industry-week_rgb-200
Sponsored by:
opentext-logo-165-copy

Digital Transformation

SIX KEY OBSERVATIONS

The digital transformation is underway. Manufacturers from all sectors and of all sizes are adopting disruptive technologies ranging from the Internet of Things to 3-D printing. Like any major business shift, some companies are farther along in their journey than others.

Manufacturers understand the value of digitization, but many companies lack the resources or expertise to fully leverage the digital advantage, according to the 2017 Digital Manufacturing Research Study by IndustryWeek and OpenText.

 

The report revealed several key factors impacting manufacturers’ digital maturity. Barriers include legacy systems and processes, skill shortages and a lack of enterprise information management (EIM) solutions to collect, store and analyze data.

 

Here, OpenText presents six key observations from the report and real-world examples of how different manufacturers are addressing their digital challenges.

6 Key Observations

KEY OBSERVATION 1

Manufacturers are Missing Digital Opportunities

KEY OBSERVATION 2

Manufacturers are Overwhelmed by Data

KEY OBSERVATION 3

Digital Transformation Must be Business Driven

KEY OBSERVATION 4

Digital Leaders are More Customer Focused

KEY OBSERVATION 5

Operational Visibility is Still a Big Challenge

KEY OBSERVATION 6

The Digital Skills Shortage

KEY OBSERVATION 1

Manufacturers are Missing Digital Opportunities

Innovation leaders know they can’t depend on yesterday’s technologies to keep pace with competitors. Unfortunately, only 26% of business leaders believe their digital investments have contributed to a competitive advantage.

 

Some manufacturers may fail to adopt digital tools because they believe their existing systems are adequate or fear upgrades are too costly. But legacy systems will eventually lead to increased costs and inefficiencies as manufacturers find themselves constantly updating, customizing and maintaining their existing systems. Even so, manufacturers recognize the importance of adopting or improving their current digital strategies (Figure 1).

Figure 1: Manufacturers’ Digital Priorities

Digital manufacturing solutions could give us an edge over competitors
78%
We need a deeper understanding of digital solutions
76%
We have a digital manufacturing strategy
50%
We have a digital strategy and budget
43%

Adelaide Brighton, an Australian building products manufacturer, is one company that realized the benefits of digitization. A division within the company was using an outdated invoicing system that couldn’t keep pace with growth.  The company addressed its issues by automating its invoicing process.

CASE STUDY

Adelaide Brighton Streamlines Invoicing

CHALLENGES

Inefficiencies with manual, paper-based processes

Mark Tosolini, Group IT Manager at Adelaide Brighton, explains, “We had a very paper-based process. All 50,000 invoices had to be converted to hard copy if they weren’t already. Though we were encouraging vendors to move to email, we still had to turn the invoices back into hard copy and scan them all. The scanned image was pushed to SAP, but from that point on, it was handled manually. We were using email and spreadsheets. The status of invoices, what problems we had with them, had we paid them, what was overdue—all those sorts of things were managed in a very manual fashion.”

Lack of automation delayed invoice processing

Adelaide Brighton relied heavily on the expertise of the AP staff to manage the manual processes, but this was not sustainable as volumes grew.

SOLUTIONS

OpenText™ Vendor Invoice Management for SAP® Solutions

The VIM solution optimizes and automates the process of receiving, managing, routing, and monitoring invoices and related documentation, and features deep integration with SAP.

OpenText™ Document Access for SAP® Solutions

Another critical requirement for Adelaide Brighton was archiving technology for the AP process. The team selected Document Access for SAP Solutions, which permits storage, management, and retrieval of SAP documents across SAP modules. The company used an established solution for OCR data extraction, which integrates seamlessly with the OpenText solution.

BENEFITS

Increase in productivity and efficiency through digitized process

Total visibility of invoice status at all times

Secure, auditable, and recoverable invoice document storage

Fewer FTE requirements due to automated and streamlined invoice processing

KEY OBSERVATION 2

Manufacturers are Overwhelmed by Data

Whether it’s information from IoT-enabled devices or the latest business intelligence platforms, manufacturers are collecting more data than ever. But manufacturers still grapple with basic data management. Nearly 50% of manufacturers say they’re still struggling a little or a lot with the way they collect, store and manage available operational data (Figure 2).

Figure 2: Manufacturers’ Ability to Collect, Store and Manage Operational Data

  • Somewhat Achieved 47%
  • Significantly Achieved 33%
  • Little to No Achievement 20%

The findings suggest manufacturers are missing opportunities to use data strategically, and legacy systems are often the culprit.  As companies grow, they often find their existing systems cannot handle the large volume of data they’re generating. This was the case for auto parts manufacturer Delphi.

 

From intelligent vehicle technology to driverless vehicles, Delphi is working to make its vision for the future of driving a reality. As a leader and innovator, the company continually strives to optimize operations. Delphi recently transformed its inefficient data archiving and retrieval process with OpenText Data Archiving for SAP Solutions to deliver secure storage and immediate access to its archived SAP® data.

CASE STUDY

Delphi Frees Data for Faster Access

CHALLENGES

Inefficient, manual data retrieval process via IT support

In some situations, it could take weeks to find data, hours to generate a report, and the resulting data might be incomplete, requiring business users to initiate the process again.

Business did not want to have data archived

Over time end users became less willing to have data archived, resulting in an increase in the database size and impacts on system performance.

SOLUTIONS

OpenText Data Archiving for SAP Solutions

The solution helps manage the size of the SAP database and ensures continued access to historical data. It securely stores data on a long-term archiving platform and, most importantly, when users need the data it is accessible directly from within the SAP user interface. The solution is fully integrated with SAP applications and extends the value of standard SAP data archiving.

BENEFITS

Efficient use of IT resources

Business users and auditors have immediate access to data

Secure, compliant archived data storage

Online data retention period reduced

Reduced the size of Tier 1 storage

Utilizing cheaper, yet high-availability storage for archived data

KEY OBSERVATION 3

Digital Transformation Must be Business Driven

Who’s leading the digital transformation? Is it IT support staff or key business decision makers? A true digital transformation starts at the top. Manufacturers that demonstrate the most success with digital implementations have buy-in and support at the management and executive levels. Poor leadership and collaboration across the organization are the primary reasons why digital strategies fail (Figure 3).

Figure 3: Top Reasons Why Digital Solutions Fail to Reach Their Full Potential

Poor collaboration between departments
56%
Inadequate IT staff skills
53%
Inadequate planning and project management
53%
Lack of support from senior management
48%
Failure to make business decisions based on data
48%
Lack of support from management and staff
46%
Lack of technological manufacturing skills
46%

Oftentimes, manufacturers have difficulty collaborating because they have disparate IT systems across the organization. This was the case for Swiss fragrance and flavor manufacturer Givaudan. The company defined a strategy for a single solution and a single source of accurate information.

CUSTOMER STORY

Givaudan: Streamlining from the Top Down

CHALLENGES

  • Content spread across multiple, disparate systems hindering a single source of accurate information
  • High costs of support and maintenance of legacy IT systems
  • Need for greater and more efficient collaboration within and across teams
  • Growth of uncontrolled document distribution via email attachments

SOLUTIONS

  • OpenText Content Suite Platform (formerly CLM)
  • OpenText Extended Collaboration
  • OpenText Web Content Management
  • OpenText InfoFusion

BENEFITS

Single source of accurate information reducing burden on email and removing uncontrolled document distribution

Major cost savings through system consolidation, eliminating support and maintenance costs for legacy systems

Greater collaboration and knowledge capture for teams at multiple global locations

Records management disciplines applied to all content types

KEY OBSERVATION 4

Digital Leaders are More Customer Focused

Leading manufacturers are building new business models around IoT-enabled products. These smart products typically have onboard sensors that record vast amounts of performance-related data. The information, often delivered in real time, allows manufacturers to offer ongoing services to their customers rather than a one-time transaction. In fact, 60% of manufacturers say digital solutions have helped them create a new, data-specific line of business (Figure 4).

Figure 4: How Digital Solutions Have Helped Manufacturers

Gain a performance advantage (higher quality, reduced scrap)
58%
22%
Reduced operating costs and maximize margins
63%
30%
Create new (data specific) lines of business
60%
46%

• Digital leaders      • Others

A successful product-as-a-service model depends upon the accuracy of the information, accessibility of the data and depth of analytical insights. The data provides manufacturers with powerful insights about product performance and the operating environment.

 

The Knorr-Bremse Group, based in Munich, Germany, is the world’s top manufacturer of braking systems for rail and commercial vehicles, such as freight trucks and metro lines. Knorr-Bremse has developed its iCOM (Intelligence Conditioned Oriented Maintenance) platform, providing advanced diagnosis and maintenance for both large and small rail and truck fleet operators. iCOM is an IoT application framework for innovative fleet management, monitoring and analytics.

CASE STUDY

Knorr-Bremse Enhances IoT-Enabled Predictive Maintenance

CHALLENGES

Customer demand for improved, self-service reporting

“Our customers wanted the ability to perform greater analysis of their data, for example to predict when components would fail, to extend the life of a component, or to understand the causes of failure,” says Martin Steffens, Project Manager and Software Architect for Digital Platform, iCOM at Knorr-Bremse.

Increasing volumes of data to provide deeper analytics

The iCOM platform uses on-board sensor units and about 30 subsystems, such as brakes, heating and ventilation, wipers, and doors to collect data. They continually generate data that is wirelessly transmitted to the iCOM platform.

SOLUTIONS

OpenText Analytics

“Using OpenText Analytics, we can provide state-of-the-art visualizations and heat maps of condition-based events, such as over-heating brakes on a specific incline. This helps our customers put measures in place to reduce component failures, extending component life, and ultimately saving money,” says Dirk Seckler, Global Head of Sales at Knorr-Bremse.

BENEFITS

Scalable solution capable of handling very large data streams

Rapid development and deployment makes Knorr-Bremse more competitive

20% reduction in customer maintenance costs

Dynamic analytics for easier interpreted visualizations provides competitive differentiator

KEY OBSERVATION 5

Operational Visibility is Still a Big Challenge

Each step in the manufacturing lifecycle generates large data volumes — from product development to production to service and replacement. Typically, in the product lifecycle different departments across the organization use various applications to support their roles and contribution. This creates data silos across the organization and visibility challenges (Figure 5).

Figure 5: Operational Visibility: Where Data Silos Exist

Content and information associated with an asset
69%
Customer satisfaction
61%
Business processes
60%
Employee performance
58%
Supplier status and performance
56%

EIM capabilities, such as enterprise content management, business process management and analytics can be combined to create a view of information across the business to provide more insightful visibility. North Star Bluescope Steel combined data from disparate systems such as ERP, asset management and spreadsheets, and replaced inefficient spreadsheet reporting.

CASE STUDY

North Star Makes Costing Clearer Through Analytics

CHALLENGES

Replace Microsoft® Excel® with a less manually intensive solution to report on and analyze costing data

Costing was still being managed through Microsoft® Excel®, in a time-consuming process that saw disparate areas of the enterprise manually collecting data in a file so large and inefficient, it could take up to 10 minutes just to open.

Facilitate month-to-month costing comparisons, as well as weekly analysis and cost-per-minute impact analysis

“There was really no window into that vehicle for month-over-month comparisons,” says Malcolm Edge, Director of Technology with North Star BlueScope Steel. “If you wanted to look at May, you had May. To look at January through May, you literally had to go through five different spreadsheets and combine that information manually.”

SOLUTIONS

North Star Solution

Analytics reporting was used to replace resource intensive and time-consuming forecasting by spreadsheet. A greatly enhanced solution was delivered where data was drawn from multiple sources, including MES and ERP systems, analyzed and presented to end users via self-service on-demand dashboards.

BENEFITS

A deeper analysis of costing data, pinpointing higher profit potential and upselling prospects

A better understanding of customer trends and needs

Quicker, more intelligent, decision making, inspired by accessible data

KEY OBSERVATION 6

Digital Transformation Bridges the Skills Gap

The talent shortage is an ongoing source of frustration for manufacturers. Smart technologies require skilled workers to operate the new systems, interpret the data and analyze potential outcomes (Figure 6). However, some technologies can help manufacturers gain more value from their existing talent pool. These solutions free workers from time-consuming administrative tasks so they can focus on their core responsibilities.

Figure 6: Analytical Skills Shortage Persists Manufacturers are having difficulty recruiting and hiring people with the following skills:

The ability to specify the issues that need to be answered by the data
79%
The ability to develop the framework necessary to analyze the data
75%
The ability to manage the volume of data being generated
71%
The ability to develop the data being generated
70%
The ability to make a business decision based on the analytics
66%

At the KUKA Group, paper-based contracts can hinder business processes and ultimately even cost money through missed termination deadlines, expired maintenance contracts and changes in payment conditions not being communicated. For this reason, the robot specialist has switched to digital contract management based on OpenText™ Extended ECM for SAP® Solutions.

CASE STUDY

KUKA Achieves Faster Contract Searches to Meet Deadlines

CHALLENGES

Excessive search times and lack of transparency due to paper contract documentation needed to relieve pressure on strategic purchasing

“Our task in Strategic Purchasing is to actively manage contracts and agreements with suppliers,” states Sabine Knecht, Head of Indirect Material at KUKA Roboter GmbH, who initiated and manages the OpenText project. “In particular, if maintenance contracts have to be extended short term, fast response times and a good overview are very helpful.”

SOLUTIONS

OpenText Extended ECM for SAP® Solutions

The OpenText-based solution allows contracts to be filtered as desired. “For example, I can press a button and display all rental, lease, and consultancy contracts, analyze them, and compare them with one another. This is active supplier management and thanks to the full text search, I can find contracts whenever I need them—in 30 seconds at most, rather than the 30 minutes it used to take before the OpenText solution was introduced,” says Knecht.

BENEFITS

Contract management costs and time reduced

Active order management due to transparency

Pressure relieved by globally standardized information

FINAL THOUGHTS

The world is in the midst of a 4th Industrial Revolution, and manufacturers understand the value of Digitization.  Data is driving this business transformation.  In manufacturing, Industry 4.0, or IIoT, will generate data at unprecedented volumes and velocities. Still, many manufacturers struggle to maximize their investments or even implement these technologies in the first place. In many cases, they’re lacking EIM tools that can help them attain a 360-degree view of big data and analytics. An EIM strategy helps manufacturers streamline organizational workflows, increase the quality of information and create integrated user interfaces for end users within a single-source platform.

To learn more about how manufacturers are leveraging the power of EIM to achieve their digital goals, visit OpenText at www.opentext.com.

Additional Resources

Special Research Report
Special Research Report
Digital Manufacturing Webinar
Digital Manufacturing Webinar
Analytics in Manufacturing
Analytics in Manufacturing

Start typing and press Enter to search