Part 4 in the 4-part series “Opportunities for Digital Manufacturing.”
Previous blogs in this series examined some of the major technological advancements that are helping companies accelerate growth. In this blog, let’s look at some of the emerging technologies that can offer additional opportunities to generate value.
- Virtual reality: To overcome the challenge of having a limited pool of experienced technicians to improve first-call resolution rates, virtual reality can help organizations consult experts, anytime and anywhere. The same is true for plant engineering.
- Predictive maintenance: The aspiration of every chief operations officer is to maximize asset utilization, especially heavy capital-intensive manufacturing plants, to reduce production costs. Yet many engineering plants still use a preventive maintenance (PMA) approach to minimize unpredictable machine failures. Unfortunately, many organizations are still struggling to keep up with their PMA schedules. Now is the time to leverage the Internet of Things and business intelligence to migrate towards predictive maintenance. Companies that have made the switch have seen a dramatic drop in unplanned production outages.
- Artificial intelligence (AI): Business intelligence provides insights on hidden opportunities for value generation. While many organizations have not invested enough to advance their use of analytics, artificial intelligence and machine learning seem to be solving this challenge. Through auto-identification of new opportunities, businesses can drive actions systematically in the near future.
The digital makeover of products brings great value to customers and businesses, such as alert notification and the collection of useful information. The combination of alerts and analytics makes connecting equipment for superior service an easy choice for companies to make. Of course, there are challenges, like retrofitting the installed base, especially when a high percentage is aging equipment. But this is where leadership can make a strategic investment decision.
The role of leadership in digital transformation
Considering that digital transformation implies a different operating model, change management efforts should not be underestimated. Top management needs to drive the creation of digital strategy and organizational alignment. CEOs are hiring digital transformation leaders to push these efforts in collaboration with the rest of the senior leadership. Such leaders need to be both business- and technology-savvy.
CIOs who have achieved a high degree of business IT alignment, and thus have created a culture of technology innovation for generating business value, are ideal candidates for such roles. They would be well suited to prepare the technology ecosystem of the organization to overcome challenges like fragmentation, data quality, and inflexible legacy platforms. However, in organizations where IT is still a reactive function, or IT management is predominantly focused on operations or just on IT operating cost reductions, company readiness for digital pursuits needs to be closely evaluated.
I personally know a couple of IT executives who were solely focused on back-office consolidation. On the topic of strategic value-building, they took the position, “after completing ERP consolidation.” However, this has become a moving target for them as their companies were heavily engaged in M&A activities. Likewise, there are examples of technology investment proposals with a clear ROI taken to the board and the executive management, but being rejected. Some of those companies have been replaced by future-minded competition.
In my view, it is time every company in these industries takes this strategy seriously and set the required focus to begin the journey. It can even start small. Beginning to prove some of the concepts can be helpful in garnering the support needed to scale. The payoff in the long run and the advantages against competition will help ensure sustainability and growth.
For more on this topic, see Digital Transformation: Opportunities In Manufacturing.