industrial transformation: reimagining continuous ... · •reimagining continuous improvement with...
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IndustrialTransformation: Reimagining Continuous Improvementwith Digital
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• LNS Research Overview
• The Digital Transformation Framework• Business Case Development
• Operational Architecture
• Operational Excellence
• Reimagining Continuous Improvement with Digital Tools
• Recommendations©LNS Research 2018
Agenda
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We are thought leaders and trusted advisors for Business,IT, and Automation executives
Our differentiators:
Authentic thought leadership
Easily consumable research
Outcome based analyst engagement
About LNS Research
©LNS Research 2017
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Sample Members: Spans Discrete, Batch, and Process
©LNS Research 2018
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Analytics that Matters Research
©LNS Research 2018
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Industrial Transformation
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IIoT is no Longer Hype
60%+ of companies have launched or are planning formal Industrial Transformation initiatives.55%
22%
7%
16%
48%
27%
8%
19%
36%
24%
15%
24%
0% 10% 20% 30% 40% 50% 60%
No Plans
Planning to Adopt
Budget Established
Implementing
IIoT Technology Adoption Plans
2018 2016‐2017 2014‐2015
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©LNS Research 2018
Digital Transformation Framework
Are companies setting themselves up for failure?
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©LNS Research 2018
Business Case Development Framework
There are many similarities and common points of failures across industrial transformation business cases.
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©LNS Research 2018
Similarities across Business Cases
• Time Frame: 3‐5 Years
• Return: $300MM+
• Justified mainly through associating specific cost savings and productivity improvements to traditional areas of operations
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©LNS Research 2018
Business Case Gaps
• Depends on step change in effectiveness of Continuous Improvement initiatives.
• Possible only if value chain can be holistically optimized in the context of financial performance.
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©LNS Research 2018
IT‐OT Convergence and Operational Architecture
• Multi‐Faceted: People,Process, Application, and Data
• Data Issues to Consider• Cloud, On‐Premise, Edge
• Type of Analytics Model
• Type of Data
• Application Issues to Consider• Role of Platforms
• Suites vs. Point
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©LNS Research 2018
Cloud, Edge, and On‐Premise
Slightly ahead on cloud and behind on Edge.
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©LNS Research 2018
Industrial Analytics Types
Slightly behind on AI/ML.
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©LNS Research 2018
Industrial Analytics Sophistication
No correlation between AI and Predictive.
Prescriptive well behind predictive.
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©LNS Research 2018
Understanding Operational Excellence
• Brings together people, process and technology capabilities
• Includes Management Systems, Metrics Programs, and Continuous Improvement Processes
• Drives Change Management and Corporate Culture
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©LNS Research 2018
Reimagining Continuous Improvement with Digital
Process industries have a Digital Disconnect for Continuous Improvement.
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Reimagining Continuous Improvement with Digital
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©LNS Research 2018
Digital DMAIC
A common operational data infrastructure and workflow to drive holistic continuous improvement across the enterprise
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©LNS Research 2018
Digital Shift Meetings and Kaizen
Moving from whiteboards, to point software, to enterprise wide mobile enabled applications that enable information handoffs, root cause analysis, and optimization.
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©LNS Research 2018
Virtual Gemba Walk
Management and subject matter experts can’t always be onsite. AR/VR can make walking the floor a reality from anywhere.
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©LNS Research 2018
Harmonized OEE and Other Operational Metrics
Eliminate differences in metric calculations and data quality across sites, enables accurate benchmarking across the business
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©LNS Research 2018
Impact of Digital CI on Analytics Sophistication
Digital CI is highly correlated with Analytics Sophistication
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©LNS Research 2018
Impact of Digital CI on Cloud and Edge
Digital CI is highly correlated with Cloud and Edge
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©LNS Research 2018
Impact of Digital CI on Metrics Improvement
Digital CI is highly correlated withprocess improvements
Average Metric Performance With Digital CI
Without Digital CI
Successful New Product Introduction 78% 70%
Net Profit Margin 25% 20%
Improvement in Cycle Time 30% 11%
Improvement in Change Over Time 32% 14%
Improvement in Throughput 29% 17%
Improvement in Yield 26% 10%
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Recommendations
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• Start on the Digital Transformation Journey
• Leverage a framework to manages the process and align strategic initiatives, operational excellence, and architecture.
• Avoid the common business case pitfalls: local optimization and not engaging culture change.
• Use investments in new architecture and Digital to reimagine Continuous Improvement
©LNS Research 2018
Recommendations
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Thank You!!
Matthew LittlefieldPresident and Principal Analyst
LNS Researchwww.lnsresearch.com
101 Main Street, 14th FloorCambridge MA 02142