Moving to digitalisation in some form or the other is the need of the hour
Published on : Friday 01-07-2022
Ninad Deshpande, Associate Director – Research, Quadrant Knowledge Solutions.
The pandemic is nearly behind us, but the effects on industry will last longer. What are three digitalisation strategies that companies are working on, based on lessons of the last two years?
Working from home for manufacturing professionals was unheard of prior to the pandemic. However, the pandemic taught us to efficiently work, manufacture goods, and keep the organisations functioning, sustaining, and growing. This is just one example that we can relate to but there were numerous learnings from the pandemic either privately or professionally. Digitalisation has been spoken about even before the pandemic, with industries, organisations, factories, plants, and enterprises looking at digitally transforming their businesses. Thus, the awareness of technologies and the benefits of digitalisation were already well known. There were many solutions that the industry adopted and put to great use during the pandemic years that are widely being used even today. Those organisations that adopted some amount of digitalisation concepts and technologies definitely had an upper hand during the pandemic years. Organisations placed their trust on digital twin and digital thread solutions that enabled them to increase efficiency in the supply chain and reduce time to market. With lesser people on the shop floor and subsequently the chip shortage led to the wide adoption of these strategies. Machine Learning was another area that was put to great use by many organisations to improve operational performance, especially in the areas of predictive and prescriptive maintenance. With Information Technology (IT) / Operational Technology (OT) converging, cyber-attacks intensified on OT as they were vulnerable to such attacks. Organisations soon focused on having secure installations in the factory and security became a prime area of concern in the digitalisation journey. Another area that saw huge traction was the transition from edge to the cloud for various use cases such as collaboration, quality assurance, and predictive maintenance. There is no doubt that the pandemic accelerated the adoption of digitalisation across the IT as well as the OT.
For so many Indian companies who are not fully into Industrial Revolution 3.0, is there any urgency to move towards digitalisation?
Moving to digitalisation in some form or the other is the need of the hour for every Indian organisation. It is indeed right to say some Indian companies are not fully leveraging automation and are still focused on semi-automatic, manual operation, or even labour. However, it is not right to say that they are not thinking of digitalisation as an urgent demand and action point. Many organisations have taken steps to embark on their digitalisation journeys. Moreover, the pandemic fuelled the digitalisation journey with many incorporating predictive maintenance, data acquisition, energy monitoring, remote access, remote monitoring, and digital twin solutions amongst many others. The list is huge with technology and features being a top priority for many Indian organisations.
For many companies, the challenge is in moving from pilots to deployment at scale. What is the way forward?
Many factors influence the possibility of scaling from pilots to wide-scale deployment for any organisation. If we name a few factors then it might be owing to high recurring costs, high initial costs, or lack of demand from their customers. One hypothetical scenario could be that the pilot projects were built looking at a competitor implementing a solution. However, it might be found that the solution implemented neither helps business, makes work efficient nor adds value as expected. There could be scenarios where there is a lack of buy-in from various stakeholders.
The way forward is to thoroughly understand the existing processes in the organisation and identify the gaps. It is also necessary to understand the available technologies and understand how they can be leveraged. It is important to identify the implementation of a solution that could bridge an identified gap. Understanding the cost and time for implementation and the perceived return on investment (RoI).Most importantly, not blindly following what a competitor is doing and adopting it, as a solution that solves one organisation’s challenge might not be beneficial for your company. Finally, there should be buy-in from all stakeholders to have a successful implementation.
There is so much work going on in the area of Data Analytics. What about the effort to get real-time data directly from machines?
A lot has been spoken about IT and OT convergence with artificial intelligence, machine learning, big data, and data analytics playing a vital role. However, the challenge is to gather real-time data from the field for leveraging data analytics and incorporating business intelligence. IT and OT were two separate worlds with different operating systems, programming languages, and different programmers with varied skill sets. Today, this gap is fast diminishing and operating systems such as Linux are being utilised in automation controllers, which enables easier real-time data exchange for data analytics. Moreover, automation controllers also benefit from various machine learning (ML) and artificial intelligence (AI) models that are readily available in higher-level languages such as Python, Java and C#, which then coupled with the real-time data add huge value for the machine builders and factories. There are many vendors offering such solutions in the market, which make it possible to use Linux and higher-level programming languages for advanced applications consisting of AI and ML.
Many niche and custom solutions are being attempted for connecting legacy machines, what about long-term serviceability?
Never touch a running system – is kind of normal in any industry and a very common statement amongst programmers. Moreover, the industrial equipment is built for robustness with many factories operating for decades. Digitalisation facilitated solutions from various vendors such as middleware that offered the latest technologies and possibilities for legacy equipment without interfering with the existing controls and processes. On the other hand, new technologies open new possibilities and add capabilities to the existing system but incorporating such new technologies is a huge capital cost. Moreover, the availability of spares is a huge topic to consider as no spare parts are going to be available for a longer period. Thus, it is a business consideration taking into account the pros and cons of either adding middleware over an upgrade to the existing system based on the costs and the RoI. Unfortunately, there is no one size fits all solution for these decisions.
Is it too early to talk about standards and regulatory guidelines for collection, storage and access to data?
There is never a bad time to start talking about standards. Usually, standards make lives easier not only for vendors but also for users and the earlier there are robust industry-wide standards the lesser the confusion it creates. Without standards, there is chaos as all vendors start creating products and solutions based on their understanding and customer needs. It is nice that there are already a lot of standards and regulatory guidelines prevalent in the industry for topics such as data access and storage, especially from the security point of view. The IEC 62443 and NIST frameworks and ISO 2700x are some standards that are widely accepted in the field of manufacturing. There are many more industry-specific standards, but it’s important to note that there is already a lot of activity in the standards and regulations area.
Digital transformation is deemed to be necessary for companies to become part of the big global supply chains. Are there already such requirements by big buyers as a condition to become their suppliers?
At present, security is increasingly gaining traction, and major players either machine builders or end-users are looking at having secure installations. Also, digitalisation is being offered by many global players in the machine-building area as well as factories, and end-users have already taken steps to move in the direction of digitalisation. Thus, even if there is no prescription from end-users their vendors are already providing advanced automation and pushing their vendors to take their solutions to the next level. Thus, for an Indian machine builder to compete in the global market the factors are technology and quality. Thus, it is not the time to look at the innovation offered by the competition and then move in that direction. This typical playbook approach will only let the organisation lag and miss many opportunities. Thus, digital transformation is not an option but a necessity.
How could Digital Transformation help companies to cope with the supply constraints of recent origin – for example, electronic chips, for example, other shortages arising out of political events in Europe?
The supply chain has been a backbone for all industries and the pandemic and other events in Europe have no doubt led to its disruption. Until now the supply chain was siloed. However, a digital supply chain helps companies to add the necessary transparency and visibility. Many supply chain professionals turned to the implementation of AI, ML, IIoT, and Cloud platforms and applications for helping them with handling downstream and upstream efficiencies. The primary reason for these steps was the lack of visibility in existing structures and systems while predicting demand and managing inventory even during unforeseen events. Overreliance on a few suppliers also largely impacted the inventory and overall supply chain that was brought to the forefront by the pandemic and the political situation in Europe.
(The views expressed in interviews are personal, not necessarily of the organisations represented)