Smart manufacturers put people and skills first

The potential of digital technologies to increase competition, foster innovation and spur growth continues to be underestimated. But perhaps in no other industry is the scale of possible change on par with the manufacturing sector. At no other time since the industrial revolution during the 18th Century have manufacturers stood to gain so much from technological disruption. Just as then, the sector stands to benefit from vast improvements to the manufacturing process by exploiting new technologies. But in equal measure, there are substantial barriers that must be considered by decision makers across the business – CEOs, CIOs, COOs, and CTOs. These can only be overcome with careful planning, strong leadership and clear foresight.

Digital change starts with smart factories, where digitised intelligent platforms enable the very best in class manufacturing processes. These smart operations allow manufacturers to gain intelligence and analytics to increase productivity. Smart supply chains give organisations end-to-end visibility into management, while smart customer connection solutions – like product configurators, CRM, B2B and B2C platforms – enable seamless sales and marketing engagement. Smart technologies have been well documented – 3D printing, artificial intelligence (AI), augmented and virtual reality, big data analytics and blockchain technology are all much discussed by leaders and the media alike. And it is clear that digital change has already made a strong impression within the manufacturing sector, as firms have been quick to adopt new technologies to remain competitive.

Digital change means faster technological progress and will therefore inevitably lead to new market entrants. This, in turn, puts incumbent manufacturers under unprecedented pressure to avoid being replaced by their nimbler and more innovative brethren. To remain relevant, today’s manufacturers need to improve product lifecycles and stay appraised of the technology driving the manufacturing industry at a faster rate than ever before. However, it is widely acknowledged that they will need to evolve significantly further over the coming years in order to thrive.

In a joint study with Dell EMC, analyst firm IDC estimates that by the year 2020, 60% of plant workers in the G2000 group of manufacturers will work alongside technologies associated with digital change, such as 3D printing, AI and robotics. These technologies will doubtlessly have the ability to underpin a manufacturer’s competitive advantage. But while conversations around these technologies have caused much excitement, they often overlook the ways in which these will be integrated to work within the existing IT infrastructure and alongside the most valuable asset of any manufacturer – its employees. So how can C-level decision makers navigate their manufacturing organisations to ensure they make the most of the operational, financial and technological benefits, while avoiding potential pitfalls of digital change?

Digital change means dramatic reorganisation of operations and the delivery model. A key consideration for decision makers when planning their digital strategy is to determine which technologies need to be adopted in order for the company to be adequately aligned with the new model. Cloud computing, IT security and customer delivery are all major challenges in today’s always-on economy. Manufacturers planning for digital change will need to run an audit into existing capabilities, processes and operations to determine where there are missing elements. But by far the largest challenge is around internal issues like company culture and organisational structure.

The starting point for manufacturers is to plan for digital transformation. Dell EMC and IDC’s spotlight on digital transformation for vertical solutions providers (VSPs) predicts that enterprises who are quick to embrace digital transformation trends will outgrow their competition, while those too slow to react will struggle to survive. The report finds that many digital transformation-related technologies are still in their nascent stages but will have a profound impact across various vertical sectors over the next three years, and OEMs will be critical in helping VSPs take advantage of these advancements.

As such, decision-makers will need to consider their existing digital maturity and work with OEMs to determine what technologies and measures will need to be adopted over the coming years to make a smooth transition. This will become more critical with time as OEM digital solutions have the potential to add capacity, experience and engineering talent across every development phase allowing the business to innovate faster and accelerate time to revenue. This will therefore underpin business success and will earn a premium reputation for those that have embraced digital transformation, allowing them to out-do the competition on reliability, resiliency and performance.

For manufacturing firms, which rely heavily on manual skills, a transformation to a digital culture can be considerably challenging, so it is critical to have the buy in of the senior leadership team. While smart technologies are still emergent, manufacturer’s success will depend on how willing digital leaders are to embrace digital transformation. This is not just because they make buying decisions, but because they define the company’s vision and direction, as well as the tone of conversation internally. So, a clear concise plan which is effectively communicated to the workforce is paramount to digital adoption and employee engagement.

The Internet of Things (IoT), which underpins the smart factory, can deliver real benefits today in efficiency, customer experience, safety and new revenue models. To ensure IoT success and rapid ROI, manufactures will need to adopt a broad set of infrastructure solutions that stand ready to:

  1. Simplify the complex with a pool of vertical-specific IoT partners, IoT Blueprints that integrate the technology with partner expertise and start to finish IoT services;
  2. Make manufacturers’ data useful by aggregating, normalising, integrating and storing/processing data from edge to core to cloud;
  3. Secure opportunities from edge to core to cloud with security and data protection and embedded security;
  4. Reduce complexity, lower risk, and deploy faster.

Today’s manufacturers will succeed based on their ability to move and respond to change at speed. Such radical disruption is enormously challenging for all departments, but particularly those at the heart of it all in IT. Whereas 10 years ago, each member of the IT team had a well-defined role and adequate budgets to continually throw more hardware at any emerging problems, today’s IT administrators face a whole host of tasks – from data security, storage and analytics – all in the face of shrinking budgets and exponential data growth. In fact, many IT teams are so stretched that they find themselves battling just to keep the data centre lights on. Manufacturers considering digital transformation must ensure that the IT team has the skills, resources and budget to implement digital change effectively. This requires sophisticated software management tools with a simple user interface providing end-to-end visibility into IT performance.

Both VSPs and their customers are facing an unprecedented era of change that impacts not only their own business, but also the environment in which they exist. These sweeping changes are taking place at a proliferating rate, and with an increased focus on innovation, outsourcing non-differentiating parts of the solution delivery and partnering with OEMs that boast a digital transformation-ready portfolio will be a critical move for VSPs' survival. Surrounded by a strong ecosystem and with a digital transformation strategy driven from the top down, manufacturers can exploit new technologies to their full potential; effectively tackle the digital skills shortage, and ensure they are set up for long term growth by implementing a shift in corporate culture.

Author profile:
Dermot O’Connell, vice president and general manager, OEM and IoT Solutions, Dell EMC EMEA