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Business Transformation

Deploying new manufacturing technologies at scale

Wednesday, June 12, 2019

What are some of the common challenges of deploying new technologies in manufacturing and how can they be overcome?

Emerging technologies such as automation, artificial intelligence and Internet of things are quickly becoming the future of manufacturing. International manufactures around the world are piloting proofs of concept that combine these technologies and finding ways to achieve significant productivity gains. However, many of them are also finding that piloting is one thing and deploying these technologies at scale is another.

Popular use cases

Predictive maintenance is one of the best-known examples of a use case that combines all three technologies. Sensors on the machines create signals, and IoT connects them into a data lake. Machine learning algorithms help to dig through all the data and digest it and make meaning out of it. Then automation steps in in the form of scheduling the maintenance job and ordering all the spare parts the maintenance engineer needs. Using AR (augmented reality) headsets, the maintenance engineer gets instructions on how to fulfil the maintenance task. Not a lot of training is required to do the job and if an expert is needed, they can be called.

Internet of Things (IoT) is another popular use case. IoT is the nerve system of a manufacturing plant. Sensors connect to the nervous system and it all connects to the cloud, the brain of the plant. Add some artificial intelligence to control the automated machinery (the arms and legs) and all of these technologies come together beautifully to enable an amazing digital transformation into the future of manufacturing.

The portfolio approach

Those are just two examples of use cases. Many companies are rolling out many different use cases around single technologies because they want to show the benefit of those single use cases. There’s no one recipe for which combination they should pursue but the combination creates a scale effect that transforms the performance of the site. Research shows that this portfolio approach is optimal. Senior Partner at McKinsey, Katy George says, “We see that around 20 to 30 use cases, applied to one site, creates a real transformation of the value.”

Katy works with manufacturers all over the world and has seen her fair share of failures. She calls the most common pitfall she has seen pilot purgatory – where companies launch pilots around new technologies and somehow never get to the scale phase. “The benefits of scaling are about scaling a use case beyond one small line to at least the scale of a plant or network,” Katy explains. “But also scaling in the sense of combining multiple use cases together to create the connectivity, the culture, the innovation, and the pace.”

Escaping pilot purgatory

One of the main reasons why companies never get past pilot purgatory is slow decision making, where there is a slow process for acquiring new technology or for completing a partnership. Another is having a backwards-looking approach to return on investment (ROI) – not being able to allocate even small amounts of capital to scale something that has proven to work.

“One of the other failure modes is when companies get excited about new technologies and take a technology-forward approach as opposed to a business-value-back approach,” Katy adds. “Embracing cool technology just for the sake of it does not create any real business value. You have to do the hard work of understanding what your competitive advantage is going to be, how you want to change it or enhance it using digital, and then work backwards to see what the new capabilities are that you want to build with digital and advanced-analytics capabilities.”

Pilot purgatory also means there are pilots all over the network that are not coordinated. These need to be pulled together and leadership is important to this process. Top management needs to lean in and decide which direction they want to take, otherwise, they will not be able to scale up. Then if you have the strategy, you need to put some scale-up enablers in place such as the right IT stack. This doesn’t have to be done from the beginning, but at some point, your IT stack will need to be modernized.

For help modernizing your IT stack or planning your digital transformation, get in touch with Pipol.

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