Industrial Transformation Blog

LNS Research regularly hosts quarterly executive roundtables to present some of our latest research, facilitate conversations among industrial leaders, and provide benchmarking opportunities for our member community. In our most recent executive roundtable, we discussed some of our latest research on the evolution of Industrial Transformation (IX) and the Vision-to-Value pivot.

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.

In my recent The M&A Rumble in the Jungle blog, I highlighted my 2021 number two prediction that "the focus on APM 4.0 will shift to a broader view in terms of Operational Excellence (OE 4.0) and Operational Risk Management (ORM). This will lead to increasing friction, and at the same time opportunity, between APM and EHS, and quality too...competitors will begin to react in 2021, and we'll see more partnerships and M&A ramping up." We said that the trend has been for both EHS and APM vendors to expand into each other’s territory, in most cases bypassing EAM, since APM solutions can drive whatever EAM is in place. While EAM vendors have a solid business, they risk being squeezed out of the running in the battle over Operational Risk Management (ORM), a key objective of what LNS Research calls Operational Excellence 4.0 (OpEx 4.0). Here, LNS Research refers to the fight between EHS and APM where ORM software straddles the divide between APM vendors' asset reliability, integrity, inspection, and maintenance focus, and the process safety management, incident management, and worker risk assessment functionality of EHS vendors.

LNS Research spends a great deal of our time exploring and writing about Industrial Transformation (IX), including best practices around people, processes, and technology. However, many small and mid-sized businesses (SMB) are not ready for the scope and impact of IX projects – they’re already behind in technology adoption, and don’t have the personnel or budget required to take on a full-blown IX project. These companies however must still compete against larger, resource-rich organizations that are moving ahead with the latest technologies and are seeing step-change improvements in their operations thanks to the new Industrial Internet of Things (IIoT) solutions. So, how can SMBs compete?

On Wednesday, June 13, LNS Research co-presented the webcast, “The Connected Worker: Modernize Safety Risk Management” with Gensuite, a Cloud-based EHS management software provider. The presentation examined how safety and health leaders can use digital innovations to enable the connected worker, improve safety, and mitigate risk.

Safety culture has been a long-standing topic in environment, health, and safety (EHS) and operational risk management (ORM) for industrial organizations. It’s receiving more attention in recent years with increased recognition of the essential role of human capital management and organizational dynamics in running a successful business.

Click here to speak with Peter Bussey.