November 19, 2018 / 4:44 PM / 3 months ago

Evolution not revolution: Digitalization does not mean starting from scratch...

With so much talk of transformation and disruption, it’s little wonder businesses from all sectors and industries may be uncertain and even apprehensive of digitalization - or Industry 4.0.

However, responding to these challenges and opportunities doesn’t need to be as all-consuming as you may think. It should not mean pulling down the very foundations of your business and re-building from scratch. A lot of groundwork may already be in place. Put simply: you may already be some way along your digital transformation journey. 

It’s not about the next big thing in tech…
It’s easy to be baffled by words such as Artificial Intelligence, Big Data, the Internet of Things – and other advanced technologies. Yet the reality is that many aspects of these digital tools have been around for a while. Manufacturers, for example, have dealt with vast swathes of data for years. Original Equipment Manufacturers (OEMs) are already taking advantage of machines that provide masses of sensor data that can be accessed remotely.

… it’s how you use it.
How you use your tools – your existing processes and systems – is changing thanks to digitalization. For businesses, the key is to drive proactive decision-making on all organizational levels, and obtain the greatest impact for you and for your customers. Asset performance excellence experts argue there is a shift towards making informed, data-driven decisions.

“Within Maintenance, for example, prioritizing work on the basis of data-driven risk, as opposed to sentiment and precedent, can improve technician utilization by 20 to 30%. This means being able to undertake more critical work within the same budget or reduce unnecessary spend on, for instance, contractors or overtime,” says Dirk Frame, Partner at T.A. Cook Management Consulting.

Be smart, not radical
As manufacturing plants are challenged to simultaneously increase both capacity and flexibility to meet evolving customer demands, realizing such efficiency gains is certainly a significant step forward.  Changing how you use tools from the digital world can enable that, as well as help manage complexities – and allow businesses to take advantage of new opportunities as they appear.

However, what it is therefore really about, is being smart, rather than radical, and using the tech available to you to its greatest potential. For example, distributed control systems (DCS) in process industries already help run complex processes with minimal human intervention. But currently, large chunks of this information are ignored. That means the ability to analyze and use existing data is largely untapped. And that’s a wasted business opportunity. Yet, as factories adapt to our changing digital landscape, we will see smarter operational intelligence boosted by AI and machine learning. Experts say this will reduce engineering hours and create leaner project execution – among many other advantages.

“In one of our projects in the United States, we are interfacing data from the distributed control systems with SAP plant maintenance, and it dramatically increases plant performance understanding. This allows maintenance teams to speed up fault and risk analysis and develop better strategies. What’s more, through targeted predictive interventions unnecessary costs can be cut and, importantly, increase output and reliability,” adds Uwe Sahl, Director at T.A. Cook Management Consulting, an asset performance excellence specialist.

An end to thinking in silos
With this in mind, digital transformation is not just a tech phenomenon; it’s an organizational and strategic one, above all. A holistic approach linking processes, technology and people together, leads to performance optimization and a digital culture. If businesses can dismantle ‘silo thinking’ they can drastically cut wasted time on iterative decision-making. The direct linking of production capacity and actual / expected performance to sales and inventory, reaps many rewards. Importantly, this information often already exists. With a small amount of effort to format and disseminate key, valuable data, huge amounts of money can be saved by avoiding uncertainty, as well as unnecessary capital and overrun spend.

The power of data discipline
It’s these small, considered steps that lead to an effective update of digital technologies and practices. There are a multitude of specific gains from new software and hardware offerings that can be integrated relatively easily into an existing business. While they may be limited, they are very useful for understanding what can be achieved. The bigger benefit, however, is the positive effect it can have on key influencers who will help win over hearts and minds and encourage ‘data discipline’ – the need to define core data sets which must be systematically captured, analyzed and communicated.

“In one particular European process industry, client engineering data is being entered directly into electronic 3D format and that’s available to everyone via a portal, in real time. With the same effort as with traditional hard copy drawings and files this key data directly increases the responsiveness and efficiency of all other parties in production, inspection, maintenance, procurement and contractor activities,” that’s according to T.A. Cook’s Dirk Frame.

Slow and steady wins the race
The key is evaluating your organizational capability and focusing on the development of communication paths where people seek out data and know how to use it. No-one knows yet what a completed digital transformation may look like in the future. The journey for businesses is one of continuous adaption and evolution. But, as we all know, the tortoise, not the hare, won the race. By leveraging the digital building blocks that may already be in place, businesses can create smart structures that are fit for the future.

The Reuters editorial and news staff had no role in the production of this content. It was created by Reuters Plus, part of the commercial advertising group. To work with Reuters Plus, contact us here.

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