- By Bill Lydon
- September 14, 2020
Attending the AVEVA World Digital Virtual Press Roundtable provided thoughts and insights about the impacts of the pandemic and recovery.
Attending the AVEVA World Digital Virtual Press Roundtable provided thoughts and insights about the impacts of the pandemic and recovery. The roundtable participants were Craig Hayman, CEO AVEVA; Jean-Pascal Tricoire, Chairman & CEO Schneider Electric; and Kevin Proutry, Group Vice President IDC Energy and Manufacturing Insights.
Kevin Proutry discussed IDC’s Covid curve that illustrates stages from the crisis, suggesting technology can be used to shape a company’s next new normal to accelerate business with market-driven and resilient decision-making. The goal is to flatten the curve going into recession and accelerate business recovery.
Proutry noted, “Companies that were digitally prepared building out digital capabilities in their operations really have not been as impacted on the recession side and are recovering much faster.” A series of IDC Covid-19 impact surveys done in the last week of May 2020 indicated that more than 15% of companies are still in lockdown, about 33% are trying to decide what actions to take, 25% are in open and in recession mode struggling to determine demand & supply, and more than 25% of the companies are accelerating out of the recession.
He reported that IDC’s Worldwide ICT (Information & Communications Technology) Spending Guide in May 2020 indicated that discrete and process manufacturing represented two of the top three hardest industries that shut down investments in upgrading technology and digitalization. Proutry said, “That is changing, and we’re seeing a rapid acceleration in spending and investment to adjust company spending in IT and digitalization capabilities.” The IDC COVID-19 Impact on IT Spending Survey indicated that 47% of manufacturers are adding new projects to 2020 roadmap plans. In addition, note these other interesting findings:
- 42% are addressing weaknesses revealed during the pandemic.
- 62% are taking advantage of our competitors’ weakness and capture market share.
- 53% are introducing innovative new business offerings or models.
He cited an example of a large chicken manufacturer that completely automated its processing plants in the United States with heavily digital capabilities. While other meat processing plants were shutting down due to the pandemic, this company’s plants are running since they have almost no human interaction with the product. As a result, they are growing selling to retailers that could not be supplied by their competitors. Another company he cited is one of the world’s largest spice producers that invested pre-pandemic in supply chain and production automation, and they increased sales during the pandemic.
The IDC survey also found that companies believe many employees working remotely will continue to do so after the pandemic. The survey indicated before the pandemic very few were working remotely.
Kevin Proutry posed these questions to Craig Hayman, CEO AVEVA and Jean-Pascal Tricoire, Chairman & CEO Schneider Electric for discussion.
Key lessons from lockdown?
Craig Hayman described how they shifted 95% of their employees to remote work in a very short period of time. The change was the hardest part; once you accepted change was going to take place, though, it was pretty straightforward. There were a few issues, including securing laptops and peripherals for people to work productively from home. When everything was in place for remote work, productivity actually increased.
Jean-Pascal Tricoire discussed how 140,000 white-collar workers were sent home within two days. Schneider Electric’s production processes are considered critical by government, so they could keep running. This required digital remote monitoring and making sure the service teams had the right personal protective equipment and other resources enabling them to help customers with issues.
Post Covid-19, what are the lessons learned for industrial companies to face the challenge and engage in the recovery?
Hayman: The industrial sector is going through the digitalization curve increasingly deploying a lot more digital technology to achieve the goals of Industry 4.0. Many have hired Chief Digital officers and technologists to be catalysts for change, and there have been good successes. One of the big challenges is inertia inside organizations, which have many priorities. Covid-19 created a forced change; working remotely required more data to be available from production sites. Once the new reality was accepted, companies were motivated to invest in digitalization to increase productivity and lower risk. This accelerated digital efforts.
Tricoire: “Before Covid-19, every company had a digitalization agenda, but massive transitions are not comfortable.” The crisis made digitalization essential; the big winner of all this is digitalization--we all want a massive fast-forward in digitalization. You want to operate remotely to have social distancing.
How does the concept of Industry 4.0 play into digitalization?
Hayman: A lot of the Industry 4.0 and digitalization discussion has been in the discrete manufacturing. In the current climate, discretionary spending has dropped dramatically, with people focused on the basics of our lives including food, drugs energy, and water. We have seen an acceleration of Industry 4.0 as it relates to the distribution of energy. The world changed very quickly, and for many companies supply chains couldn’t change as fast needed Industry 4.0 solutions provides a way to be more efficient and flexible when things change.
Tricoire: There are a wide range of benefits to implementing Industry 4.0 for efficiency, quality, flexibility, resiliency. Once you have the digital twin to achieve these goals, there are many more opportunities for improvement including predictive maintenance, optimization, and increase safety. Digitalization also empowers people with the information to make the right decisions with more and better data leading to more creativity.
What is the digitalization impact on sustainability?
Tricoire: Sustainability relies on capturing and measuring information to understand where you are to improve processes and reduce your carbon footprint. Information helps you to strategize and create new methods to achieve goals.
What are the key digital capabilities industrial company should prioritize?
Hayman: Just as important as the technology are the people going through the digital transition journey. It is important for people to embrace digitalization and to provide them education.
Hayman: We are very early on the digitalization journey and it is accelerating…particularly with the pandemic.
Tricoire: The crisis has forced us to be faster to have less resistance to be broader in our transition thinking.
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