Industrial Transformation (IX) is the proactive and coordinated approach to leveraging digital technologies to create step-change improvement across the value chain. IX is a key mechanism that Consumer Products and Goods/Food and Beverage (CPG/F&B) companies are using to address the changes rolling across their industry: pandemic driven demand fluctuations, worker shortages, increasing competition from local brands, new channels to the consumer, and ever-increasing use of contract manufacturers and copackers. Yet the industry is falling behind in IX and is paying the penalty in the form of sub-optimal financial performance compared to manufacturers more generally.

LNS Research has defined Industrial Transformation (IX) as the proactive and coordinated approach in leveraging digital technologies to create step-change improvement across the value chain. By definition, we are contrasting IX from such Continuous Improvement (CI) programs as Lean or World Class Manufacturing (WCM) by its focus on step-change. Further, we consistently note that IX is particularly challenging as solutions must be deployed across a manufacturing network that is diversified by manufacturing models, culture, Operational Technology (OT), and digital maturity.

Industrial Transformation (IX) is the proactive and coordinated approach in leveraging digital technologies to create step-change improvement in industrial operations. Industrial Transformation has become a very real phenomena across industrial operations. More than two thirds of companies surveyed have implemented, are currently implementing, or plan to implement an Industrial Transformation (IX) program. The worldwide COVID pandemic is not slowing IX down with 78% of companies maintaining or accelerating their programs in the face of the economic turmoil created by the pandemic. IX Leaders are three times more likely to be increasing their IX budget in face of the pandemic.

Every year, LNS Research analysts put forth predictions around the Industrial Transformation (IX) topics where we focus our research. In December 2020, I made five predictions for 2021. This year I am going to make only one prediction – in multiple parts – but I will drill into that one prediction more extensively. To help you to decide whether my multi-part prediction for 2022 is worth considering, I am concluding this blog post with an assessment of how I did in my 2021 predictions (spoiler alert: by my count, I was 4 out of 5 but you can decide).

Follow the money to see the real story

Google the phrase “Pilot Purgatory” and you will see a raft of press articles about the state of Digital Transformation and the Industrial Internet of Things (IIoT). McKinsey and Company, Deloitte, and a series of other firms have published several articles on “pilot purgatory” in IIoT, Digital Manufacturing, and Digital Transformation. IIoT and Artificial Intelligence/Machine Learning (AI/ML) vendors often exasperatingly discuss the successful implementations they have done at the company’s home office that have not translated into wide-scale rollouts. These vendors curse “pilot purgatory.”

Given all the brouhaha, one would expect that companies deploying these pilots would feel “stuck in” pilot and that getting to a wide-scale rollout was a key challenge in front of their Industrial Transformation (IX) Program. But when we surveyed industrials, we found just the opposite. Few companies felt “stuck in” pilot mode and only a fraction of companies identified “moving out of pilot phase” to be a key challenge. So clearly, pilot purgatory is fake news! Let’s look at the facts and see how we can reconcile these different perspectives.

As the year 2020 ended, LNS Research published a set of three Research Spotlights highlighting the three alternative architectural paths available for manufacturers around Industrial Transformation (IX). In the 3^rd Spotlight we introduced the concept of Industrial Transformation Strategic Partners. As part of the run-up to the release of the LNS Research IX Strategic Partners Solution Selection Matrix™ let’s revisit our definition of IX Strategic Partners, highlight the criteria we use to evaluate these vendors, list the vendors, and conclude with advice to manufacturers.

In a recent blog post, our fearless leader, President and Principal Analyst Matthew Littlefield, noted that, “Although no one can argue with the technological innovation and productivity gains that lighthouse plants demonstrate, our data shows that including lighthouse plants as part of your Industrial Transformation (IX) program does not correlate to success.”  This post builds on that earlier post and drills into when lighthouse strategies can be effective and what is an alternative strategy more correlated to success.

We all know the reality of discrete and batch manufacturers. If you walk into virtually any manufacturing plant, you will find literally hundreds of manufacturing computing applications being utilized. A few of those applications, ERP most prominently, are generally supported by the corporate IT staff. A wider number of those applications, automation and MES, are typically supported by operations itself via the OT team or the “shadow IT” team (the manufacturing engineers, etc., that are providing day-to-day support to these systems). The vast majority of applications are custom – often built in Excel, Access, or Java – and are not well-supported and virtually impossible to deploy across sites. And, the picture gets worse: despite all these applications, operational personnel are still looking for more technology to help reduce manufacturing costs and improve quality.

LNS Research has been writing about Digital Twins for a number of years. We still find our manufacturing clients confused by the opportunities presented by Digital Twins and unclear on how to proceed. In face of this reality, we wanted to set up a simple framework for thinking about Digital Twin use cases and answer some of the most common questions we hear about these concepts.

LNS Research had the opportunity to participate in ETQ’s virtual event, Quality Vision 2021. The virtual mainstage was dominated by discussion of the company’s concurrent new product release, Reliance NXG, a cloud-native version of Reliance that is reportedly fully functional.