A company’s digital transformation can’t be done without interoperability between systems across the supply chain. If manufacturers had to rip out and replace core systems like PLM, ERP, or MES then a total digital transformation would be harder and adoption would slower. For many manufacturers, integration between systems is a necessary part of digital transformation.

We caught up with George Young, global managing director of Kalypso, a professional services firm that helps companies make the transition to digital systems. We asked his view on the process of making the digital transformation. Young noted that supply chains work best when they’re connected by a digital thread. The need for this was particularly pronounced during the pandemic.

The Opportunities Hidden in the Pandemic

Young believes the COVID-19 pandemic accelerated digital transformation. Enterprises needed to solidify digital foundations and ecosystems to meet near-term demands while also building long-term resiliency and flexibility. “The digital thread is key to accelerating digital transformation initiatives into 2021. The goal is to unite and integrate IT and OT data into a seamless flow of data,” said Young. “The digital thread of information will need to span the entire value chain – from market and customer insights to product design – to deliver business growth, improve operational excellence, and enable risk mitigation.” 

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He pointed to digital twins as a key component of digital thread’s success. “Digital twins will accelerate product development timelines, cut costs, and reduce risk by virtual modeling and piloting the entire supply chain, from requirements collection and design to factory layout, capacity, scheduling, processing, manufacturing, and servicing in the field,” said Young. “The digital thread and digital twins will be key as manufacturers adapt to the new normal in 2021.”

Catch Up Now or Get Left Behind Forever

In 2021, the window will close on the digital transformation’s competitive advantage, according to Young. COVID proved digital transformation’s value, and companies that don’t tackle high-priority business problems with digitalization now will see their competitors pass them by. “Companies that moved on digital transformation in 2019 or early 2020 are reaping the benefits of never skipping a beat since they sent their employees home in March,” said Young. “They know how to develop new and complex products from home with an integrated tech stack enabling digital twins. For products already in the market, they are turning on AR or VR remote service offerings seamlessly.”

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Companies turn to digital processes when they understand it has become a competitive imperative. “We see enterprises identify one or two high-priority business problems in innovation, productivity, or risk management and solve them with proofs of value in data science, smart connected products and operations, and digital product creation,” said Young. “Addressing a problem will show instant value, drive user adoption and create a new roadmap based on value rather than technology.”

Digital Transformation Requires a Best-of-Breed Solution Ecosystem

Young believes a collection of best-in-breed suppliers offers the best path to successful digital transformation. An ecosystem of technologies, solution providers, and architects is key. “Organizations need to favor open architecture platforms to unite the best features of various IT, OT, and engineering technology (ET) solutions. Over-leveraging a single provider with a narrower tech stack, can have limitations and impede results,” said Young. “A blend of best-of-breed providers allows for the critical flexibility digital transformation initiatives require. A mix of suppliers allows teams to quickly implement solutions and drive results.”

Young notes that best-of-breed solutions and partners can create a closed-loop system to further improve outcomes. “They can share input and output data across the ecosystem to continuously adapt to shifting conditions or constraints,” said Young. “By sharing information, organizations can minimize time, reduce effort, and eliminate redundancy.”

Artificial Intelligence Will Become Less Artificial in 2021

Even as the impact of COVID-19 diminishes, the pandemic’s impact on how people work and interact has fundamentally shifted. “As we move through 2021, remote work will continue, social distancing requirements will remain, and supply chains will continue to face disruption,” said Young. “This new way of life demands a new way for companies to continue operations effectively across the value chain – from the product to the plant to the end-user.”

Young believes the use of artificial intelligence (AI) will be the standard for addressing these challenges. Manufacturers, however, need to consider how humans will interact with and leverage these new autonomous systems. Without that consideration, AI will fail,” said Young. “In 2021, enterprises will take a human-centered approach to AI initiatives, understanding user needs and values, then adapting AI designs and models accordingly, which will, in turn, improve adoption.”

The goal is to put the same focus on people and culture as the technology itself. “Organizational change management teams will be critical for driving digital transformation and AI forward by bringing people along for the change journey and setting the organization up for measurable results,” said Young. “Proper change management is the most important – yet overlooked – aspect of any digital transformation initiative.”

Prescriptive Analytics Are a key Component for Digital Transformation

Advanced analytics are becoming mainstream as businesses increasingly collect and analyze data across their organizations, with 35% of US manufacturers deploying advanced analytics in the past three years, according to Kalypso. “For AI to have a significant impact across the value chain, prescriptive analytics will be the catalyst to optimize performance,” said Young, “Prescriptive analytics will become an essential piece for scaling AI within organizations, by leveraging product and customer data to advise AI models on how to improve processes, adjust production and increase efficiency.”

He noted that prescriptive analytics enables constant improvement with an AI model by continuously monitoring and adjusting based on evolving conditions. “Prescriptive models can then enable decision automation, where the models can take the best course of action based on prescriptions,” said Young. “Going beyond predictive analytics to prescriptive analytics will ultimately enable digital transformation success for manufacturers in 2021.”

Rob Spiegel has covered manufacturing for 19 years, 17 of them for Design News. Other topics he has covered include automation, supply chain technology, alternative energy, and cybersecurity. For 10 years, he was the owner and publisher of the food magazine Chile Pepper.