Industrial Digital Transformation Isn’t About More Automation – If you’re in manufacturing and paying attention to industry media, then your newsfeed is probably like mine, where it seems every other story is about how you’re falling behind if you’re not going full-speed ahead with your business’s digital transformation.
But just what does that mean? Many of the articles are awfully vague in that regard, usually touting fancy new gear and technologies like industrial robots, Industrial Internet of Things (IIoT) devices, digital twins, augmented and virtual reality, artificial intelligence (AI) and 3D printing, as a sort-of grab-bag of digital magic. And hey, those kinds of things can certainly be great. Heck, I’ve done articles about every one of them and their individual potential benefits. But I’ve never threatened that if you’re not adopting them, you’re doomed. And that’s what strikes a sour note for me about so much of the media attention: it feels way too much like hyper-aggressive marketing for the makers of those things.
So I turned to a true expert in the field, the leader of this very business area for the number-one company in industrial technology, to help me understand things better. Cedrik Neike is the CEO of Siemens Digital Industries and Member of the Managing Board at Siemens. “The last twenty years have been about bringing digital to different silos–finance, design, testing, and manufacturing, for example,” he explained. “Now it’s about breaking those silos to bring functions together, whether that’s OT and IT, or the shop floor and the top floor.”
Interestingly, then, despite the cajoling of so many of the articles out there, digital transformation has little to do with adding more–and more advanced–factory automation. (Don’t get me wrong: automation is absolutely the right answer when it improves worker safety and productivity. But those installations are stand-alone business cases that must deliver their own ROI.) Digital transformation is about collecting and analyzing data, and getting the meaningful information from that data where you need it to go. “The goal is to feed information from the end user back to the designers,” said Neike. For him, the key elements are using the right IIoT technology to generate needed data on the shop floor; 5G with low latency, which is important for handling that data and for things like connected robots; and edge computing (data processing right out in the factory). “We believe 80% of the computing will still be on the shop floor, not sent to the cloud.” Another big piece is building digital twins. “When we have a digital twin of both your product and your process, we can combine the two like no one else can. That’s how you really bring the silos of digitalization together.”
For Neike, it’s truly all about the data. “Data is the new oil,” he said. “When oil was a new thing, we had too much of it. It’s the same with data now. A plant will generate 500,000 Netflix movies worth of data every month. You have to make sense of all that.” Since a truly digital company also incorporates data from its suppliers, transportation providers, intermediate customers like retailers, as well as the final consumer, the full data challenge is even bigger than that. So the final key element of digital transformation is AI, which is essential to understanding all that data. “AI is instrumental in helping make sense of that tremendous amount of data.” AI-driven analytics can help with shop floor applications such as early fault detection and maintenance planning, as well as product quality priorities, such as getting a uniform distribution of the toppings on a pizza.
While I have no doubt Siemens, and Neike himself, would love to sell you some of their stuff, it was refreshing to hear his humility in that regard. “This can’t all be Siemens-only,” he said. “So we partner with companies like SAP and Google Cloud.” The SAP partnership, announced in July 2020, is aimed at providing customers complementary software products for end-to-end solutions for product lifecycle, supply chain and asset management. The collaboration with Google Cloud, announced this past April, focuses on integrating that company’s AI, machine learning, and data cloud capabilities into Siemens’s efforts at improving shop floor productivity and optimizing factory processes.
Neike truly does believe that most manufacturers stand to benefit from the latest in digitalization. He offers some real-world examples. “SMEs in particular can use this to differentiate themselves. There’s a keg-maker in Melbourne, Australia, that’s using it to help them transition to cans and bottles. Surf Loch uses advanced simulation tools to help create perfect waves in pools. BioNTech uses these digital tools to speed vaccine development. In fact, pharmaceuticals used to be one of the slowest industries, and now they’re becoming one of the fastest, as they explore with the FDA how to accelerate medical development by testing and approving using digital twins.
“The main message is that industry constitutes about 35% of our resource consumption,” he added. “We need to make it more flexible to drive out waste. During COVID, the companies farthest along on digitalization had a definite advantage. There’s still so much more we can do toward tearing down silos.”
About the Author:
Jim Vinoski – I’ve spent decades in the “trenches” of manufacturing, focused on engineering, operations, and management. My career has taken me from plant floors to corporate boardrooms, with companies such as Ralston-Purina and General Mills, making everything from plastic to paints and foods to bourbon. I blog at The Interface.
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