This blog is written by Ke Wang, Managing Director, Industry X.0, Accenture Greater China
Across the globe, rapid technological change is powering a revolution in smart and sustainable digital manufacturing.
Whether it’s IoT connectivity, big data analytics, 3D printing, digital twins, cobotics, manufacturing execution platforms, or the digitally augmented workforce, today’s manufacturers have an unprecedented range of smart digital technologies at their fingertips.
From the connected plant, to the intelligent enterprise, to the digital supply chain, these technologies offer the promise of radically enhanced operational efficiency, the ability to capture entirely new sources of value, and the start of a new era of sustainable manufacturing. This will be marked by operational excellence, providing new services and experiences, minimizing negative environmental consequences and improving society.
Sustainable value chains for the customer-centric business
Just think about how the hyper-efficiencies delivered by predictive maintenance can transform operational uptime in the connected plant while simultaneously driving down materials wastage. That’s a big win for sustainable production-line efficiency as well as reduced environmental impact.
But consider, too, how digital value chains are central to delivering the next generation of consumer services. For today’s customers, value isn’t only found in “the product” a manufacturer produces and sells, but also in the services and experiences built around it.
To deliver this kind of value, manufacturers must work ever more closely with their partner ecosystems to ideate, innovate, produce, sell, and service products and experiences that are centred around the needs of individual consumers.
Take a product like running shoes. Some brands already offer the option to design a personalized set of sneakers and have them 3D-printed in store. That’s precisely the kind of hyper-relevant tailored consumer experience many customers are now demanding.
In fact, this kind of localized personalized manufacturing represents the future for many consumer products. But it also requires a complete digital transformation of the value chain.
Smart manufacturing in China
In 2018, the economic value of industrial digitalization was expected to reach 24.9 trillion yuan, an increase of 23.1 percent over 2017(1). In research by the China Economic Report, 73 percent of 1,815 enterprises in 10 Chinese cities expressed real enthusiasm for smart manufacturing implementation(2).
The 7 percent of enterprises that have become transformation leaders performed much better than the others: generating over five times more revenue and two times more margin(3). In particular, smart manufacturing helped to increase production efficiency by over 30 percent and energy efficiency by more than 15 percent, as well as reducing operational costs by over 20 percent.
The secrets of a sustainable transformation
Besides governance and cultural transformation, there are three components every business needs to get right to ensure a smooth transition to sustainable digital manufacturing:
- Align the strategy. A coherent digital strategy needs to cascade down from the very top of the enterprise to each local facility or plant. That’s vital for supporting the enterprise-wide digital initiatives – cloud infrastructure, manufacturing execution systems, standardized maintenance and procurement – which are central to the digital value chain. If individual plants have built bespoke on-premise systems overfitted to their particular needs, that’s only going to hinder business sustainability over the long run. The returns on investment and economies of scale just won’t be there.
- Prioritize the use-cases. It’s essential to think about the value each digital manufacturing initiative creates and prioritize accordingly. There are already hundreds of industrialized digital use-cases manufacturers can apply across the value chain, from planning to production to quality control to energy management. With so many possibilities, it’s crucial to have a systematic way to assess the business value of each use-case – and how sustainable it is – so investments can be optimized.
- Ensure the technology foundation. Everything a manufacturer aspires to achieve with a digital value chain is underpinned by the technology foundation: the integrated data platform, network of connected sensors and devices, and security environment. A sustainable transformation needs IT and OT systems to be integrated, both horizontally across the value chain and vertically throughout the enterprise layers of IT, OT, and data. This is where a platform like Dassault Systèmes’ 3DEXPERIENCE is invaluable.
Time to get smart about sustainability
Digital manufacturing promises a genuine transformation in smart and sustainable operations across the value chain – not just in terms of a lighter environmental footprint, but also in the future competitive sustainability of the business.
There’s no doubt that transforming manufacturing for the digital age is a complex challenge. But it’s one that needs to be faced head on. The risk of failure – being left behind as competitors forge ahead and capture fertile sources of new value – is just too great to ignore.
Data sources 1) China Institute of Information and Communication “White Paper on Digital Economic Development and Employment in China (2019)” 2) China Economic Report, April 2019, “Development Roadmap of China’s smart Manufacturing” 3) “Index of China Enterprise Digital Transition in 2018”by Accenture Research and National Industrial Information Security Development Research Centre
Managing Director Digital Production & Operations, Accenture China
Mr. Ke Wang has over 15 years of professional consulting and management experience, he is currently a managing director of Accenture China leading their digital production and operations practice. Mr. Wang has rich experience which covers strategy and management consulting as well as engineering. Prior to joining Accenture he was the CEO of a management consulting firm and a member of the management team for a leading strategy consulting firm in China.
Mr. Wang has led various projects focusing on corporate and business strategy and operational excellence. He has optimized production processes to improve the production efficiency and implemented lighthouse projects for smart manufacturing. In addition he has strong expertise in connectivity and digitization, especially in the automotive industry.