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Welcome to Industree 4.0 for October 2020, exclusively sponsored by SAP. We lead off with a great article from Alfred Becker of SAP. That is followed by regular columnists Pat Dixon and Jim Thompson. We'll wrap with other perspectives from around the industry. |
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By Alfred Becker, SAP SE, Global Lead for Paper and Packaging.
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Sustainable Supply Chains
Part 1--What is a Sustainable Supply Chain?
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A sustainable supply chain is one that fully integrates ethical and environmentally responsible practices into a competitive and successful model. End-to-end supply chain transparency is critical; sustainability initiatives must extend from raw materials sourcing, to last-mile logistics, and even to product returns and recycling processes.
Digital transformation and the growing sophistication of digital supply chain technologies are playing a major part in the evolution of supply chain transparency and sustainability. Big Data management, advanced analytics, artificial intelligence (AI), and security tools, such as blockchain and RFID sensors, have brought unprecedented visibility and accountability to modern supply chains. Companies now have a much greater ability – and obligation – to demonstrate corporate social responsibility and to share best practices for green supply chains and sustainable logistics.
As ethical supply chain practices become a greater and more immediate priority for businesses, compliance goals and sustainability benchmarks are also becoming more standardized. The United Nations Global Compact has laid out 10 criteria for measuring supply chain sustainability. These cover areas of environmental responsibility, labor practices, human rights, and corruption. These principles are built upon the realization that socially responsible practices and products are not only good for people and the planet, but are also good for building positive brand awareness, competitiveness, and long-term profitability.
Supply chain sustainability in a changing world
For many businesses, it took the arrival of COVID-19 to deliver the sharp jolt of realization as to just how outdated and vulnerable their supply chain operations were. However, even before the pandemic was upon us, some fundamental changes to consumer behavior had been causing global supply chain managers to begin reevaluating their operations.
One such change has been the huge rise in demand for next-day shipping. This is known as the Amazon Effect, and it has created something of a paradox as it relates to supply chain sustainability. In a 2019 survey of over 1,500 U.S. consumers, delivery speed was ahead of all other factors when it came to choosing a retail channel. Yet, in many other surveys, such as this recent report, Nielsen indicates that customers are willing to pay more for products that ensure green logistics practices and transparent supply chains.
If companies are to deliver on both speed and sustainability in a meaningful way, it will require the ability to have real-time access to third-party logistics networks and deep, end-to-end visibility into their entire supply chain operation, including the most distant, low-tier suppliers.
A recent article in the Economist calls COVID-19 “the new normal” and suggests that we will have to restructure our lifestyles and businesses in the long term. Part of this will mean decreased reliance on overseas suppliers and manufacturers. Added to the uncertainty we’ve seen in the past few years regarding global trade and tariffs, we will be looking at increased reliance upon modern supply chain and manufacturing technologies to help us bring our supply bases closer to home. But, realistically, ours is a global economy and we will always have to rely on some international sources for certain raw materials and manufacturing capabilities.
Three components of sustainable supply chains
Twenty years ago, the word sustainability was almost completely synonymous with eco-friendliness. Today, it is a much more holistic term. Green, transparent, and circular supply chains are all components of a modern sustainable supply chain.
•What is a green supply chain?
A green supply chain is achieved by successfully integrating environmentally responsible principles and benchmarks into supply chain management. This includes product design, materials sourcing, manufacturing, logistics, and end-of-life product management. With the rise of e-commerce, there are more product and shopping choices than ever. To compete, businesses need to find resilient solutions to greening their supply chains while still growing profit. Supply chain technologies such as AI and machine learning can help businesses spot risks, patterns, and opportunities – allowing them to minimize waste and improve efficiency.
•What is a transparent supply chain?
Supply chain transparency refers to the ability and willingness of a business to openly disclose information about the provenance of goods and labor and end-to-end supply chain practices. Many businesses invest significant time and resources into establishing and maintaining ethical and environmentally responsible standards. The problem is, even with the best of intentions, this has traditionally been very difficult to enforce and reliably implement. Fortunately, through the use of digital technologies such as blockchain and RFID sensors, supply chain managers can now obtain an accurate and irrefutable record of all the products and suppliers along the entire supply chain journey.
•What is a circular supply chain?
In a circular supply chain, products are disassembled or reduced to their raw materials form, and remade into sellable products – thus allowing businesses to achieve the environmental benefits of recycling while recouping costs in the process. The win-win nature of this model is growing in popularity, and, according to a 2020 Gartner survey, 70% of supply chain leaders plan to invest in the circular economy. Some of the modern technologies that support these initiatives include the use of recycled plastics in 3D printing and the ability for advanced analytics to map out the most efficient logistics journeys for returning products into the supply chain loop.
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By Pat Dixon, PE, PMP
President of
www.DPAS-INC.com, offering project management and engineering for industrial automation projects.
co-authored this month by Jack Bray, former VP of Operations for Domtar
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This is my least favorite term in Industry 4.0.
In Industry 2.0 there was automation. Interlocks could be performed with hard wired electrical relays and field switches. PID loops could be designed with pneumatic bellows and restrictors. In a control room there was a panel with hard wired gauges and illuminated indicators for equipment status and alarms. When Industry 3.0 arrived, its distinguishing attribute was the application of computers to industrial production. What changed in Industry 3.0 is that these analog means of connection and processing were transformed to digital. Computer processors provided the conversion between analog and digital worlds.
Wasn’t that “Digital Transformation”?
To argue otherwise would be nonsense. You would have to change the definition of “digital” and “transformation” to suggest that digital transformation did not occur 50 years ago. The English dictionary is not that fungible.
What it is meant to mean in Industry 4.0 is that some of the work processes in industry that are being done manually are being automated. In some cases the work processes are on paper, in many other cases they are in Excel. Excel is a digital spreadsheet, so replacing Excel with an automated work process does not transform it from analog to digital. To call this “Digital Transformation” still makes no sense.
These work processes are primarily performed in a Manufacturing Execution System (MES) above your DCS or SCADA system, and the Enterprise Resource Planning (ERP) which sits on top of MES. You may already have these systems and be using them, but if it requires manual effort on paper or in Excel you have not been digitally transformed in the Industry 4.0 sense. In Industry 4.0 the objective is to be fully connected so that realtime data is being used to automate these work processes instead of spending money on manual effort using old data.
To enable this digital transformation, Walker Reynolds of Intellic Integration advocates for a unified name space (https://youtu.be/PB_9HIgSCWc). This is a single source (database, tag list) that allows everything to connect to realtime data. This needs to be an open, not proprietary, resource. It does not require a license or key to access. Every resource from the plant floor to ERP uses this name space. Reynolds says this is a requirement for digital transformation because without a unified name space there is a cost to engineer connectivity between everything that prohibits progress. Therefore, a unified name space can be one definition of Industry 4.0 digital transformation.
The August article on “MQTT” that I co-authored with Ian Verhappen is an example of a unified name space technology that is being used today.
Digital Transformation is just a very poor, misleading, and obfuscating term in Industry 4.0. Perhaps better terms to use would be:
•Unified name space transformation
•Enterprise automation transformation
As it stands, it has been so widely used and abused that I do not expect it to disappear. Any attempt to rename it may be quixotic. Perhaps the “Industry 4.0 Lexicon” is the best we can do to deal with it, in which we define it as follows:
•A new customer-driven strategic approach to designing and running a business. All processes are rethought in terms of addressing customer needs and designing products that fits those needs.
•It is not limited to manufacturing or production; accounting may be redesigned to offer more transparent, more automated billing and payments. HR may be rethought to provide a workforce with more customer-focused skills and training.
•Digitization projects are driven by this strategy, either to automate the new processes or provide the data they need to function.
No matter what happens, I expect the term “Digital Transformation” will never be transformed into one that I like.
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Applying Industry 4.0 to B2B Marketing |
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We mostly think of Industry 4.0 in a production setting. After all, the obvious productivity gains are in production, be it processes or discrete item manufacturing.
I do a lot of work in project validation--does the proposed project make sense? This is the question we ask in this exercise.
In that realm, we think of projects in three steps--markets, raw materials and the assets that fit between markets and raw materials. Notice the assets, or production facilities are third in rank. Yet these assets (equipment, buildings, people) have been nearly the entire focus of Industry 4.0.
We think of marketing as something retailers or high fashion does, not something done in a B2B transaction. Yet without marketing, you have no business, no matter how great your production system is.
And it shows. Marketing, were it not for computers and the internet doing disjointed little bits and pieces, is not much different than it was fifty years ago. We still have brochures, we still have person-to-person conferences (at least we did until Covid-19; let us hope the death of these dinosaurs is one of Covid-19's benefits). Most transmission of information is merely putting magazines on the Internet, not much different than faxing.
Industry 4.0 Marketing will be as transformative as Industry 4.0 in the production setting, if it ever gets here.
Why is this transformation so difficult to make? Unlike production, marketing involves so much more human emotions and human interaction. These connections are time honored and sacred to some. What this means is that Industry 4.0 Marketing is going to take longer.
Industry 4.0 in production and logistics is leaving Industry 4.0 marketing in the dust. Doubt me? Just think about how hard it is to find exactly what you want on Amazon or the program you want to watch on a streaming service. These are marketing interfaces and they don't work well.
Taken to the production floor, what bearing do you use to replace the one that just failed? One just like the one that just failed. Why don't you use a better one? The process, the marketing, of that better bearing is stuck in a dressed up version of 1930s marketing, just gussied up to look modern.
As revolutionary as Industry 4.0 is to production, just wait until it finally gets to B2B marketing.
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Manufacturers explore Industry 4.0 as possible solution for talent shortage |
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One manufacturer was having trouble finding workers to move production forward on its spray foam operation, she said. As a result, the company automated the process and instead of a person donning a full suit and respirator, team members could simply harness the technology. This one anecdote highlights the essence of Industry 4.0, which is to eliminate tasks that might be dull, repetitive, dirty or dangerous. |
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Tips to Pivot in Times of Change |
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By John McEleney
Industry Week
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When a major external crisis like COVID-19 comes along and changes our world, this lag exposes reliance on cumbersome, error-prone legacy processes. In good times, a cautious or “late majority” embrace of digital may get you by, but when a major externality hits, the weaknesses become glaring. As Warren Buffet once said, only when the tide goes out do you discover who's been swimming naked. |
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By Johan Gout, COO Capture 3D Inc.
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An essential step in employing a digital twin strategy is identifying a steady process for obtaining reliable data to create it. A blue light 3D scanner quickly collects high-quality data to establish the geometric identity of the digital twin’s real-world counterpart, saving time and money and improving quality control. The success of critical downstream processes relies on accurate measurement data, positioning blue light 3D scanners as an ideal solution. This as-built digital twin provides insight into design and manufacturing processes and supports determinations of additional downstream processes. Digital twin methodologies are also used for virtual assembly to simulate, predict, optimize and verify the assembly and fit of parts before investing in the production and distribution of physical components. |
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IoT Is Vital for Our Future Success, Say 87% of Businesses |
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“IoT has grown up. It’s no longer just about increasing return on investment or providing cost savings to businesses: it’s changing the way they think and operate. And it’s giving them an opportunity to re-design their operations and future-proof their business model. This research proves IoT is an essential technology for businesses that want to be resilient, more flexible and quicker to adapt and react to change.” |
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Industree 4.0 is exclusively sponsored by SAP |
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