Industrial Transformation Blog

A recent LNS Research article highlighted the need for Industrial Transformation (IX) exemplars, identified three major reasons why IX programs stall, and four major areas that companies need to focus on for ensuring a robust and scalable IX program.

LNS Research had the pleasure to attend Rockwell Automation’s 28^th Annual Automation Fair and companion Process Solutions User Group in Chicago, IL November 18 through 21st, 2019. Rockwell Automation noted there were over 16,000 attendees at the event making it the largest Rockwell Automation Fair ever. They also hosted “Automation Perspectives” for the media and analysts on the 19^th of November.

On Wednesday, December 11, 2019, LNS Research hosted a webcast on “Industrial Transformation (IX) in Aerospace & Defense". The presentation covered the scope, scale, strategy, budget, organization and technology choices of Industrial Transformation (IX) Programs globally and in the Aerospace & Defense (A&D) industry specifically. We also looked at another regulated industry, Life Sciences, to validate our conclusions as to why A&D companies are leading in IX. The session concluded with detailing the 5 Best Practices for driving IX. Here we will look at the 6 most common questions that came out of that session.

It’s been said many times that “age is but a number”, but when it comes to the industrial workforce, age indeed matters. Although an aging workforce affects all sectors, manufacturing is being particularly hard hit. The median age of a manufacturing worker rose from 40.5 to 44.1 from 2000 to 2018, while the median age for the U.S. labor force overall was 39.3 in 2018. (Source: Manufacturing Institute, 2018).  This is having a profound impact on industrial organizations.

Industrial Transformation, or IX, is new. There is no play book. There is no proven methodology. There is no exemplar. The improvement programs of the last generation are clear – Toyota and Lean, GE and Six Sigma, Dupont and Operational Excellence, among many others. But why were these companies successful in these endeavors – and why did they share them with the world?

IIoT has become a primary talking point about not only Industry 4.0 (I4.0), but all of the other digitalization topics around I4.0 such as analytics, artificial intelligence, augmented reality/virtual reality and digital twins. The ability to get information from the factory floor and move it anywhere and to anyone cheaply and in real time has driven IIoT into virtually every manufacturer and asset intensive industry client and vendor community discussion lately. With so much focus, both from management and leadership and technical and engineering staff, why then, have so few industrial internet of things (IIoT) projects moved out of pilot purgatory and into full scale production. Some will argue the business case isn’t there yet, others will argue that the technology is not ready or scalable yet while others say something else is lacking like leadership support or adequate deployment and support skills. There is possibly an even more fundamental cause projects are stalling; cultural wars inside the organization are inhibiting progress.

We recently attended Schneider Electric’s global innovation summit in Barcelona. While LNS Research is most focused on the industry division, it is very interesting to catch up with Schneider Electric’s overall strategy for efficiency and sustainability across the energy and automation solutions spaces. It is great to see a major energy company like Schneider Electric being so singularly focused on sustainability and for that attitude being driven from the top down and into industries where the emphasis on the planet has sometimes been seen as somewhat less important.

In the last several weeks there have been two big stories about major manufacturers abandoning robots, reverting to manual labor instead. Boeing struggled with fuselage assembly robots that were supposed to drill and rivet 777 aircraft fuselage sections and will revert to using human machinists instead. Adidas announced it was closing its “Speedfactory” plants in Germany and is moving production back to Asia where it has relied on humans to assemble footwear. Adidas has said that it does plan to introduce some of the Speedfactory technology into its Asian plants in the future. With two large multinational manufacturers seemingly reducing automation, in both low volume (Boeing) and high volume (Adidas) environments it may lead other manufacturers to question whether automation investments are wise at this time. The best way to answer that question is to understand the limits of technology, the organizational readiness to accept technology and assessing how technology will support the business strategy.

Technology has almost always proven most beneficial when it operates within an ecosystem. The adage “the whole is greater than the sum of the parts” is especially true in the world of technology. Smartphones have changed the world because they operate within multiple technological ecosystems. If they did not allow phone calls to landlines or to subscribers of other providers, they would be of limited use. Without GPS much of the smartphones value would gone. Bluetooth makes lining the smartphone to other devices easy and provides not only wireless headsets but connectivity to vehicles and other devices. What makes all of this connectivity work? Standards. The same holds true in the industrial automation sector.

During our inaugural industrial transformation (IX) event, The IX Event, principal analyst Tom Comstock led a roundtable discussion about IX in regulated industries, focusing on aerospace and defense and life sciences (pharmaceuticals/biotech, medical device, etc.). These industries provide an interesting contrast in approaches to IX, with one leading the way and one trailing.