As digitalization of manufacturing processes continues to expand and intensify, the supply of and the demand for manufacturing data are rapidly growing. Typical Platforms such as Google and Apple have shown that Platforms are becoming a defining feature of the contemporary information society.
In our last article, called “Platform thinking in manufacturing” 1, we explored the general application of 'platform thinking' in the manufacturing industry in response to what we see as both an opportunity and a challenge. We argued that the use of data platforms to securely share manufacturing data with external parties provides great potential for manufacturing organizations to reduce the operational costs and to improve process utilization. As outlined in our previous article, opportunities to improve manufacturing efficiency are seemingly endless, which is why the options for platforms on the market for manufacturers is increasingly interesting. However, with those opportunities, a range of challenges arise for the manufacturing industry as it develops. In underlying article, we will have a closer look at these benefits and challenges by applying the Platform model to heat exchangers.
In recent years, we have deduced that manufacturers increasingly acknowledge the necessity to make more extensive use of data mining tools and analytics to provide valuable insights in e.g. process inefficiencies and equipment proactive maintenance needs. However, the cost and capability of developing the appropriate tools is typically lacking within these organizations. Leaving, as research by Gartner2 shows, on average 70% of the data captured in the manufacturing industry unused.
Large scale data sharing via secured Platforms allows suppliers and process specialists to develop customized apps that provide process / equipment performance information including benchmarking among peers. Based on the process insights, suppliers and specialists can further feed the manufacturers customized proposals to e.g. reduce maintenance cost, increase equipment reliability and utilization, improve carbon footprint. Through this path, the available data will be turned into directly applicable improvement opportunities, using the brains and industry expertise that are very rarely found in-house.
During the past years, we have seen the manufacturing supply chains becoming more integrated. A typical example would be the chemical cluster parks where chemical companies share feedstock (ammonia) or energy (steam) amongst each other. Data sharing and analysis to further optimize the asset- and material flow optimization would provide direct benefits to all parties involved.
Solutions to facilitate manufacturing data sharing are currently being constructed. For example, Siemens and GE3, who are currently developing a cloud-based Platform aimed at linking each stage of the manufacturing value chain across partners.
We are observing that most databases in the manufacturing industry e.g. data historians, quality data reports, maintenance systems are typically loosely intertwined. Making better use of available data requires the development of smart algorithms to mine the databases. Opening the data to a range of external app developers and suppliers, via a highly secured portal, will enable the entire ecosystem to develop similar smart algorithms on top of the data Platform. The benefits of such a Platform are threefold:
To demonstrate, let’s see how this would apply to, for example, process data regarding heat exchangers in a plant that manufactures some kind of liquid product. This product needs to be heated and cooled at various stages in the process. Suppose, that a plant has increased its production volume with 10% in the last two years and now faces process downtimes due to fouled heat exchangers with a related increase in maintenance cost. What do you think happened to the plant’s utilization rate, as a result of this downtime?
In the plant described above, the process is equipped with various sensors (to measure e.g. flow, pressure, temperature) and their measurements are registered every few seconds in a data historian. Through maintenance systems, we can extract information on heat exchangers characteristics: type, year installed, internal surface, material, when it is cleaned / maintained and sometimes even blueprints. In addition, the quality measurement on the final product is registered. The plant decides to put all of the heat exchanger related data on a secured Platform.
Using expertise on heat exchanger characteristics, suppliers or specialized app developers; we now have all the ingredients to develop algorithms in place to show the organization:
For an internal process engineer, it may take months of research and development to develop the specific solutions to obtain the listed insights. In addition, it will require continual monitoring of these results and market solutions to spot when the business case for process improvement will become a viable option. Through data Platforms, where manufacturers and suppliers / partners have started to interact in the fashion as described, the role of the manufacturing excellence organization is starting to change. A new approach will focus on prioritizing the improvement suggestions and on steering the external parties to extend app development which will allow them to create more diverse insights. For example, safety and environmental risks could be monitored continuously and have a proactively alert system.
Moreover, product compliance issues may be predicted and control measures may be suggested by continuously learning algorithms that will connect the data of the various process and reporting databases. In other words, leveraging an ecosystem of data analysts / experts through a digital Platform will enable the manufacturing excellence department to achieve results in multiple improvement areas at the same time.
Becoming connected to a Platform that will expose you to a wide ecosystem has significant technical implications on your business, which we will explore in our five step approach below. Based on our experience, we can conclude that successful implementations of Platforms are generally characterized by a strong vision of the organization to make the digitization leap. The journey has to start with the development of a strategic roadmap, governed by empowered leaders in the organization. These leaders should have a clear focus on getting the organization ready to scale up the Platform fast enough once the first successful interactions have been established. Pricing strategies are adapted accordingly, in response to or in anticipation of changes in the manufacturing industry and the market. Dedicating an entrepreneurial team of Platform experts, cyber security specialists, change managers and supplier managers, is a key requirement for achieving maximum benefit.
Using a five step approach, we will briefly describe which steps need to be considered for launching your manufacturing excellence Platform successfully1.
During the journey, as outlined in the 5 steps mentioned, there are a number of critical factors that enable manufacturing organizations to maximize the benefits from a Platform:
Multiple industries have proven that valuable Platforms can be established among suppliers and competitors. Enterprises in other sectors, for instance the ‘Neutraal Logistiek Informatie Platform’ (NLIP)4 in the logistics industry or the Philips HealthSuite5 digital Platform in the healthcare industry, have shown that connecting various parties to orchestrate data in an industry via a Platform is possible.
The concept applied to the manufacturing industry is promising, as we are entering an age where the intelligence and analytics are mutually aligning. The real challenge, if we may be so bold, lies mostly in overcoming the conservative mindset of the manufacturing community to harmonize the right partners in an continuously growing ecosystem. Once the Platform is up and running, it is will be very hard to compete against as the power of network effects protect them from classical competition.
Note 1: Platform thinking in Manufacturing: A fresh alternative to Manufacturing Excellence (2016, R. Tulkens, S. Klous, J. Pasman, & M. Boute)
Note 2: "Predicts 2016: Opportunities Abound for the Factory to Reach Its Potential", Gartner, 2015
Note 3: http://www.foxbusiness.com/features/2017/03/05/ge-siemens-vie-to-reinvent-manufacturing-by-harnessing-cloud.html
Note 4: The ‘Neutraal Logistiek Informatie Platform’ (NLIP)4 can be earmarked as an logistics industry changer by facilitating the disseminating of information / data through the entire chain. http://www.nlip.org/nlip/
Note 5: The Philips HealthSuite, an open cloud-based Platform which harmonizes data from various medical devices to enable continuous healthcare innovation and the development of personalized care applications. http://www.usa.philips.com/healthcare/innovation/about-health-suite