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Top trends driving digital transformation in manufacturing

May 31, 2018

Smita Dave   

Director, Product Marketing, Business Collaboration and Network Services

Digital transformation is at the heart of every enterprise IT conversation today. Every industry, every company, every CXO is envisioning a journey to digital transformation.

There are four key trends shaping the manufacturing industry at present: industry 4.0, IoT (and IIoT), AI-enabled machine learning and fundamental changes in cloud infrastructures are creating a wave of innovation that is sweeping manufacturing businesses worldwide.

These digital technologies are poised to transform every link in the manufacturing value chain, from research and development, supply chain, and factory operations to marketing, sales, and service.

Becoming smarter with Industry 4.0

Industry 4.0 is taking manufacturing by storm because of its focus on automation and data exchange integrating many or all parts of manufacturing, including physical, cyber, IoT, cloud, and cognitive computing. According to Grand View Research, the global smart manufacturing market is predicted to be worth nearly $400 billion by 2025, up from $172 billion in 2016. Moreover, by 2025, the automotive industry will be the biggest user of smart manufacturing in North America, followed by aerospace and oil industries.

Siemens, for example, recently upgraded its 80-year-old electric motor manufacturing plant in Germany. The digital solutions the company adopted include new control interfaces, connected machines, and improvements to the flow of information between design and the computer numerical control systems that manage machining operations. This increased throughput times by 40% and new machines rates by 60%. They now showcase the plant as a smart factory for existing and potential customers.

Siemens is just one example though. McKinsey experts have reported that a staggering 89% of companies in the U.S., Germany and Japan expect Industry 4.0 to increase their operational effectiveness, and 80% believe that it will even have an impact on their overall business model.

Creating opportunities with the IoT and IIoT

The manufacturing industry is also undoubtedly leading the way in industrial IoT (IIoT). According to Zebra Technologies, by 2022, 64% of manufacturers believe their factories will be fully connected with the latest IIoT technologies.  These technologies have streamlined and simplified many manufacturing processes in revolutionary ways. For instance, production robots now have sensors or software that send information to remote teams; some apps can gather real-time feedback and send alerts on defects or damaged goods; and other apps can help track working schedules of factory workers. These simple yet critical implementations of IIoT reduce cost and waste. Beyond machine-to-machine, the IIoT lets employees contribute data to organisational compilations through both personal feedback and workflow-based analytics. While current figures peg IoT devices around 20.35 billion, due in part to IIoT growth, projections for 2025 indicate that devices will exceed 75.44 billion worldwide.

Smarter with machine learning and analytics

A machine’s ability to learn and adopt intelligent human behaviour may not be a new phenomenon – but it is fuelling further demand for connected sensors and ways to collect and move data to analytics systems, and transforming the nature of manufacturing. It is now easy to reduce wasted time and materials, as well as optimise accuracy and workflow through spotlighting previously missed production opportunities; influence changes in daily scheduling as per employee productivity peaks and lags; and manage raw materials and manufactured parts flowing through a manufacturing network.

Xylem, a maker of water management solutions is on that journey. The company is not only leveraging social, mobile, IoT and analytics in a service-oriented architecture to help connect employees with customers, but is also building a roadmap for a new service delivery platform and savings through process improvements, standard technology platforms and AI-enabled robotic process automation.

Cloud, fog, edge – getting the architecture right

Industry 4.0, IoT (and IIoT), AI and analytics are paving the way for better-integrated workflows and smarter manufacturing. Yet, all of the technology innovations that are shaping this industry rely on two things: cloud computing and cloud connectivity. Volume, latency, mobility, reliability, security, privacy and network bandwidth are common networking challenges in today’s industrial plants. These challenges are fuelling the need for a more open architecture. Whether moving to cloud application platforms, open systems, or fog computing and lightweight edge solutions, the idea is to make the challenge of industrial big data manageable.

Manufacturing is quickly transforming from mass production to bespoke solutions. Not only must the right products be delivered to the right place for the right price, the process of how products are designed and delivered must be at a higher level of sophistication harnessing the latest IoT, IIoT and M2M technologies. To strengthen their competitiveness and move fast in this increasingly digitised environment, more and more manufacturers are now working with digital partners to help make their vision for the future a reality – today.

Read more about taking the brakes off the Internet of Things here.