Accelerating Industry 4.0 Through Remote Monitoring and Diagnostics 2021

Transcription

1 In partnership with Advanced Technology Services, Inc. Competition has never been higher in manufacturing, and outside factors can cause major disruptions overnight. Many manufacturers have turned to Industry 4.0 as the driver and platform for digital transformation. Accelerating Industry 4.0 Through Remote Monitoring and Diagnostics 2021 Written by: Reid Paquin, Research Director, IDC Manufacturing Insights Introduction Customer and market expectations for more personalized products, deliveries, and services as well as unanticipated events and sudden demand shocks such as COVID-19 are driving change and creating opportunities for companies to transform how their operations stay aligned with the market. In response, manufacturers are beginning to define their future success by how well they react to market disruptions. They are doing so through a process IDC calls "resilient decision making." This process is the combination of ongoing efficiency measures by manufacturers and a new focus on providing employees with near-realtime information, detailed insights on performance, and analytics to improve the decision-making process. AT A GLANCE KEY STAT The average cost per hour of unscheduled downtime is over $110,000 in manufacturing. KEY TAKEAWAYS A more predictive asset management approach is where the true value is generated and serves as the foundation for resilient manufacturing operations. Remote monitoring and diagnostics of assets is key to accomplishing resilient manufacturing. Lean and other types of continuous improvement philosophies used by operations teams in factories and plants will always be important. These methods have benefited companies as they pushed for operational excellence. However, to achieve a balance between efficiency and resiliency while remaining competitive, leading organizations are now focused on data and connectivity. Remote work/connectivity has been shown as essential to business continuity and is expected to be a long-term enabler of manufacturing success. According to IDC's September 2020 COVID-19 Impact Survey, over 40% of manufacturers said that their work models will need to be redesigned to support a hybrid workforce, the top permanent change cited by the industry. For manufacturers, the importance of enabling hybrid work through remote monitoring and diagnostics really shines through when looking at Industry 4.0 and specifically asset management. The reason behind this focus on asset management becomes clear when examining the potential impact of downtime on the business. IDC's 2020 IT/OT Convergence Survey showed that the average cost per hour of unscheduled downtime is over $110,000 in manufacturing. While many factors can influence the cost of downtime (e.g., company size, manufacturing segment), even small improvements to asset downtime can result in millions of dollars saved during the course of a year. Having access to asset data is a necessary first step for any manufacturers looking to implement Industry 4.0 (see Figure 1).

2 FIGURE 1: Industry 4.0 Continuum Digitize to Diagnose Digitize Monitor Diagnose Control Autonomous Convert analog signals to digital and establish secure network connectivity Monitor assets or processes remotely through a digital interface Merge asset or process data with contextual data to perform root cause analysis Utilize a digital interface to remotely control or configure an asset or a process AI-driven orchestration of an asset or a process using simulation, modeling, and digital twins Source: IDC, 2021 While Industry 4.0 has been a concept for years and manufacturing, as a whole, is progressing down this continuum, the majority of the industry is still in the early stages of digitizing assets and utilizing real-time visibility to monitor asset performance. However, the value that can be gained increases sharply the further along a manufacturer progresses diagnosing issues before they arise is what all manufacturers need to strive for. This is how a manufacturer can shift from being reactive to proactive when it comes to asset management. Also, an important component of asset monitoring and diagnostics is the mapping of asset performance to known failures and remediation plans. Remote monitoring and diagnostics not only delivers value but also serves as the foundation for autonomous operations. Benefits Asset management is a core aspect of connected factory operations, and transforming this process through remote monitoring, diagnostics, control, and predictive analytics can serve as the foundation for operational resiliency. Many manufacturers still rely on aging infrastructure that makes managing assets more proactively a challenge; connecting these assets is a critical first step. Digitalization has long been the backbone of operational effectiveness for manufacturers. IDC's recent Digital Manufacturing Study of 680 publicly traded manufacturers highlights the clear advantage that occurs over time for organizations that embrace these modernization efforts. Over the study's six-year period, digital manufacturers benefited from a 26% increase in their revenue performance index (RPI) Manufacturers that already made investments in modernization were better prepared to respond to disruption. and a 27% increase in their profit performance index (PPI). During this same time, nondigital manufacturers experienced decreases of 9% in RPI and 2% in PPI. However, the biggest takeaway from the study is how the gap between the two groups increases over time. Many companies have already acted, using digital technology to make better decisions, and they are reaping the benefits. Page 2

3 Traditional preventive maintenance processes are slow and generally ineffective, but strategic asset management will put an emphasis on condition-based monitoring and predictive analytics to raise the availability of critical production assets. IDC has been working closely with a large pulp and paper manufacturing company that is moving down the path to resilient decision making and operational transformation. The manufacturer has begun moving from a silo-based asset management strategy to a collaborative asset management center, like a call center with levels of service:» Asset, Ops, IT generalists as the first line with defined workflows» Ops and Ops IT specialists with a large knowledge base» Traveling resources who go onsite and who are very specialized As this pulp and paper manufacturer has worked to implement its collaborative asset management center, the critical need has been consistent and reliable remote data. According to surveys that IDC has conducted with manufacturing clients, around 7% of asset-intensive manufacturers have established a remote monitoring and diagnostics center, with another 25% in the process of standing up centers. However, the expected benefits of adopting this approach highlight why it is such a high priority for the company, with the pulp and paper manufacturer estimating that response times will be improved up to 50% and in-plant resources will be reduced by up to 75%. The reduction in maintenance personnel could potentially be the most impactful to manufacturers, starting with the need to raise labor costs. But there's a more pressing concern the growing talent gap in manufacturing. With personnel becoming increasingly limited, it is important to focus on utilizing skilled talent in other ways across the plant floor operations. While the opportunity to transform operations through remote monitoring and diagnostics is clear, starting up one of these centers can be a complex task. As with industrial Internet of Things (IIoT) projects in the past, scaling these projects beyond pilots/proofs of concept (POCs) is a common roadblock, especially for manufacturers that take a do-it-yourself approach. As a result, there is a high amount of interest among manufacturers to outsource to a managed service provider or implement a hybrid approach of in-house and outsourced resources. Key Trends Talent is a hot-button issue for many companies, but manufacturing organizations are feeling the pressure more than most. The industrial workforce skews older, and as these experienced employees retire, they leave gaps that are hard to fill. Many manufacturers are understaffed in their high-skill positions, and many of the workers who are relied upon lack the knowledge/skills needed to perform effectively and safely. They lack the right mix of resources and knowledge, both of which are hard to find, but knowledge is leaving the business at accelerating rates, especially among operational workers (see Figure 2). Page 3

4 FIGURE 2: Operations Lacking Critical Resources and Skills (% of respondents) Lack of resources (not enough employees to perform the workload required) 25.6 Lack of knowledge (employees lack skills needed to perform as required) 32.3 Both lack of resources and lack of knowledge Source: IDC's Talent Management Survey, September 2019 These skills gaps are already having an impact across the business and will only worsen if no action is taken. In fact, according to IDC's September 2019 Talent Management Survey, manufacturers experiencing a shortage in skilled workers reported an 11% increase in unscheduled asset downtime on average. Manufacturers need help to address this talent issue the proper approach will be utilizing technology to maximize existing talent and turning to partners to fill in the remaining gaps. The importance of choosing the right partner to help accelerate remote monitoring and diagnostics and the overall Industry 4.0 road map cannot be overlooked. Considering Advanced Technology Services Advanced Technology Services (ATS) Inc. is a leading industrial maintenance and MRO asset management solutions provider with service offerings that combine advanced monitoring technologies and analytics with best-in-class maintenance leadership, engineers, and multicraft technicians to deliver optimized reliability and measurable results to manufacturers. To meet the needs of manufacturers to lower costs of operation, increase asset availability, and reduce unplanned asset downtime, ATS provides the expertise that not only makes manufacturers' operations more productive but also helps accelerate manufacturers' digital transformation with IIoT technologies. The ATS Reliability 360 Technology Center is the central hub for data-driven maintenance and offers a unique differentiator from other labor-based only service providers. Page 4

5 ATS at a glance:» The company provides a wide range of technology-driven industrial maintenance and MRO asset management solutions and services that deliver increased uptime, higher productivity, and measurable results. By combining the company's large network of reliability experts with advanced technologies, ATS offers a holistic approach to maintenance that provides manufacturers the benefits of remote and onsite skilled talent and IIoT technologies.» The company supports process and discrete manufacturers across many core industries including aerospace, automotive, building products, consumer packaged goods, heavy equipment, paper and pulp, power distribution, and tire and rubber delivering over three decades of equipment expertise and reliability experience to a wide variety of unique production assets and manufacturing environments.» As many manufacturing companies and plant maintenance environments struggle with the ongoing skills gap and retiring workers, ATS provides the skilled technical workforce to improve asset productivity and uptime.» With a "technology first" strategy of continuous innovation and improvements, ATS helps manufacturers innovate at scale. Remote monitoring and diagnostics is a growing area in manufacturing, and ATS helps manufacturers accelerate transformation through its sensor-based Machine Health Monitoring System. Condition-based data is monitored 24 x 7, and real-time alerts are transmitted to the ATS Reliability 360 Technology Center. Reliability engineers analyze the data, figure out root cause, and provide the onsite maintenance team with prescriptive actions that eliminate unplanned downtime and reduce cost. Challenges The key to realizing value from asset performance management or any developing technology is to place it in the context of a manufacturer's overall DX strategy. Technology providers such as ATS will need to help manufacturers build out their industry 4.0 road maps with clear value being delivered at each step of the journey. Many of these initiatives can still get stuck in limbo if manufacturers are not properly prepared, so service providers will need to work closely with their customers to ensure scalability. In addition, the asset performance management space is a competitive market that includes large enterprise IT companies, industrial automation/iot providers, and start-ups focused on asset analytics. Organizations such as ATS will need to clearly articulate their differentiation to manufacturers as more competitors try to expand into this space. Conclusion The manufacturing environment is changing faster than ever before. As the industry comes to terms with this shift, organizations that embrace resiliency will become the most successful. Operations play a critical role in enabling this resiliency. Manufacturers that continue to take a reactive approach to asset management put their entire business at risk. By enabling remote monitoring and diagnostics of assets and operations, manufacturers can deliver measurable business value and safeguard against future disruption. Given the complexities of implementing a remote monitoring and diagnostics center, manufacturers should consider working with a labor and technology partner that can help them modernize their asset management approach and fill in the talent gaps that will only increase over time. Page 5

6 About the Analyst Reid Paquin, Research Director, IDC Manufacturing Insights Reid Paquin is Research Director for IDC Manufacturing Insights responsible for the IT Priorities and Strategies (ITP&S) practice. Mr. Paquin's core research coverage includes IT investments made across the manufacturing industry and manufacturers' progress with digital transformation. Based on his background covering the manufacturing space, Mr. Paquin's research also includes an emphasis on the technology enablers that help manufacturing executives make better-informed operational decisions. MESSAGE FROM THE SPONSOR About ATS Advanced Technology Services, Inc. (ATS) is a global solutions provider with over three decades of proven experience in technology-driven industrial maintenance and MRO asset management. Through a technically skilled workforce, standardized processes, and Industry 4.0 technologies, we deliver asset health and productivity to many of the world's leading process and discrete manufacturers. To learn more about how we make factories run better and smarter, visit The content in this paper was adapted from existing IDC research published on IDC Research, Inc. 140 Kendrick Street Building B Needham, MA 02494, USA T F idc-insights-community.com This publication was produced by IDC Custom Solutions. The opinion, analysis, and research results presented herein are drawn from more detailed research and analysis independently conducted and published by IDC, unless specific vendor sponsorship is noted. IDC Custom Solutions makes IDC content available in a wide range of formats for distribution by various companies. A license to distribute IDC content does not imply endorsement of or opinion about the licensee. External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2021 IDC. Reproduction without written permission is completely forbidden. Page 6