SMAC/IoT and Manufacturing – a perspective

By Sairam Bollapragada & Narayan Katti

With stress levels on automation and robotics going northwards, every manufacturing unit is investing hard on ways to pull down the cost of production and RPUs, increase the customer retention for sustenance, increasing business process efficiencies, creating differentiators, being able to most competitively price, continuously innovate, optimize operations, manage supply chain and others – but the largest investment being human interaction.

Manufacturing also has seen a significant shift from pure play product philosophy to product and services philosophy. Customer is at the center of all initiatives that the manufacturing industry is embarking on.  Customer-centricity is now the new mantra of Manufacturing Industry.  Be it, Automotive, Consumer Electronics or Industrial manufacturing, manufacturers are looking at delighting customers with various innovations across the value chain of manufacturing.  SMAC/IOT is a channel which will create scope for these innovations.

As per IDC, “…55% of discrete manufacturers are researching, piloting or in production with IoT initiatives…”. The oil and gas industry, hit with the downwards spiraling oil prices, is still investing in technology space driven by optimism and compulsion to reduce the cost of production.

Globalization is pushing everybody to compete in the market place without compromising on universal standards.  The ever demanding customers are pushing for decreased business cycles, hence re-inventing business processes, with more demands around personalization and better service levels. (ref: The caging of SMAC/IoT). The other issue is complexity and erratic value chain in the industry. The real time process integration for manufacturing and supply chain has always been a persistent problem to solve with newer radical innovations around  business processes further challenged by emerging market growth and behaviors.  Globalization of demand-supply chain is also playing a pivotal role in how the markets behave.

There is a discussion about a $ 19+ Tn economy in the next decade with manufacturing garnering at least 27% of the share. The manufacturing Industry is betting big on   IoT and emerging technologies to help shape up their future. Manufacturers would need to redesign their thought processes, with a significant focus on analytics connected devices, and related areas.  One could visualize a shop floor where each device is connected with its own IP identity and communicating with the centralized automated monitoring mechanism.  The data from such connected devices and also the analytics could get into the supply chain processes. This would provide all necessary information in real time for better decision making and also better time to market!! Managing the inventory dashboards across warehouses and manufacturing units in real time will be a challenge, interesting to handle and change your supply chain plans on the fly.

IDC says that by 2018 more than 40% of manufacturers will depend heavily on connected devices.  The innovations would be around product innovation, product services and productized services. Each connected device will generate critical data to further their own efficiencies and hence the generation of data will be beyond petabytes across similar industries and each company would need to demonstrate aggression to mull, mine and read into this data to stay ahead of the curve. A transition journey will commence to these new technologically driven services for higher profits and far superior CSAT. The manufacturers will indeed hire or create their own data scientist teams for this.

Connected devices will also increase the complexity of communication between themselves re-defining the product design to manufacturing to marketing to after-sales services. The smart connected products being manufactured will necessitate building new technology infrastructure made up of hardware, software, engineering components, running on remote cloud based servers, using security mechanisms to protect the information leakage and integration of business processes through completeness of information which will enable extraordinary new product capabilities; products which can monitor and report their own condition periodically, bringing in near-zero manual preventive maintenance processes.

This product and product-generated data will become the new value-add in the business processes. The seamless dovetailing into other product generated data will make it very valuable for analytical reasons. The connected devices with addresses – both, virtual and physical, data on spare parts, data emitting parts, laced with sensors for capturing material characteristics of various products or parts will take us to the meticulous levels,  unheard and unforeseen thus far.

Security: However, since the adoption is in nascent stages, the Industry standards and best practices are still being explored and reviewed in the IoT Labs. Security would play a key role in IoT areas as the expanse of touch points is enormous. While it is a big boon for the customer for all connected devices, it is a big challenge for IoT implementers with respect to security. There would be lot of opportunities for IT security players, as the scope for a COTS security product in this area in near future is bleak.

People aspect:  Hence the first casualty will be the manpower optimization and this will move jobs to automation. The severe lack of manpower will be the result of the historical paradigm where IT and production engineers have been working in silos for so long. Getting them aligned to each other and also to a common goal will take time. The learning curve is on both ends but whoever does it first will stand to gain unquestionably. The core competency of the production engineers will need to be blended with cloud, mobile, analytics, social media  and both the sides will need to collaborate heavily to innovate. These innovations would deal with how best to leverage on creative business processes across ERP, CRM, PLM, SCM platforms.  The need to have high end partners and third-party advisors would become essential in many cases that will be expected to not only keep them honest but also bring speed into the collaborative innovative processes.

Here is where the current avatars of Service industry will need heavy transformation. All the experience of helping manufacturing industry – whether BPO, ITO, KPO and other services will need to be brought to the table and devise a mechanism to understand transformation parameters like costs, differentiators, growth targets, and partner-eco systems apart from others to create the strategic  transformational  roadmap for them….

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