Building a Digital Transformation Foundation

Technologies Beyond the Enterprise Resource Planning (ERP) System

For over thirty years manufacturers have invested in technology to support their day-to-day operations. For instance, almost all have implemented ERP technologies. ERP enables transactional process capabilities ensuring the right materials are procured/produced at the right times, in the right places.

“When the digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.”

– George Westerman, MIT

Focus on establishing new capabilities rather than implementing technology, because data is useless without meaning. The objective is to transform the traditionally siloed supply chain capabilities into a Digital Supply Network of capabilities, as depicted in the figure below.

Figure 1: Deloitte’s Digital Supply Networks

The five additional technologies explored in this article are designed to build foundational capabilities that can significantly improve your operations, product development lifecycle, and acquisitions.

1) Product and Application Life Cycle Management (PLM/ALM) Technologies

PLM/ALM augments customer experiences through collaboration and closed-loop information flow. These technologies are foundational for developing a Digital Twin of your products and processes. This Digital Twin can be used to optimize how you fulfill customer expectations and needs.

Capabilities enabled:

  • Part Rationalization
  • Requirements Management, Systems Engineering, and Customer Experience
  • Change Management

  2) Manufacturing Execution Systems (MES) Technologies

MES increases shop floor controls by managing information surrounding your materials, people, processes, and equipment. MES can also offer embedded Statistical Process Control (SPC) capability, which can alert operators when processes drift out of control. MES interactive tools, such as dashboards, wearables, and mixed reality can generate healthy competition; improving operator engagement where/when it matters, enabling faster and better decision making.

Capabilities Enabled:

  • Quality & Process Control/Analytics
  • Intelligent Production Planning and Scheduling
  • Traceability, Serialization, and Genealogy

  3) Enterprise Asset Management System (EAM) Technologies

EAM can be leveraged to optimize asset performance by collecting relevant asset information. These technologies track and monitor maintenance activities and important asset information, which can then be linked to performance data from the MES. Linking MES information with EAM technologies enables condition-based monitoring and remote asset monitoring, such as through a control room.

Capabilities Enabled:

  • Condition Based Asset Management
  • Remote Monitoring
  • Total Productive Maintenance

  4) Enterprise Quality Management Systems (EQMS) Technologies

EQMS covers Quality Management Systems elements. These technologies enable compliance/conformance assurance to standards and regulatory requirements. They also provide insights into how internal/external KPI’s effect, and are affected by, operations and new product development. Once the linkages to PLM and MES are established you can become more proactive to solve systemic problems plaguing your organization.

 Capabilities Enabled:

  • Closed-Loop Quality & Regulatory Management
  • Nonconformance Management
  • Performance Monitoring including Cost of Poor Quality (COPQ)

  5) Intelligent Digital Supply Chain Technologies

End-to-end visibility through the supply chain can uncover significant opportunities for cost out and value creation. These enabling technologies leverage big data across your global operations enabling Sales and Operations Planning (S&OP) and optimization modeling of your supply chain network.

Capabilities Enabled:

  • Collaboration including Global Sales and Operations Planning
  • Supply Chain Control Tower and Network Modeling
  • Procurement Intelligence

The secret is to optimize these enabled capabilities by seamlessly architecting linkages and closed loops between technologies. This includes establishing strong integration between solutions, to gain new insights and optimize their performance and stability. It also includes defining parent/child relationships, governance, and a fit/gap to better practices. Figures 2 to 4 highlight best in class (macro to micro) approaches to technology architecture.

Figure 2: CIMData’s Recommended Capabilities Model

Figure 3: PwC’s Recommended Smart Factory Model

Figure 4: Industrial Internet Consortium’s IIOT Architecture Framework

While a big bang platform approach to these solutions can realize significant benefits, advancing Application Performance Interfaces (API) allow your organization to tailor technologies that derive the most value. What once cost millions to deploy can now be done in the thousands of dollars.

The Impact to Your Firm

Case studies from around the world have showcased the value of these technologies. The diagram and bulleted list below highlight some of these value drivers.

Figure 5: Illustration of the capability value drivers

 Speed:

  • Faster/improved decision making (single source of truth; transforming data to insights to value)
  • Increased early price potential

 Quality:

  • Increased accuracy/completeness of information
  • Reduced rework from real-time error proofing, traceability, and analytics
  • Improved process capability reducing COPQ

Flexibility:

  • Increased flexibility to meet changing customer needs
  • Ability to quickly adjust for disruption or ideally, prevent disruption

 Efficiency:

  • Increased collaboration, harmonization, and reuse
  • Reduced hours spent on wasteful activities
  • Automated inputs/outputs (paperless manufacturing)

New Business Models:

  • Freed up resources for bigger opportunities
  • Establishing new product/service offerings
  • Improved aftermarket collaboration

To better gain widespread adoption, establish a state-of-the-art UI/UX and a robust support model. If after deployed, your way of working is still manipulating data using Microsoft Applications, you have work to do. Without these foundational technologies, your organization will struggle to deploy more advanced/disruptive technologies, which will rapidly set you apart from competition. And as with any transformation, it’s not about technology. You must begin by transforming your people, organization, and processes.