When I look back on the last 12 months, I see a substantial number of changes in the requests for solutions we received from our clients. The pandemic deeply affected all manufacturing industries and supply chains, forcing them to quickly rethink their investment strategy. Things happened in a nonlinear progression, with several changes of directions, while companies began to understand how the virus was changing their business and modifying their usual market. Looking back, I can find four main phases: reaction, waiting, planning, and implementing.
The first approach was an emergency reaction trying to put in place all the initiatives necessary to protect their business. The only target was business continuity and workforce protection. Different industry verticals were of course affected differently and reacted differently. Some of them saw their market shrink instantly, while others needed to manage an unplanned and impossible to forecast expansion. Investments were reduced to the minimum necessary to keep the business safe and guarantee production and workers health.
The second phase was a substantial hold of any significant investment, while trying to understand what was going to happen. Many companies realized that the modifications they implemented during the first phase would not go away quickly, but it was not clear how long the emergency was going to last and if/how it was going to change normal activities permanently.
The third phase started when they (and all of us) realized that the emergency was going to last long enough to create some permanent changes in the market. They started to understand that they needed not only to react but to start planning for a new landscape, a new market, new consumer habits, new supply chain organization, and a modified demand. It was clear that the competition was going to change and that everyone needed to prepare for the “new normal”. Many companies started to plan not only how to adapt, but even how to shape their new market.
The fourth and final phase (started recently) is focused on starting to implement the strategy defined during the third one. Investments are being released and projects are starting.
What never changed during the various phases was the sense of fragility and presence of unpredictability of any forecast and strategy. The sudden and uncontrollable change we had to go through made all of us understand that the capability to adapt fast to changing landscape is a strategic characteristic that we cannot miss.
This is, in my opinion, one of the main reasons the number of IIoT requests we received grew significantly last year. It’s significant that many analysts predict a CAGR (Compound Annual Growth Rate) in adoption of IIoT solutions of more than 30% in the next few years.
IIoT, with respect to traditional approaches and solutions, has three characteristics that fit the previously described scenario:
- It’s more agile: It can be implemented small to react to a sudden necessity and scale fast if needed. It doesn’t need infrastructures with heavy footprints, so it’s possible to minimize the first investments (in a try and implement approach), while allowing an expanded adoption if the results are positive.
- It’s easier to connect to your current factory: The existing production environments can be transformed and empowered quite easily implementing IIoT solutions. It can be used to increase operational visibility, to connect and coordinate legacy machines, to coordinate organizational processes, or to connect a spread workforce
- It’s faster to implement and to rollout: This means that results can be collected faster, but even that they can be extended to multiple areas or plants quicker and with lower investments. This is crucial in a fast-changing scenario that does not allow investments to depreciate in 10 or more years like in the past, since the investments life expectation is much shorter.
The changes the pandemic is making to the market and to our habits, combined with the characteristics of IIoT solutions, is inducing the growth in IIoT demand while eroding the interest in traditional automation or MES (Manufacturing Execution System) solutions.
Originally published on Automation World – May 3, 2021
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