If sweat and grime, sparks flying from huge cauldron’s of molten metal; massive railways engines being hauled by men in greasy overalls or menacing aircraft engines that can suck the life out of you come to mind at the very mention of the manufacturing sector, then you are probably right; but only if you have been living under a rock and stuck in the year 2000. If you thought that digital transformation is a vocabulary that belongs to the people in the telecom, hi-tech and media sectors, then you can’t be further away from the truth.
The manufacturing sector is the new frontier for digital transformation.
Being a human capital intensive sector, digital has the potential to impact not only the products and businesses but also our livelihood. Digital is viewed as the revolution that will finally bring manufacturing back to the developed economies. This can have far reaching implications for factory workers both in developed and developing economies. So vast is the potential impact that Institutions like the World Economic Forum have adopted ‘Industry 4.0’ as the theme for this year’s conference. Sustainable green manufacturing is another area that will greatly benefit from digital.
However, the focus of this blog is on the technology and business dimensions of digital rather than the societal implications. Take the case of an aircraft engine, everything about it is massive. It is a huge piece of machinery, it costs a lot of money to buy and is equally expensive to run and maintain. Until recently the only way to acquire one was to buy it for a huge amount of money. But today thanks to digital it is possible for airlines to acquire an aircraft engine on a pay per use model. Software as a service is passé, how about aircraft engines as a service !
If you guessed that the company enabling these possibilities is Google, Amazon or one of the new age silicon valley firms, then you would be dead wrong. The company that makes these things possible is General Electric. A traditional manufacturing firm from the pre digital era.
Aviation is not the only industrial sector being transformed by digital. Today massive wind turbines can communicate with each other and automatically orient themselves in the right direction for optimal power generation. They can communicate with the smart grid and the charging system to ensure a steady output. Further down the power distribution chain, smart meters can communicate with smart electric vehicles to schedule charging during low power rates.
The healthcare sector with its expensive assets like MRI scanners is another area that is being transformed. Just as with aircraft engines, connected medical equipment allows for new usage based business models, remote monitoring and preventive maintenance ensures that these critical systems are kept running. Even the humble hospital bed is becoming smart, thanks to GE Health Care’s “AgileTrac”. AgileTrac enables hospitals to tag and track beds and other mobile assets like heart rate monitors, wheel chairs etc., thus improving the efficiency of the hospital staff and ultimately the quality of patient care.
If you thought Google’s driverless car is the epitome of great engineering, think again. How about a smart train ? GE transportation’s Rail Edge Movement planner allows railway operators to combine logistics with traffic control systems. Operators can monitor the progress and pin point the exact position of the locomotive from a central location. Cruise control for smart trains continuously monitor the terrain. Depending on the slope & other terrain information, speed of the locomotive is increased or decreased to maintain optimal fuel efficiency.
At first glance small optimisations in fuel consumption and improvements in efficiency may not seem like much. But given that massive scale of the industrial sector, even a 1% saving translates into a huge amount.
1% saving in aviation fuel translates to a 30 billion $ saving over 15 years. A 1% optimisation improvement in healthcare adds 63$ billion over 15 years. A 1% reduction in Capex in the oil and gas industry translates to a 90$ billion saving.
Almost all the examples quoted here are from General Electric. While it is true that most of the manufacturing firms are slow to adopt digital, General Electric is an example of benefits that digital can bring to this sector.
You can read the entire paper from here..
https://indd.adobe.com/view/f9e1426c-a79f-4aa2-a506-f21fe4c9e26a
