Unlocking the value of Digital Transformation

Posted on 28 Jun 2019 by Jonny Williamson

Many companies are either talking about or investigating how they can start to unlock the benefits of digital transformation, yet most are still unsure of where to start and what potential business outcome improvement it can deliver.

In his keynote at this year’s Manufacturing Innovation Summit, Mike Loughran explained how Rockwell Automation has embarked on its own digital transformation journey, the business value delivered, the lessons learnt and its future plans.  

Digital Transformation permeates almost every business conversation, and with good reason. The global growth of the middle class is having a direct impact on the amount of goods and services being demanded, putting pressure on a wide variety of industries.

There is also a very real skills gap with an aging workforce at one end and a lack of people pursuing careers in industry at the other. On the technology side, the convergence of IT and operational technologies (OT) continues to grow.

On the equipment side, machines are getting older and more difficult to maintain and keep running (though most businesses are under financial pressure to do exactly that).

Global trends - Rockwell Automation - Manufacturing Innovation Summit

Mike Loughran revealed some key findings from the latest research by Rockwell Automation:

In the EMEA region, the most common challenge cited by executives was competing demands on organisational resource.

The second most common challenge was the need to develop a digital transformation strategy, followed by a lack of initial CAPEX funding.

Offering a global perspective, Loughran noted that having to develop a digital strategy was the top challenge for both Latin America and Asia Pacific. For North America, it was integrating new systems and processes into legacy infrastructure.

What’s Rockwell Automation’s answer to these challenges? The Connected Enterprise

“All businesses want faster time to market, lower total cost of ownership, improved asset utilisation and improved enterprise risk management. The Connected Enterprise is a practical way to make these concepts a reality,” Loughran said.

Digital transformation starts with bridging the physical and physical

A world of interconnected data has transformed the way we live and work – and our expectations.

Customers, partners, employees and other stakeholders expect customised products, seamless and personalised experiences and immediate access, Loughran noted.

To meet those expectations, manufacturers must:

  • Seamlessly bridge IT and OT
  • Connect users to data and insights from disparate or legacy equipment and systems, facilities and multiple vendors
  • Create and visualise a ‘single version of the truth’
  • Easily access real-time data to inform decision-making
  • Apply game-changing technology, such as augmented reality, to drive increased effectivenes

Several years ago, Rockwell Automation made the decision to embark on its own digital transformation journey and apply these concepts to its own production facilities.

The business operates in a very complex environment. It handles 400,000 SKUs ranging from individual components and control and visualisation platforms to complete turn-key solutions. It has 17 production plants and each order can contain up to 200 SKUs.

Today, Rockwell Automaton is living the Connected Enterprise, according to Loughran.

The company has developed and validated an approach for integrated IT and OT and, in doing so, has reached an unprecedented level of collaboration across its organisation and with suppliers and customers.

This collaboration links processes and facilities in new ways, and – crucially – allows critical lessons to be shared and learnt from.

The Connected Enterprise - Rockwell Automation - Manufacturing Innovation Summit

“It starts with an assessment, it’s really about change management. Are people willing to innovate the processes that have led them to success? Can they envision what it will mean to leverage accurate, real-time information?” said Loughran.

“Then you need to evaluate your secure and upgraded networks and control. This is where the intersection of people, process and technology often gets challenging. You need a process that prioritises where to upgrade devices and the network.

“Then you can start getting into the analytics and reaching higher levels of productivity, quality, capital-avoidance and cost-efficiency. Finally, there is collaboration and extending the IT/OT capabilities to other business units, suppliers and customers – and to their people, processes and technologies.”

As a result of its digital transformation journey, Rockwell Automation has achieved:

  • Inventory – 120 to 82 days
  • CAPEX – 30% in capital avoidance
  • Deliver – 82% to 96%
  • Lead times – reduced by 50%
  • Quality – 60% reduction in PPM

“We started with the basics, by value-stream mapping our processes, by looking at the work practices, the culture that existed on the plant floor. There is no shortcut to understanding where your pools of potential of savings are on the plant floor,” concluded Loughran.

“Technology cannot help you if you don’t go through the basics. After that, we looked at the opportunity to reduce inventory in our plants, to be able to error-proof our processes to reduce the need for rework. And the results, measured by things like time to market, are tangible. And they are driving increased sales.”