How Leaders are Leading in Digital Industrial Transformation

It’s no secret that technology is a heavy focus for today’s manufacturers. Unfortunately, many manufacturers often focus on technology as an end, when in reality, technology is a means to achieving better business outcomes. A few years ago, LNS Research coined industrial transformation (IX) as the industrial form of digital transformation, developing a framework for success that urges modern manufacturers to rethink their approach to adopting new industrial technologies and ensure every solution is tied to specific operational initiatives and goals. As opposed to a technology-first approach, industrial leaders are prioritizing business objectives and strategic initiatives, then managing IT / OT convergence to drive solution selection and change over time.

Digital Industrial Transformation and the Journey to Value Realization

Currently, only 28% of companies are seeing value in their industrial transformation efforts, while the remaining companies have not yet realized value. Examining industrial leaders who are reaping the rewards of IX reveals several key insights that can help companies maximize value earlier in their journeys. Research indicates that IX leaders are marked by three defining characteristics:

1.  Adoption of Technology in the Right Business Areas  

IX leaders are 3.5 times more likely to deploy technology, but this technology is not limited to IIoT. This underscores the fact that IX is more than IIoT alone. While IX leaders are ahead of the technology curve, they remain focused on the needs of the business. In fact, IX leaders are 31% more likely to implement business-driven initiatives and 60% less likely to focus solely on technology. IIoT is viewed as just one of the many initiatives that plays a part in driving transformation. Beyond just IIoT, these initiatives could include autonomous guided vehicles (AGVs), robots, cobots, intelligent wearables, additive manufacturing, connected worker initiatives, remodeling operation centers, as well as upgrading and modernizing legacy systems.

2. Extension of Efforts Beyond the Factory

IX leaders are 53% more likely to extend transformation efforts beyond the factory floor, involving suppliers. In order to be a successful leader in digital and industrial transformation, companies must embrace the “Power of More” in which IX leaders have a larger functional scope, expanded focus, and broader teams with greater subject matter expertise. By fully exploring the possibilities of IX and involving both suppliers and customers in transformative initiatives, IX leaders are able to achieve more meaningful solutions and a stronger funding model.

3. Executive Sponsorship, Coupled with Cross-Functional Buy-In

86% of IX leaders have executive sponsorship and buy-in to actively drive change. LNS’ research revealed shallow executive buy-in without adequate budgetary backing and a lack of plant manager involvement as two key disconnects in the modern manufacturing space that negatively impact the potential value of IX. Many companies take a top-down approach to digital and industrial transformation. While executive support is necessary, it alone is not sufficient; in fact, subject matter expertise from plant management and staff is just as critical.

Benchmarking Successful IX Adoption and ROI

But how can your company gauge success in your own IX journey? Whether you’re still in the planning phase or have already adopted select IX initiatives, following are five pillars of success to benchmark your progress in maximizing the value of IX.

1. Innovative adaptability when enabling new business models and revenue sources. When looking at technology solutions to support your digital transformation efforts in manufacturing, it is key to evaluate not only based on your business today but also ensure the solution can adapt to future business demands/changes. Does the system enable real-time adaptability to machine-down conditions, staffing fluctuations, mass customization, CTO, and any other real-world contingencies without needing customization? Is the solution 100% location-aware of all material at the lowest level of component detail when it comes to scheduling jobs – is it leveraging a combination of real-time consumption data (not inferred or calculated consumption), a knowledge of all of the asset information – such as warehouse operating hours, material movement times - and a knowledge of the predicted completion times of the jobs? How easy is it to transfer product & process details to another line or another factory?
2. Critical visibility through real-time dashboards, interactive reports, and mobile apps. Visibility is a key driver for companies deploying manufacturing automation. But this data is meaningless without a way of contextualizing that information to provide actionable insights. True drag-and-drop construction of real time dashboards and reports is only possible if the structure of the system itself is designed in such a way that any incoming data, whether implemented today or four years from now, are normalized and stored in a meaningful way. The reporting engine should be designed in such a way for it to be a collaborative tool for teams – the ability to traverse the data in real-time to get deeper insights than possible with basic static dashboards & reports. The key is in the contextualization of information every time you add a data source like a machine, does the system simply know how to handle that data, or do you need an army of integrators and coders to make that data mean something in the data model before it can be used in analytics? Every vendor will tell you that you can get any information you want out of their system but at what cost? Is it something that you and your team can do?
3. Complete connectivity of manufacturing operations, production asset management and maintenance, and field service. In order to capitalize on the connected ecosystem, organizations need to start looking at seamless integration and data exchange with suppliers, customers and other external stakeholders. This is when architecture and standards play a very critical role in breaking down the barriers between disconnected systems and devices without the exorbitant price tag that this traditionally incurs. When looking at solutions, it is important to dig deeper into their technology stack to assess how interoperable the solution is with both machines on the factory floor as well as other business systems in your organization. Does the connectivity require expensive middleware? How much additional customization services will be required? What will happen when a system changes? Is the vendor leveraging industry standards or a proprietary data protocol?
4. Configurable through process design, analytics, and a user interface. When choosing the right MES solution one must factor in whether the solution requires extensive customization to make the system work as described or if the system is easily configurable to support any modifications. Oftentimes, software vendors will present that their solution is capable of handling everything, but unfortunately it is not until the deployment phase do companies realize that heavy customization is the only way that they will be able to get the system to a level they expected and require. Companies should not have to change their processes to match the software solution, but you also should not just replicate the manual process you have in place today with digital solutions. Therefore, you want to make sure that the solution is feature-rich but also extensible. It is a whole lot easier to “turn off” capabilities that you may not need today, vs trying to customize in the future. If you do need to customize a solution, make sure to ask your vendors how customizations are handled. Does your customized solution now become isolated from their core code base? Are you left behind when the core product continues to get enhanced and you are left on a branched version of code? What happens when you want to upgrade, is it automatic or is it yet another customization and deployment adventure?
5. Ease-of-use with simple and dynamic user workflows with an engaging interface. Regardless of how feature-rich a solution may be if it is hard for your employees to adopt and use then it doesn’t matter. People want things that are simple and easy to use but they also want powerful capabilities. The usability of a solution is often overlooked during the evaluation process. When a software interface is poorly designed, it will most likely deliver a poor user experience that can ultimately lead to diminished capabilities of the employee and your company. The challenge lies in delivering advanced capabilities in such a way that the solution is easy for people to understand and use. When exploring solutions, usability cannot be overlooked. Ensure that end users are involved in part of the evaluation process. These folks are going to be the primary users of the solution and it is essential they have the optimal user experience.

Become an IX Leader with FactoryLogix®

With FactoryLogix® MES technology, you can gather critical intelligence from machines, devices, systems, and people to create a fully-dynamic digital manufacturing environment that drives transformation from shop floor to top floor. As a proven partner to manufacturing leaders across industries, Aegis Software empowers its customers to accelerate and maximize the value of their IX efforts.

Learn more about the path to digital transformation and IX leadership and the benefits of deploying FactoryLogix® in our webinar with LNS Research, “Benchmark the State of Your Manufacturing Digitalization”.