Digitalization is changing the game. New technology trends have leveled the playing field, arming companies with extraordinary amounts of data used to reinvent how they compete in the future. Success today no longer guarantees success tomorrow. Rather, it is the manufacturers willing to redefine who they are, what they sell and how they operate that will win in the new digital economy. Even better are those companies open-minded enough to reevaluate every aspect of operations with an eye toward new, customer-centric innovations.
Much has been written about the Internet of Things and how embedded sensor are transforming the product and services used in daily life. The use of sensors is predicted to grow astronomically with the goal of solving nearly every human need and want from smart shoes to cancer killing medical chips. According to a report from analyst firm IDC, the world will have 30 billion connected devices by 2020. Devices that have been performing a single function for years, such as car tires, are suddenly transmitting and, in some cases, collecting vast amounts of data. When the resulting information is combined with analytics in real-time, on the same platform, the power of data is unleashed, changing business processes forever.
Possible New Business Processes to Improve Operational Efficiency
By converging information and operational technologies, manufacturers are uncovering new ways to optimize business outcomes and reimagine their existing processes. Not only are they using digitally enabled machinery to improve business processes, but innovating their own solutions to deliver more value to customers. Below are a few examples of emerging new processes that are driving operational efficiency and improving profitability in the digital economy.
- Collaborative R&D – Building digitally enabled products requires bringing together mechanics, electronics and software across the extended business network. Using technology to facilitate and encourage collaboration promotes innovation across departments and between business networks, as well as enables greater agility in responding to changing market demand.
- 3D printing – Some manufacturers are using 3D printers to print prototypes or spare parts. Creating parts in-house has the potential to reduce inventory and the associated capital significantly and to reduce idle time because there is no wait time for deliveries. It is important to note that patent and copyright issues need to be resolved in order for 3D printing of parts to become common place.
- Predictive maintenance and services – Moving away from reactive or scheduled-based service models, digital data is being used to constantly monitor equipment health and predict future failures. The benefits of preventative maintenance and machine connectivity include faster customer response time, improved uptime, a higher level of customer service, the promise of better service-level agreements (SLAs) and fewer customer outages.
- Benchmarking – When key performance indicators from one location are captured and shared across an organizations network, it is possible to strategically determine and implement best practices. Trends and issues on a daily basis can be analyzed in real-time in order to make immediate changes and improve profitability.
- Connected manufacturing – When the manufacturing process is seamlessly connected from top-floor to shop-floor, new capabilities are possible. For example, connecting manufacturing makes it possible to realize a “lot size of one” during production. Also, demand-driven production can be implemented to more closely align operations with orders. Finally, automation can be used to reduce labor costs and streamline operations in remote locations. In addition, when supply chains are connected in real-time, it is possible increase efficiency by instantly making changes based on demand or events.
- Asset intelligent network – Managing many assets from different manufacturers and vendors is a time-consuming challenge, involving maintaining updated specifications, maintenance records, upgrades and more. In the digital economy, it is possible to create an asset network to facilitate communication between a company and its different partners. This type of network helps reduce complexity for operators and helps manufacturers better understand how customers are using their products.
Airbus, a leading aircraft manufacturer, has re-imagined nearly every one of its internal processes. Using the latest techniques, designs and equipment, Airbus has created a modern manufacturing facility that is nothing like the past. Today, their aircrafts completely are designed in the digital world. 3D geometric data models create a digital mock-ups of new aircraft designs, which are then used as masters during the production process. (Airbus Group). Also, customers can explore a new aircraft in virtual reality and advanced digital technologies on the shop floor power production lines where computer-suited personnel work side by side with robots.
Innovative processes leveraging digital technology can have a game-changing impact on a manufacturer’s top and bottom line. Processes that digitally connect suppliers, customers and assets are creating unique efficiencies and customer value not possible before. From connecting machines on the shop floor to connecting data from different asset vendors, operating in the new digital economy means using information to inspire new methods of operation that help close the gap between a company and its customer.
Pradeep Amladi is Vice President of Marketing, Manufacturing, Energy and Natural Resources Industries at SAP.