The Connected Enterprise and Why Operations Managers Should Care

Why Operations Managers Should Care About IIOT

With the emergence of the Internet of Things (IoT), a wealth of possibilities have emerged that through greater connectivity between the plant floor and the enterprise are revolutionising efficiencies of production.

Through greater industrial connectivity, we can make better decisions, expose inefficiencies in our production and spark collaboration, leading to better management and implementation of manufacturing and industrial processes.

For Africa to grow its competitiveness, its production needs to take advantage of the opportunities of the IoT to gear up for maximum efficiency.

But what does this actually mean on an operational level, and how do we talk about this beyond mere conceptual idealism?

Operationalising The Connected Enterprise

Let's consider our own story, as Rockwell Automation, and our own journey into the "information age."

Since 2008, we've systematically implemented our own merging of internal enterprise and operations of our over-20 production facilities across the world that manufacture our products – some 387,000 SKUs.

So what did we actually achieve?

  • Too much capital tied up in inventory is a waste of resources and negatively impacts business performance by reducing an organisation's ability to react fluidly to market changes and customer demand.

For us, better connectivity of our enterprise and production floors has enabled us to reduce our inventory from 120 to 79 days. In so doing, we're more agile, leaner and far better equipped to respond to flexible market demands.

The financial impact of an inventory days reduction by a third is, obviously, huge, especially for an organisation as big as ours.

  • Supplier availability maximises the efficiency of an organisation's production flow. Having a more holistic, accurate and intelligent interface with our suppliers has increased on-time deliveries from 85% to 96%.

With live quality reporting, quality issues in the production chain can be isolated and actioned immediately, not after the fact in a month-end report.

Through this, we've improved product quality, as defect rates of parts per million, by 50%. In so doing, we've reduced waste, achieving faster time to market with enhanced agility and a greater product consistency.

  • Perhaps most critically, all these processes comprising our Connected Enterprise have meant a decrease in necessary capital expenditure by 30%. This wasn't the result of corporate cost-cutting or any financial initiative; it was the natural result of a more responsive enterprise whose production and enterprise systems are in sync.

Reduce your capital requirements by 30%, in a time where everyone's capital expenditure budgets are being cut anyway? The proof's in the pudding.

The final result of this? A 4 to 5% increase in productivity – annually! We're a far leaner organisation because of it.

This has been critical in Rockwell Automation maintaining our profit quality even in the particularly adverse market conditions of the global economy of the last several years.

So where do we start?

The key to operationalising The Connected Enterprise is to take a customer-centric approach that takes into account their processes; plant architecture; and operating and capital expenditure requirements, constraints and objectives – and recommend solutions accordingly.

Our advisory role becomes critical in terms of optimising resources through intelligent technological implementations and greater operational connectivity.

It may not necessarily be about wholesale component upgrades; it might simply be the way the plant is configured or engineered where the utilisation of existing technology is not as efficient as it could be.

How ready is sub-Saharan Africa?

The data that plants receive from the multitude of connected devices showing up on our MES or ERP systems is in many cases still "raw," in the sense that it needs to be interpreted and actioned into some kind of usable information that we can do something with.

The role of ‘knowledge workers' engaged in data analytics will need to grow and correspond with the uptake in enterprise connectivity of each organisation.

And like every technological revolution, skillsets will need to be fostered, adapted and developed.

In southern Africa, we have very capable, technically skilled people. Is this pool of workers big enough? Probably not as big as it needs to be, ultimately.

It will certainly take time, and there's a need to ensure we have the best mechanisms in place that can develop and retain a group of knowledge workers and data analysts equipped for the requirements of Industry 4.0.

In the globalised economy that we all compete in, we can't afford not to.

It's satisfying and encouraging to know that not only did Rockwell Automation have a vision of the industry of the future, but that we lived our vision, we operationalised our vision.

The results speak for themselves.

Barry Elliott
Posted May 23, 2016 By Barry Elliott, Managing Director, Rockwell Automation South Africa
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