Pradeep Agarwal, senior director – cloud at Oracle, explains how ERP is changing the world of manufacturing.
What do you mean when you talk about the term Industry 4.0?
Industry 4.0 describes profound changes in all areas concerning business: technology, social, economic, and geo-political. Profound advances in machine connectedness, advanced analytics, and cloud computing have created the toolset required to support your digital transformation journey.
Industry 4.0 means a world where everything is connected to everything. Everything talks to everything, and advanced analytics and artificial intelligence create autonomous manufacturing capability. From a world of sequential, siloed transactional recording of what happened, to a world where data is real time and your operational/informational systems tell you what will happen. New technologies are creating value-chain innovations and forcing market disruptions. Globalisation, new manufacturing technologies, IoT, AI, and cloud computing enable this next industrial revolution.
What are the challenges faced by companies and what do they need to come to terms with, in order to stay competitive in the market?
From a long time, organisations have been continuously looking out to better segment their customer base and deliver products as well as services more effectively and efficiently and this has been a major challenge for companies across industries. With industry 4.0, a paradigm shift has started, and many manufacturers now realise that they can get an opportunity to adopt one or more of the enabling technologies like Internet of Things, Big data, Analytics, etc. in order to transform their business.
In terms of overcoming these organisational challenges, there are certain recommendations that I would like to make. The most important one for organisations is to evaluate these advanced technologies in the context of the business outcomes they want to achieve. Secondly, it is very important to identify areas of operations which can benefit the most and then defining those use cases very clearly, before adopting a new technology.
Thirdly, it is very important to try and avoid the cost of integrating different disparate pieces of technologies to form a solution. This becomes an on-going burden that they will have to manage for perpetuity. More importantly, the outcomes need to be seamless and cannot be fractured insights from multiple applications. Additionally, pre-integrated applications are always preferable. Lastly, I would like to mention that we know that there are several players with these new technologies. Therefore, it is very important to look for someone who can carry out the complete solution – for example in IoT, the value is not in the device, but in the analytics using that data. And that can only be brought in by enterprise applications. Look for someone who can build the entire solution, rather than getting mired in the technical nitty gritty of the device.
What is the role of technology in contributing towards the transformation of the work processes of various industries?
From the way we interact and communicate with one another, to how we make basic decisions about our day, shifts in the technological landscape have completely transformed the very basics of what life looks like, and how society operates today. Nowhere have those changes been greater than in the world of manufacturing. From the dawn of the first industrial revolution, technological changes have had a major impact on how products are manufactured – opening up new opportunities for improving efficiency, productivity, and quality. Robotics, CAD, and machine-assisted processes all had a huge impact on manufacturing.
Organisations across sectors and industries have generated large amounts of data – from their PLCs and SCADA systems collected over more than 20 years. The problem that has been persistent with them is that they are not using that data. There are no easy to use tools for them to make use of the data in a contextual manner. The idea is not to analyse data for the sake of it, but to derive some useful insights from it. how do they do that? Here is when the use of emerging technologies comes in handy. By using them to analyse the existing data, they can identify ways to optimise their existing business processes or they can reduce the manual workflows that otherwise go unnoticed and add to their cost or improve customer experience. Thanks to Amazon and its ilk, firms would like to know where each consignment is at every step of the way. And if the quality of delivery is not good, the products are returned. Using technologies like AI, ML and blockchain, firms are able to enhance their customer experience. Imagine a use case, where the customer does not have to complain about a product issue. The manufacturer calls and schedules a maintenance visit, because the IoT device has sensed a potential problem. Being able to provide product-as-a-service is another huge opportunity in the waiting. IoT and AI can enhance such use cases. Blockchain applications will address the challenges faced in multi-tier visibility, non-disputable root—cause analysis, compliance and provide opportunities for avoiding counterfeiting, providing farm-to-fork visibility to end consumers etc.
How is Oracle ERP contributing towards enabling companies to meet the requirements of the digital economy?
According to Allied Market Research, the global ERP software market will surpass a value of $41 billion by 2020. At the same time, IDC is predicting that in the similar time frame, global IoT spend will total nearly US$1.4 trillion as organisations continue to invest in the hardware, software, services and connectivity required to enable IoT. As both these processes are showing a huge propensity to grow, they are also overlapping. By 2022, IoT enabled ERP is poised to become a huge opportunity for the organisations as this market is expected to reach close to $50 billion by 2022.
This overlapping of ERP and IoT seems inevitable. Data from IoT will further enhance ERP systems’ efficiency. Insights from AI and machine learning will further strengthen the ERP systems. This culmination will enable business leaders to take better decisions based on data driven insights. For example, sensors can communicate details about lack of or excess of inventory, allowing supervisors to better manage ordering and replenishment while minimising the possibility of human error.
Oracle’s strategy is focused on revolutionising businesses through IoT applications by extending them to the physical world as well as integrating organisational silos (Design, Manufacturing, Logistics, Transportation, Service) in real-time throughout the digital supply chain. Oracle’s IoT Applications eliminate manual processes by creating ‘Digital Thread’ and workflows from enterprise assets to ERP applications and, thus, provide an end-to-end view of the entire manufacturing lifecycle. IoT uses the assets master data, productions plans and prebuilt workflows etc. from ERP systems.