- March 05, 2019
By Bill Lydon, Editor, Automation.com The convergence of Information Technology (IT) & Operations Technology(OT) has been a growing topic of importance in manufacturing. Many times, however the focus on IT/OT convergence can be too narrow in scope to leverage the increasingly advanced technologies to achieve a manufacturing competitive advantage
By Bill Lydon, Editor, Automation.com
The convergence of Information Technology (IT) & Operations Technology(OT) has been a growing topic of importance in manufacturing. Many times, however the focus on IT/OT convergence can be too narrow in scope to leverage the increasingly advanced technologies to achieve a manufacturing competitive advantage. In my experience, I find that IT/OT convergence presentations and discussions have, in many ways, continued to foster siloed suppliers and groups within a manufacturing company. This limits the scope of thinking about digitalization, which should ideally encompass the entire manufacturing process and ecosystem, including:
- Product design
- Incoming supply chain synchronization
- Flexible production
- Customer responsiveness.
Comprehensive business integration streamlines the entire ecosystem in order to achieve superior performance.Smart manufacturers have understood the profound impact which technology is having in society and commerce. They are learning from these impacts and adjusting in order to be successful. Future success may rest on applying new technologies to revolutionize manufacturing reshaping your industry with superior business, process, and operating models. It is the people in manufacturing companies, who embrace holistic digitalization throughout the organization, who will create new opportunities that drive winning organizations.
Manufacturing is ripe for business disruption, and yet focusing solely on IT/OT convergence may leave your company less competitive as well.
If you want something new, you have to stop doing something old” Peter Drucker, Management Guru
Disruption Throughout History
History has taught that disruption occurs periodically and those prepared to change can prosper. Take the steel industry, for example
From 1962-2005, the U.S. steel industry cut 400,000 employees. The decline had massive effects. In Pittsburgh, (the former center of the U.S. steel industry) the city population fell from 10th to 52nd largest in the U.S. Yet, during this same time period, U.S. steel productivity grew: worker output increased 5-fold, and factory output increased by 38%. How? According to Duke economist Allan Collard-Wexler, new technology — the steel minimill — quickly replaced less efficient “vertically integrated” mills. During this time, domestic steel production returned to 1960s levels. The meaning of this? The drop in steel employment was not the result of globalization or the steel industry moving from the Midwest. Instead, these jobs in steel were displaced by more efficient technology.
Today, rapidly advancing technology, both cheaper and more efficient, is creating a more connected world: 8 billion devices are now connected to the internet; by 2030, that number is forecast to grow to 1 trillion. Many of those devices incorporate Systems On a Chip (SoC), powerful edge computers, but also incorporate with mobile, cloud, sensors, analytics, and the Internet of Things (IoT) to create a wide range of new applications and possibilities. Further, customers of manufacturing companies are increasingly expecting relevant, personalized interactions through every part of the lifecycle. In short, technology is a multiplier that is accelerating exponentially.
An Integrated Organizational Change
Achieving the effective digital strategy for any manufacturing company requires a change in thinking and organizational structure. Integrated digital manufacturing cannot be accomplished by companies that have siloed opalizations.
The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.
These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hardfor large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence.
In any manufacturing company, digitalization is an important task that needs to be accomplished with a common organizational plan. Knowledge of technical capabilities and limitations will be most heavily concentrated among those who work with it regularly, the Subject Matter Experts (SMEs). Any plan that fails to invite and incorporate the SMEs’ input is one that is likely to lead to big problems later in the deployment process. In today’s rapidly advancing digital world, automation professionals are a vital SME group that should be a large part of your planning process.
- The IoT Impact on Business Models: What Should Manufacturers Do First?
- IoT Impact on Industrial Automation
- Compliance of the Victim: ARC Industry Forum Highlights an Industry in Transition
- Bill’s Top 10 Automation & Control Trends for 2019 – Accelerating Change & Reaching the Tipping Point
Did you enjoy this great article?
Check out our free e-newsletters to read more great articles..Subscribe