It’s the start of 2021, and we’re coming off an unprecedented year in industrial automation. How will the COVID-19 pandemic continue to affect operations?
Find out below in Part 1 of our annual round-up of the trends and technologies set to impact the plant floor during the coming year. In this instalment, we’ve asked industry experts, including Craig Resnick at ARC Advisory Group and Don Matthew and Francois Gaudreau at KPMG Canada, to weigh in on their top five trends for the coming year.
Check back soon for more predictions, and see the full article in the next issue of Manufacturing AUTOMATION, coming to you in early February!–Kristina Urquhart, MA editor
Craig Resnick, ARC Advisory Group
Craig Resnick is vice-president at ARC Advisory Group. He supports both automation supplier and financial clients. He has more than 30 years of hands-on experience in marketing, business development and strategic planning. Resnick graduated from Northeastern University with an MBA and BS in Electrical Engineering.
The convergence of information technology and operations technology (IT/OT convergence) is progressing rapidly as manufacturers realize it is key for successful digital transformation.
Connectivity and/or convergence between OT and IT is essential for businesses to compete with the increasing demand for tighter integration and more information that leverages Industrial IoT, Industry 4.0, 5G, cloud, edge, additive manufacturing, advanced analytics, digital twin, AR/VR, AI, ML and other emerging technologies.
IT/OT convergence includes cybersecurity, which helps fill existing security gaps and ensures consistent security levels across the entire organization. Increasingly, convergence also includes the integration of power and automation, which involves converging information about electrical assets (such as in motor control centres) and the production process to help improve sustainability across the entire lifecycle of a manufacturing plant.
Convergence between power and automation also provides an integrated, digitalized approach that increases interoperability and flexibility, reduces capex and opex expenditures, increases production efficiencies, decreases unscheduled downtime and improves overall profitability.
Rather than a trend, ARC believes that this convergence between IT and OT, IT cybersecurity and OT cybersecurity, and power and automation will become permanent, representing a true technology fusion.
In 2021, look for the introduction of new solutions where these technologies will move beyond convergence and be fused into a single offering.
One of the objectives of a company’s digital transformation journey is to ensure resilient operations, improving a manufacturer’s capabilities against heightened business risks.
These include increasing cybersecurity threats, new regulatory compliance mandates, and more strenuous plant and personnel safety requirements.
Even before COVID-19, manufacturers faced numerous challenges such as market and commodity uncertainty, rapid fluctuations in demand, supply chain disruptions, and the need to become more agile, efficient and sustainable.
However, the current pandemic magnified those challenges, leading manufacturers to focus on operational resilience as a key corporate objective.
Operational resilience means that companies are breaking physical and organizational boundaries to engage a real-time workforce, connecting teams and enhancing collaboration. It means supply chains are being managed in real-time to maintain their integrity, agility and flexibility to respond to market demand and material availability shifts.
Operational resilience means that new methodologies are being deployed for companies to protect against unscheduled downtime and asset failures, ensure product fulfillment, protect personnel and enhance security architectures.
In 2021, manufacturers will look to increase their operational resilience to reduce their supply chain vulnerability, lower safety risks, improve remote operational performance and optimize production throughout the plant lifecycle.
The COVID-19 pandemic has forced companies to shift to running their operations remotely, with many employees working from locations outside of the plant, such as their homes.
This requires a connected workforce with the right cyber-secure tools to provide real-time visibility and control and meet the challenges of fully remote access of operations.
Remote operations require appropriate enabling technology for a connected and remote workforce, facilitate collaboration and reduce paperwork, provide secured access to information from anyone, anywhere, and support interactions with remote experts.
This improves the efficiency of performing tasks and offers a safer working environment for employees. It also helps companies capture and manage knowledge, and incorporate and deploy new workflow processes.
Remote operation greatly benefits from technologies such as augmented reality (AR), where the remote user can see any asset in the plant with information digitally overlaid. AR devices sense what the remote worker is looking at and displays the data needed for the operation at hand using tablets, smartphones, smart glasses or wearable computers.
In 2021 (and beyond), manufacturers will continue practicing remote operations to a significant extent even after the effects of the COVID-19 pandemic have passed.
Accelerated by the COVID-19 pandemic, industry urgently requires new modes of operation.
Thanks to advances in digitalization and new open process automation standards, IT/OT convergence and digital transformation, manufacturers have an opportunity to move from “automated” to “autonomous” operations where appropriate.
Not only do these advances present the opportunity to improve overall business value, they present an opportunity to further advance safe and flawless operations. The goal of moving from automation to autonomous operation is to improve the reliability and predictability of the operating plant.
Today, human operators decide what to do when something unpredictable happens. Tomorrow, the autonomous systems may be making those decisions, with the humans serving as observers and overseers.
One concern often expressed is the aging workforce and how to pass on the knowledge gained over years of making decisions. This is often based on intuition and experience.
While these human characteristics can be hard to replicate in systems, when trained with appropriate historical data and combined with adequate real-time data, artificial intelligence (AI)–based applications can enhance the human’s understanding of what is normal and abnormal in the plant operations.
In 2021, manufacturers will continue to make inroads toward moving operations from automated to autonomous.
Edge computing platforms and applications continue to grow rapidly, but these often require support from corporate IT personnel with specialized skills to install, program, operate and support them.
This has led to the development of edge automation platforms designed to provide the full capabilities and benefits of computing at the edge, such as gathering, analyzing, processing and storing data locally in real-time at or close to the point that the data is gathered.
The key difference is that personnel without specific IT skills will be able support these new edge automation platforms.
The edge automation platform is designed to run continuously without the need for specialized onsite or remote IT support.
Edge automation platforms are critically important because edge computing platforms used in industrial processing and manufacturing applications are typically under the jurisdiction of the OT group, the same people who install, program, operate, and service automation equipment, such as PLCs, PACs, DCS, sensors and other instrumentation. This creates tremendous savings in time and personnel costs.
Furthermore, the edge automation platform is designed to run continuously without the need for specialized onsite or remote IT support. Look for new edge automation platforms to be introduced in 2021.
Don Matthew, KPMG
Francois Gaudreau, KPMG
Don Matthew, CPA, CA, is the national sector leader for KPMG in Canada’s industrial manufacturing group. He is a member of the board of directors and chair of the finance, audit and risk management committee of Canadian Manufacturers & Exporters.
Francois Gaudreau is a partner in KPMG’s advisory practice, leading the Canadian Intelligent Business Process Automation practice.
While not a new trend, business process automation continues to evolve. The COVID-19 pandemic ramped up the automation of monotonous manual processes and tasks.
For too long, organizations focused on creating digital versions of legacy analog systems in their middle and back offices, instead of reimagining how digital technologies can improve the entire enterprise value chain from decision-making to the way people work and connect with customers or suppliers. The pandemic has made companies realize that they could embrace digitization technologies.
Forrester Consulting research for KPMG International conducted in July 2020 finds that two in five Canadian companies will start automating all or part of their operations moving forward.
Also, they will continue to automate all or part of their inventory management and distribution process (48 per cent), followed by IT processes and procurement (each at 32 per cent) and supply chain (27 per cent).
The focus is shifting from task-based automation to functional-based business process automation across multiple tasks and areas.
The shift to Industry 4.0 solutions – which includes connectivity, advanced analytics, intelligent business process automation and advanced manufacturing technologies – started before and gained momentum during the COVID-19 pandemic and will accelerate rapidly post-pandemic, as companies look to build resilience and radically improve operations, production efficiency, speed to market, customer service and end-to-end supply chain transparency.
Intelligent business process automation – that is, the integration of robotic process automation (RPA), low-code/no-code tools, intelligent document processing, integration platforms (iPaaS), machine learning, natural language processing and decision management systems – has the power to increase speed, scale, quality and precision of business process execution exponentially while also complementing and augmenting human skills.
Companies that can power up scalable and agile intelligent business process automation efforts become long-term winners.
But piecemeal efforts that focus mainly on cutting the cost of legacy processes and reducing headcount – with, for example, siloed efforts to automate payroll, invoice processing and customer service enquiries – will not move the needle in a post-pandemic world.
Over three-quarters (76 per cent) of Canadian CEOs surveyed in KPMG International’s special COVID-19 Global CEO Outlook report acknowledged that investing in technologies, such as AI and automation, is critical to achieve long-term sustainable growth. Over four in five are now prioritizing their technology spend.
According to KPMG International’s Enterprise reboot research, 61 per cent of Canadian companies expect cloud to be their predominant app, data and computing infrastructure within the next five years.
With remote work having become the norm and a hybrid model likely to be adopted post-pandemic, cloud computing provides more flexibility and agility to deal with present and future economic and business uncertainties. It has become a business imperative.
We anticipate companies will build out cloud-enabled capabilities, including AI, robotic software and data analytics.
Increasingly, companies are using machine learning to make robots teach themselves how to perform tasks better and that knowledge can eventually be shared via the cloud, allowing robots to learn from one another to improve speed and efficiency and reduce waste.
Cybersecurity has never been more critical. With the growing use of networked sensors and intelligent devices, cyber resiliency is a concept whose time has come.
It includes information security, IT infrastructure, business policies, processes and governance practices and business continuity. There’s a growing realization among companies that they’re sitting on a treasure trove of information that if better organized and made more efficiently accessible can create value.
The pandemic fast-tracked the need to digitally transform security and widen the security perimeter to encompass remote workers.
However, cybercriminals are also looking for ways to access that same information. The pandemic fast-tracked the need to digitally transform security and widen the security perimeter to encompass remote workers. The shift to the automation of security functions from identity authentication to threat detection and response has accelerated.
Companies are looking to automate first and second lines of defence via the cloud to better respond to enterprise-wide threats, while simultaneously confirming that security controls are operating as expected.
Process and task mining helps organizations discover and visualize all business processes across the enterprise, and analyze operative process data created by IT systems, providing greater business process transparency and optimization.
Leveraging purpose-built analytics tools, users can analyze vast amounts of data in real-time, contributing to an end-to-end operational intelligence platform. One of the biggest challenges of business process analysis is understanding how the process is currently performed.
Process experts often design processes expecting that their execution will be faithful to the design. However, designs tend to be incomplete and not executable in practice, and people tend to overlook or bypass designed processes and work in silos.
These challenges are more prevalent than ever due to digital transformation programs, adoption of global business services, and the introduction of bots and other AI into the business processes.
Process and task mining offer a set of novel tools and techniques for the factual analysis of business processes. Based on system logs and/or screen recordings, they automatically map and visualize how processes have been executed in reality, and help companies to remove all assumptions and guesswork from processes.
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