Change is here because of the digital revolution. Companies that supply industrial machinery and components are seeing strong gains as they digitize the machinery and components they sell. But at the same time, these companies need to become leaner and more agile. This means digitizing their own processes to drive efficiency for increased revenue and reduced overhead.
We’ve seen businesses make this same push in the past, in the form of industrial revolutions. Most people think this digitization revolution is the second Industrial Revolution, but in reality it is the fourth. The first was due to steam, the second electricity, the third involved putting computers into machines, and now the fourth is to connect those computers and machinery to the internet.
Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (Social, Mobile, Analytics, Cloud) Technology Podcast, caught up with Georg Kube, global vice president, head of the Industrial Machinery & Components Industry business unit, SAP, on an episode of Digital Industries, an extraordinary series that examines how digital transformation is affecting 16 different industries.
Digitalization is impacting areas such as manufacturing operations (how machines interact with each other), service operations (having more insight into their customers’ equipment), and supply chain (how to drive down costs). As Kube points out, “Making products smart is really where everybody is right now.”
With most equipment now computerized, connectivity and analytics have come into their own. Digitizing a manufacturing floor allows all your machinery to communicate. This increases automation, increasing efficiency, and thus increases overall production. They only require human interaction on exception-based issues, allowing workers to focus on improving the company’s productivity and profitability. What’s more, they can also focus on improving not only the use of product, but also its reliability.
Supercomputing power, connectivity, and Big Data analytics allow industrial machinery and component companies to take advantage of information and thus improve their product development process. Tracking the data from equipment at the customer’s site provides manufacturers with more data points to determine failure rates or potential product issues. The data also can be analyzed and used to improve the overall product. For example, if a specific issue or error arises 75% of the time before a breakdown, the manufacturer can provide preventative maintenance before it becomes an issue.
Digitalization continues to impact and improve supply chain logistics. Access to better information allows a business to reduce levels of safety stock and lowers overhead costs. Machines could also replace more of the labor-intensive and heavy-lifting type jobs and help address working in hazardous conditions. Nowadays, robots can often be seen working alongside people, a new development. All of this changes the type of workforce that is needed; they need to be able to see the machine in context and be more comfortable with technology. However, as the older workforce is transformed, although younger works have more system and IT capabilities, they do not have the experience. So it will be critically important to digitize the knowledge and experience of the older workforce.
But to gain that new type of workforce, manufacturers will need to compete with different companies, such as Google or Facebook. Kube conceded, “it is an unfair competition.” To compete with these different types of companies may require manufacturers to build facilities near IT populations, such as Silicon Valley or the Tech Triangle. Manufacturers also will need to create a more IT-friendly environment. Their company culture will need to entice young IT professionals away from more traditional IT companies.
More opportunities in the future
However, transformation is continuing as new technologies, such as virtual reality and machine learning, hold a lot of potential for industrial machinery and component companies.
“Virtual reality will allow them to basically dispense knowledge in a digital way,” observes Kube. An expert can talk a service operator through complex maintenance in a remote location, such as a wind turbine on the North Sea, and support the remote operator by being with them virtually to give step-by-step instructions.
Machine learning will be an ideal mechanism to capture the implicit knowledge held by the experienced operators, experience that they have gleaned over many years working with the machines, experience that is just “in their blood.”
3D printing is yet another technology creating a plethora of opportunities, both in terms of creating specific or special parts, as well as helping speed up innovation cycles. Manufacturers also are using 3D printing to help with a variety of spare parts concerns such as reducing stock, shortening the time to deliver parts, or as a stop-gap solution while waiting for the real spare part (which has a longer lead time) to be delivered.
The industry will not be standing still any time soon.
To listen to this episode of Digital Industries for the industrial machinery and components industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.
Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission-critical business processes inside your “four walls” and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.
Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading “Accelerating Digital Transformation in Industrial Machinery and Components.”
2“IIoT is building momentum across the industrial landscape,” Greg Gorbach, vice president, ARC Advisory Group