Welcome to the Future of Digital Transformation in Manufacturing (Hope You Like It)

1. Welcome to the Future of Digital Transformation in Manufacturing (Hope You Like It) ===================================== We’re continually hearing how COVID-19 has catapulted digital transformation forward years in a matter of months, but IDC has now quantified the truism with their Worldwide Digital Transformation Spending Guide. It forecasts global spending on digital transformation (DX) will reach $6.8 trillion by 2023 and that 65% of the world’s GDP will be digitized by 2022. Amid the pandemic, we can divide manufacturers into two distinct camps: those that are burying their heads in the sand, waiting for a return to the status quo, and those investing intelligently in digital transformation to exploit new opportunities as they present themselves. The status quo is never coming back. So, which side are you on? What is Digital Transformation in Manufacturing? Digital transformation in manufacturing is widely understood to mean the adoption of digital technology to replace or automate manual processes–swapping out the old for the new. But that’s a rather short-sighted view. More than merely digitizing and optimizing existing systems, the benefits of digital transformation in manufacturing should redefine strategy, create new competitive advantages, and future-proof processes for the new normal. We’re living through what Klaus Schwab, executive chairman of the World Economic Forum, has called the Fourth Industrial Revolution–the transition away from a global economy powered by machines towards a world “characterized by a range of new technologies that are fusing the physical, digital and biological worlds.” Manufacturers that fail to adopt key Industry 4.0 technologies risk falling behind an advancing pack of agile “smart factories”–fully connected systems, fuelled by continuous data streams, that learn and adapt to new demands as they emerge. 3 Technologies Driving Digital Transformation in Manufacturing Big Data and the Industrial Internet of Things As digitalization swells the global data sphere, the power of big data (data sets so large that they exceed the capacity of conventional processing methods) combined with machine learning (computer algorithms that improve automatically through experience) increases at a dramatic pace. Manufacturers with big data capabilities are making huge gains across a broad range of dimensions: everything from product quality, production efficiency, energy management, supply chain management, and safety. Sensors inside production equipment, instruments, and other devices, connected in a cyber- physical network known as the Industrial Internet of Things, provide real-time

2. ‘condition monitoring,’ improving machine lifespan, reducing downtime, and predicting defects before they occur. From a purely commercial perspective, manufacturers can use big data to reveal patterns and trends in the market, predict customer behavior, and personalize buyer journeys to maximize conversion rate and retention. They can automatically update prices to account for fluctuating market conditions (dynamic pricing), ensuring they retain agility and competitiveness while ringfencing target margins. More than 59 zettabytes (ZB) of data (a zettabyte being one sextillion bytes) will be created, captured, copied, and consumed globally this year (2020.) More data will be made over the next three years than over the past 30! Big data capabilities will soon become table stakes in manufacturing, but it’s not too late to jump aboard the big data train. Additive Manufacturing (3D Printing) Additive manufacturing, or 3D printing as it’s more widely known, is the CAD- controlled process of printing 3D objects by depositing and joining a multitude of different materials in layers, anything from plastics to titanium and steel. Advantages for manufacturers include cheap, rapid prototyping, less wastage, lower stock on hand requirements, simple recreation of legacy parts, and, crucially, the ability to harness AI-driven generative design (an iterative product design process carried out by a machine, which is super interesting.) With additive manufacturing, a custom cell phone case can be printed at home, on a cheap 3D printer, in less than 20 minutes. Meanwhile, the Strati–the world’s first 3D printed car–can be printed on more advanced machines in about 24 hours. While that might sound fast, it’s not that fast. The stamping, welding, painting, assembly, and inspections involved in manufacturing your average Toyota take only 18 hours–that’s six hours less than the Strati. A basic phone case can be injection molded in under 30 seconds! So why is additive manufacturing so crucial to digital transformation in manufacturing industry? It’s all about the differential costs between batches. Traditional manufacturers have to produce thousands of units to be profitable. Additive manufacturers can produce just one. As additive manufacturing becomes cheaper, it’s tearing down barriers to entry, transforming supply chains from global to local, and making mass customization commercially viable for the first time. Industrial Augmented Reality Most of us have heard of augmented reality (AR). We might have even experimented with Google’s various AR features in apps like Google Lens or Google Maps. The technology isn’t new. It dates back to 1990 with the work of Thomas Caudell and David Mizell*. But it’s still in its relative infancy considering the manufacturing use cases coming down the pipeline. An AR system brings digital content into the real world by giving users a “composite view”–a combination of a real-world scene as viewed by the human eye and a virtual scene as generated by a computer. Manufacturers use AR (or

3. “Industrial AR”) for tasks as diverse as assembly guidance, maintenance and repair; quality control; and training. When combined with advanced robotics and virtual reality (VR), many of these tasks can be carried out remotely through a mobile device. AR is just as powerful when used by manufacturers as a sales tool. Demand for personalization is on the rise, and manufacturers seek ways to enable non- technical sales reps (and even self-serving end-customers) to configure complex, customizable goods without the prerequisite knowledge and skills to do so. With AR visual product configurators (a feature of some visual CPQ solutions), sales reps can assemble products within a highly intuitive simulated reality. Advanced product and pricing rules built into the software ensure every configuration is error-free and technically viable. It’s a fully immersive buying experience that boosts average conversion rates by 40%. *Caudell and Mizell, working for Boeing in the early 90s, were asked to design a replacement for large plywood boards that displayed the wiring instructions for the various aircraft assemblies. So they devised a head-mounted display that superimposed different sets of wiring instructions onto the real world. They only managed to make the instructions appear on bare, reusable plywood boards. But still, less plywood! GE Healthcare is a Manufacturer That’s Doing Digital Transformation the Right Way GE Healthcare is a leading global medical technology and digital solutions innovator and a prime example of a company at the forefront of digital transformation in the manufacturing industry. As Jon Zimmerman, Vice President and General Manager at GE Healthcare, puts it: “We speak, eat, and breathe digital.” The company’s full end-to-end business process is linked by what they call the “Digitial Thread”–a seamless flow of data that drives automation, gathers information, and provides data-driven insights. GE digital transformation aims to digitize healthcare by supplying healthcare providers with an array of digital solutions. These include their intelligence platform, Edison, which improves efficiency, patient outcomes, and access to care through its 50+ Edison apps. And their Industrial Internet of Things platform, Predix, which provides out-of-the-box condition monitoring through asset connectivity, edge-to-cloud data processing, and a feature-rich user console.