Using Data to Build Growth and Revenue

Using Data to Build Growth and Revenue

Data scares people, but manufacturers can’t afford to ignore it.

Envision a bustling manufacturing plant floor. You see heavy machinery, assembly lines, and busy workers.

Not as visible, but equally critical, is data.

Unfortunately, many manufacturers are not getting the most out of their data.

| Related: How Manufacturers are Unlocking the Value of Data

“Data scares people,” said Douglas Bellin, global lead of manufacturing and energy industries at Cisco.

That frightening data, however, could help executives keep their companies competitive by turning uptime into revenue.

Many of these leaders, Bellin added, have not unlocked the value of the data their companies already have—much less unleashed the full potential of data and analytics. Complexity, after all, is daunting. And many have only begun their digital journeys.

The result, he continued, is “a lot of machines out there that are still ‘orphaned’—not connected at all.”

In a podcast for Connected Futures, Bellin teamed with Scott Lapcewich, vice president and general manager, customer support and maintenance for Rockwell Automation.

The two stressed that as more and more industrial machines are connected, complexity and challenges will only increase.

With that complexity, however, comes “tremendous opportunity to understand what’s occurring on the plant floor,” Lacewich said, “how to optimize production, how to optimize what’s coming in and going out of a plant.”

Capturing that opportunity demands leadership.

From Data Phobia to Digital Journey

Lapcewich recommends each digital journey begin with an “upfront assessment of every asset on the plant floor and its current level of connectivity.”

From there, executives can begin formulating a master plan for modernization and connectivity, covering machines, devices, and the merging of IT and operations. “A big part of that,” he stressed, “is making sure they have the right security built into the infrastructure, so that information is secure throughout the plant environment.”

With greater connectivity and data insights come opportunities for new services and business models—for example, selling uptimeinstead of just products.

“We can start building a completely new services business model,” said Bellin. “Moving away from the capital-intensive ‘buy the machine’ to an operational expense where I’m going to pay for output from the machine. So that machine is guaranteeing me a million widgets a week.”

Predictive Analytics: Taking Downtime Down

Such a model, Bellin continued, “is really going to change how people start looking at maintenance.”

In particular, predictive maintenance. As Lapcewich said, a plant-floor machine can be monitored “to determine what are various factors that indicate degradation of quality.” With a managed-service agreement, those machines can be watched remotely and fixed before a problem results in downtime.

FANUC, for example, provides industrial robots for automotive and other heavy industries. By combining predictive analytics, cloud, and extensive plant-floor sensors, FANUC is fixing issues before they turn into problems. Its customers, in turn, are avoiding costly downtime, improving quality, and enhancing cycle times.

It’s a great case study of a highly digitized manufacturer driving solid business outcomes. For any organization to reach that point takes leadership.

| Related: The Digital Manufacturer: Resolving the Service Dilemma

Leading from the C-Suite: “It’s Not a When, It’s a How”

C-suite leaders may feel that their companies are already drowning in data. But Lapcewich stresses that more data and analytics will be required to pinpoint where their organizations stand — and, from there, to enable a roadmap to digital transformation and service-oriented business models.

All of this can appear challenging, not to mention expensive, at a time when budgets are flat and additional technology investments seem daunting. Digital transformation, however, requires a “save to invest” strategy. Increases in plant uptime, business agility, and customer engagement will offset initial costs.

Cisco’s economic analysis reveals the payoff for a $20 billion manufacturing firm that digitizes is a profit upside of 12.8 percent over the next three years, and 19 percent over 10 years.

So, in the end, the cost of not acting may be the highest of all.

“There is a great survey recently that said 40 percent of businesses are going to be disrupted unless they move into digital capabilities,” said Bellin. “It’s not a when anymore, it’s a how.”

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Digital Transformation