Build the Foundation First

The manufacturing industry has to deal with disruptions in the workforce, such as worker shortages, challenges in their supply chain, sustainability requirements and changing market dynamics. In what stage of automation are manufacturers and what are the main challenges when it comes to o automation and digitization?

We asked HSO Enterprise Architect Peter Buenk for his view on this topic.

Q: When you look at enterprise automation and digitization in manufacturing, what do companies struggle with most?

A: A very big challenge for manufacturing companies is that they have always been building all kinds of applications on their own, on-premise, over the years, and to their liking. These systems support their way of working, but when it comes to a transition to the cloud, this means a huge change. Left or right, the need to standardize is very urgent. Because our customers don't have 20 development teams that can keep up with the required digital transformation. Standardizing processes to enable further automation is a huge challenge in which people play a crucial role. Because it will have a lot of impact on their daily work.

Q: There's another question preceding that. These companies need to change, but why exactly?

A: I call this the legacy trap: as a company you have built so much yourselves, you're in a safety net of custom-made and local applications. On a micro level that's fine, but on a higher level, it blocks innovation and change. You often have to sell no to customers, teams, or suppliers because products are old, no longer in service, or people are gone... All these reasons make it hard to change. But the need to change is rising, because of globalization, increasing regulations and new customer demands. You can't wait any longer, especially since the challenge of getting out of that "trap" is only increasing. The longer you wait, the greater the risk that competition will catch up with you.

Q: What other drivers for change do you see?

A: One of the drivers for a more adaptable IT landscape, is that customers our manufacturing companies don't want to invest so much upfront anymore, but want to buy a service or a subscription instead. To be able to deliver on servitization you need to modernize, because old relationship and finance systems often cannot handle this.

Another driver of change is that customers expect a personal approach and service. You can no longer produce for a generic market. Personalization also requires different systems.

Old systems and processes get in the way of automation, speed and agility. The foundation of digital transformation and the ability to change is missing in many companies. Manufacturing companies traditionally have a tendency to do everything as efficiently as possible. But the consequence of this focus on cost management, is that optimizations, where investments come before benefits, often have not been done in the past. We see at our customers a history of a lot of ad-hoc repairs, rather than addressing the fundamental problems of the system.

Q: What exactly do you mean by the foundation for digital transformation?

A: That foundation consists of several parts: first, the ability to change, the will and understanding. You must understand what is needed, then get what that means for the company, and then execute. That's more or less the soft side. Second, on the hard side, you need a platform for data and integrations. That's really at the root of all modernization and automation. Our customers are very dependent on integrations because they work with many different systems. That means that good master data is critical. If these conditions are not met, progress is blocked.

Of course, you can hang your machines full of sensors. And then you get a lot of information from customers, usage data, but that’s where the actual work begins. How can that data work for you: connect the information to production, to supply chain, to your service process. So my advice is: get the foundation in order first.