VUCA in Digital Manufacturing

By Sairam Bollapragada Sairam & Rajesh Mohandas

In our first part of this series Digital in a VUCA World we walked thru various facets of Digital being impacted, the first paper was domain agnostic and we will today focus on the impact of VUCA on DIGITAL MANUFACTURING!

 

Manufacturing roughly contributes to 1/3rd of the global GDP as per the world bank figures and approximately 10% of the global workforce is directly employed by manufacturing companies. The “Multiplier Effect” brings in nearly 37% of the entire global workforce is indirectly connected with manufacturing sector as per the Forbes. Compared to that of discrete manufacturing there is more technology penetration and today the emergence of Digital and Adaptive manufacturing has clearly redefined this prone-to-be disrupted sector, adding predictability, efficiency, effectiveness and above all cost optimization with improved productivity as challenges.

 

VUCA conflates four distinct types of challenges that demand four distinct types of responses; the need of the hour for companies during an economic downturn is business developers and not problem solvers or better a combination of the two.

 

Along with VUCA came the concept of working world 4.0. Derived from industry 4.0, the fourth industrial revolution, it names its immense and rapidly spreading impacts on many areas of work and life. It changes the way we communicate, get and read information and prepare decisions. The special feature of Industry 4.0 is networked manufacturing, i.e. the further development of digitisation through emerging technologies…

 

ART OF THE POSSIBLE in the VUCA world for manufacturing sectors leveraging Digital …

 

Volatility: The Manufacturers are increasingly becoming aware of the fact that to alter their manufacturing strategies face the raising volatility. One has to firstly understand the volatility exposure and assess how agile are internal business processes, the business operations and at least 75% knowledge about the customers customer in all three B2B, B2C and C2C markets.

 

Manufacturers are under constant pressure of continuously improving QPM, especially in the fluctuating market demand irrespective of the magnitude. One bad product and the digital reach being so large and quick, it can dent your credibility.

 

Big Data with Predictive analytics and bots leveraging machine-learning algorithms will bring in mechanisms to tackle volatility and hence automate a large chunk of the manufacturing process.

 

Uncertainty: The manufacturing sector has lived thru multiple uncertain eras and has indeed mastered the art of change management, in the digital world the same can be replicated with “USE-PREPARE-FOCUS-FIND” cycle

 

  • USE : use Data: Knowledge – Process – Technology, to arrive at strong data analytics platforms to predict and handle uncertainty. Data lakes can help drive multiple inferences and leverage on historical information. The shift to Virtual prototyping, IoT based surface modelling QAC, Sheet metal design, CAPP, AR based marketing, process simulation, are all areas that need to be understood well.

 

  • PREPARE: be well prepared to tackle situations raising out of events unknown, with digital technology like cognitive computing, neural networks, artificial intelligence algorithms etc. to speed up effective decision making capabilities with a “First – to – Market” objective. Prepare well to use tools like SAMCEF, NASTRAN, ABAQUS (to name a few), etc. for FEA, embedded M2M based information analytics, Connected Device Platforms (CDP), AEP, etc. You need to move fast and as much to Intelligent Manufacturing.

 

  • FOCUS: The market is shifting towards customer specific demand fulfilment, hence analytics, cognitive computing and plethora of such tools available can help you focus on very specialized “M2C – Manufacturer to Customer” markets – hence the agility and reach. Continuously focus to improve the PLM, from conception to service and disposal.
  • FIND: the digital marketing and media provides platforms for very fast feedback which can be leveraged catalytically to improve the products and build variants, thus maximizing footprint.

 

Complexity: Looking the way Digital Manufacturing is being challenged, the four influencing factors are:

  1. optimized resource usage,
  2. shortened lead times,
  3. personalized fit-to-purpose manufacturing,
  4. increased (squeezed?) productivity

(refer https://itservicesdelivery.wordpress.com/2016/05/05/digital-manufacturing-through-industrie-4-0-2/)

 

The complexity in the Digital Manufacturing space is predominantly, due to the fact, that manufacturing is shifting focus from pure play product philosophy to Product & Services philosophy. Hence, the challenge shifts to balancing maintenance with production.

 

Ambiguity:  

Haze in vision to the roadmap on how technologies can better your product or services can be a killer. You need to have a dynamic strategy which keeps refreshing its goals every 6 months to a year. 64% of the leadership time is being spent on articulating shared vision as per a CII-EY report.

 

Any organization unclear of the path it wants to tread to embrace technological advances to transform itself, will not be kindly treated by the market demands and especially in Manufacturing segment. In fact, the Industry 4.0 is exactly about that. 27% of the so-called $19 Trillion Digital economy is due to the manufacturing sector.  Hence in this ambiguity (though not a choice anymore), crafting out leadership opportunities can be indeed be an opportunity.

 

 

Manufacturers, with so much at stake, simply can chose either to run the race or to become legacy as they are challenged every day to the field by new and modern entrepreneurs who are coming up with some very interesting and disruptive innovations continuously shifting the co-ordinates to newer business parameters. The VUCA in DM is all of that – to be strategized and attacked in a truly multi-pronged approach.

 

Digital Manufacturing through Industrie 4.0

by Sairam Bollapragada

From the 1784 first mechanical loom to the current definition of Smart Manufacturing in the era of IoT, the manufacturing industry has come a long way and we have left the first programmable logic controller of 1969 far behind.

What started early in 2012 as the research alliance,  the German Mechanical Engineering sector has worked hard to freeze on the launch of the joint platform in mid-2013 and ensure it had a vision ready for field test in late 2014.

Though initially meant for the German industry, the concept and standards are propelling to fuel the market, hand-in-hand with the IoT fever acting as catalyst.

Taking a leaf from my earlier note on the manufacturing (https://itservicesdelivery.wordpress.com/2016/03/28/smaciot-and-manufacturing-a-perspective/),  there is an ever increasing pressure on

  • Optimized Opex, upwards demands on flexibility and productivity,
  • Compulsions of competitive differentiation creation,
  • Progress in communication and sensor technologies,
  • Production and operational processes getting more robotic in nature,

the Industrie 4.0 is here to challenge all the manufacturing industry players and push them to the brink further on

  • optimized resource usage,
  • shortened lead times,
  • personalized fit-to-purpose manufacturing,
  • increased (squeezed?) productivity,

– with technology opening up new and sustained methods of innovation, production, consumers demand-supply through faster and better information flowing through the processes.

Will too much of IoT/automation eat away into our jobs then?

Yes and No. Yes because the repeatable jobs will be taken up by bots. No because the need for a knowledge worker will still persist. For all supported processes, while data required will be faster acquitted, the data quality would still need to be the essence. This will need appropriate invention since ¾ th of the data so acquired may not be having self-correcting capabilities.

Also a NO because the supported products could expect the onboard service revenue increase in its industry revenue share down the line due to connected products. Supply chain experts will look beyond silos to get more from the eco system (a value-network interconnecting objects, devices, human) creating a potential real-time optimized system.

The new manufacturing industry would rally around traditional parameters with the following changes:

  • Design and conceptualization – the demand of an Industrie 4.0 construct will keep the manufacturers to be in an “all time ready” mode. Understanding of new technologies, devices  to be factored towards design of the smart products clubbed with their feasibility, environment specifications, data to be captured, communication channels to be used, etc. will become part of any design engineers mainstream thought process.
  • Demand Planning – when customization is leaning more towards a mass B2B, the demand planning should be done meticulously. The demand-variants will be many. The challenges staring would be stocking inventories with different materials and smart component leading to Smart Inventory Management. These in turn become the capability to churn out customized orders in bulk.

However, networked machines are expected to optimize the production. Sensors fitted to transmit data into the data lake for getting analyzed for increasing efficiency while cutting on downtimes.

  • Shop floor activities will need to re-cast themselves as the design teams would start catering to the ways and means of interfacing smart component into their traditional device production.
  • Product Operations: Instead of being a discrete process which ends when the product is packaged and shipped, the operations cycle would extend till the product grave. The objective is continuous product improvement
  • Supplier Network Design- In order to have such a dynamic planning done for the clients, the material supplier network would need to keep itself most active. What I mean is all vendor partners would need to keep themselves committed to deliver timelines (anytime) to the variant needs.

The design of such a network would be driven by the single goal of optimized T2M (time-to-market). Even after so many years, conventionally this is still an area of concern for most product companies. With Industrie 4.0, the demands will stretch the ask even more.

  • Supplier Management – Smart Logistics, Smart Mobility, Smart products, and smart machines – all will make the supplier management more drawn to bringing virtual and physical parameters of the connected B2B world together.

The suppliers will expect to be managed more efficiently with reduced warehouse dwell times and increased material utilization levels. The connected devices would call for the distribution and logistics companies to configure and re-configure the networks with most finely tunes service level management.  Hence the supplier management is targeted to become more effective than ever before.

  • The framework consideration for the Industrie 4.0 would push a huge focus on data security, communication infrastructure, innovation funding, and reference architectures.
  • Supply Chain Visibility – the capability to respond quickly to the events in the upstream and downstream supply chain through the Industrie 4.0 defined standards will, making the zero-latency supplies more realistic. The connected devices will be able help transmit the data pertaining to their locations, (mal)functioning, associated bugs, etc. and hence the supply chain visibility.

What about post-services?

  • Remote Services will become a critical part of the services league which will kick in once the connected devices hit the markets. Sysmex is a classic example. It is a simple blood/urine sample collection equipment used by pathology clinics. Loaded with connectivity feature, the same is used for remote monitoring and servicing. When the offshore and onsite difference is defeated, the objectives of service costs, equipment utilization, and CSAT makes these connected devices a winning enabler.
  • Using the predictive analytics in the connected devices, the early warning signs of a “to-be faulty” machines can be helpful. It helps to slot out the preventive and proactive maintenance of devices and keeps the uptime high for the better performance.
  • Value Added Services is another thing which will catch up as each connected device is identified with a signature address. The performance parameters data gathered for equipments, especially ones which are complicated in size and function, is analyzed by the product engineering/development companies for advising how best to use, optimize, accomplish efficiencies, and eliminate potential showstoppers.

Every connected device is a potential entry point into the network for cyber-attacks. The devices exposed must be provisioned with smart ways to get a security blanket covering it against any potential vulnerability.  Similarly, means to detect early intrusion and a mechanism to study, analyze and improve the device security against a break-in should be a continuous effort from product engineers.

The risks arising out of penetrating connected components in aircrafts, automobiles, medical equipment, generators, and others could be far greater than the risks from a breach of a business e-mail server. That seems much simpler now.

Will the new Industrie 4.0 lead to new culture?

The Organizational behavior will be compelled to see a big change. The silos across the organization need to be erased. The organization would need much more orchestration to manufacture smart devices. Every unit within the organization, be it design, prototyping, shop floors, CNC teams, inventory, supply chain, invoicing-billing-finance, logistics, HR, training – all need to be in a perfect sync to be able to target (in-tandem) the shortest time-to-market – to beat the competition and be a leader! In the next blog, I will focus on how the IT industry will need to align to its manufacturing clientele as the latter change their organization norms, working policies, and more importantly the structure.

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….