Enterprise Transformation in Disrupted Environment
Published on : Monday 13-07-2020
The long-term investments for enterprise wide digital transformation need to be planned and roadmap developed to achieve effective quick-wins early on, asserts Manomoy Das.
Industrialisation and automation have a come a long way since the days of advent of Industry 1.0, when mechanical production was powered by water and steam power. Over the decades we have moved on to the Fourth Industrial Revolution in which industry leaders are creating cyber-physical models to integrate the end to end value chains. In the current unprecedented global scenario, the need of the hour is to engrain the core capability to be resilient and agile. There are two aspects to approach this downturn situation – first is the short term tactical set of actions and secondly the most important is to prepare for the long-term strategy to deal with future similar adverse situations. We all know that Covid-19 pandemic, which shook the industrial world violently, would not be the first and the last one. We should also be aware of the negative impacts of climate changes, which would probably cause more frequent natural disasters.
Leaders always seem to see the positive side of such disruptions and use it as an advantage to usher in cost reduction opportunities, build resilience, agility and efficiency into the entire supply chain, with specific focus on those value chains which would face the maximum brunt of these unprecedented disruptions. Leaders also grab such opportunities to completely metamorphosise their business models. Losers blame the negatives of the situation and perish. Being opportunistic and riding the waves is the only way to tide over similar disruptive periods.
Now the question asked by many is on what change in long term strategy is required and what would be the immediate 60-90 days tactical action plan. For this we must never lose sight of the ultimate objective, which is to have a technology enabled integrated portfolio of empowered decision-making systems, which have the capability to present actionable real time actual performance of the various processes, that form the value chain. It would let the decision makers change the tactical action plans with lightning speed depending on the production constraints, market demand fluctuations and supply chain disruptions. This capability however requires instrumentation, integration, analytics for billions of information pieces generated form these sensors and finally AI support to extract insights from this analysed structured and unstructured piece of information.
There are 3 underlying phases in leveraging the best of Industry 4.0 capabilities, which is the preferred framework for business transformation for manufacturing industries, process and discrete.
1. Instrumented: Instrumentation, connectivity and event driven/human trigger to capture data
2. Insightful: Information exchange among multiple connected sub-systems, human hypothesised insights to identify and remove lower productivity bottlenecks, probably using machine learning offerings, and
3. Intelligent: These are self-learning, self-healing enabled AI driven capabilities. Edge Technology is increasingly taking up more shelf-space these days.
These phases do not only demand large scale changes in the infrastructure, skills and business processes, but need a totally innovative way to re-assess the ‘Capabilities’ of the organisation. Experts suggest that the only way to kick start this transformation is to have an intensive ‘Capability’ discovery and assessment engagement across the complete value chain. Extensive studies have concluded that since last 5 years, technological capabilities have been the key drivers to get competitive advantage and more so when such global meltdown occurs. Speaking about acquiring new ‘Capabilities’, the other very interesting fact which has emerged is that there should be no barriers in adopting ‘Captive technologies’ which were meant to play host to certain specific industry domains. For example, Blockchain technology was built for traceability of financial transactions. Today the same technology has been effectively adopted in scores of other industry domains like transportation, pharma, oil and gas, diamond production, mining, etc. Another example is mobility, which has become a pervasive offering in almost all industries and stakeholder engagements. Inventory monitoring, remote maintenance, employee safety, banking and courier transactions and many more. This has touched almost all facets of our life. AI has also entered almost all facets of our daily life, though we don’t seem to visibly identify them always.
Let’s talk a little about the challenges and resolutions in the short term, 60 days, approach. Lost orders, disruption in supply chains, erosion of skilled resources, re-starting and ramping up idle capacities, employee social distancing constraints and well-being monitoring and ensuring process safety are the leading challenges. To counter these, leaders have adopted 3 point tactical approach.
1. Cost reduction and increase efficiency: High volatility and unpredictable market forces are exposing even the smallest inefficiencies across the value chains. Manufacturers can no longer work in a disjointed/interrupted environment in which automated real time information flow is not available among, planning, sales, asset management and production. Studies say that only 30% of the manufacturing structured data is used for decision making, which effectively translates to about 70% speculations. This leads to unwanted downtime, longer batch change set up times and asset down time due to un-predicted breakdowns. What can be done: Connect the remaining data sources and enable some ‘off the shelf’ optimising solutions. For example, Inventory/MRO optimising, AI driven ‘What if’ capabilities for supply chain disruption impact assessments, Intelligent and Automated Business process transactions, etc. As a continuation to increase asset uptime and availability introduction of Digital Twins for prescriptive and AI driven maintenance is a very valuable investment. The other cost reduction action on the IT infrastructure area is to explore the migration to Cloud platforms.
2. Focus on ‘Integrated Trusted Partner’ ecology: It is well known that about 40 to 60% of material items are externally sourced in most manufacturing facilities. We have traditionally relied on human communications with our partners, be it either order release, design changes, supply schedules, quality reporting or demand management. This process is not efficient, often slow and prone to speculative errors. Enterprises need to deploy technology enablers to connect seamlessly to the supply chain applications of partners and maximise human intervention free multi directional information flow. This would result in a tight integration of the two supply chains, resulting in both being agile in responding to sudden market fluctuations and demand changes. Blockchains technologies and AI driven supply chain optimising applications come a long way in achieving this capability.
3. Employee well-being and re-skilling: The pandemic has forced enterprises to introspect the management of human assets. Employees will not be able to contribute and increase efficiency if they are under constant fear of being unwell. Two actions are being pursued by leading industries. First one being immediate investments in the area of employee health and well-being monitoring using Edge technologies. The second one being leveraging AI driven Knowledge Assistants to help operators take quick decisions on process control, safety and yield optimisation. These two actions take a long way ahead to improve efficiency and minimise cost of rework or scrap.
No enterprise has un-constrained budget and endless deep pockets. The long-term investments for enterprise wide digital transformation need to be planned and a roadmap developed, so that the earlier most effective quick-wins are achieved to ward off the immediate impending risks posed by the current disruptions, the better. The objective now isto sustain the onslaught and then build immunity and resilience in the long term.
There would be a long-term transformation in the business strategy to make the organisation proactive by being intelligent. All these capabilities can only be achieved if one takes the wide road of technology and focus on re-skilling of the workforce. A garage type ‘Design Thinking’ approach is usually initiated to decide on the priority and impact of these multiple technology driven interventions and then the management decides on a roadmap to enhance the capabilities, re-write cognitive business workflows, re-define partner engagements/information flow/traceability, re-assess technology delivery platforms, like cloud and most importantly continuously upgrade and augment employee skillsets, using AI driven tools.
Business publications like Industrial Automation can play a very critical role in creating a platform where multiple practitioners and thought leaders can share their ideas. It is like a crucible in which a whole lot of ideas, experiences, hypothesis and strategies melt and create a balanced point of view.
Manomoy Das, Associate Partner, is a leading Global Subject Matter Expert for Chemicals & Petroleum & Industrial products domain and is a lead associate of the IBM Global Centre for Competence for C&P/ IP. Manomoy brings in deep Digital Cognitive Transformation knowledge across multiple industry and technology domains. He has led complex engagements in the area of Enterprise Architecture for automation strategy, Digital Roadmap definition, Information Management & Intelligent Analytics, IoT & Complex