Where are Manufacturers Exploring Digitalisation in their Operations

Where are Manufacturers Exploring Digitalisation in their Operations
The Manufacturer March 2021
By Jonny Williamson

According to new research, two-thirds of manufacturers have accelerated their digital projects as a direct result of the Coronavirus pandemic. But what do these projects look like and can the rate of acceleration be sustained?

Those were the core questions discussed at an exclusive virtual event hosted as part of The Manufacturer Director’s Forum and sponsored by IBM.

Faced with lockdowns, reduced market activity and a suddenly diasporic workforce, rising numbers of industrial businesses have turned to digital technology to help improve their operational resilience and efficiency and support their growth strategies.

With just 16% of manufacturers choosing to pause their tech adoption, it is clear that the majority of organisations now recognise the strong correlation between digital tools and increased productivity, profitability and flexibility.

That’s the headline finding from the 2021 Digital Transformation Assessment, co-produced by The Manufacturer and IBM.

The most-widely adopted technologies, include cybersecurity, advanced data analytics and cloud computing, cited by 88%, 79% and 79% of participants, respectively. In particular, participants displayed a strong emphasis on digitising and automating many of the processes involved with overall equipment effectiveness (OEE) and manufacturing/enterprise resource planning (M/ERP).

The study also revealed that manufacturers are focusing their digital investments in four key areas: IT and/or data systems, product and/or customer growth, efficiency improvements and collaboration.

With society and the economy, hopefully, on the road to reopening, what methods and tools will become “COVID keepers” and which will fall by the wayside? Can the high rate of innovation and agility manufacturers have demonstrated over the past 12 months be maintained? Is remote working here to stay?

These front-of-mind concerns were explored in a stimulating conversation with 20 senior manufacturing leaders, co-hosted with representatives from IBM, which took place over a curated virtual wine tasting.

Excellence Bottled

Proceedings began with Richard Lloyd discussing the incredible journey of Accolade Wine’s multi-award winning facility in Bristol.

Just a decade earlier, what would become Europe’s largest wine and bottling facility was nothing more than a muddy field. Richard was tasked with getting the $100m site up and running.

Today, the technologically advanced site is renowned for setting new standards in wine production and packaging. Spare parts are 3D printed, machine learning is used to monitor wine loss (currently half that of any other wine facility), and a significant fleet of automated guided vehicles (AGVs) is due to arrive shortly.

Key for Richard was the opportunity to handpick a leadership team aligned to his philosophy of combining lean and operational excellence methodologies.

He explained; “We have some incredible technology at this facility, but what differentiates us is having a leadership team that has managed to engage the majority of the workforce to a common purpose and a common way of working resulting in a laser-like focus on continuous improvement.”

His comment resonated with many attendees, including the Head of Manufacturing Process Capability at a major aerospace and defence manufacturer.

He noted; “I’m currently project managing a ‘factory of the future’ initiative and involving the workforce is a vital part of that, understanding the things that are causing our people pain today. We’ve taken those user stories and turned them into problem statements, and a lot of the pain is around the right people having the right data at the right time and place and their ability to use it to make decisions.”

Richard Bolton, Digital Supply Chain Capability Lead at IBM agreed, adding; “People are the key to a successful digital transformation. Regardless of the technology, it’s the people who are using it that will make the difference. The journey is as important as the destination, because a journey that takes people along with it, that has the right engagement, is a journey that will last and scale.”

Catalyst for change

The discussion moved on to discuss the galvanising effects of COVID-19. Rishabh Arora, Industry 4.0 Leader at IBM, explained that the key stage in the adoption of any technology is the gap that exists between early adopters and innovators and the majority.

He noted; “The industrial sector has been waiting for a bridge across this chasm and COVID has unquestionably been an accelerant, demonstrated by the 67% of manufacturers looking to increase their investments in digitalisation.”

According to Rishabh, pandemic-induced changes in strategy, management, operations and budgetary priorities are here to stay, with executives now more trusting of what technology can enable.

He continued; “Digital investments are being deployed in three stages. The first, Doing things better, is about using digital to do what you’re already doing in a smarter more efficient way. For example, replacing paper-based, manual processes with digital processes and automated reporting.

“With that in place, you can mature into Doing better things, such as using the data you’ve already captured to predict the future, to gain greater visibility, to optimise your supply chain, to improve your production process. This is where the realm of predictive maintenance and prescriptive quality comes in.

“The final stage is Doing new things like reinventing your business model and transitioning from selling products to offering outcomes perfectly aligned to what it is your customer wants to achieve. Regardless of product portfolio or level of technology maturity, any organisation can take those building blocks and better leverage their digital investments.”

Factories of the future

Several attendees described how their organisations were undergoing similar transformations; from electrification in automotive – “I’ve never seen the amount of focus there is right now on future technology”, to next-generation combat aircraft – “One consortium partner investing in a ‘Factory of the Future’ focuses the minds of the others to follow tack.”

The Head of Maintenance at a luxury automotive manufacturer noted; “Electrification is a natural conduit to invest in future technologies because it requires a completely different production methodology. Factories were already becoming more automated, connected and intelligent and COVID has enhanced that by giving us the opportunity to invest more time into considering the future.”

Talk of building brand new factories led the Digital Systems Leader at a major aerospace player to question how they could get the most transformational bang for their limited buck.

He commented; “We are a well established company with decades old factories in some places and we face this dichotomy of where to put our limited investment.

“Do we get minimum standards for our legacy facilities, connecting aged machines to extract the very fundamentals of process variable information in order to learn what’s happening and drive up quality? Or do we put everything into the future? In reality, we’re doing a bit of both; we are investing in ‘acorn projects’ as well as upgrading our established business.”

Sense of optimism

The session closed with a discussion around the future of work. The overriding perspective was that the benefits of remote working outweighed the downsides and that it was here to stay, albeit combined with regular returns to the factory or office.

A number of attendees noted how their traditional office spaces were being transformed into much more collaborative, interactive workspaces complete with sofas, huddle areas and innovation focus rooms.

On the subject of skills, one Managing Director explained how his company didn’t look for experts to lead on digital projects but those with enthusiasm and a passion for learning. He explained; “Having people that don’t have the skills at the outset means that we can create many of the capabilities that we need as part of the deployment itself.”

The Head of Engineering at a large defence manufacturer commented; “Being involved with the production of ventilators last year showed that we have the skills and ability to innovate quickly and successfully when we need to. We’re looking to retain that capability and apply it to our new products, systems and working methods.”

Willem Meijer, Industrial Sector Lead at IBM, concurred, noting that; “Organisations have had to adapt to the needs of their workforce in real-time, and those which are digitally enabled have handled this best. Today’s manufacturing landscape presents an exciting opportunity for organisations which manage complexity and drive competitiveness by tying digital transformation to business priorities and to the wellbeing of their employees.

“Acting swiftly is essential to gain headway in competitive environments and build on digital foundations faster than competitors. Smart organisations are pushing onwards with their digital transformation and investing to weather current and future storms. That’s why 2021 is the year for optimism and change.”