Why Manufacturers Need to Go Digital Now

Why Manufacturers Need to Go Digital Now
اسم المؤلف
3 ديسمبر 2020
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مقالة بعنوان
Why Manufacturers Need to Go Digital Now
The industrial Internet of Things (IoT) is transforming the manufacturing
industry from end to end. No matter what competitive advantage you think
you have—in customer service, operations, technology, people or something
else—companies deploying IoT are changing the terms of competition. The
stakes of sitting on the digitalization sidelines are rising.
Consider that in 2014, PwC found that Industry 4.0 “was on the radar for many companies—but relatively few were
actually in the process of implementing it,” according to the consultancy’s 2016 research report. Noting the dramatic
change from 2014 to 2016, the report declared: “Industry 4.0 is no longer a ‘future trend’—for many companies, it is now
at the heart of their strategic and research agenda. Companies are combining advanced connectivity and advanced
automation, cloud computing, sensors and 3D printing, connected capability, computer-powered processes, intelligent
algorithms and ‘internet of things’ (IoT) services to transform their businesses.”
Fast forward to the consultancy’s 2018 survey results, and the accelerating trend toward digitalization becomes
clear. The report highlights the emergence of “Digital Champions,” those companies furthest along in digitalizing
their business. PwC defines this group as companies “with an established digital product and service offering and
multichannel integration in their customer solutions ecosystem. They have also integrated and aligned their operations,
technology, and people ecosystems with their customer solutions ecosystem.”
The report found that only 10 percent of companies meet these high standards. However, another 27 percent merit
“Digital Innovator” status, PwC’s name for companies ranked in the second of four tiers.
As the research indicates, IoT in manufacturing has moved beyond the early adopter phase. With the trend toward
digitalization accelerating, it is more critical than ever for companies to go digital before they lose their competitive
advantage. Companies that have mastered digitalization are now defining manufacturing competitiveness.Why Manufacturers Need to Go Digital Now 2
The benefits reported by early adopters run the gamut from using resources more efficiently
and decreasing maintenance costs to transforming customer relationships and creating
new business models. With end-to-end connectivity, manufacturers gain transparency of
operations. Such visibility enhances collaboration across the enterprise, so leaders and
operators alike can make informed, data–driven decisions and act more quickly.
The impact on revenue and efficiency gains is equally significant. The PwC report says that
Digital Champions “expect their Investments in new technologies and in improving their digital
ecosystems to result in revenue increases of 15 percent over the next five years.” Meanwhile,
Digital Novices, those least along the digitalization journey, project top-line growth of 9.5 percent.
Similarly, Digital Champions expect to achieve efficiency improvements and cost reductions of
16.2 percent, while Digital Novices forecast 10.5 percent.
As manufacturers deploy the IoT – connecting
plant, machines, devices and people to achieve
end-to-end integration – they set new standards
for competitiveness. By optimizing extended value
streams and workflow processes, the IoT gives rise
to entirely new ways of thinking about and executing
every business and operation process. Additionally,
it transforms the interplay between functions in the
extended value stream.
Further, the PwC report notes that enhancements
from technology compound over time “because
technology benefits tend to be continuous, iterative,
and cumulative.” The report asserts, “These benefits
create a virtuous circle—each digital advance can
be the starting point for additional technology
improvements that accelerate digital maturity.”
You cannot have a mature digitalization strategy without the IoT. With the IoT, you can
automatically gather, compile, share and act on data from every element in the industrial
environment to boost operational efficiency and production. Without the IoT, you can’t.
A cloud-based, open IoT operating system, such as Siemens’ MindSphere, forms the
foundation of a digitalization strategy by enabling you to connect your physical machinery and
infrastructure to the digital world. With such IoT integration, no part of your manufacturing
operations remains siloed, whether existing or legacy assets.
For manufacturers that have
embraced digitalization, what
are the primary benefits they
are realizing?
How has the adoption
of the industrial IoT
impacted competitiveness?
How does the IoT fit into a
digitalization strategy?Why Manufacturers Need to Go Digital Now 3
Because unplanned downtime and asset failure are the main challenges affecting profitability
in the manufacturing industry, industrial organizations find that predictive maintenance
delivers the fastest return on investment. The U.S. Department of Energy (DOE) reports that
predictive maintenance can achieve the following benefits:
• 25 percent to 30 percent return on investment through lower maintenance costs
• 70 percent to 75 percent decreases in failures
• 35 percent to 45 percent reduction in equipment downtime
The DOE estimates that reactive maintenance costs four to five times as much because failed
equipment reduces overall plant productivity, causes inventory backups and reduces overall efficiency.
As with any journey, getting started begins with knowing where you are and where you want
to go, along with information about the path others have taken. Begin with an assessment of
your current physical and digital assets and digital connectivity capabilities. Then, determine
whether you want to boost a current or create a new competitive advantage. You can start by
reviewing some common industry use cases and industry maturity models. For example, the
Siemens Digital Maturity model, a phased, planned approach to IoT adoption that provides
targeted outcomes for organizations on their digitalization journey.
This content was developed together with Siemens Digital Industries Software.
How do I get started in building
my roadmap for digitalization?
Where should manufacturers
start if they want to gain
immediate benefits
from digitalization?
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