Digital transformation can help companies meet supply chain challenges and shortages. But what does supply chain digital transformation mean?
Supply chains around the world are struggling. A survey by the Institute of Supply Management found that 75% of U.S. manufacturers have experienced delayed resources and materials during the Covid-19 pandemic. This is forcing a rethink in supply chain management, and a need for more automation and digitalization technology.
“For the first time in recent manufacturing history, demand, supply and workforce availability have been affected globally at the same time,” said Claudia Jarrett, U.S. manager for EU Automation, a distributor of industrial components, machinery and equipment. “Heavily dependent on offshore production and foreign suppliers for raw materials, manufacturers have been forced to come up with creative ways to continue operations.”
Spread out risk through digital transformation
One strategy is to reconfigure supply chains to be less reliant on a single geographical location or one core supplier and increase the proportion of local sourcing. Jarrett added that companies are using digitalization and automation to bring greater agility, responsiveness, and resilience to their supply chains.
Digital transformation has been a buzzword for a few years. It is the stock answer to questions such as how to resolve supply chain issues. But what exactly does digital transformation mean?
Naveen Poonian, CEO of iBASEt, said there has been plenty of confusion around the term. For some, it means automating business processes using traditional enterprise software like ERP. Others think it means a change of business model such as shifting from manufacturing capital goods to selling outcomes as a service.
“2020 is forcing manufacturers to rethink digital transformation.,” said Poonian. “Just automating business processes will not deliver the benefits many companies seek from their digital transformation initiatives.”
He noted disruptive forces such as supply chains breaking due to pandemic hot spots or extreme weather events, power unreliability due to natural disasters forcing outages, and global trade deals being overturned. Technology must support the identification of problems and the optimization of processes in real-time to adapt and adjust to new opportunities.
Poonian's company, for example, provides manufacturers, shop floors and maintenance/repair operations with a platform that helps them rapidly adapt to whatever problems emerge through manufacturing and supply chain automation and services.
Networking is another area where technology is needed to boost efficiency across supply chains, manufacturing operations, and field service. Many manufacturers continue to use aging communication protocols such as HART, PROFIBUS, and Fieldbus, and have largely avoided the deployment of Ethernet, according to Harry Forbes, an analyst at ARC Advisory Group. But that is about to change.
A new standard is emerging known as Ethernet-APL (Advanced Physical Layer). It is addressing the challenges of Ethernet in industrial environments such as cable lengths limited to 100 meters and unreliability in hazardous environments. Improvements include a 1,000-meter long, two-wire physical layer with 24-volt device power and characteristics that are compatible with many existing communication protocols used in manufacturing. According to Forbes, this is an important part in helping the industrial sector merge its IT systems with its operational technology (OT) systems as part of overall digital transformation.
This article was originally published on 11-19-2020