A critical inflection point for asset transformation: Are you ready?
How asset management can become your competitive edge
Recently, ET Group and IBM organized an executive forum that began with two virtual events. The first focused on Enterprise Asset Management and the second on Asset Performance Management. The program culminated in a live executive forum, The Economic Times Industry 4.0, that took place at the Taj Palace in Delhi on 20 September 2019. The event attracted many leaders who are looking for the next competitive edge. Throughout the evening, they participated in interactive thought leadership opportunities, viewed demonstrations and networked with industry peers. During the executive forum, IBM SMEs tackled many questions from those who were still on the fence regarding the adoption of IoT. I’d like to share with you some of what they learned about critical inflection points, and the digital transformation that is disrupting industries.
Competitive advantage has become transient in nature
Business challenges have changed as digital transformation creates inflection points in and across many industries. Innovation scaled up with production can rarely guarantee sustained profitability. Visionary companies know this and prepare for impending inflection points by devising strategies to deal with disruption. You’re either going to transform your business with digital technologies, or you’re going to see someone else do it.
Capital investments have long been perceived as key barriers to entry for the manufacturing industry. But one must consider the total cost of ownership over the life of the asset. This includes its maintenance and upkeep. The cost of initial purchase and other variables (such as power requirement and manpower) may not be much different from those of competitors. Therefore, an optimal deployment of maintenance activity, and the deployment of a skilled workforce assigned to this activity, may provide the much-needed strategic edge.
Cost mitigation is a key determinant to profitability in an environment of thinning margins and competition gnawing away at market share. Is having “economies of scale” the answer? Probably not, considering that demand is fluctuating and possibly declining in many sectors. This may be counter intuitive, resulting in unsold inventory of finished products, warehouse rentals and other unforeseen costs.
Organizations can effectively contain costs with predictive maintenance
Many companies still use the age old methods of asset maintenance based on calendar scheduling. This can result in over-maintained assets, or under-maintained assets that risk uncertain break down. While the costs of this scheduling issue may not be immediately evident, they add up over time.
Is there a silver-lining to compete in this uncertain environment?
I suggest that forward looking manufacturing leaders reassess their competitive strategy by reflecting on a few questions:
Am I trusting and empowering small, agile teams?
Agility and empowerment for a field worker stems from having complete knowledge about such things as the equipment optimal parameters, system, and historically appearing faults and applied solutions. But this is a challenge in industries that see a constant churn of that employees, or have an aging workforce. They need to digitize knowledge so that it’s available to the field worker at the click of a button
Do I have mechanisms to foster little bets?
Innovation usually stems from accumulated incremental insights. While companies have a lot of historical data gathered over years, what is to be done with the data is still a mystery. Unless the data is analysed to produce insights that inform on how to optimize, storing data has little utility. Effective predictive maintenance harnesses the convergence of data from instrumentation and IoT with advanced analytics and AI technologies through digitized systems.
Do I regularly get out of the building to see what’s going on?
Modern manufacturing, as it originated with Henry Ford’s assembly line, relied on an individual developing a specialized skill and doing only that activity. This single-purpose mentality has been perpetrated over the ages, and thinking in silos has become inherent to the manufacturing industry. This is where data analytics comes into the picture: systems may be optimized, be it in multiple manufacturing units spread across the country, or as simple as data gathered from numerous sensors in the same organization.
So how do you know when you’re at an inflection point?
News of an inflection point doesn’t land at headquarters at the conference table. News of an inflection point starts out with a complaint received from a customer, a tweet posted by a happy or an aggrieved customer, a strange question that a customer asked, an unusual request somebody made, or with something unusual appearing on the radar. Executives must have an internal mechanism to access such uncomfortable news which comes in the form of non-tabulated data. Data driven insights especially unstructured data is usually the source of this.
Am I sure I’m not in denial?
Denying a negative sign or an uncomfortable reality often leads to poor results in business. It makes management blind to inflection points and they may react too late to take corrective action.
Being defensive to keep things the same is not the right strategy. You need to think about offense, be proactive, take the next step.
It’s time for smarter decisions
I advise organizations to make smarter decisions about asset management. For the best results, I suggest they augment IoT data with powerful cognitive insights driven by artificial intelligence (AI).
AI is vital in building the foundational capability to accurately capture:
- Asset hierarchy
- Maintenance records
- Root cause for failure (through failure modes)
- Skills required for repair
Additionally, AI helps manage safety requirements.
Companies that deploy suitable asset management equipment software, such as IBM Maximo®, can achieve savings of over 15-20% in operating efficiencies. They’re better able to service impacted customers on time, and can typically fix the problem on the first visit. That’s because the software helps deploy the right personnel quickly, and can provide on-site technicians with the right knowledge and tools to remedy the issue.
IBM asset management solutions start with a base knowledge level that enables organizations to deploy systems right away. The model we develop with your data is exclusive to your organization. Recommendations provided by such systems improve over time as the system learns on your data. It may be important to note that IBM does not use your data to make our own systems more intelligent. You own the data as well as the insights that arise from it.
You’re at an inflection point. It’s time to take action.
Organizations that embrace digital transformation and system-enabled intelligence are setting the foundation for unprecedented data-driven value. They’re unlocking completely new business models and are completely transforming their business processes across their supply chain, customer channels, and workforce experience.
If you’d like to learn more about the current landscape and technology, I encourage you to read my previous blog, The curious case of IoT: Unlock new value from data with AI.
Visit our IBM Maximo web page for more information about how our asset management software solution can help you with your digital transformation. You may also visit the Watson Internet of Things homepage.