Microsoft: manufacturing a smooth digital transformation
Digital transformation is not simply about technology, and It can mean many things to different people. The arrival of new disruptors entering new markets and reshaping entire industries is a reality. With more than half of all organisations expecting disruption to impact their industries within the next two years, businesses and organisations must see digital transformation as a key phenomenon to innovation and growth.
But seeing it as simply the industrial era – only faster and more efficient – is to miss what is happening and the profound impact it is already having on UK businesses, in particular, manufacturers. Digital transformation in manufacturing is bringing the intersection of manufacturing and technology even closer. This is enabling organisations to help companies gain insight and take action from big data, optimise their operations and change the very nature of the business models around their industrial products.
In an age where uncertainty has replaced ‘business-as-usual’ and competitive advantage is fleeting, a fundamentally new approach is required to run businesses. Digital transformation is not simply an IT department initiative reinventing services for a mobile world. Everybody is in the digital transformation team, and the quality of the leadership is paramount, so if done right, digital transformation permeates the very fabric of an organisation.
Where are manufacturers on the transformation journey?
In a recent survey conducted by Microsoft amongst UK public and private organisations with 500 or more employees, just 41 percent of manufacturers agreed they had a clear or formal digital transformation strategy in place, and nearly a third believed their business model would be significantly disrupted within the next 2-5 years. 44 percent also stated that over the same period, their current business model will have run its course. These are startling figures. Consequently, UK manufacturers must start thinking seriously about how they will adapt in this new environment being dubbed the ‘fourth industrial revolution’, in which digital transformation is a key component.
The same report also found that a third of manufacturers (33 percent) believe that the biggest disruption impact in their organisation will come from established companies from their own sector. However, and more surprisingly, only 6 percent of the manufacturers surveyed described themselves as disruptors. Given the previous finding that a large proportion of organisation’s business models will cease to exist in 5 years, this suggests an acceptance of their own fate.
Changing the approach
A big focus on budgets is indicative of a failing business model, and when businesses come to a close, their margins tend to gravitate to zero. A way to prop up the business is to focus on driving out costs to re-engineer the margin – a focus on cost savings rather than innovation is an indicator that the game is coming to an end.
Digital economy players are ruthlessly cost sensitive. But they are also ruthlessly curious and innovative. They are quick to establish what the market wants, and are quick to modify or kill off a service or other initiative where required. This real-time dynamic simply serves to make the industrial era players sloth-like in their behaviour.
But the game is not over, we see many digital economy players in the manufacturing sector encouraging signs of innovation. However, the indicators are that organisations are not necessarily in a hurry to upskill and empower their people, so that innovation is woven into the fabric of their organisations.
Considerations for effective digital transformation
The bottom line is that the current focus on process refinement needs to be replaced with a strong emphasis on innovation if UK manufacturers are to truly embrace digital transformation, and reap its benefits across their operations. Despite the challenging times ahead for UK manufacturing, digital transformation will, without question, be a key factor for success alongside engineering excellence.
Below are some areas to consider if your organisation is going to give its digital transformation journey the best possible chance of success:
Understand what is driving the need for change – There are certain macroeconomic trends that are impacting the world we live in. Hyper-connectivity brought about by new technology has a role to play. As does globalisation, changing demographics, energy security, and talent scarcity. The point is to identify what factors affect your market most.
Empower your people – As more people start to align their work with their passions (and of course market demand), they will not need micro-management. They should be given the latitude to be curious, to experiment, to fail, and to thus learn both personally and on behalf of the organisation.
Become data-driven – The majority of the most successful organisations within the digital economy are data-obsessive. They will push products and services into the market and study the associated data very carefully. The data will tell them whether they have a winner, where to develop or innovate further, or whether to drop the new proposition altogether.
Embrace the cloud – Embracing the cloud is not the risk it once was. Many established organisations have been running their business on it for years. By doing so they can free up the cognitive capacity of their IT function to focus on matters of higher value. It is sometimes said that all companies are in the technology business in the fourth industrial revolution. This is not necessarily true. All companies are in the information and insight business. Let someone else worry about the technology infrastructure.
Experiment with new business models – Nobody can safely say that their existing business model is futureproofed. Therefore, organisations should always be experimenting with new business models. This needs to be a parallel exercise. It’s a little too late to start exploring new business models when the current one has bitten the dust.
UK manufacturers are made of stern stuff. For generations, they have been at the forefront of developing new ideas, and raising the standards by which manufacturers across the globe are measured. It’s now time to roll-up the shirt sleeves and apply that same vigour to the digital transformation journey. That effort needs to be wholesale and woven in to the fabric of every manufacturer.
By Peter Mellish, Chief Technology Officer, Manufacturing, Utilities and Services at Microsoft UK
Follow @ManufacturingGL and @NellWalkerMG
Siemens: Providing the First Industrial 5G Router
Across a number of industry sectors, there’s a growing need for both local wireless connectivity and remote access to machines and plants. In both of these cases, communication is, more often than not, over a long distance. Public wireless data networks can be used to enable this connectivity, both nationally and internationally, which makes the new 5G network mainframe an absolutely vital element of remote access and remote servicing solutions as we move into the interconnected age.
Siemens Enables 5G IIoT
The eagerly awaited Scalance MUM856-1, Siemens’ very first industrial 5G router, is officially available to organisations. The device has the ability to connect all local industrial applications to the public 5G, 4G (LTE), and 3G (UMTS) mobile wireless networks ─ allowing companies to embrace the long-awaited Industrial Internet of Things (IIoT).
The router can be used to remotely monitor and service plants, machines, as well as control elements and other industrial devices via a public 5G network ─ flexibly and with high data rates. Something that has been in incredibly high demand after being teased by the leading network providers for years.
Scalance MUM856-1 at a Glance
- Scalance MUM856-1 connects local industrial applications to public 5G, 4G, and 3G mobile wireless networks
- The router supports future-oriented applications such as remote access via public 5G networks or the connection of mobile devices such as automated guided vehicles in industry
- A robust version in IP65 housing for use outside the control cabinet
- Prototypes of Siemens 5G infrastructure for private networks already in use at several sites
“To ensure the powerful connection of Ethernet-based subnetworks and automation devices, the Scalance MUM856-1 supports Release 15 of the 5G standard. The device offers high bandwidths of up to 1000 Mbps for the downlink and up to 500 Mbps for the uplink – providing high data rates for data-intensive applications such as the remote implementation of firmware updates. Thanks to IPv6 support, the devices can also be implemented in modern communication networks.
Various security functions are included to monitor data traffic and protect against unauthorised access: for example, an integrated firewall and authentication of communication devices and encryption of data transmission via VPN. If there is no available 5G network, the device switches automatically to 4G or 3G networks. The first release version of the router has an EU radio license; other versions with different licenses are in preparation. With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and autoconfiguration of the devices,” Siemens said.
Preparing for a 5G-oriented Future
Siemens has announced that the new router can also be integrated into private 5G networks. This means that the Scalance MUM856-1 is, essentially, future-proofed when it comes to 5G adaptability; it supports future-oriented applications, including ‘mobile robots in manufacturing, autonomous vehicles in logistics or augmented reality applications for service technicians.’
And, for use on sites where conditions are a little harsher, Siemens has given the router robust IP65 housing ─ it’s “dust tight”, waterproof, and immersion-proofed.
The first release version of the router has an EU radio license; other versions with different licenses are in preparation. “With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and auto-configuration of the devices,” Siemens added.