Wielding the Double Edge Sword of Disruption
Published on : Monday 08-11-2021
Making both products and processes smart and connected unlocks additional value potential, especially when integrated with other solutions.
Disruption has two sides, or two edges of the sword: threat and opportunity.
Disruptive forces, ranging from Covid-19 to silicon chip shortages, must be an accepted constant, no matter the company type, industry, product, or solution. These disruptions threaten well established—and proven successful—business models and strategies, forcing change on a short timescale to keep up. Technology advances further enhance those threats, especially towards industrial operators where high complexity workflows and value chains are common. Pressure from digitally-native startups that can deliver impressive flexibility and scalability not only increases direct potential competition, but also raises customer expectations broadly.
On the other edge, companies can turn to technology solutions to manage disruption in these cornerstones of work and create opportunity. Industrial companies are rolling out digital transformation projects at an accelerating rate, looking to capitalise on innovative technologies, fend off disruptions, and disrupt markets themselves.
Three technologies stand out in the age of disruption: Augmented Reality (AR), the Internet of Things (IoT), and Software-as-a-Service (SaaS). These three are forces disrupting the status quo while allowing other companies to fend it off. While not the only elements in this equation, they provide a robust foundation that can cover existing workflows and enable movement and scale into new ventures, business models, and operations.
AR bridges skills gap, empowers frontline workers
In enterprise settings, many of these disrupting technologies and innovations, while valuable, have been geared towards desk workers. The frontline worker has either been relegated to using existing but outdated solutions, or newer systems far from purpose-built for their workflows. Augmented Reality is the next disruptive step here for frontline workers, both through improving the handheld connected device experience as well as eliminating it with smart glasses.
Disruption: Aging workforce and a skills gap
The skills gap is anticipated to create a job shortage of 2.5 million positions in manufacturing over the next decade. This skills gap is a result of a few key frontline worker trends, including a workforce that is taking their domain knowledge with them into retirement. Often, this knowledge has not been properly captured and transferred into training programs for new recruits and replacements, who are difficult to source with increasingly competitive job markets and negative perceptions of industrial work.
Capturing these worker’s knowledge and expertise is a pressing need as a result. Traditional methods, such as paper instructions and process logging, are inefficient and negatively impact that worker’s productivity while producing that content. Video capture of processes can reduce some of that inefficiency but can also miss nuance of a workflow or intrinsic knowledge that is unclear over a video and do not put digital information into the worker’s field of view.
Solution to disruption: Augmented reality
AR as a solution performs in two primary ways: as a visualisation tool for users and as a digital ecosystem for the worker within the physical world. AR solutions offer a seamless, efficient solution for knowledge capture. Entrenched domain knowledge can be more efficiently captured in real time using AR, in parallel with normal operations and with low upfront user requirements. This can be as simple as single process instructions, through to full multi-step workflows. A mixture of content types including point of view video, images, annotations, location data, verification status, and more can be included in a knowledge capture solution.
Outside of capturing knowledge for use post-capture, remote assistance over AR offers real time access to experts and that knowledge. Instant access to an expert that can be anywhere in the world saves on expert travel costs getting them on-site, reduces time to response for unexpected situations/maintenance, and allows for streamlined knowledge transfer in-situation.
Combined, AR worker enablement solutions can collect, digitise, and distribute knowledge in a flexible and scalable way. Training junior staff on new concepts, often complex in industrial settings, through captured knowledge is highly effective versus traditional training methods, while also enabling training of novel content not previously able to be captured or distributed.
Remote expertise is currently the largest AR use case by number of users, and it will continue to be for the foreseeable future given its impact during Covid-19 and longstanding role supporting a global workforce. In Manufacturing, ABI Research expects around 700,000 monthly active users of AR remote assistance worldwide, growing to over 8 million monthly active users in 2026.
AR as a disruptor
Using AR for a different application, such as customer support, provides a means to disrupt manufacturers. AR allows providers to engage with customers in a novel and interactive way. This can be as simple as adding 3D visualisation to a product demo to increase engagement, but it can also be more deeply integrated in the customer relationship. Many producers of complex products and machinery are exploring bundling augmented reality content with purchase. Post-sales support using AR can tap into all the benefits seen in AR training and remote assistance.
IIoT creates differentiating products, optimises processes
Industrial IoT (IIoT) is bringing visibility to machine operations through a suite of tools and services offered by a range of suppliers with expertise in machine connectivity, analytics, and application development. IIoT can replace uncertainty around equipment performance and process efficiency, as well as highlight additional novel revenue opportunities inaccessible otherwise.
Smart Connected Products
Disruption: Digitally native startups and manufacturers
The tech world has seen a shift in what innovation means, with the focus most often on “digital native companies” tied intrinsically to software companies as the truly disruptive threats. However, digital native is more robust and broader than just software; nascent industrial and manufacturing startups can tap into the latest digital technologies and embed them in workflows.
While these companies are still creating physical products with physical production, the core of operations is digital. This enables significant internal agility around both people and processes, leading to quicker reactions to market changes and greater differentiation in offerings and value propositions. The disruption of markets then follows.
Solution to disruption: Smart connected products
Manufacturers are creating new products or retrofitting their existing ones to be smart and connected to fend off this disruption and better engage with the customer. Smart Connected Products (SCPs) in the industrial domain range from pumps and mining equipment operating in remote environments to machines on the factory floor ranging from low-voltage step motors that power a production line to equipment that packages finished products.
SCPs can facilitate better end customer relationships through real-time intelligence. This allows the manufacturer's customers to maintain and ensure uptime targets in their own operating environment. SCPs can also reduce overall labour and service costs associated with servicing these products; unnecessary dispatches for low time-to-fix services can be lessened through remote monitoring and service. The resulting product usage data can also serve as a closed feedback loop to engineering teams, improving short- and long-term insight for current and future product iterations.
SCP also compliments other emerging technologies, as in the case of augmented reality placing real time IIoT data into a frontline worker’s field of view.
ABI Research forecasts that the installed base of IoT-connected industrial equipment and sensors will grow from 264 million in 2020 to 1.1 billion by 2026. IoT solution revenues will grow from US$46 billion to US$116 billion over the same 5-year period.
SCPS as a disruptor
SCPs also provide an option for an entirely new business model for manufacturers to disrupt the markets they serve: Products-as-a-Service.
Instead of selling products by units or by volume, SCPs enable companies to offer subscriptions to pay by usage. Uptime guarantees can be incorporated in service-level agreements (SLAs) to lessen customer concerns, while remote and predictive service improves customer experience with higher confidence in product reliability and expected operation alongside that increased flexibility.
Smart Connected Operations
Industrial processes typically involve multiple machines plus manual tasks to transform inputs into outputs. Smart connected industrial processes take IoT data to the next level; IoT data from connected machines and other sensors are combined with other operational data to measure process key performance indicators (KPIs) against benchmarks, all displayed within an application.
Disruptions: Universal market threats
Threats to business like trade wars, Covid-19, and chip shortages can have far reaching implications, but industrial markets are often one of the most heavily impacted. Manufacturing operations and supply chains are routinely challenged with these disruptive events, and with high complexity and significant downtime costs, that impact can be exacerbated quickly and severely. These bottlenecks are often unpredictable, requiring agility and flexibility to mitigate impact as much as possible.
Solution to disruption: Smart connected operations
Smart Connected Operations (SCOs) tie directly to critical plant KPIs, operating margins, and financial statements. Operational costs are always on the short list for reduction, and SCO can enable that through production monitoring and predictive maintenance. In uncertain market conditions, these undertakings not only reduce cost and impact overall equipment effectiveness directly, but also help maintain business continuity in a market environment constantly changing. SCO can not only alleviate market changing pressures, but also provide greater production flexibility to match rising customer demand for customised products.
SaaS – Next-Generation Product Development Platform
SaaS has established itself as the gold standard of modern enterprise software, revolutionising technology provider business models and enhancing usability for end users. In the age of constant disruption, SaaS’s unique ability to provide flexibility, agility, and collaboration at an enterprise scale is paramount.
Disruption: Covid-19 and a hybrid work expectation
The Covid-19 pandemic has had ebbs and flows in consumer and enterprise impact. Some of the short-term impacts on enterprises are lessening, but some learnings are driving long-term strategies. There is a significant and ongoing desire for hybrid work opportunities across roles, groups, and industries. To maintain business continuity while fulfilling this desire, companies have been forced to seek out and implement new operating paradigms while minimising disruption in the process.
Solution to disruption: SaaS
Before SaaS, industrial software applications lived on-site, often in digital silos or in file-based systems. This architecture quickly proved a challenge for distributed teams when work was forced off-site. SaaS’s ability to scale horizontally and vertically as needed by the organisation’s requirements exemplifies its flexibility to cope with disruption.
SaaS enables flexible collaboration, faster innovation, and greater productivity at a lower total cost of ownership. With a SaaS solution, there is no software to install, manage, or upgrade. Users can simply open a web browser, log in, and get to work. Additionally, everyone has access to the latest version without the need for IT infrastructure or system administration. The same applications can be accessed across devices, whether it be PC, Mac, mobile, tablet, or HMD. Cloud-based SaaS also allows teams to collaborate simultaneously on projects, documents, and designs in real-time, with awareness of everyone else’s presence and changes, instead of working on copies of files checked out and downloaded from the server. This means more seamless collaboration and a better way for organisations to share knowledge and innovate.
Consider how accessing these applications in the cloud gives different cohorts of users access to the same data but consumed through a different lens. For engineering, it may be to analyse product quality; for a field service technician, it may be to create or manage a work order. Accessing and managing the same shared data source allows more agile and concurrent workflows, so in this case the field service technician can work in real time with the engineering colleague. Increasingly, this scenario is expanding to include supply chain data to ensure parts are available, and, in some cases, the environmental impact of each decision.
SaaS as a disruptor
Core SaaS capabilities for simultaneous updating and access to resources also provides a path to product innovation and disruption. Through SaaS, companies are accessing the latest and greatest features every few weeks instead of months or years. For product development, this could include simulation to optimise designs or generative design to create entirely new designs. These tools are needed for manufacturers to continuously differentiate existing products, create new products, and disrupt the markets they serve.
SaaS is a foundational technology platform for these capabilities and its broader use in manufacturing is growing rapidly as more companies see the advantages. Today, it is commonly thought of for its use in cloud-based and collaborative product development, but SaaS will transform other domains such as PLM, AR, and IoT platforms. ABI Research estimates that 32% of all industrial software revenue will leverage a SaaS model in 2026.
There is what can be disrupted, and there is the disruptor. Utilising new technologies that simultaneously defend against disruption and enable disruption is a win-win, but requires guaranteed integrations with existing systems, along with flexibility and scalability. Cooperation with innovative partners and platforms can make those integrations easier, with fewer barriers and faster time to market.
AR keeps the worker as part of the digitisation ecosystem. Not only can worker efficiency and related processes be improved, but AR often enables a bi-direction data sharing synergy where AR makes other integrated systems better through real time updates.
IoT is the keystone of horizontal digitisation. IoT can touch every element of an environment and bring it into the digital world. AR connects humans, and IoT connects products and everything else. Making both products and processes smart and connected unlocks additional value potential, especially when integrated with other solutions.
SaaS solutions offer a crucial mix of flexibility, scalability, and ease of integration that can be difficult to deliver. Eliminating siloes and incumbent system rigidity through cloud-based offerings is a prerequisite for broad, futureproof digitisation efforts. Keeping workers and systems connected and persistently updated maintains efficiency through a connected ecosystem and builds a foundation for further scale and deeper integrations.
Ultimately, stemming disruption and disrupting the market happen in parallel when a platform is cloud based, flexible with integrations, and innovative with worker enablement solutions. The pace of change is rapid and increasing continuously, making the need for disruptive and innovative solutions all that more important and valuable.
PTC’s innovative portfolio highlights that end-to-end strength: origins in CAD initially disrupting the market with parametric modelling; a web-based PLM bringing greater flexibility and access; IoT extending software solutions into the physical world; Augmented Reality adds human-centric elements; and SaaS as a foundational technology platform delivering faster time to market with greater efficiency and scalability.
Whitepaper courtesy: ABI Research. Download link: https://abi.link/3k5APLk.