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Untold Benefits of Digital Transformation for The Industrial Sector
September 20, 2019 News

 

The benefits of digital transformation in the industrial sector are many. Improved asset health will result in a reduction in unplanned downtime and better asset performance, while incident prediction capabilities have the power to lower operational risk and protect worker safety. Furthermore, cognitive learning can deliver digitised intelligence resulting in knowledge and experience being freely available throughout the organisation.

At a media session at the Aveva World Summit 2019, AVEVA’s CEO, Craig Hayman, alongside senior executives from Worley, leading provider of projects and expertise in engineering, procurement and construction, the Abu Dhabi National Oil Company (ADNOC) and Nestle Worldwide, stressed that it was time for the industrial sector to embrace innovative technology to drive positive business outcomes in order to realize greater productivity, optimize energy consumption and the return on investment.

While finance, insurance, health and retail sectors have rapidly harnessed the Internet of Things, artificial intelligence and big data to meet the changing needs of their customers, the industrial world has been slower in adopting new technologies. Recent research, conducted by ARC Advisory Group (ARC), of 157 process manufacturers found that there were still barriers in organisational accountability, culture and employee change management that impeded transformation.

“It’s never been easier to begin a digital transformation program, as cheap access to cloud computing, great connectivity, a merged edge and enterprise combined with analytics and machine learning, means that the ability to digitally drive productivity improvements into the industrial world is now unprecedented, “commented Craig.

At the conference, Craig Hayman also outlined three key steps to accelerating the organisational digital transformational journey.

“Over time, these three steps combine into an end-to-end digital twin, that spans from an organisation’s original engineering data through to operational performance and maintenance work. By leveraging the integrated data and analytical capabilities of the individual digital twin, companies can embark on true digitalisation to optimise their asset’s lifecycle. This process begins with the initial capital investments right through to the operating phase of a modern plant, refinery, or smart city.”

 

The stages of digital transformation

According to Craig Resnick, Vice President of ARC Advisory Group, the digital transformation journey is not a straight path. It involves a lot of data, process, people, technology and customers. He explained that digital transformation has to be able to connect through all this to reach the end goal.

“Digital transformation is driving change at an unprecedented pace and opening up new opportunities. Automation, robotics, IoT, AI and big data offer big promise but can be light on return. Accelerating return on these investments requires agile, digital-savvy leadership and strategic vision to infuse a digital mindset across the entire workforce.”

He pointed out that the industrial sector is being more considered and fast followers in this. Around 80% to 85% industrial process manufacturers are piloting advanced technology but only 5% to 8% industrial process manufacturers are ready for digital transformation.

The senior executives from ADNOC, Worley and Nestle shared their digital transformation journey as well as the decisions they made to reach the status of their transformation journey. All three companies are at different stages in their journey. But ADNOC is leading the oil and gas industry.

Abdul Nasser Al Mughairbi, Senior Vice President Digital, ADNOC, said that digital transformation for the oil and gas industry is different from other industries. “They need to collaborate with each other on technology. If they succeed, everyone succeeds, and if they fail, everyone fails as well. The uniqueness of the oil and gas industry is that they have no control over the price compared to other industries. They can, however, control their cost and future,” he explained.

“It is not just about technology. It’s also how we manage tech and people. In the long term, digital technology and people working together will sustain what we are doing in the long term.”

Echoing Nasser was David Makin, Senior Vice President, Integrated Digital Operations, Worley. He explained that Worley’s transformation journey required them to change the way they work. They had to invest significantly to develop their employees to understand the digital environment.

Interestingly, it was a very different situation for Nestle. Thierry Friant, Cereal Partners Worldwide Global Operations Excellence Initiative, Nestlé, said they are only beginning to take a more serious approach into digital transformation. Thierry admitted that the competition is tough with a lot of smaller players beating them in some areas.

“Our customer demands are growing. We need to meet these demands. The business challenge is to be more agile. Industry 4.0 helps us address this. We recently kicked off a global initiative called connected operations to embrace technologies such as Cobots, AGVS, advanced analytics, predictive and digital solutions to better connect our workforces.”

He added that this included reducing more paper-based workloads to free their workforce, automate their process and using Artificial Intelligence technology

“We have so many factories all over the world. We are looking at small solutions. At the end of last year, Nestle set up a team to try experimental projects. We are now in a position to find a vision. We have different categories, and each of our business is defined in their own arcs in IR4.0. Our connected operations just started this year. We are now in the midst of selecting key suppliers to determine key solutions and hope to start our pilot next year. Of course, our financial people are still looking at ROI.”

 

The modern workforce

While Nestle is looking to make the right decisions in their digital journey, Nasser from ADNOC said there is no end to a digital transformation journey.

“We are still scaling up to visualise and create value. Right now, we want to understand more about Machine Learning and Artificial Intelligence and move forward. We are at a stage where we are scaling, but we are still catching up in human capitalisation transformation. And this will take the longest. As the workforce changes, the culture is changing dramatically. There is going to be a loss of knowledge in the process, but we are also looking at a very different type of workers.”

Digital transformation will, of course, have to consider the workforce as well. The modern workforce works very differently from the traditional workforce. Craig pointed out that while the older workforce works with a lot of equipment, they actually have a lot of data in their mind. This includes handling the machines and the information they collect.  He explained that machine learning and AI is doing the same thing. “They are learning from all data made available”.

Nasser concurred with Craig. He said, “We realised we have a lot of inefficiencies and were working in silos. There was a lot of Information silos as there was a lack of information exchange. Once it was all connected, the flow of information was faster.”

All three executives and Craig agreed that organisations need to have a clear road map of what they want to do in their digital transformation journey. AVEVA continues to innovate different solutions to help businesses in their different stages of the journey. At the end of the day, organisations should be able to realise the proof-of-value of the decisions they are making in their digital journey.

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