customer and employee experiences: OmniStudio enables organizations to build branded, dynamic customer interactions and employee workflows fast. Flow easily connects them with enterprise data and applications, without code.

• Easily manage rules and actions: Business Rules Engine allows organizations to simplify and automate processes such as pricing discounts, care management or financial planning with declarative setup, management and evaluation of rules. Using a no-code interface, organizations are empowered to build, test and execute rules before they are integrated.

• Save time and resources: Document Generation gives organizations the ability to automatically generate and share documents using a no-code template designer, while Intelligent Form Reader uses optical character recognition (OCR) to automatically read and extract document data, unifying the end-to-end management process, and freeing up time for higher-value work.
• Simplify data management: Data Processing Engine helps organizations create definitions to transform data across multiple sources then surface that to customers within a workflow.

The Flow for Industries suite of automation products is generally available now. These tools are free to base license holders.

Learn more about the new Flow for Industries on Salesforce here.

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More specifically, the tech giant is veering from using virgin plastics in its products, and plans on making all its products with recycled materials by 2022. Similarly, Google also recently announced that all of its product shipments will be carbon neutral by 2020. Both pledges are also challenging the company to think about how to make its products last as long as possible, easy to disassemble at the end of their lives, and use the most sustainable materials, Fast Company says.

“Some people think design is about making things look pretty or look good,” Ivy Ross, who heads Google’s hardware design team, told Fast Company. “And really design is about solving problems for humanity.”

In order for Google to go ahead with making its products more sustainable, each decision has to go through detailed analysis and go through multiple steps such as:

• Materials need to meet a lengthy list of specs
• Match exact color on devices to test durability and heat exposure
• Materials cost and manufacturability

Similarly, as Google works to offset emissions used to ship products, it’s working to cut those emissions, too. For example, the tech giant was able to reduce shipping emissions by 40 percent when it shifted from air shipments to cargo ships.

All in this together

While Google is taking steps to “build its ‘sustainability muscle,’” other tech companies are already implementing more sustainable practices. For example, Fast Company says that Apple uses recycled plastic, aluminum and tin for some of its products, including for a custom robot that that disassembles iPhones and send the taken-apart materials back onto its supply chain. Apple also uses the cobalt from old iPhone batteries to make new ones.

As a result, it’s likely that decision makers will continue to see tech companies prioritizing sustainability practices in their supply chains and overall company culture. Examples like Google and Apple can be used by decision makers to decide what to do – and what not to do – when it comes to implementing their own methods of sustainability, and what steps are entailed.

For instance, even though Google was able to reduce its shipping emissions, changes had to be made across the company’s production processes, especially since shipments would now take longer to arrive. Even still, the company’s commitment to sustainability out-weighed the wait time. “We are looking at this opportunity as a perfect time for us to make a stand and bring something to what we believe customers want in the marketplace,” Anna Meegan, Google’s head of sustainability for hardware, told Fast Company. “It aligns to our broader company culture around thinking about the big unsolved problems of our time. So this is something that we feel is the right thing to do.”

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The Oxford Economics report also says that China will lead the charge in automating jobs in manufacturing; by 2030, it will have 14 million industrial robots in use. Other researchers and reports say the world is on track to follow suit due to the implementation of robotics, Business Insider says. For example:

• Newly installed robots currently replace 1.6 manufacturing workers
• Half of companies are expected to reduce their full-time workforce by 2020
• Approximately 7 million jobs in the United Kingdom may be displaced by 2037
• 800 million people worldwide may be jobless by 2030

One reason why robotics is booming in manufacturing is due to cost – machines are much cheaper than paying people, Business Insider says. “Technological advancements have pushed down the average unit price of robots by 11% between 2011 to 2016. The US has already lost 260,000 due to automation since the turn of the century.”

Going, Going, Gone

As robotics continue to increase and manpower continues to decrease, it seems that this trend is going to stick around, especially in the United States. Business Insider says that the Oxford Economics report has “implications for manufacturing policy,” especially since President Trump promised to bring back manufacturing jobs in his campaign, and didn’t. In fact, manufacturing job opportunities dropped even faster during his administration: “Manufacturing activity fell in the US to a two-year low in June, in part due to the ongoing trade war with China,” Business Insider says.

Regardless of which country they’re based in, decision makers should consider how their company is, or will be affected by robotics, and how they can support human workers and automation simultaneously. This is because whether or not a company is ready, the machines are coming: “The repercussions of robotization are interconnected and complex, but the growth in robotics is inevitable,” Business Insider says, pointing to the Oxford Economics report. “These challenges must be embraced and addressed.”

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The IIoT Observatory involves years of research and industry collaboration. It details nine Connected Applications Market Areas across three major regions, and the providers that offer them. The observatory also provides a number of use cases and case studies with end user technology decision makers. These case studies show the budget process, analyzing how money flows in these IIoT deals.

The data from the Observatory clearly shows growth of global IT and Enterprise software providers revenue comparted with OT and Industrial providers. IT and Enterprise is growing far faster in Connected Applications, 65 percent compared to 29 percent for OT/Industrial.

Asset Management and Performance Monitoring are the most popular use cases, with the highest number of case studies in the process manufacturing and machinery industry sectors. Most projects have been in these industries.

Q&A with Cambashi’s Alan Griffiths

What is the Observatory and what does it teach readers?

Cambashi’s Industrial IoT Observatory provides global sizing for the emerging industrial IoT market, focusing on Connected Applications – the new focus for many key providers. The underlying research is based on critical industry input from leading providers to define the scope and segmentation of the market. The Observatory contains information essential for global software providers planning their product development and marketing strategy in this area.

What does the Observatory reveal about the state of IIoT?

Connected Applications are gaining traction in nine key market areas. The global 2018 figures indicate major changes compared with 2017, our base year, with a leap of 42 percent in total revenues and radical changes in the relative positions of leading providers. This points to the success of robust, packaged software over pilot projects and initiatives.

How does the Observatory impact how tech manager end users should build their strategy moving forward?

This depends on their risk-reward appetite. It’s important to understand:

What level of technology you need – Technological Capability ranges from:

• Monitoring – where data is simply received from a sensor on a device or “thing” and used to notify someone of an anomaly or to product a report
• Control – where the sensed information (often with the support of analytics) is used to control a device, machine, vehicle, or factory
• Autonomy – where the machine, vehicle, or factory uses advanced apabilities such as machine learning and artificial intelligence to make its own decisions

How much business transformation you want to have – Business impact ranges from:

• Efficiency Improvements – where processes are improved to reduce cost
• New revenue Streams – or new ways of interacting with customers
• Major Business Transformation – where businesses undergo radical organizational or technological change to increase profits and/or growth

It’s important to understand these factors act independently. For example, a fairly simple technology such as sensing and reporting the location of vehicles can support a major business transformation like that achieved in ride hailing by Uber and Lyft. A sophisticated technological solution that requires autonomous working, for example in a “lights-out” production operation, can be achieved without major business transformation.

What other insights from the findings should our readers know about?

We expect further significant changes and consolidation in the next few years. The Asset Management and Performance Monitoring use cases have the most published case studies. The top ten use cases all strongly feature in the Connected Production and Connected Asset market areas.

There is a clear distinction between IT/Enterprise and OT/Industrial providers, and we are observing the formation of new relationships and ecosystems.

More information about Cambashi’s Industrial IoT Observatory can be found here.

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Pretty much everything that happens within the indoor farm is automated, according to Fast Company, with some yellow robots packing trays with soil and seeds and other trimming towers of kale. The growing room is monitored by infrared cameras and sensors to control the indoor climate, whilst a sophisticated software keeps the detailed “recipe” in check, adjusting the amount of light and water needed to create optimal flavor. 

One of the company’s most unique components is its “sensory” department, which evaluates the flavor of each crop and tweaks the growing environment recipe for the next batch. “We essentially coax a different flavor profile out of the plants by giving them the right recipe,” says Barnard. “We take those plants and analyze what’s in them, and then we work to give subsequent crops exactly the right recipe so that these things are lovable. And that’s critical. That’s how we get to 10-year-olds asking their mothers for our kale.”

Energy is one of the bigger barriers in making the argument for indoor farming, as the lighting is a large cost. But Plenty has cut energy consumption by 80% per kilogram of plants grown. It also eliminates long supply chains, keeps the crops from sitting inside distribution centers for days at a time, costly transportation from farms far away from the vendor location, and reduces the likelihood of the crops getting contaminated. 

Another major concern is that indoor farming is a sort of gentrification of the agricultural industry, though Barnard says he has no intention of putting traditional farmers out of business. The Plenty website quotes him: “We don’t have competitors and we aren’t out to get traditional farming…We are all in this together.

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The tech giant has been installing automated machinery in its warehouse over the past few years; the machines scan goods that come down a conveyor belt, and then place them in custom-built boxes for each item. A statement from Amazon says that the major reasons for the installation of these products is to increase safety, speed up delivery times and add efficiency across its network, Reuters says.

The new machines Amazon is looking to install, called the CartonWrap, are able to produce 600 to 700 boxes per hour, which is four or five times the rate of a human packer. And they require less man power – they only need a single worker to load custom orders, another to supply cardboard and glue, and a technician to fix jams.

These new machines, which help make up Amazon’s “technology suite” and includes item-mailing machines called “SmartPac,”will be able to “automate a majority of its human packers,” Reuters says.

Will the machines take over?

Reuters says that Amazon has considered installing two CartonWrap machines at dozens of its warehouses, which would eliminate 24 positions at each one; these facilities employ approximately 2,000 people. “That would amount to more than 1,300 cuts across 55 U.S. fulfillment centers for standard-sized inventory.” Additionally, Reuters reports that another way Amazon intends to bank more profit and trim its workforce is by eventually refraining from refilling packing roles.

However, Amazon claims that “a fully robotic future” is far off – its employee base is one of the largest in the United States, especially as it continues to open new warehouses and raise wages to attract employees in a “tight labor market.” It also claims that its movement towards machinery is an effort to “re-purpose” workers; for example, as machines gradually take over some human roles, workers that stay with company “can be trained to take up more technical roles,” Reuters says.

Regardless, Reuters says that even though Amazon is making strides to move towards full automation, machines programmed to do common warehouse tasks, such as picking up an item, “are still beyond its reach.” Vetting these types of solutions can take time, which means that employees’ jobs are safe – for now.

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European Union members are reevaluating dishwasher efficiency and repair, and revising the 2009 Ecodesign Directive, “which governs everything from how much energy a vacuum cleaner sold in the EU can use to how many household appliances and electronics are recycled.” As a result, the EU is exploring current rules within manufacturing, including those pertinent to lightning, T.V.s, washing machines, refrigerators, and more, Fortune says.

Similarly, at least 18 U.S. states are revisiting manufacturing laws, too; activists have actually drafted new laws that “that seek to give consumers more control over how they repair and maintain their property.” For example, Fortune points to the 2015 case where farmers were enabled to modify software as needed to repair machines (like tractors, etc.); but, as a result, companies like John Deer took issue with this, and many farmers faced legislative battles and backlash.

Companies like Consumer Reports and iFixit are also promoting standards that would force manufacturers to make it “legal and practical” for consumers to fix their appliances when something breaks, Fortune reports.

What this movement could mean:

For end users, this is potentially a good thing – “regulators are starting to listen and considering proposals that address the impact of planned obsolescence by making household goods sturdier and easier to mend.” This may lead to less stress, less limitations and risk regarding voiding warranties, and saved money in the long run.

For manufacturers, this new movement might not be ideal. Because of past, strict warranties, which led end users to junk a broken appliance and purchase a new one, manufacturers would make money on those sales. With legislation potentially becoming reality, manufacturers would lose more control over their appliances, and miss out on prospective sales.

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Business Insider tightened its lens on Tesla, which follows a type of “production hell model” while working on its cars. For example, if Tesla’s vehicles aren’t currently being mass-produced, engineers might “make calls to suppliers, conduct design reviews,” and visit assembly lines in the factory. After evaluating where progress is at, the engineers then use what they’ve learned to make the technology that is creating the vehicles – or, “the machine that builds the machines” – function more effectively.

According to Business Insider, this production hell, or “less segregated approach,” helps Tesla design and manufacture its vehicles more thoroughly: “…at Tesla, an overarching ambition is to remake the entire manufacturing process — so if engineers…who are working to increase automation can communicate more fluidly with designers, Tesla vehicles can be designed with those advantages in mind.”

Decision makers’ takeaways:

Even with all the technology and product advances that large companies like Tesla are making, the trial-and-error process of evaluating workflows still helps decision makers see what processes are helping their businesses thrive, or struggle. Human input is still needed. Based off of Business Insider’s look at Tesla’s general assembly or “production hell” model, it seems that decision makers, such as engineers, are still focused on the workflow processes that produce better quality products, rather than the quantity of products, which often determines a business’s success.

Plus, every business goes through it, and can reach out to peers for help, or to compare workflows with: “It’s something that manufacturing goes through,” one of Tesla’s engineers told Business Insider. “Anytime you do it, it’s going to be difficult. But what’s really cool here is that everybody is banding around it, while at the Big Three” — General Motors, Ford, and Fiat Chrysler — “it is manufacturing’s problem. Here we say, ‘No, no, no, it’s everybody’s problem,’ because it’s just our third car and it’s that much more important,” she said. “We’re still calling up design to come to the floor.””

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