Change is a constant in life and manufacturing is no exception. How do organizations get ready for this coming wave of Smart Manufacturing change and the associated new enabled capabilities, business processes, automation and integration strategies, and business models? What should businesses be doing now and in the next few years to keep up with this wave of accelerated technology innovation?
Digital transformation strategies need to be innovative, driven by change and powered by emerging technology. While technology-centricity takes the spotlight, its strategic use in new business models and services will ultimately determine the digital transformation ROI.
Develop and Align to Future Market Strategy
Digital transformation needs to be an enterprise-wide endeavor focused on the business goals, yet every facility and stakeholder has their unique needs and expectations. Aligning strategies based on the business objectives is a proven formula to achieve successful transformation.
No matter how visionary the new mission and exciting the new technology, business leaders must steer strategies to a corporate alignment to accomplish the business goals. Business leaders need to become change agents and leverage new technology to transform the business units into highly connected collaboration hubs.
Will competitors change the game by adopting new business models, developing new capabilities or leveraging new technology? If the answer is yes, then the business should be proactive and incorporate these strategies into their growth strategy.
Evaluate current innovation centers and continuous improvement processes. Perform a Hoshin-Kanri-type strategic planning exercise where the organization evaluates current competencies, capabilities and processes against the requirements to achieve future goals.
Establishing the vision for a future competitive state for the business is a critical step in the journey of Smart Manufacturing. Without a clear end business state in mind in terms of future product lines, capabilities and business models, the organization risks investing in technology projects that will achieve small incremental improvements in efficiency but could miss the opportunity for breakthrough business innovation.
Smart Manufacturing methods can provide an infrastructure that enables business innovation. For example, streamlined business processes in the next generation manufacturing ecosystem can reshape supply chain concepts in a much more engaged way. By analyzing the data that will become available on product lifecycle, end user experience and usage of the product, the business will be have a better understanding on how to bring better product and services to market. Suppliers that react and adapt quickly with more flexibility will have a big competitive advantage. Manufacturers will synchronize their supply chains as they gain connectivity to bring products to market faster and improve intelligence in their entire value chain operations.
Establish Roadmap and Milestones for the Journey
Smart Manufacturing is not a single milestone project; it is a journey to new business models and/or enhanced business processes enabled by new technology, architecture and integration methods. Each business must map its own journey.
There will be a need to invest in exploratory steps and projects along the way. Budgets for these efforts need to be established based on achieving the potential returns of the long-term business strategy. This is not an easy step for many companies focused on short-term return on investment (ROI) and small incremental improvements. Methods of allocating budget to long-term investments could be one of the new skills required in the organization. Smart Manufacturing methods will provide better data that can be used to benchmark and measure success or failure to make better data-driven decisions about subsequent investments.
Exploratory projects need definition as achievements or trials on the path to the future business vision. It is important for each project champion to position clearly the relationship of the project goals to the achievement of the business goals. This will help the entire organization rally around the implementation of new technology and infrastructure. For example, it is not enough to say that a project will “enable real-time visibility of production.” Instead, the champion should go further and explain how real-time visibility is important to achieving a business goal that puts the organization in a more competitive position in the marketplace.
Most organizations are not going to throw away old equipment and replace it overnight with new smart machines. The evolution plan should include consideration to develop and implement middleware solutions that bridge and integrate older manufacturing equipment into newer manufacturing IT platforms where it makes business sense. These bridging solutions could allow old equipment to participate in the enhanced integrated business processes and extend the lifespan for equipment.
Nurture New Culture and Organizational Collaboration
Digital transformation and modernization are all-embracing, it involves all stakeholders and requires strategic alignment and collaborative culture connecting people, processes and technology. Organizations embarking on the journey of digital transformation need to radically rethink their philosophy. Leveraging digital opportunities, new business models and revenue streams need to
be identified. IT infrastructure must be modernized to reflect the hypervelocity of new market and value chain demands.
It is important to establish a culture where customers and suppliers are part of a collaborative partnership team. This step can be the most difficult as external organizations will make changes and adapt to the new manufacturing landscape at their own pace. Supply chain champions need to recruit partners and suppliers into the new vision.
To achieve Smart Manufacturing goals, it is imperative to break down the legacy wall between office information technology (IT) and shop floor automation and operations technology (OT). Many companies are already on this journey as IT organizations integrate smartphones, tablets and Internet services into new capabilities to support production and supply chain systems.
The organizational structure and culture must evolve to embrace the new reality of this highly connected and transparent enterprise. New levels of efficiency in manufacturing business processes are achieved by bringing office information technology (IT) and shop floor automation and operational technology (OT) closer together, crossing and breaking down departmental walls between product design, manufacturing engineers, machine programmers, production workers, inspectors, supply chain managers and facilities managers.
The organization should plan to market and internally promote the new strategic business vision, as well as the relationships between achieving the business goals, improving the workplace and improving personal skills for the entire team. There will be a need for a top-down culture of embracing innovation and expanding the daily dialogue beyond solving crisis and improving cost. The daily dialogue must include references to the progress on new initiatives.
Address Skills Gap for Knowledge Workers
The trends fueling the Smart Manufacturing direction are already turning shop floor personnel into knowledge workers who now have information that empowers them with more decision-making tools. Education programs are required to help the team obtain the skills required for jobs in the evolving manufacturing landscape. Management must reassure the team that they will support developing these new skills within the current workforce, and at the same time ease others fears of being left out during the implementation of new practices due to lack of skills with new equipment or technologies.
Developing a training strategy that will drive collaboration and build trust in the organization will be crucial. Developing education programs that span old departmental walls and combine skills traditionally taught in separate computer science, mechanical engineering, industrial or system engineering disciplines will be important. Enhanced skills in the workforce include configuring, programming and maintaining new sophisticated equipment and integrating it to the Smart Manufacturing information technology platform.
Build Partnerships to Support the New Strategy
The journey to Smart Manufacturing is not an internal journey for a single company division; it is a journey for the entire value chain of each product line and perhaps for an entire industry. An important part of this new culture is a partnering philosophy with suppliers of materials, components, equipment, technology and services that collaborate and support the requirements of enhanced integrated business processes. Suppliers need to be convinced to support a diversity of strategies – like embedding RFID tags, supporting new integrated supply chain practices and supporting specific M2M and B2B communication standards. Partners need to share and support a common business goal, and organizations need to earn the trust of suppliers to achieve these new levels of collaboration.
Where it makes business sense, the partnering strategy should include participation in industry groups that are developing and promoting standards listed in prior sections to support the Smart Manufacturing ecosystem. It is important to recognize that participation in these efforts helps elevate the entire industry and provide a platform for collaboration across the entire supply chain.
Evolve the Information Technology Infrastructure
The evolving demands of the digital workplace and workforce require IT infrastructure to support the flexibility, agility, and cost-effectiveness it demands. When implementing digital transformation strategies, organizations need to determine the right type of IT infrastructure. While traditional software has been working for decades, it needs review considering new technologies and new business needs.
Security solutions must extend beyond products and technologies to include guidance on company-wide security best practice designs, policies and procedures. This approach helps companies establish a sustainable security culture, conduct comprehensive security assessments and deploy a robust security infrastructure across both automation and industrial IT assets.
Open standards are preferred for M2M, A2A and B2B communications for business processes that cross the internal walls between departments and external walls with the supply chain. Smart Factory automation mechanisms should leverage sensors, auto-identified components with RFID, programmable machines and open standards for connecting multi-vendor equipment and software.
Create digital threads of information, from product definition to manufacturing, and inspection definition to aftermarket services of the product to maintain the integrity and fidelity of the product definition through product revisions and configurations throughout the product value network. The thread will leverage structured information exchange from customer to multi-tier supply chain, transportation and warehousing logistics.
Integrate business processes across enterprise IT systems and factory operations technology to streamline data exchange from shop floor equipment to operations management to business intelligence. Bi-directional data exchange standards that enable product definition revisions to be systematically translated to programs and processes, executed by automated inspection, production and service equipment, and enable acquired data from the shop floor to be aggregated and analyzed at higher levels of the Smart Manufacturing IT platform.
While digital transformation is an enterprise-wide endeavor, different business units have specific requirements that can be addressed through custom line-of-business and role specific apps. With intra-departmental APIs rapid application development platforms offer flexibility and agility, an area where traditional systems might fall short. Low-code platforms help to achieve enterprise agility by supporting the development of custom LOB apps promptly and efficiently. These new tools can accelerate innovation by empowering the business user and transforming IT into a governance and oversight role. Rapid app development can empower the digital workforce, bridge silos, streamline lines of business and modernize infrastructure cost-effectively in an efficient manner.
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