IT in manufacturing – the CIO’s new challenge

by Nov 1, 2015IT in Manufacturing

The computerisation of manufacturing as encapsulated in “Industrie 4.0”, or the so-called “fourth industrial revolution” is attracting attention by manufacturing decision-makers who find their companies increasingly part of the global supply chain.

Industrie 4.0 fact or fiction?

Industrie 4.0 describes an industry where customisation of products and flexible mass production is enabled by information technology, advances in virtualisation, mobility, data processing, and internet-enabled service architectures. Some companies have been proactively preparing for this new benchmark in manufacturing flexibility, while others have predicted that Industrie 4.0 will eventually die a natural death, much in the same way that other IT-led innovations climbed Gartner’s famous hype-cycle only to fall spectacularly again.

The requirements of Industrie 4.0 are ambitious and many companies will fail to meet the new benchmark. Does this mean that they will go out of business? Probably not, at least for now.

Industrie 4.0 is placing new demands on the manufacturing CIO who is tasked with building the necessary capabilities within the IT organisation to future proof the systems.

In the past it might have been possible for the CIO simply to focus on business process optimisation, running the ERP systems, and providing a secure stable IT infrastructure for the enterprise. This remains necessary but is no longer sufficient.

The convergence of IT and operations

Those CIOs that in the past avoided MES as being the realm of “highly specialised SCADA programmers and control engineers” are no longer able to ignore the reality of the convergence of IT and sensors on the physical plant. In turn, the specialists who preferred to work on their isolated proprietary PLC, SCADA, or DCS systems cannot avoid these systems becoming part of a much broader ecosystem.

Integrated MES level applications such as laboratory management, plant maintenance, and supply chain systems also need to be extended beyond the enterprise boundaries to connect with external real-time information. Several of these systems might have served the business well in the past but they are not designed for the future open architecture and will need to be upgraded or replaced.

As the Internet of Things (IoT) evolves and more and more physical sensors are coupled into the plant, IT is also increasingly being asked to process, store, and analyse the resulting data. This requires a new set of skills and capabilities, and many are finding it hard to keep up to date.

As systems become more connected, integrated, and automated, so the skills required to implement, maintain, and operate the systems also become more specialised. New skills will be required across the board that can leverage these new services and technologies in ways that enhance business performance. Many individuals will find themselves poorly prepared in this regard and will have to seek out new skills in order to stay relevant.

The influence of human behavior

I was involved in a project some years back that calculated the optimum production schedule to meet forecast demand in a beverage company. The system involved a very complex interrelated system such as raw materials, batch processing, blending, packaging, warehousing, and distribution. The problem was so complex it could only be optimised using advanced software. Yet, as it turned out, the people involved in executing the resulting plan were often unwilling to accept the calculated optimum because they could not understand how the computer had come up with it. When the solution was not consistent with their own instincts, the system was deemed to be wrong. In the new world of Industrie 4.0, such behavior would severely inhibit the organisation’s capability to respond correctly in response to complex external stimuli.

It should be clear that implementing the principles of the fourth industrial revolution is more than wiring sensors to the Internet and analysing the resulting big data. It will involve a fundamental change in the way people make decisions at work using new technologies; and will require a new level of skill in operations, engineering, process control/MES, and IT. A new generation of informed information worker is required to make Industrie 4.0 a reality for most.

The manufacturing CIO clearly needs to be comfortable with the concepts of Industrie 4.0. Established IT processes that in the past focused on preparing month-end reports from an ERP system might not be adequately prepared for real-time analytics-driven manufacturing decisions.

My advice to a manufacturing CIO is to get familiar with Industrie 4.0, even if it is not yet clear on how it will impact on your organisation. Deep organisational transformation takes time; and the sooner there is a clear vision of what the future holds and an understanding of what is required, the sooner the process can start.

As CIO you should proactively build the new required competencies in your teams. Most of the Industrie 4.0 concepts will be familiar to IT people who are presently getting comfortable with cloud, mobility, SAAS, and big data. Align the IT organisation closer to the engineering and manufacturing execution teams and seek common ground for collaborative projects. This is one area in manufacturing where the CIO can certainly lead business transformation.

This article was first published on SA Instrumentation and Control.

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