Forbes: How Manufacturers Can Get IT And OT To Work Together

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Organizations worldwide will spend $2.1 trillion a year on digital transformation projects by 2021. Considering this is double the 2017 levels, this clearly shows that digital transformation hardware, software and services is serious business.

And few business functions are hit harder by digital transformation than Information Technology (IT) and Operational Technology (OT). Traditionally, these departments have operated in isolation, but digital transformation forces them to align.

This convergence is often met with resistance, so the big question is how can manufacturers successfully align IT and OT?

By showing IT and OT employees exactly how their departments benefit from aligning their processes, manufacturers can start embracing Industry 4.0.

The silo challenge

A factory is like a living organism with many different parts to it; there’s the materials, the machines, the people and the systems that they use to make high quality products.

IT and OT are key parts of that living organism. However, the challenge for manufacturers is that IT and OT often work in silos with little interaction, even when it concerns critical production data. This results in a lack of visibility into how each department’s role fits in the manufacturing organism. Consider the IT decision maker. Their chief concerns are around privacy and security; that’s what keeps them up at night. While the Operations team is more interested in uptime and safety.

So it’s no surprise that as digital transformation forces these two departments to align, conflict will arise. Many manufacturers have discussed the convergence of IT and OT for some time, and many fear the change.

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Forbes: Data Is The Foundation For Artificial Intelligence And Machine Learning

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Artificial intelligence (AI) and machine learning (ML) are going to have a huge impact on manufacturing. With these technologies, manufacturers will gain the computational power needed to solve problems that humans can’t possibly solve. They will ultimately be able to provide prescriptive answers to production issues manufacturers have been asking for centuries. Namely, how do we make our product as efficiently as possible, with zero waste and the least amount of downtime.

As with most reports about groundbreaking technology, this discussion of the ‘holy-grail’ is way ahead of industry practices. The vision serves a useful purpose in suggesting what’s possible. But with many manufacturers lacking the data infrastructure necessary to obtain real AI and ML capabilities, the journey towards perfect production can also be so abstract that it confuses the very people looking to achieve it. I’m often asked by corporate leadership, “Where and how do we adopt AI technology?”

Begin with data.

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Forbes: How Industry 4.0 Helps Manufacturers Solve Workforce Challenges

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Part 1 in a two-part series exploring the less tangible benefits of Industry 4.0.

Stuck between a soon-to-be retired workforce and a cohort of young engineers and operators with comparatively less experience, manufacturers are in a bind. They have job openings, but can’t find qualified people to fill them.

While the general public believes that all of the manufacturing jobs are going away, unemployment figures tell a different story. Since 2011, manufacturing unemployment has been lower than overall unemployment, sometimes by wide margins.

Exacerbating the issue is the skills gap, which means the jobs that employers need filled require skills that most of the unemployment pool doesn’t have. Manufacturers need highly skilled engineers and machine operators, but often times it’s those without this required skill set that are looking for work.

The result is that almost every factory I visit has open engineering positions and is struggling to run their business with a workforce that’s smaller than ideal.

One of the solutions to this conundrum is technology. Industry 4.0 technologies amplify the contributions of every employee, from the highest skilled engineer to the entry-level operator, increasing their productivity, so manufacturers  can do more with fewer employees. Here’s how it helps address each aspect of manufacturers’ workforce problem.

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Forbes: ‘What’s At Stake In The Race To Industry 4.0?’

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As Industry 4.0 gains momentum in the manufacturing world, executives are calculating the risk-reward ratio of becoming early adopters of this technology. Some are considering the cost, in money and time, against the potential gains. Others are determining whether they should wait until their competition shows definitive proof of the benefits before striking out into the largely unknown territory. Still, others, stung by the over-blown promises of overly complex and costly earlier technologies, are simply wary. All of them are working to figure out what exactly is at stake in leading or lagging behind the Fourth Industrial Revolution.

To put it simply, the answer is that the future of your business is at stake. But most executives will see that answer as too simple or abstract, if not too glib.

To truly understand the risks and rewards of being among your industry’s leaders during this transformation, bring the debate down to earth. Consider one of the fundamental issues you deal with every day: the cost of poor quality and the cost of downtime.

Reducing the cost of poor quality and downtime

The daily battles that manufacturers wage to make better products and keep machines running figure prominently in Industry 4.0. Driving down the cost associated with these basic elements of manufacturing are among the most critical challenges a manufacturer must address — and for good reason.

The true cost of poor quality — the sum of the costs from repair, rework, scrap, service calls, warranty claims and write-offs from obsolete finished goods — can range between 5 and 30% of a manufacturing company’s total revenues, with the range for a majority of companies falling between 10 and 20%.

And that’s not counting the costs associated with lost customers.

This profit leakage is a staggering amount for an individual company, alone. When you calculate how it compounds through the supply chain, impacting the bottom line and ultimately the customer, the value of fixing the problem becomes clear.

Likewise, the cost of downtime reduces profitability in a variety of ways too numerous to detail here: lost production and capacity, higher labor cost per unit and inventory costs and added stress on employees and machines. When the machines are down, everyone’s attention is diverted from growing the business, whether it’s responding to new opportunities or innovating new products and services.

Though variable industry to industry, one survey places the cost of one minute of downtime in the automotive industry at an average of $22,000 per minute. If you can reduce your downtime costs to a fraction of that, the benefits to the bottom line alone will be substantial.

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Forbes: ‘Industry 4.0: The Journey Towards Perfect Production’

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I was thrilled when Forbes invited me to contribute to their website on the future of manufacturing. Given all the time I spend speaking to people in manufacturing about Industry 4.0, its competitive advantages, and how they can leverage their factory data to improve production, I’m excited to now share my perspective with the readers on Forbes.

Below is an excerpt from my first article in the series. Join me every other week for my take on how manufacturers should approach Industry 4.0 in addition to other challenges facing the industry.


“Manufacturers are under constant pressure. They need to decrease waste while increasing uptime, throughput and quality to continue to compete effectively. Manufacturers are no stranger to disruption either, and in recent years lean manufacturing practices and automation have applied further pressure on them, even forcing some out of the game altogether.

The next disruptive phase in manufacturing is already well underway. “Industry 4.0” builds on the previous three phases of industrialization – mechanization, mass production and controls. It’s an intelligent production environment enabled by an integrated platform of enterprise data systems, the Internet of things (IoT) and cloud computing.”

Industry 4.0 provides insight into variables or anomalies that can cause performance issues, such as machine failures, bottlenecks or waste, and it is going to completely transform the manufacturing sector and fundamentally change the established relationship between the makers and consumers of products.

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