Industrial Manufacturers Lag in Digital Transformation
While finance, insurance, health and retail sectors are rapidly embracing IoT, AI and big data to meet the changing needs of markets, industrial process manufacturers appears to lag behind. Senior Execs from Abu Dhabi National Oil, Worley, Nestlé and AVEVA share their digital transformation journey.
The recent AVEVA World Summit in Singapore revealed interesting insights by ARC Research which claims only five-eight percent of industrial process manufacturers are ready for digital transformation.
The report conducted by ARC Advisory Group (ARC) claims that 157 industrial process manufacturers found that there were still barriers in organizational accountability, culture and employee change management that impeded transformation.
According to ARC Advisory Group Vice President Craig Resnick, the road to digital transformation is not a straight path, but it acts as a catalyst for positive change.
“Digital transformation is a key driver of change that opens new opportunities for companies to grow and create value. The key to successful digitalization is an agile, digital-savvy leadership that sets forth a strategic vision for organizations, and effectively infuses a digital mindset across the entire workforce,” says Resnick.
AVEVA’s CEO Craig Hayman, together with senior executives from Worley, the Abu Dhabi National Oil Company and Nestle, all stressed that it was time for the industrial sector to embrace innovative technology to drive positive business outcomes in order to realize greater productivity, optimize energy consumption and the return on investment.
Abu Dhabi National Oil Vice President Digital Abdul Nasser Al Mughairbi says ADNOC’s state-of-the-art operations across its entire oil and gas value chain is experiencing greater efficiencies thanks to digital transformation.
“Modelling, simulation and analytics solutions have enabled us to drive greater production efficiencies as part of our digital transformation journey,” says Al Mughairbi.
Worley Senior Vice President, Integrated Digital Operations David Makin also says their digital evolution started when they recognized a change in traditional ways of working was needed.
“Over recent years, we’ve invested significantly in developing our people to better understand and apply new ways of working in the digital environment; and that’s just one step in our evolution. We continue to look at ways of automating what we do, developing our people and creating more efficient ways of working with our customers that wouldn’t be possible without embracing digital change,” says Makin.
Nestlé Cereal Partners Worldwide Global Operations Excellence Initiative Thierry Friant stresses that digital transformation for them resulted in greater agility and increased its go-to-market times for new product launches.
“In a context where consumers habits are changing quickly, customers asking for more personalization, while competitors become more agile, investing in new technologies is seen as one of the lever to increase speed to Market, reduce total delivered costs, and become more agile. Nestlé recently kicked off a global initiative called connected operations to embrace technologies such as Cobots, AGVs, advanced analytics, predictive solutions, digital solutions to better connect our workforces,” says Friant.
Breaking Barriers to Adoption
According to ARC’s report, the main barriers to adoption are organizational makeup and scalability of use cases and users. The biggest driver of digital transformation for industrial process manufacturers is the need to address the business consequences of unplanned downtime.
Hayman says leaders driving the next wave of transformation need to move fast to stay in the game.
“It’s never been easier to begin a digital transformation program, as cheap access to cloud computing, great connectivity, a merged edge and enterprise combined with analytics and machine learning, means that the ability to digitally drive productivity improvements into the industrial world is now unprecedented. Leaders driving the next wave of transformation know they must move quickly. AVEVA works as a partner to accelerate organizations on their digital journey, helping them accelerate the use of digital technology, realize the value of a digital twin and build a digital team,” says Hayman.
According to Hayman, the benefits of digital transformation in the industrial sector are many. He says improved asset health will result in a reduction in unplanned downtime and better asset performance, while incident prediction capabilities have the power to lower operational risk and protect worker safety. Furthermore, cognitive learning can deliver digitized intelligence resulting in knowledge and experience being freely available throughout the organization.
Hayman says there are three key steps to accelerating the organizational digital transformational journey. Firstly, he urges organizations to ‘snap in’ a unified operating center to visualize the industrial data they already had. Secondly, organizations need to use data to free up the OPEX or operating budget, build a knowledge graph about an asset as well as utilize machine learning and artificial intelligence to predict when it will fail before it fails. This process called Asset Performance Management or APM, is a hot area that has moved very quickly with a lot of innovation. Lastly, Hayman says organizations should use their data to remove risk bringing simulation into engineering design and using the cloud to eliminate legacy workflows.
“Over time, these three steps combine into an end-to-end digital twin, that spans from an organization’s original engineering data through to operational performance and maintenance work. By leveraging the integrated data and analytical capabilities of the individual digital twin, companies can embark on true digitalization to optimize their asset’s lifecycle. This process begins with the initial capital investments right through to the operating phase of a modern plant, refinery, or smart city,” says Hayman.
(Featured image courtesy of AVEVA; Co-Founder and CEO of ADDO AI Dr. Ayesha Khanna at the AVEVA World Summit, Singapore, September 2019.)