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In a recent interview, our expert delves into the intricacies of Smart Manufacturing, the significance of digital transformation for manufacturing companies, and the transformative power of the SIRI (Smart Industry Readiness Index) framework.
Defining Smart Manufacturing
According to the World Economic Forum, Industry 4.0 signifies the advent of "smart" and interconnected production systems. These systems are designed to sense, predict, and interact with the physical world, enabling real-time decision-making. Smart Manufacturing enhances productivity, energy efficiency, and sustainability, contributing to reduced downtime and maintenance costs.
Automation professionals will abide by the technical definition published by The International Society of Automation (ISA).
ISA defines smart manufacturing as "Manufacturing that improves its performance aspects with integrated and intelligent use of processes and resources in cyber, physical, and human spheres to create and deliver products and services, which also collaborates with other domains within enterprises’ value chains".
This collaborative approach extends across functional domains such as supply chain, engineering, product development, and marketing.
The Imperative of Digital Transformation
Digital transformation emerges as a strategic mandate for manufacturing companies, regardless of size or industry segment. A key enabler for competitive advantage, digital transformation enables companies to offer superior products, optimize costs, and operate with net-zero carbon impact.
Early adopters of digital transformation have reported significant improvements, including reduced machine downtime, increased throughput, improved labor productivity, and more accurate forecasting. Furthermore, digital transformation serves as a crucial strategy for business resilience, allowing companies to navigate disruptions in the supply chain and mitigate climate transition risks.
Exemplary Use Cases of Digital Transformation in Manufacturing
Our expert highlights several compelling use cases of digital transformation in manufacturing:
Predictive Maintenance
Predictive maintenance has become a cornerstone in modern manufacturing. By employing sensors and data models, companies can infer equipment health, preventing catastrophic failures and minimizing disruptions to production capacity and quality.
TotalEnergies, a world leading energy company, automates rotating equipment health monitoring using IoT technologies, reducing unplanned equipment down time without incurring higher manhours. Learn more about the use case.
Robotics
The integration of robotics in manufacturing processes is another success story. Inspection robots, robotics welding, and Automated Guided Vehicles (AGV) have become commonplace, enhancing efficiency and precision.
TORO, a leading Norwegian food producer, revolutionized their operations by automating more than 30,000 intra-factory movements that were previously done manually, now seamlessly executed with automated forklifts. Learn more about the use case.
Track and Trace
The use of barcode and RFID technology for tracking material movement and tools is a game-changer. This not only enhances electronic work instructions but also prevents mis operations.
Troy Design & Manufacturing, a vehicle conversion specialist based in Chicago, deployed wireless WIP tracking system, is able to monitor step-by step progress of its 150 daily conversions without burdening the operators. Learn more about the use case.
Energy Savings and Environmental Monitoring
IoT sensors and software applications are instrumental in achieving energy savings and environmental monitoring. By capturing real-time data, companies can optimize energy usage and minimize their environmental footprint. Takeda Pharmaceutical achieved an energy-positive building in Singapore using various green technologies, coordinated by a centralized Building Management System. Learn more about the use case.
Production Digital Twin
The concept of a Production Digital Twin, mirroring resources, flow, and constraints of production processes, is reshaping how companies plan and execute their production strategies. Gebhardt Fördertechnik GmbH, a large intralogistics solutions provider from Germany, are able to manage daily planning updates of over 30,000 production orders over a planning horizon of 24 months in advance in under 2 minutes. Learn more about the use case.
These use cases exemplify how digital transformation is not just a theoretical concept but a tangible reality reshaping the manufacturing landscape.
Navigating Digital Transformation: The L.E.A.D Framework
Digital transformation is a journey encapsulated in the L.E.A.D framework:
Learn
Learning key concepts and building a common language is the first step. The transformation involves all functions within a company, necessitating foundational knowledge across the organization.
Evaluate
Establishing a baseline is crucial. Benchmarks and identification of high-impact areas are integral in this phase, allowing companies to understand their current standing and potential areas for improvement.
Architect
Developing a coherent transformation strategy and implementation roadmap follows the evaluation. This strategic planning ensures that digital transformation aligns with the overarching business goals.
Deliver
Implementation is the final phase, realized through a series of initiatives. Starting with pilot projects, scaling, and sustaining the impact ensures a gradual but impactful transformation journey.
For Small and Medium Enterprises (SMEs), the challenges often revolve around the lack of a clear vision, strategy, and systematic roadmap. Before diving into implementation, it's crucial for SMEs to design a roadmap directing resources into the right places.
Assessing Digital Maturity with SIRI Framework
In the quest to measure digital maturity, the Smart Industry Readiness Index (SIRI) framework emerges as a robust tool. Developed in collaboration between EDB Singapore, TUV SUD, McKinsey and validated by an advisory panel of industry and academic experts, SIRI serves as a comprehensive assessment matrix with 16 dimensions categorized under processes, technology, and organization.
The application of the right framework is crucial, ensuring success by riding on the shoulders of giants. When companies apply SIRI, they tap into a global benchmarking platform, accessing insights from a diverse array of manufacturing segments.
The framework's accessibility and global adoption contribute to what is well regarded as the largest benchmarking database in the world.
Leveraging SIRI for Optimization and Efficiency
Manufacturers can optimize production processes and improve efficiency through SIRI by following these steps:
Start with SIRI Assessment
The first step is to conduct a SIRI assessment, establishing a baseline. This crucial information serves as the foundation for understanding the scope of the step change required.
Focus on High-Impact Areas
The SIRI assessment report recommends focused dimensions that can create a high impact according to assessed company's profile. This targeted approach ensures that efforts are directed where they are most needed.
Develop Relevant Initiatives
Based on the focused areas identified in the assessment, manufacturers can then develop initiatives or technology use cases aligned with these areas. This strategic alignment ensures that efforts contribute to moving the maturity level of production processes.
SIRI for SMEs: A Game-Changer
One of the pivotal aspects of SIRI is its inclusivity, ensuring that Small and Medium Enterprises (SMEs) are not left behind in the industrial transformation. Recognizing that 90% of companies globally fall into the SME category, the adoption of SIRI by SMEs is crucial for comprehensive and inclusive progress.
The benefits for SMEs are evident in the low entry barrier that SIRI provides for obtaining a first-cut baseline of digital readiness. The framework balances rigor and usability, making it accessible to companies of all sizes. Additionally, SIRI is supported by a global community of practitioners, including consultants, technology vendors, investment bankers, and government officials, reducing project risks by leveraging best practices and benchmarking built into the framework.
The framework balances rigor and usability, making it accessible to companies of all sizes.
Developing Digital Transformation Strategies with SIRI Results
The results obtained from a SIRI assessment play a pivotal role in developing successful digital transformation strategies. The tailored recommendations based on a company's cost drivers, top KPIs, and ambition to become Best in Class (BIC) significantly reduce the time and effort required for making strategic decisions.
Directing Focus to High-Impact Areas
SIRI results offer guidance on where to direct focus, covering process, technology, and organizational aspects. The recommendations span the entire company, mobilizing all functions and employees at different levels.
Guiding Investments for Step-Change
The maturity banding provided by SIRI offers insight into the investment needed for a meaningful step-change. This ensures that the company sets realistic targets, even if it lacks previous experience in digital transformation.
Uncovering Blind Spots
SIRI results often uncover blind spots in identifying opportunities. White space or gray space in organizational roles and responsibilities become apparent, providing an opportunity for organizations to optimize their internal structures.
Success Stories Unveiled by SIRI
The success stories resulting from the application of the SIRI framework are not just theoretical; they are tangible examples of how digital transformation can reshape an organization. The MT Insight Report 2022, published by the World Economic Forum every two years, discloses some of these success stories.
P+F, A German Industrial Electronics Manufacturer
An illustrative example of the impact of SIRI can be found in the journey of P+F, a German industrial electronics manufacturer. In 2018, P+F conducted a SIRI assessment to inform their digital transformation strategy. The assessment highlighted areas where the company could increase its maturity level from defined to digital and from continuous to integrated. Over the next two years, P+F implemented projects based on these insights, reporting impressive outcomes such as a 5-10% increase in productivity for key products, a 50% increase in operational resilience through improved supply chain management, and the introduction of updated HR talent development programs.
These success stories underscore the practical impact of the SIRI framework, transforming theoretical concepts into tangible results.
The SIRI Assessment Process Unveiled
Understanding the process of a SIRI assessment is crucial for organizations looking to embark on their digital transformation journey. The assessment process unfolds in three distinct steps:
Onboarding
The initial step involves an onboarding call, lasting approximately 1 to 1.5 hours, conducted one week before the on-site evaluation. This call sets the stage for the upcoming assessment, aligning expectations and clarifying the objectives.
On-Site Evaluation
The core of the assessment is the on-site evaluation, lasting between 1 to 1.5 days per factory or site location. This hands-on phase involves a detailed examination of processes, technologies, and organizational aspects.
Analysis and Review
The final step is the Analysis and Review phase, involving a debrief of the final report lasting approximately 1 to 1.5 hours. This phase occurs two weeks after the on-site evaluation and serves to discuss the findings, recommendations, and potential next steps.
One crucial principle guides the entire assessment process: the avoidance of being compelled to beat the score. SIRI is not an audit for compliance, and there are no passing marks to aim for. This approach ensures an open-minded evaluation that establishes a true baseline for the organization, setting the right foot forward for improvement.
Final Thoughts: Bridging Industries with SIRI
As we conclude this comprehensive exploration, our expert shares personal reflections on the rewarding experience of being a SIRI assessor. The joy and fulfillment derived from creating value for every assessed company, regardless of their digital maturity level, showcase the transformative power embedded in the SIRI framework.
SIRI's ability to challenge advanced companies for greater heights and guide beginners by bringing a world-class framework to their factories is at the core of its success. The framework is not just a tool for assessment but a catalyst for impactful actions, propelling companies towards a digitally transformed future.
In the words of our expert, the advanced companies thank SIRI for pushing them towards greater heights and tighter end-to-end process integrations. Simultaneously, the beginner's express gratitude for introducing a world-class framework to their factories, an opportunity that was previously unaffordable.
The profound impact of SIRI, as exemplified by success stories like P+F, reiterates that the journey toward digital transformation is not a sprint but a marathon. The real impact emerges not just from the assessment but from the actions taken in response to the insights gained, aligning with the fourth step of the L.E.A.D framework – Delivery.
In conclusion, the combination of Smart Manufacturing principles, digital transformation imperatives, and the transformative power of the SIRI framework creates a roadmap for industries to navigate the complexities of the fourth industrial revolution. The journey is marked by challenges and triumphs, but with the right tools and frameworks, companies can unlock the full potential of a digitally transformed future.
Notes
- “TotalEnergies Eliminates Downtime Using Vibration Sensors - Use Cases.” TWTG, https://www.twtg.io/insights/use-cases/totalenergies-vibration-sensor/. Accessed 3 Mar. 2024.
- TORO’s Goods Are Safely Moved by Driverless Trucks from Toyota. https://toyota-forklifts.co.uk/case-studies/toros-goods-are-safely-moved-by-driverless-trucks-from-toyota/. Accessed 3 Mar. 2024.
- “Track and Trace | Zebra.” Zebra Technologies, https://www.zebra.com/content/zebra1/ap/en/solutions/industry/manufacturing/use-case/track-and-trace.html. Accessed 3 Mar. 2024.
- This New Building Produces More Energy than It Consumes | Takeda Stories. https://www.takeda.com/our-impact/our-stories/this-new-building-produces-more-energy-than-it-uses/. Accessed 3 Mar. 2024.
- “Gebhardt Fördertechnik GmbH.” Asprova GmbH, https://www.asprova.eu/en/references/gebhardt-foerdertechnik-gmbh/. Accessed 3 Mar. 2024.
