Machine and Process Management

In the “efficiency economy,” digitization changes everything

The Conference Board CEO Challenge 2013  conducted earlier this year asked CEOs, presidents and chairmen around the world to identify their top 10 business challenges for the coming year. The results revealed that their two main concerns are “human capital” and “operational excellence”.

The study went on to suggest that the 729 survey respondents “…appear somewhat less concerned than participants in previous years about external factors in the business environment that they cannot control (e.g., macro issues of risk and regulation). Instead, they are taking a hard look at their own organizations and focusing on people-driven strategies to counter slow markets and economic conditions, and improve performance.”

I have written before about the move from capex to opex One size no longer fits all. This research is in the same vein. You are not looking for capacity anymore. In an environment where capital is scarce and the economic climate is volatile, you are looking for efficiency. This is the efficiency economy.

In the efficiency economy, why is digitization so important?

Because the concept of digitization can be absolutely transformational for efficiency.

Digitization enables us to do to things we never dreamed possible. Digitization means things like big data, real-time business interactions and collaboration to achieve collective intelligence. Add these three things together and the sum equals efficiency. Let me show you how I did the math…

Data is the currency of the efficiency economy

I was at an event some weeks ago where the keynote speaker said that “data is the new currency.” It means that being able to collect relevant business information and put it to use to increase your operational efficiency is the ultimate power in this economy.

So how do you get more data?

Through connected products and architectures.

process control, efficiency, big data

The explosion in the number of products contained within an automation architecture creates a huge opportunity to make those products much more intelligent. Products connected via Ethernet, with the ability to provide information on those classic automation functions like alarming, eventing, time-stamping, configuration, diagnostics and so on, are the basis for creating operational efficiencies.

To make improvements to any part of your business, you first need to know where your problems lie. To know where your problems lie, you need information. Information is data. To get data, you need connected products.

Connected products are the first step towards operational efficiency. And digitization means we can connect more products than ever before.

Real-time business interaction

Smart devices, social media and 24/7 Internet connection are just some of the things that enable instant communication. Communication with businesses is no longer restricted just to point of sale, but happens right throughout the product lifecycle. Consider if I buy an iPhone. Is my interaction with Apple limited to the monetary exchange for the device? With the advent of digitization, not anymore! I connect to the App Store and iTunes. I take to social media to complain about the battery life of my new device. And then when they release a new device, I start the cycle all over again.

In the industrial world, digitization means interactions for your automation needs are becoming much the same. You don’t just contact the business developing your new plant in the design phase. Digitization gives you the opportunity to interact through the commissioning, maintenance and renew phases.  At every point, there is an opportunity to ask questions and provide feedback to get more value for your business.

Digitization also provides the opportunity for real-time interactions to many more of your people. Your operators and maintenance personnel – who are left to ensure the plant is running smoothly – can now initiate social or business interactions with your business partners to get information, share feedback, request changes and so on.

And it’s the speed of these interactions that help drive your efficiency. If you have problem and you need help, digitization enables fast access to information, whether it’s fast person-to-person communication over social media, or scanning a QR codes to go straight to product documentation.

 Build collective intelligence with business partners

Digitization is now truly giving us the infrastructure to build collective intelligence. For many years in the industrial world, we’ve been speaking about the idea of online communities, of knowledge bases that are accessible by teams anywhere in the world. Until now, though, the technology available to achieve this reality has been limited and prohibitively expensive.

In the past, dealing with different people at different sites, in different countries and in other languages was beyond difficult. Today’s online world means we can connect people in ways never imagined. Crowd sourcing on Twitter to answer your configuration questions, IM exchanges with tech support, or YouTube training videos are all ways to build and share collective knowledge. Gathering and implementing this knowledge is where you gain efficiencies.

I’ve mentioned before that fostering collaboration to create more collective intelligence is the most difficult competitive advantage to replicate. I truly believe this.

You need a partner who understands your process and challenges, so they can recommend solutions to help you get the most out of your operations.

This is a strategic business partnership, one that gives you technology and knowledge to help create efficiencies where you never even knew they could exist.

Which is what you told the Conference Board would be one of your biggest challenges over the coming year, right?

 


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