Driving Digital Transformation Urgency in Manufacturing
[fa icon="calendar"] Jul 30, 2020 / by Anisha Padamshi
Digital transformation is a hot topic. Business and IT leaders are faced with the challenge of understanding what’s urgent from what’s important, and the tactical from the strategic. Your manufacturing operations must transform the way your company does business or risk being left behind – or worse, risk going out of business entirely.
Early adopters of Industry 4.0 technologies, once considered visionary, are now poised to drive quick and measurable operational improvements in today's new world. How has COVID-19 forced the urgency of innovation and transformation in business and operational models, and how can companies get up to speed swiftly?
In a recent discussion with manufacturing and production industry experts, it’s evident that COVID-19 is a catalyst for rapid digital transformation. How have priorities changed because of the pandemic? Has there been a shift in digital efforts due to COVID-19? And, what lessons can be learned?
Over the last couple of months, we’ve witnessed an emerging focus of companies moving from adjusting to the early days of COVID-19, to stabilizing operations. By now, we’re all well aware of frontline workers and personal protective equipment (PPE).
The pandemic has changed companies’ priorities around digital transformation. Regardless of what industry you’re in, whether it’s oil and gas or CPG, the one overarching priority that COVID-19 has drastically impacted across all industries is safety. Everyone in the industrial world has a heightened sense of safety on their mind. Operating a business during a crisis, when you may have intermittent challenges around employee safety, is an additional concern to think about. Whether you’re a worker on the factory floor or an employee working from home, ensuring your teammates’ safety is absolutely critical.
In addition, many companies are embracing agile methodologies because of COVID-19. An agile business system can help companies create the innovation needed to survive these uncertain times, and beyond. If you don’t adjust to change, your operations will be challenged, yet again in the next looming crisis. What we’ve observed is a tremendous amount of innovation and new ways of working, as manufacturers adapt to the “new normal.”
Lessons From the World Economic Forum (WEF)
Parsable has been working to create the New Generation Manufacturing Leaders community in partnership with the WEF. Our CEO, Lawrence Whittle, shared some thoughts on how member organizations are addressing these issues in the short and long term:
- Collaboration across the value chain and driving transparency between suppliers and customers – Pre-COVID-19, companies would spend a significant amount of time adopting and deploying technology across their organizations. In recent discussions with WEF members, as a result of COVID-19, companies have started to move fast and prioritize collaboration among teams.
One of the learnings that has come out of the WEF is the need for transparency between suppliers and customers – across the value chain. On top of that, remote collaboration across teams has become the new norm. You don’t need to send people to the factory floor to conduct an audit; it can now be carried out remotely with modern digital tools, as not all team members are physically present on the factory floor.
- Starting with a few use cases and drive them globally – Companies in the manufacturing space want to propagate new ideas, quickly. Change management in the industrial environment has typically always been a challenging and slow process for many companies. Because these organizations are quite large and have a global presence, even with digital technology and the willingness to collaborate, it can be difficult to drive change across an organization.
Manufacturers want technology they can rapidly test, deploy and learn from. A key component is to find a use case, whether it’s safety, quality or efficiency, and then drive it across sites, globally.
Shift in Digital and Technology Efforts Due to COVID-19
According to many, overall investments are down and CAPEX is at its lowest since 2009. However, this does not apply in many cases to digital transformation. And because the economy is struggling and resources are constrained, there’s a pressing need for manufacturers to be strategic in their approach. Many companies are maintaining and even accelerating their spend on digital technology. This is due to the fact that there are fundamental needs, that only digital tools can address. To quote Satya Nadella, the CEO of Microsoft, “We’ve seen two years’ worth of digital transformation in two months.” Companies need to focus on ROI and the types of digital innovation that will drive inherent value.
Though change management can be an arduous undertaking for many organizations, COVID-19 has created a catalyst for change. Technology solutions are making it possible for manufacturers to not only continue operations given the disrupted work environment, but drive compliance.
For example, instead of conducting monthly forecasting, teams have switched to daily digital sales and operations planning (S&OP) meetings. In addition, non-essential workers are not able to go on site and working remotely is the new norm. Companies have shifted their operations to accommodate for a new way of doing work. Frontline managers and support maintenance personnel are now tasked with monitoring processes and assets remotely, which has only been possible because of modern digital technology. Providing frontline workers digital instructions at their fingertips, to accurately and safely carry out jobs, has never been more important.
Safety is a priority, but due diligence is also a concern. For example, as government agencies mandate social distancing protocols on the factory floor, it's more difficult – yet more important than ever – to prove safety compliance. That’s where technology plays an integral role in enforcing and driving compliance, ensuring frontline workers are maintaining social distancing. We’ve seen some amazing things with our customers that have been using connected worker technology to enforce social distancing within their work environments.
Concerns and Priorities That Have Emerged Because of COVID-19?
There are a number of challenges teams across the manufacturing and production space face in pushing projects through.
- Don’t waste a good crisis – As early as a couple years ago, discussions of AI, machine learning and automation were nebulous ideas and manufacturers lacked a clear understanding of the role technology plays in manufacturing. The pandemic has amassed a significant amount of focus and attention on digital transformation and technology’s role in it. It wasn’t necessarily a critical priority beforehand, but it’s now transformed into an urgency that is manifesting itself in various change management projects.
Now the focus has shifted towards connecting humans to technology, collaboration and business results. The new normal is about how you react and whether or not you are driving sustainable impact. Another crisis will happen; how will you prepare for it?
- Take advantage of moving fast and seizing the opportunity – As mentioned previously, for large established companies, change management can typically take years with a lot of back and forth among key decision-makers. COVID-19 is forcing manufacturers to be agile, and make decisions even faster than they used to – as they try to maximize on the urgency. Set expectations that you are moving fast, but remember you are learning, and there will be hiccups.
- Use of devices on the shop floor – Another topic that often comes up is the use of devices on the shop floor. We’ve seen a proliferation through this period of the need to enable people to execute work on mobile devices, whereas pre-COVID-19, it was still a debate for some companies. We need to change our attitude toward devices on the shop floor, we have seen this shift, particularly when it comes to the topic of safety.
For example, one of our customers has a massive deployment around behavior observation safety analysis, where 44,000 employees worldwide execute behavioral observations every week. It’s not efficient to have people lining up at one device at the factory. Mobile devices are secure enough and it reduces the bottleneck of having to queue up behind one device to complete a single job or even worse – paper, manual processes. The value of data is not just for the workforce, but for driving safety, quality and productivity.
COVID-19 has created a sense of urgency of innovation and transformation across all manufacturing and production companies. The importance of being agile and operating with a sense of urgency, while understanding that importance of the role of humans. Connected worker technology is no longer a nice to have, it’s a must have, empowering your teams to be successful in these changing world environments.
- From Crisis Into Recovery: How Connected Work Improves Safety Management in Industrial Environments (eBook)
- Beyond COVID-19: Drive Innovation with Technology and Agile Manufacturing
- Leading Through Crisis in Manufacturing