The Future of Industrial Operatations: What's at the End of the Digital Transformation Rainbow?

I had the privilege of being invited as a panelist at ARC Industry Forum Europe 2022 , and having great discussions and thoughts with Christine Maul, Dirk Didascalou and David Humphrey. It took me a couple of days, swallowing the talks, before deciding to nail down my takeaways into this brief.

What is Digital Transformation

In the end, Digital Transformation is a “concept”, a perception and a way to define an aspirational vision with multifarious interpretations diversified from industry to industry, and company to company. You must make prominent your definitions and expectations, setting a common ground.

My two cents, and personal one: Digital Transformation is about democratization and the abundance of technologies, making them suitable to address a wider scope of business problems. I believe that 90% of Digital Transformation is about an intellectual attitude aiming to rethink the operating model of an organization, and its offering's value chains. 10% is just about the enabling technologies (and data).

From Digital Transformation to Continuous Improvement

II believe that Digital Transformation is somehow following the Gartner hype-cycle, and we will reach the "plateau of Productivity" , when it naturally transitions into a kind of new "Digital Continuous Innovation" process, which will be based upon three pillars:

1. Continuous Data+Process Optimization (as described in the next section) power charged by real-time data availability
2. Continuous Product Improvement enabled by a strict interaction among Digital Thread and Digital Consumer Engagement channels, enabling strong products/services tailoring, helping to cross the chasm between R&D/Product development and the final customer/consumer need identification
3. Continuous Learning where workforces must deal with a constants upskill, and willingness to learn and study, elevating any kind of professional activity. The future worker will not execute any more repetitive tasks, conversely he will try to figure how to automatize these, using data, looking for leverage effects.

About Process and Data Driven Organization

I believe that Digital Transformation is somehow following the Gartner hype-cycle. Manufacturing companies are culturally driven by financial KPIs, setting the pace for a continuous industrial processes loss reduction (efficiency improvement). Considering that Digital Transformation is expected to make data (a lot) available, ...well, ideally meaningful data and information.

1. Are we sure that our business processes are efficient or executed as expected? Can we use all of those data to challenge the status quo of the business processes?
2. Shall we continuously revisit and optimize business processes based on continuously gathered data?

I know that Process Mining companies will stand up and claim, "that's what we do! that's what are technologies provide". True, though to succeed, there are some preconditions:

• Culture: Do we have the right "transformational" commitment in the companies, hiring people with a data-driven critical mindset able to challenge convictions and practices strongly rooted in processes, ways of working, and decision-making practices?
• Do we have the proper partitioning and entanglement among the domains of processes and the domains of data? If those are disconnected, there is no way you can easily use data to optimize your processes!

IT/OT Convergence

This is another dilemma affecting many industries with operational technologies in place and many contrasting opinions out there.

My 2 cents:

• In the modern world, it's wrong to think about dual IT and OT.
• At the end, we are just talking about technologies and engineering practices. Surely technologies originated from two different ecosystems of vendors and approaches. We can state that In "OT" there is a predominance of Legacy technologies coupled with physical infrastructure (machinery, power grid, etc.) with a long depreciation cycle
• There is a conviction that Legacy technologies are the only ones that can provide 7x24, five-nine uptime, so they should not revolutionized and blended with IT technologies.
• Though, are we sure that it is the right thinking? What about cybersecurity?  What is ensuring that OT technologies are not vulnerable to modern threats? In one way or another, revamping will be required to modernize the legacy, embedding Zero Trust practices since cybersecurity surface of attack is increasing exponentially with an exponential growth of connected devices/equipment in different industries
• Some IT technical trends (Software Defined Network, Software Defined Everything, Virtualization, etc.) can be easily pivoted and adapted in OT world
• Upskill should occur everywhere, and it's not only something for Automation/OT folks (as I believe many manufacturing companies perceive nowadays). Also IT must be upskilled to incorporate the engineering practices required to run critical infrastructures on a 7x24 basis where there is no rollback, nor a backup if there is a failure on a switch controlling a power grid! Perimeters and common ground of IT/OT will become the Edge Layer. IT must understand that there is "world" beyond the network switches, as the OT engineers must realize that PLCs are just the first tier in the enterprise technology stacks. 

Manufacturing in 10 years

Fully echo what Dirk said. It's so hard to make a prediction because any industry is different, with diversifying economic drivers.

Personally I believe that CPG companies, with industrial processes heavily based on equipment interconnected by material flows, will move more and more to Touch-Less production.

I remark one more time, the only thing I'm pretty sure is the continuous upskill of workforce which will not blindly execute anymore, but will identify way to execute better at any level.

Disclaimer

I started my career when Digital Transformation was transitioning from MS-DOS to Windows, from Mainframe to Client-Server and from C to C++... I've been through Y2K, Internet Bubble, raising of open-sources, Cloud, and since 2014 digital transformation. My mantra is "Looking Beyond Digital Transformation", and I would prohibit to say digital :-) at the end it's all about technologies and continuous innovation.