MANUFACTURING

Mark J. Barrenechea

Tom Jenkins

DIGITAL MANUFACTURING
Mark J. Barrenechea
Tom Jenkins

Barrenechea, Mark J.
Jenkins, Tom

Digital Manufacturing
First Published, 2018
Published in CanadaFirst Edition
ISBN
978-0-9936047-8-2
Published byOpen Text Corporation
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III

ACKNOWLEDGEMENTS

This book is dedicated to the staff, partners,
and customers of OpenText andits subsidiaries. This book is possible due to their
combined efforts, innovation, and collective vision.

Special thanks go to writers Elizabeth Chestney-Hanson and Renee Tremblay, as well as thefollowing contributors:
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We would also like to thank Kevin Sy for artwork, layout, and design. Special thanks go out to ourcustomers as well for their contributions to this book.
Special resources are accredited in the Bibliography.
VCONTENTS
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  IX
HOW TO READ THIS BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XV
1. DIGITAL DISRUPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
2. MANUFACTURING AS A DIGITAL BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . .  27
3. EIM AND THE DIGITAL THREAD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
4. DIGITAL SUPPLY CHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  79
5. DIGITAL ENGAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1056. DIGITAL GOVERNANCE, RISK, COMPLIANCE, AND CERTIFICATION . . . . .  1297. EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE . . . . .  1578. STRATEGIES FOR CHANGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . .  179BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
INNOVATOR STORY AND INTERVIEW BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . 221
INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225VIIINNOVATOR STORIES AND INTERVIEWS
ArcelorMittal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Argos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
BRF.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Bumble Bee Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Carhartt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Coca-Cola Refrescos Bandeirantes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Columbia Sportswear Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Davigel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Deloitte Consulting LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Deutchsprachige SAP Anwenderguppe (DSAG). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
DistributionNOW (DNOW). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Envoi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
HMB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Illovo Sugar Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
iTAC Software AG (Internet Technologies and Consulting) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Knorr-Bremse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
LANXESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Lear Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Local Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
MAN Diesel & Turbo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Marks and Spencer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
MillerCoors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
MOBIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Multiconsult. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
North Star BlueScope Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SAP.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Solenis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Tarkett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
Tata Consultancy Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Thales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The Chemours Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

VIII

INTRODUCTION“When you’re finished changing, you’re finished” – Benjamin Franklin“By 2020, 60 percent of plant floor workers at G2000 manufacturers will work alongsideautomated assistance technologies such as robotics, 3D printing, AI and AR/VR.”1

Disrupt or Die

The definition of digital has changed. It is bigger and bolder, always on, real time, visual,
intuitive, and getting smarter. Organizations today are faced with challenges introduced
by digital—extreme automation, extreme connectivity, advances in Artificial Intelligence(AI) and the Internet of Things (IoT), and changes to security, the nature of work, andthe workforce.

Based on how their organization responds to these challenges, 72 percent of CEOs
believe that the next three years will be more critical for their industry than the last
50 years.2 By 2020, 25 percent of the world’s GDP will be digital.3 The mandate for all
is to embark on a journey of digital transformation into the intelligent and connected
enterprise. The options are clear: to disrupt operations, processes, infrastructure, andworkforce—or risk becoming obsolete. In the digital world, it is disrupt or die.

The World Economic Forum estimates that the combined value to society and industryof digital transformation will be upwards of $100 trillion over the next 10 years. Digitaltransformation requires a pervasive shift to digitize tools, processes, and information
to uncover new paths to value. There are many different routes to success, fromtechnology adoption to building capacity to reinventing processes to partnering withdigital innovators in evolving ecosystems of value. This book is an exploration of thesepaths in context of the manufacturing industry.

The Fourth Industrial Revolution

We are in the midst of what has been called the Fourth Industrial Revolution, also called
Industry 4.0. This digital revolution is being driven by technology advancements insoftware, analytics, AI, machine learning, quantum mechanics, robotics, the IoT, materialscience, 3D printing, automated cars, and more. Technological change is unstoppable.
The scale of change is larger than it has ever been.

IX

Advances in technology are having a profound impact on the manufacturingindustry. The IoT, for example, will redefine human and machine interaction by adding
connectivity to every kind of machine, from mobile devices to traditional appliances
to wearable devices. Models like intelligent predictive maintenance, proactive
replenishment, and inventory monitoring, along with pay-as-you-go, machine-tomachine (M2M) communications and the IoT will make manufacturers more efficient andprofitable. The expected proliferation of IoT-connected devices alone will significantly
enhance operations, enabling organizations to save $3 trillion through optimized
logistics and next-generation digital supply chains.4
Likewise, AI, 3D printing, and robotics are upgrading the industry to digital. At a
global level, manufacturers are embracing these new technologies to transformtheir business models and operations, improve customer engagement, and securecompetitive advantage. According to recent predictions, by 2020, as they movecloser to the “service economy,” 65 percent of manufacturers will adopt digitalmanufacturing practices.5

Q. Which of the following best describes the state of digital transformation in your supply chain?
Discrete/Automotive (n = 51)

5%

Retail (n = 51)

High Tech (n = 51)

26%

16%

20%

6%

30%

22%

16%

19%

23%

20%

26%

19%

51%

2%

4%
33%

Process Manufacturing (n = 51)

27%

35%

1%

2%
23%

CPG (n = 50)
0%
Ad HocOpportunity

44%

20%

40%

Repeatable

32%

60%
Managed80%

100%
Optimized

N=254

Stages of Digital Transformational Maturit y in Manufacturing Industries 6

Some sectors within the manufacturing industry are embracing the potential of digital
faster than others. Organizations in discrete/automotive manufacturing and retail areleaders when it comes to optimizing their supply chain with digital technologies. Hightech is embracing the digitization of products, services, and customer experiences.

XBoth process manufacturing and Consumer Packaged Goods (CPG) are in the earlystages of implementing digital technologies and practices to deliver innovative products
and services. In general, discrete manufacturers are the most advanced, while thosethat produce expensive assets or equipment are lagging.7
The majority of manufacturing leaders realize the tremendous potential of digitalsolutions. According to IDC (see figure below), more than three quarters of
manufacturing companies view digital transformation as more of an opportunity than arisk. Despite this recognition, only one in four are experiencing a Return On Investment(ROI) from implementing digital solutions.8

Is Digital Transformation a Risk or an Opportunity?
23%

77%
Risk

Opportunity

Digital Transformation is a Top Business Priorit y for Manufacturers 9

With opportunity comes risk. As disruptive technologies introduce new formats andgrowing volumes of information, expectations around security, IT infrastructure,and regulatory compliance are rising. Manufacturers require a proven digital
information management platform to balance disruptive innovation with security andregulatory compliance.

EIM Powers the Intelligent and Connected EnterpriseDuring this digital revolution, the capacity to generate and collect information isgreater than it has been at any time in human history. As the extremes of automation,connectivity, and computing power converge, the need to manage new types of
information is critical. Deriving meaningful insight from this information will be the next
major transformative activity for manufacturers.

XI

Information lies at the heart of transformational change. To compete in the digitalworld, manufacturers will be required to manage and analyze their vast stores of
information at each stage in the manufacturing process. Information is delivered acrossbusiness processes, from product design to manufacturing, logistics and distribution,asset management, and sales and aftermarket support, as part of a larger systemof ecosystem applications. Advanced Enterprise Information Management (EIM) andBusiness-to-Business (B2B) integration provides the digital platform that manufacturers
need to transform their operations and organizations into the smart factories ofthe future.
As the basis of a transformational digital strategy, EIM helps manufacturers consolidate
information internally across silos and applications and digitize processes, from end toend. Operations are more easily coordinated and streamlined throughout an ecosystemwith digital consumers at its hub. At every stage in a product’s lifecycle, operations canbe automated and analyzed for deeper insights to improve efficiencies, output, andengagement with customers, partners, and suppliers. Empowered with intelligence andconnectivity, manufacturers are better able to compete with agility, adapt to market
changes, and respond to opportunities for growth.

Digital transformation can only happen when all nodes in the network are connected.
For many manufacturers, transforming their supply chain is a strategic goal. More than
24 percent of organizations in the industry believe that the role of digital transformation
is to revolutionize the supply chain.10 While the approach typically takes a tactical route
focused on operational efficiencies, it is expanding to incorporate innovative productand service offerings and new business models.
Smart factories are digital businesses that excel at the production and global exchangeof goods and services, and can efficiently manage the underlying volumes of crossborder data, communications, and commerce. They rely on tightly interconnected
networks and ecosystems to achieve the levels of speed, accuracy, and visibility
required for digital supply chain excellence. The ultimate vision of the smart factory is
an intelligent enterprise—one that is fully automated, connected, and has the ability torespond and adapt its operations as information changes.
Transformative enterprise technologies like EIM, in combination with the IoT, managed
services, and B2B integration, form a comprehensive, secure, and automated platform
for the management and exchange of supply chain information. From engagement todigitized processes to governance and insight, EIM is the proven digital backbone forsmart manufacturers and factories. EIM brings together key technologies for content
services, compliance, automation, discovery, engagement, and AI and analytics,
available on premises or in the Cloud.

XII

Security

3D Printing

Wearables

Robotics

IoT

Cognitive/AI

Digital Transformation

Traditional IT
andOperating
SystemsCloud

Big Data/Analytics

Millions of Apps

Mobile3 Platformrd

Billions of Users

LAN/Internet

SocialTrillions of Things
Client/Server

Emerging IT
Systems andSmart
Equipment

2nd Platform
Mainframe

1st Platform

Terminal

Smar t Manufacturing Includes the IoT, AI, and the CloudThis book describes how a digital information platform can help manufacturers
connect with their enterprise information in new and meaningful ways. The Cloud
plays a fundamental role in this. The extension of EIM to include cloud, hybrid, andcloud-to-cloud deployment models is the next logical step forward on the journey todigital transformation.

EIM in the Cloud delivers uninterrupted access to content both internally todepartments and externally to partners and suppliers, while ensuring content is
consistently available. It brings agility, flexibility, cost savings, and competitive
advantage. For these reasons, the Cloud will continue to play a key role in enabling
digital transformation in the manufacturing industry. A cloud-based IoT platform gives
manufacturers the ability to dynamically integrate multi-tiered supply chain communities
and build enterprise IoT solutions for greater efficiency, agility, and new services.
Additional value can then be added with cognitive and AI-based operations.
With the convergence of a trillion connected devices, 4 billion connected people, andone million times the computing power, manufacturers have the opportunity to breaktheir data silos and leverage machine learning to unlock the value of their information.
Analytics and AI provide actionable intelligence. From implementing more targetedmarketing campaigns to improving efficiency through predictive maintenance togreater savings in fleet management, manufacturers can use AI to better analyze andunderstand their customers, trading partners, employees, orders, invoices, documents
and other data managed in EIM repositories.

XIII

By 2020 there will be more than 7.6 billion connected things in the business sector, andthe annual sales of such devices will exceed $1.4 trillion.11 With more people connecting
and more machines generating information, business will become increasingly digital.
As they do, it will become essential for manufacturers to digitize their informationbased processes in order to remain competitive. Across every industry, digital leadersconsistently outperform their competitors.
In a digital world, with unprecedented opportunities to innovate and evolve,
manufacturers will function as intelligent and connected enterprises. They will re-invent
their operations to find new customers, markets, and materials. The outcomes will
stretch beyond operational efficiencies—to software-driven services, interconnectedecosystems, deeper customer engagement, new revenue streams, and the potential
to take collaboration between humans and machines to a whole new level in the global
production of goods and services.

Mark J. Barrenechea

Tom Jenkins

O PEN TE XT C ORPOR AT I ON

OPEN T E X T C O R PO R AT I O N

VICE C H A IR , CE O AND CTO

CH A I R

XIVHow to Read this Book

A digital manufacturing enterprise digitizes activities throughout the complete lifecycleof manufactured products and the facilities used for production and distribution—fromend to end.
Each chapter of this book addresses how Enterprise Information Management(EIM), B2B integration, the Business Network, Managed Services, IoT platforms,
and information applications work together to address each stage in the productmanufacturing lifecycle.
Using this book, you’ll learn how to: Embrace Industry 4.0 disruptive technologies for improved insight and agility.

 Transform your business into a digital business to improve efficiencies, reduce

operational costs, and decrease time-to-market.

 Optimize the flow of information across the manufacturing value chain.

 Automate your procurement and supply chain processes with a single, cloud-based B2B integration platform.

 Increase the uptime and efficiency of robot work cells, machining centers,

assembly equipment, and utilities-related infrastructures.

 Establish consistent, auditable, and defensible Information Governance acrossyour business to comply with internal policies and external regulations.

 Extend your Enterprise Resource Planning (ERP) systems to deliver collaboration,

information governance, and process control to operations and associatedmaintenance procedures.

 Build capacity, fill skill gaps, and manage change.

 Engage with all stakeholders in the extended ecosystem—from partners

to distributors to customers with omni-channel delivery for improved
satisfaction levels.

The following diagram is a guiding principle of the book. It illustrates each stage of
product development with the digital consumer sitting at the hub. Each chapter explores
these stages in detail. The topics to be discussed are highlighted in the diagram at the
beginning of each chapter.

XVAftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

Each icon pictured below represents a specific stage in product development. When aspecific stage is discussed in the chapter, the corresponding icon will appear.
New Product Design
Product Prototype & Testing
Digital Supply Chain
Digital Manufacturing & Production
Governance, Risk, Compliance & Certification

XVI

Plant Maintenance & Asset Management
Logistics & Distribution
Digital Engagement
Aftermarket Services & Support

XVII

C H A P T E R

1

DIGITAL DISRUPTION

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

Digital technologies are driving transformation across the entire manufacturing value
chain by disrupting all aspects of production, from research and development toengineering and design, factory operations, and sales and support.

CHAPTER 1

Digital Disruption“The explosion in data and new computing capabilities—along with advances in otherareas such as artificial intelligence, automation and robotics, additive technology, andhuman-machine interaction—are unleashing innovations that will change the nature ofmanufacturing itself.”1
The Fourth Industrial Revolution will present manufacturing organizations withunlimited opportunities to acquire new customers, create new markets, and introduce
new products and services.

Digital consumers are demanding more customized and personalized products andservices. Products are evolving based on smart manufacturing, new ways to prototype(like digital twins), and extreme connectivity. Platforms-as-a-Service (PaaS) areaugmenting the delivery of products throughout their lifecycle, enabling organizations
to use analytics to monitor both performance and customer preference. Production
is evolving thanks to 3D printing and robotics. Same-day delivery and zero-length
supply chains are becoming a reality. The supply chain is being replaced by a digital
ecosystem; in many instances, the middleman is being disintermediated to allow for
more direct relationships between manufacturers and consumers.

To survive, manufacturers in industries like automotive, aerospace, food and beverage,
and retail will be required to embrace digital technologies. This chapter examines how
technologies such as drone-based logistics, wearable devices, 3D printing, Artificial
Intelligence (AI), automation and robotics, and the Internet of Things (IoT) are combining
to create the Fourth Industrial Revolution and provide manufacturing companies with
unprecedented opportunities to innovate and evolve.

1st Industrial
Revolution

2nd Industrial
Revolution

3rd Industrial
Revolution

4th Industrial
Revolution

Steam powered
mechanized production

Electricity powered
mass production

IT automatedproduction

Digital automateshuman production tasks

1750 – 1870

1870 – 1969

1969 – 2000

2000 – Today

Figure 1.1: The Four th Industrial Revolution

2

D I G I TA L D I S R U P T I O N

The Fourth Industrial Revolution

Earlier revolutions have been defined by automation and productivity gains that
resulted from inventions like the first mechanical loom, the conveyer belt, and the earlystages of IT with the Internet. The next phase in the digitization of the manufacturingsector will be driven by the convergence of extreme connectivity, extreme automation,and extreme computing power.

ExtremeAutomation

DISRUPTIVE TECHNOLOGIES

Robotics, 3D Printing, Digital,
Cognitive, Artificial Intelligence,
Machine-to-Machine

ExtremeComputingPower

DISRUPTIVE TECHNOLOGIESScalar, In-memory, SSD,
Neural Networks, Massive
Computer Arrays

ExtremeConnectivity

DISRUPTIVE TECHNOLOGIES

5G Networks, Global Internet,
4 Billion Connected Users,
1 Trillion Devices

Figure 1.2: Convergence of Automation, Connectivit y, and Computing Power

Connectivity is bringing four billion people and one trillion devices together onto thesame network. Parts of our lives are being automated through advanced robotics
and AI. Computing power is one million times more powerful than it was decades ago.
Connectivity, devices, and computing are driving today’s wave of innovation on an
evolutionary scale. As more people connect with more machines, we are moving closer
to zero-distance connectivity with technology.

These combined forces will bridge the gap between the physical and virtual worlds,
giving us new ways to interact with machines. So-called “cyber-physical systems”
will integrate intelligent sensors, computers, networks, and manufacturing systems
and processes. The outcome will be a highly efficient, complex system of machines
operating intelligently with each other and humans in real time. This is where theopportunity lies, with information at its core. Our capacity to generate and collectinformation is greater than at any time in human history; deriving meaningful insightfrom this information is the next major transformative activity for business that will
present new possibilities for new business models.

Manufacturing enterprises will respond by developing platform architectures tosupport both hardware and software, bringing together engineers and IT departments.
The automated car is a great example of this. Joint Advanced Driver Assistance
Systems (ADAS) and infotainment systems are creating a more seamless human-tomachine interface in cars. Automotive giants are hiring developers: GM announcedplans to hire up to 1,000 engineers in Canada, which will be a major boost for the
future of self-driving cars. 2 Software competence is becoming a key differentiator in
the industry, as auto and high-tech supply chains come together to meet consumer
demand for smart cars.
3

CHAPTER 1

In the future, car components will be upgradeable in the same way that software is. This
will redefine the automobile's product lifecycle, adding opportunities to engage with
consumers to upsell throughout the duration of a car’s lifetime. To accommodate this,car manufacturers will establish new processes for product lifecycle management andsoftware development capabilities.

The Impact of Digital Technologies

In the Fourth Industrial Revolution, the technologies that underpin fully integrated anddigitized supply chain environments can be placed into three categories.

The first category includes fifth-generation (5G) mobile networks, IoT-related
platforms, and other cloud-based network infrastructures. The second consists of thedevices that connect to these networks (3D printers, advanced robotics, drones, and
IoT devices). The final category describes technologies that help to manage, archive,
and process all the information produced by these connected devices, such as
analytics, AI, and cognitive systems that can be used to obtain deeper insights about
performance, consumers, and much more.

Drones3D Printing

Wearables

Robotics

IoT

Figure 1.3: Key Disruptive Technologies

Across these categories, the following disruptive technologies are having the mostsignificant impact on the manufacturing industry (especially in relation to supply
chain operations):
 Autonomous Cars, Trucks, and Drones will impact infrastructure and improve theefficiency of delivery networks

 3D printing and production will revolutionize manufacturing with zero-length

supply chains Wearable devices such as smart watches and glasses are helping improve

warehouse and logistics management

 Advanced robotics platforms like “Baxter” and the “Foxbots” can automate

manual production processes The Cloud and the IoT and their impact on future Business-to-Business (B2B)

platforms will improve the efficiency of supply chain networks

The following interview discusses the process of digital transformation in thecontext of self-driving cars, tracing their evolution from a means of transportation
to service platforms, with a reliance on standardization and data to achieve end-toend digitization.
4

TRANSFORMATION IN ACTION

Deutchsprachige SAP
Anwenderguppe

Deutchsprachige SAP Anwenderguppe (DSAG) is the German-speaking
SAP User Group, composed of more than 60,000 members fromover 3,300 companies in Germany, Austria, and Switzerland. DSAG
is the leading and most influential advocacy group for SAP users.
Members focus on three pillars: networking, exchanging experience,and exercising influence to extract value from their SAP software
while gaining valuable digital transformation insights from peers andthought leaders.

Figure 1.4: DSAG

What follows are excerpts from an interview with Otto Schell, Member of the Board of
Directors – Industries Solutions/Digital Transformation, DSAG.
“I have been involved with DSAG for
more than ten years. As a member of theBoard of Directors, I am responsible for
Business Processes, Industries Solution,
Globalization, and Digital Transformation. I
am also a main contact to international SAP
User Groups.

In my world, and among my peers in the
DSAG and other SAP User Groups, digitaltransformation is the relentless pursuit of
the conversion of our physical world into an
environment represented by information,
software, analytics, technology-enabled
processes, bits, bytes, and data. For this5

TRANSFORMATION IN ACTION

conversion to happen, many things needto come together, such as pervasive andomnipresent mobile technologies, infinitely
scalable infrastructures—like the Cloud,and connected, sensor-equipped devices(that come together to form the IoT). At theheart of these things is real-time, global
information sharing. And for information
to be shared effectively, it needs tobe digitized.

For example, an automotive company that
digitizes its enterprise information andprocesses will have an end-to-end viewof all its data. This gives the company
the agility required to digitize its supply
chain and automate its factory floor withconnected, smart technologies (likesensors). With a digital supply chain andconnected factory floor, maintenance canbe automated, machines can talk to eachother, and stock can self-replenish.

Digitization is a popular topic right now. A
lot of organizations think they are digitizing,but in reality, they are only digitizing a few
processes. Or they are just talking about
digitization. Very few organizations areconnecting the dots across the enterprisefor true, end-to-end digitization. The sameis true for transformation. Oftentimes,
people believe they are transforming theirbusiness, but they are only increasing
efficiencies and lowering cost. This is nottrue transformation.

When a factory is this smart, customers
can order directly from the manufacturer
based on real-time availability. If thecustomer is ordering a self-driving car, forexample, the car could deliver itself rightto the customer’s door. All this is possible
because of shared standards across anenterprise, between machines, acrossa supply chain, and extending into the
e-commerce network. The more agile acompany becomes, the more it is able totransform. And the more it can transform,
the more relevant and disruptive it can be.
In this scenario, the auto manufacturer
can disintermediate the dealership andsell directly to the consumer. This istrue digitization.

Data and standardization are fundamental
for digitization. A lot of people think
digitization is about collecting andanalyzing big data. But true digitization
requires finding patterns and new ways
to apply the information that is collected.
Digitization means using data. Uber comesto mind. They used their data as an asset
to find patterns to create something new.
They created a new business model anddisrupted an entire industry in the process.

My background is in the automotive
industry. Over the past 20 years, I’ve seen a
lot of innovation in the industry. Cars have
evolved from a means of transportation intoa mobility package. I believe in the future
they will evolve into service platforms. To
me, a car is several channels. Everything in
the car is connected—not only information
about fuel but information about the brakes,
as well as other service requirements. This
information can be sent directly to the auto
dealer’s suppliers. If something happens
to the car, if something goes wrong, it’s allconnected to the service department andeven their suppliers. This is all part of the
auto ecosystem and the consumer sits at
the hub.

We won’t be able to realize the true
potential of digitization without standards.
Standardization provides the framework toconnect everything from people to devices
to companies, industries, and governments.
The path to digitization is iterative. It starts
with end-to-end standardization within
the enterprise, then automation throughconnected networks in the supply chain,and finally with the digitization of businessmodels in the larger ecosystem.

6

TRANSFORMATION IN ACTION

Networks

The Business Value Path from Standardization to Digitization
B2B2C

Automatization
Though Sensoric,
Networks

B2B

Company View

Agility

ChainsDigitization ofBusiness Models

E2E
Standardization on“Classical Premise”

Foundation
Source: Otto Schell

Relevance

Transformation

Figure 1.5: From Standardization to Digitization

our lives will be digitized. We will pay for
products and services with software, ourdoctors will use software to operate on us,
and we will get from one place to anotherusing our mobile phones to access aservice like Uber. Companies will connect
software from machine to machine basedon the Internet of Things (IoT). And the
IoT will connect to everything. There areopportunities to monetize this, or evensave consumers money. If someone goeson vacation, for example, they can program
their electricity requirements accordingly
and be reimbursed based on reduced
consumption. This model can be applied
to many industries and it will change how
we live and work. That is the power ofdigital transformation.”

Like the automated car, 3D printing is also a
disruptive technology in most industries, notjust automotive. The Aachen University ofTechnology in Germany recently developed
a car where 75 percent of the materials were
3D printed. At the moment, the capabilities
are rather basic, with a top speed of 60mph
and a range of 80 miles. Even if it takes asliver of market share away from traditional
car manufacturers, that’s money thatthey can no longer invest in research anddevelopment. Three-dimensional printing
presents the opportunity for industries thatcurrently outsource manufacturing work toother countries to bring much of that workback home.
Soon, everything we do will be influenced or
directed by software. Every step of7

CHAPTER 1

Manufacturing has been slow to adopt disruptive technologies, leading the crossindustry average only in its applications of robotics. 3 According to recent reports,
wearables, 3D printing, and machine learning are emerging technologies (with moremature technologies like analytics and cloud computing being mainstream, especiallyin the retail, high-tech, and automotive sectors). These technologies promise to
introduce new capabilities, expanded reach, and new products and services. 4 Of
these, 3D printing will have the greatest influence on the automotive industry,advanced robotics will impact the high-tech industry, and the IoT will revolutionize
the Consumer Packaged Goods (CPG) industry. 5 As these technologies are adopted,organizations in the manufacturing industry will have to restructure their supply chainsto incorporate them.

Autonomous Cars, Trucks, and Drones

AI-based algorithms that leverage capabilities, such as reinforcement learning, aredriving the development of autonomous vehicles, robots, and drones.

According to recent forecasts, many car manufacturers, including Audi, Ford,
Volkswagen, GM, Toyota, and Tesla, in partnership with technology companies like
NVIDIA and Bosch, will produce autonomous cars by 2020. 6 The industry expects
driverless cars to be in use all over the world by 2025.7 Autonomous transport trucks
may hit the road before self-driving cars, eventually automating 1.7 million U.S.
trucking jobs. 8
The ripple effect will extend beyond job displacement; autonomous trucking willcompletely restructure logistics and transportation industries. Roads, infrastructure,laws, and logistics companies will need to change to accommodate driverlessvehicles. Warehouses may even become obsolete, with autonomous trucks doubling
as mobile depots.

“Driverless cars will have significant economic ramifications. Dealerships
will collapse. Cars will be electric. Gas-powered cars have 2,000 parts in thetransmission, electric cars have 20. The average lifespan of a gas-poweredcar based on mileage might be 150,000 - 200,000 miles. For an electric car,it is one million miles. Car sharing will have the most devastating effect ofall. There will be a lot less cars. Considering how many people are employedin the auto manufacturing industry, the impact will be huge. We’ll end up
with a large number of people with a skill set that is obsolete. Driving will bea luxury.”– TOM ROBERTS, GLOBAL VP SAP 3RD PARTY TECHNOLOGIES, SAP.

8

D I G I TA L D I S R U P T I O NAutonomous vehicles are not confined to the ground. By 2020, Uber plans to havea fully automated fleet in the air, as outlined in their plans for their automated flying
taxi service, Uber Elevate. 9 Drones have already taken flight. A drone is essentiallya robot that can be flown autonomously using software, onboard sensors, andGlobal Positioning Systems (GPS). Used for many years by the military, other, morecommercial applications are being explored, such as surveillance and intelligencegathering, farming and crop maintenance, as well as logistics and distribution. It has
been predicted that as they come down in price, 12 percent of the $98 billion spentglobally on drones will feed into commercial use.10

The use of drones will expand to include the delivery of goods like medicines toremote locations, groceries to consumers, and component parts to manufacturers.
Amazon has received a lot of press lately with their Prime Air® drones that can deliver
small packages to consumers. This last-mile delivery of packages is an increasingly
important area of development for third-party logistics (3PL) providers. DHL, a global
market leader in the logistics industry, is one of the first 3PL providers to leverage
drone technology to deliver medicines to remote islands in the Far East. There are
initiatives underway to define corridors for air-based drone devices, but drones are
not limited to air travel alone.

Figure 1.6: Drone-based Logistics

Starship Technologies, for example, has developed a small autonomous vehicle thathas the capacity to carry two grocery bags. The same drone technology could be used
to deliver small components from automotive suppliers to a major automotive OriginalEquipment Manufacturer (OEM). Drones could help streamline the delivery efficiencyof parts to car manufacturers to support Just-In-Time (JIT) production environments.
While drone-based technologies are relatively new, they offer unique capabilities that
support today’s production and aftermarket retail sectors.

9CHAPTER 1

Increased connectivity will mean greater fuel efficiency and safety. Some analysts
predict that there will be around 1.8 billion automotive machine-to-machine(M2M) connections by 2022.11 Connected cars, trucks, and drones will generate a
massive amount of data. If this information is adequately managed, protected, andanalyzed, governments and organizations will be able to monitor performance andcommunications between vehicles for greater safety and better efficiency. We could
realize significant gains in safety (preventing more than 30,000 fatalities a year in
the U.S. alone).12 There will be improvements in traffic flow and reduced pollution.
But issues around liability, privacy, regulations, and cultural acceptance are current
barriers to adoption. Future generations may never have to learn how to drive andcurrent restrictions (based on age and disability) will no longer apply. Society will
have to adjust to support autonomous vehicles with new skillsets and the knowledge
required for maintenance, operation, and any related infrastructure.
In the following interview, a global food manufacturer and supplier is embarking on atransformational project to improve the quality of their products based on intelligencegathered from drones, predictive analytics, and cloud computing.

3D Printing and Production

Three-dimensional (3D) printing is an additive manufacturing process that is computer
driven. Using a digital model, objects are printed from materials that include plastics,
metals, and even, different kinds of foods. The technology is being developed at a fast
pace and is already in use in many sectors, from jewelry manufacturing to aerospace.
On the production side, manufacturers such as BMW, Ford, and VW Group are producing
3D metal parts.13 The Federal Aviation Administration (FAA) has cleared 3D printed
parts for commercial jets.14
Three-dimensional printing is transforming the design and engineering of tomorrow’s
vehicles as more parts are being identified for “design for replacement.” If a car goesin for service, for example, and a broken support bracket needs to be replaced, rather
than ordering a new bracket from a supplier, the replacement bracket can be 3D printed
onsite at the dealer’s service center and fitted directly to the car. This is the zero-length
supply chain in action, which does not involve 3PLs in the delivery of replacement parts.
One manufacturer, Local Motors in North America, is manufacturing an entire vehicle
using 3D printing. In the same way that Tesla cornered the market in the premium
electric vehicle, Local Motors is disrupting the modular construction of vehicles using
new 3D printing technologies.

10TRANSFORMATION IN ACTION

A Global Food Manufacturer

What follows are excerpts from an interview with a director of one of theworld's largest food manufacturers.
"As part of our transformation project,
we’re exploring cloud computing. Right
now, we store ten percent of our data in the
Cloud. It’s not a big number. And the cloud
solutions we’ve used are private to keep our
information secure. But things are evolving
so quickly, we’re more open to adopting
public cloud solutions if they are secure andwe can maintain ownership of the data. The
Cloud is key when it comes to amassing
and analyzing large data sets. We are
running some analytics on our data. We’repulling information off our systems to help
management run our plants as efficiently as
possible, which produces a better-quality
product adds money to the bottom line.

The other thing we’re looking at doing isfuture crop prediction over two or three
years. We’re employing weather services
that have tons of data spanning many years.
Based on the algorithm, you can predict
what the weather’s going to be like for the
next crop season in a certain area of theworld. It’s not perfect, it’s not one hundred
percent accurate of course, but it’s very
insightful. Every region of the world isdifferent—from the weather to the crops tothe farmers. We have to be able to deal withthem all and technology is helping with that.”

New ideas spawned from our data
intelligence projects are providing new
ways to conduct business resulting in cost
reduction or improved quality. We’re looking
at using drone technology in agriculture,
which is a huge part of our business. We’ve
been using satellites for years to takepictures of crops and provide us with theinformation we need to predict what a crop
will be like. We can see, based on the colorsof the plants, whether they need wateror fertilizer or even if they have a diseaseof some sort. But satellites don’t work
very well in cloudy weather. Drones canbe programmed to fly over an entire field
and take pictures. When they land, we canupload that information into our system forcrop predictability. That same information
can be downloaded into a fertilizer spreader
so when it’s taken out in the field, it knows
exactly where to spread more or lessfertilizer, depending on the data.
Figure 1.7: Crop Scouting with Drones11CHAPTER 1

Figure 1.8: 3D Printed Car

More can be accomplished with 3D printed materials to make them flexible and useful.
Three-dimensional printing is evolving into four-dimensional (4D) printing, an emerging
technology that enables printed objects to reshape or assemble themselves on-thefly, based on intelligent data. Examples developed include a printed cube that folds on
its own or a printed pipe that senses when it needs to expand or contract. Capabilities
like 4D printing will cause a radical shift in rapid prototyping, with objects changing
over time to perform functions based on material properties.

As access to printers and the process becomes more mainstream and affordable, theapplications of 3D printing technology will expand (along with other additive processes
like rapid prototyping and direct manufacturing). Soon, consumers will be equipped toprint their own bespoke products in the comfort of their own homes. This will give rise
to cottage industries and impact manufacturing in terms of production, distribution,and the experience of shopping itself. This could result in a reduction in labor alongwith associated costs, shortened supply chains, and less waste and pollution. The dataassociated with original products (as opposed to 3D printed knock offs) will need to beprotected as intellectual property. This will also be true for digital models.

Wearable Devices

Mobility in manufacturing is expanding beyond tablets and devices to include wearable
technology. In recent years, there has been an increasing trend in developing apps
for wearable technologies to modernize the way people interact with information andprocesses. Sensors are being embedded into fabrics to monitor both performanceand the surrounding environment (such as heat-resistant smart jackets for firemen).
Wearable devices have been receiving more attention from the enterprise, driven by
the need to provide employees with direct access to smart systems and real-time
product information.

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D I G I TA L D I S R U P T I O N

Figure 1.9: Logistics Management Via a Smar t Watch

Smart glasses enable people to receive information or alerts while remaining handson with their work. Volkswagen deployed smart glasses in one of their factories, giving
employees the ability to view assembly drawings and videos, and other product-specificinformation. This helped workers access any digital asset related to the assembly ofa vehicle. Wearable devices will also increase the efficiency of the warehouse picker,
who can be guided to collection points where they can pick hands-free. Connecting
the workforce to information in an immediate and hands-free way allows people toexchange real-time advice or updates, which results in faster time-to-resolution. For
large manufacturers, reducing time in the assembly line means significant cost savings.

The ability to view information relating to purchase order status or Advanced Ship
Notice (ASN) delivery status improves the transmitting and monitoring of transactions
across a business network. One of the challenges faced by suppliers is ensuring that
their customers receive their ASNs on time or within the specific delivery window. Many
automotive OEMs rate their key suppliers on their ability to deliver ASNs efficiently
as they are critical to the smooth running of JIT production systems. Using mapping
apps to track shipment deliveries helps to increase end-to-end visibility across a
supply chain. For high-value goods such as cars, a smart watch would enhance thelogistics management experience with real-time, graphical access to information andintelligence based on analytics.

13

CHAPTER 1

Figure 1.10: Car Production Using Holographic Images

Just as smart devices will help to mobilize B2B platforms, augmented reality (AR) andvirtual reality (VR) will transform tomorrow’s B2B and supply chain environments.
Technicians can perform maintenance using AR/VR with AI image recognition, following
instructions and guidelines for repair. A holographic computer built into a headset, forexample, is being used to provide collaborative review processes, not only at the design
stage of a new product but also across retail distribution networks where advanced
features can be demonstrated to potential buyers. Volvo Cars recently implemented
holographic lenses across their dealer networks to allow potential buyers to visualize
and experience the various safety features of their vehicles. From giving customers asensor’s vantage point to configuring cars in entirely new ways, AR/VR demonstrates
the new ways that technology can bring objects to life.

“We just won a project to do design management for a new hospital and we
introduced virtual reality glasses to show key stakeholders a model of thebuilding. This is another exciting technology for us. If we can walk around ina virtual building with a customer and give them information about certain
objects on the walk—that will help to engage our customers. This is definitely
a technology that will become more prominent in our industry.”– OLE MEYER-SKJØLINGSTAD, HEAD OF INFORMATION AND DOCUMENT MANAGEMENT AT MULTICONSULT

14

D I G I TA L D I S R U P T I O N

In a digital world, mobile and wearable devices will expand beyond offering personal
productivity into tools that provide access to information and business intelligence.
The combination of AI and VR results in better and faster ways to address problems.
When machines talk to each other across the IoT, the exchange of massive amountsof data will trigger automated responses and deliver greater insights. As wearables
and AR/VR find their way into factories, a mobile strategy will be required to enableadvanced robotics and digitization.

Advanced Robotics and Automation

In the digital world, an increasing reliance on self-service technology, sensors,
M2M communication, and AI will transform the workplace as menial tasks and evennon-routine jobs are digitized through robotics and process automation. AI relies
on computer systems to perform tasks that normally require human intelligence.
Based on more powerful microprocessors, sensors, and improved analytics, smart
systems will become more intelligent and applicable to our daily lives. By 2024, 10
percent of workplace activities that can be harmful to humans will require the use of
mandatory smart systems.15

New research shows that nearly half of all jobs will be susceptible to automation
over the next two decades.16 Currently, in the automotive industry alone, one robot is
employed for every 10 humans.17 Over the next 10 years, there will be 60 million robots
in the world.18 The combination of advances in robotics and automation, along withrising wages in developing countries, has encouraged organizations to switch gears
from outsourcing and re-invest in local manufacturing and services.

Interest in robotics is sparking an investment boom. After growing at a compound
rate of 17 percent a year, IDC predicts that the market will be worth $135 billion by
2019.19 Patent filings for robotics technology have increased alongside investments.
Competition is fierce in Asia, with spend in Japan and China accounting for 69 percent
overall, as both countries look to overhaul their manufacturing sectors. 20

Silicon Valley is taking note. Over the past few years, Google has acquired eight robotics
companies, including Boston Dynamics—an engineering and robotics company thatis best known for the development of BigDog, a quadruped robot designed for the
U.S. military. Google has been applying their robotics research towards production
environments and is working closely with Foxconn, a leading contract manufacturer inthe high-tech sector, to replace manual workers across their Chinese production plants
with “Foxbots.” Since 2014, Foxconn, an Apple and Samsung supplier, has reportedly
replaced 60,000 factory workers with robots. 21

15

CHAPTER 1

One of the key drivers for robotics research is to develop more intelligent robots
that can not only think for themselves, but also sense their surroundings in a moreaccurate manner. Another leading robot manufacturer, Rethink Robotics®, developed
the Baxter® robot to improve production line operations. Traditional single-arm robots
normally require a safety cell to work within so that workers on the shop floor don’t get
injured. Baxter, however, has proximity sensors in both of its arms so that if anyone
approaches, it shuts down immediately. Advances like these in AI are impacting theevolution of industrial robots.

Photo by: Steve Jurvetson

Figure 1.11: Baxter

When AI is combined with the IoT, production lines will be automated, selfsensing, and more responsive to changing production requirements. Swarms ofintelligent machinery will work together. Next-generation AI systems will feed
off fast, real-time data streams. Automation will be integrated with key businessprocesses and machine learning solutions that target specific tasks in controlledenvironments. The full potential of the Industrial IoT will be realized when intelligent
devices, systems, and automation combine with physical machines, facilities,
and fleets for improvements in productivity and lowered costs across the
manufacturing industry.
In the following feature, Knorr-Bremse uses analytics and the IoT to enable intelligent
fleet management and condition-based maintenance.

16

I N N O VAT O R S T O R Y

Knorr-Bremse
Knorr-Bremse keeps
the wheels rolling withpredictive maintenancepowered by Analytics

Figure 1.12: Knorr-Bremse Group

Based in Munich, the Knorr-Bremse Group is the world’s leading manufacturer of braking
systems for rail and commercial vehicles. For more than 110 years now the company
has pioneered the development, production, marketing, and servicing of state-of-theart braking systems. In 2015, Knorr-Bremse reported sales of €5.8 billion and employed
more than 24,000 people worldwide.

Knorr-Bremse's iCOM (intelligent Condition Oriented Maintenance) platform brings
digitization to the rail business, connecting wireless-enabled sensors aboard trains to a
back-office cloud-based network, using an IoT model. This platform transmits detailed
data that can help predict repair and replacement needs. The iCOM platform requireda powerful and user-friendly analytics component to enable the analysis of the data
received to help users make data-driven decisions.

The ability to make predictive, data-driven decisions results in more efficient and costeffective repairs. With data being continually collected, the volumes across a fleet are
significant. Customers now have the ability to visualize the data through interactive
graphical dashboards, reducing the reliance on IT to create new reports. For example,
they can provide heat-maps of condition-based events, such as overheating brakes on a
specific incline, helping customers put measures in place to reduce component failures,
extending component life, and ultimately saving money.

17

CHAPTER 1

The Industrial IoT

If there is one disruptive technology that is getting the most interest from theindustrial manufacturing sector, it is the IoT. The IoT, or the Industrial Internet, or theInternet of Everything as it is commonly referred to, is an M2M platform for billions ofconnected devices.

M2M technologies like Radio Frequency Identification (RFID) tags, sensors, video
cameras, GPS chips, and smart cards are the primary enablers of the IoT. They capture
data on the identity, status, condition, and location of physical assets. According toresearch, one million IoT devices will be purchased and installed every hour by 2020,
the number of devices connected to the Internet will grow to 35 billion and almost halfof these devices (47 percent) will have the intelligence required to request support. 22
The IoT has the potential to transform how companies manage their supply chains.
With billions of intelligent devices connected to the Internet over the next decade,organizations will have access to more information from their global supply chains.
This means that anything that is a part of a supply chain—storage bins, forklifts, pallets,
containers, warehouses, delivery trucks—can send information back to a centralized
IoT hub using a simple Internet connection. In much the same way that B2B platforms
are being integrated with ERP systems today, organizations will be integrating IoTrelated hubs.

The IoT will fuel an intelligent, closed-loop digital supply chain infrastructure,streamlining processes like pervasive visibility, predictive maintenance, and proactive
replenishment (see Chapter 4 for more detailed information). Across all manufacturingrelated industries, the IoT will enrich business processes to provide operational
benefits. Organizations will be able to monitor performance, track materials, and locate
workers to make real-time changes or retrofit factory floor equipment.

Eventually, the Industrial IoT will scale to billions of connections and trillions of events,
all supporting real-time analytics to help manufacturers get the insights they needfrom the connections of people, processes, data, and devices. Gartner estimatesthat improvements to plant automation processes and improved production output
from the IoT is a potential $2 trillion opportunity over the next 10 years. 23 As reamsof data are exchanged across the IoT, significant issues such as liability, privacy, andregulatory compliance need to be addressed. Organizations that successfully addressthese issues will have a significant advantage.

18

D I G I TA L D I S R U P T I O N
EDI Order Received by B2B Network
Through MQTT Connection

QT
M

Link
ms
om
C
T

B2B Network

MQTT APIOFTP2EDI Order
Received byParts Supplier
via OFTP2

Creation of“On Device”
EDI Order

DigitalSupply Chain
Dealer Contacts
Customer toBook Repair

New Part
Deliveredto Dealer

Cloud Motors Ltd

Figure 1.13: The Intelligent, Closed-loop Digital Supply Chain

Building a dedicated IoT platform and processing the data from this infrastructure ina database is only part of the solution. Providing connectivity to a B2B network which
can make actionable decisions and initiate supply chain processes is the next logicalstep in the evolution of a company’s IoT-related digital supply chain strategy. DedicatedApplication Programming Interfaces (APIs) will connect future IoT networks to a B2B
network. The API is a critical cornerstone of developing a completely closed-loop, IoTconnected digital supply chain infrastructure.

In the following interview, Thales, a multinational company based in France, has
implemented a transformational program that includes the creation of a Digital Factory.

19

TRANSFORMATION IN ACTION

ThalesThales Group is a French multinational company that designs and builds
electrical systems and provides services for the aerospace, defense,transportation and security markets. From the bottom of the oceans
to the depths of space and cyberspace, Thales helps customers
think smarter and act faster—mastering ever greater complexity andevery decisive moment along the way. Thales has more than 64,000
employees and operations in 56 countries worldwide.

Figure 1.14: Thales

What follows are excerpts from an interview with Lahcène Massoum, Group EnterpriseArchitect at Thales.
In our business, information is key. We
design and develop everything from simple
products to complicated systems, andwe need to manage all the associatedinformation. We have to be able to share
this information across the organizationand manage it throughout its 40-year
lifecycle—from content creation to finalarchive and disposition. Making thisinformation available to employees andmining it for insights is critical to Thales’
digital transformation efforts. Between our
experts, engineers, and our products, wehave a great deal of valuable information“Thales is a key player in keeping the
public safe and secure, guarding vital
infrastructure and protecting the national
security interests of countries around theglobe. Our customers are split between
civilian and military markets, which means
we provide systems and services forcompanies like Airbus and Boeing, as well
as for departments of defense, including
the French DoD. With 55 percent of our
total sales in the military market, Thalesis the tenth largest defense contractor in
the world.

20

TRANSFORMATION IN ACTION

that is underutilized. We’ve identified thisas an opportunity. We want to tap into thisinformation to transform organizational
behavior and become a more datadriven company.

across geographic borders. So, we areseeing a paradigm shift from perimetersecurity to data security. As organizationstransition to digital business models,data security is often one of the biggest
inhibitors to their digital transformation. As
such, we have collaborated with leading
cloud providers to deliver high-assurance
data security technology. “Our Bring YourOwn Key” (BYOK) Deployment Service
Package, for example, allows users toestablish strong safeguards around their
sensitive data and applications in the Cloud,and gives them greater flexibility while
ensuring they retain control over their data.

Two years ago, the company started
thinking about how we could disrupt themarket and digitize our organization. In ourquest to become data-driven, we acquired
Gauvus, a real-time, big data analytics
company, to help us mine, analyze, andderive value from our information. We hope
to combine real-time analytics capabilities
with our existing products and services todeliver additional value to our customers.
For instance, if we can analyze the Healthand Usage Monitoring Systems (HUMS)
data of a customer’s airplane in real time,
we can provide them with value-added
services, such as predictive maintenance.
We could also analyze the data collected
to help us design more efficient products
and services for our customers. These
capabilities would prove to be especiallybeneficial to our aerospace customers,
where sending a technician out to service apiece of equipment, like a satellite in space,for example, isn’t always a viable option.

We are currently exploring the opportunities
that disruptive technologies are introducing.
In fact, over the last three years, thecompany has invested over €1 billion in theInternet of Things (IoT) and connectivity,
big data, Artificial Intelligence (AI), andcybersecurity technologies. These
technologies play a crucial role in enabling
our customers, including airlines, satellite
operators, air traffic control organizations,rail operators, armed forces and security
services responsible for protecting urban
infrastructure and energy supplies, to makethe right decisions in real time.

Digital gives us the agility to innovate.
That’s why it is one of the five pillars of
our transformation program. ECOsystem,
our Efficiency and Capacity-Oriented
solution for aviation, is a great example
of digital process innovation. ECOsystembrings together big data analytics, a digitalplatform, and the Cloud to gather andprocess air traffic and weather data on a
global scale. Depending on a customer’s
privacy policies and regulations, the data
can be stored in their own datacenter,sovereign cloud, public cloud, or a hybrid tosupport a whole range of applications.

Earlier this year Thales announced
the creation of our Digital Factory.
The Digital Factory represents a €150
million investment through to 2020and demonstrates our commitment toaccelerating digital transformation. It
brings together the best experts in key
digital technologies to serve customers in
our five core markets: aerospace, space,ground transportation, defense, andsecurity. The Digital Factory will also serveas an incubator for internal and external
startups and host a digital academy topromote digital culture across the Thales
organization. The goal is to capture theinnovative potential of this new ecosystem
for the benefit of our teams and customers.”

Digital has broken down traditionalorganizational structures and transformed
the way we collaborate. Information isshared outside of “company walls” and21

CHAPTER 1

A Platform for Smart Factories

The IoT will lead to an exponential growth in data flowing across the extended enterpriseand companies will have to acquire personnel with the necessary data analysis
experience to be able to process this information. These employees will design robustalgorithms for processing IoT-related information and then translate what happens in
the physical world into a format that can be managed in the digital world.
With all the devices “talking” across the IoT—communicating things like events,
conditions, temperature, etc.—systems can make smarter and timelier decisions.
Typically, systems that drive the manufacturing value chain, from product design toproduction and logistics, function in a silo. Disruptive technologies like the IoT andsmart sensors are bringing together the physical and the virtual, so that intelligencecan be applied for better visibility into operations, shortened innovation cycles, andincreased productivity.

Welcome to the Smart Factory of the future, where machines coordinate the production
and distribution of custom products made up of component parts and materials
sourced from hundreds of suppliers. Processes like proactive replenishment andpredictive maintenance are fully automated. Humans interact with machines, working
side by side to guide digitized processes and robots. Analytics helps to improve theoperational efficiency of connected industrial equipment.
In the Smart Factory of the future, the foundation layer will be automation intensive:
all production processes will be highly or completely automated with few or no people
involved in production operations. An IT-intensive operational layer will support realtime decision-making environments. The connection between factory technology
and enterprise systems is based around an IoT layer for a seamless transition fromOperation Technology (OT) to IT systems. The traditional organizational boundaries
between OT and IT as separated domains will vanish.

People are at the center of the Smart Factory of the future as they provide the degree of
flexibility and decision-making capabilities required to deal with increasing complexity.
Enterprise Information Management (EIM) is the facilitator that eases the exchange of
information transparently across organizational or IT/OT silos.
Big data, the shift to new cloud-based platforms, and mobile technologies all play a
key role in the success of any IoT-related Smart Factory strategy. Cloud deployments
in manufacturing simplify the management of a global IT infrastructure, allowing
manufacturers to quickly scale production up or down and making information
accessible as large data pools that can be analyzed for intelligence.

22

D I G I TA L D I S R U P T I O N

on Feedback L
ducti
oop
Pro

Digital Supply Chain

Suppliers

Digital Manufacturing

The Smart Factory

Financial
Institutions

ac

kL

oo

p

Digital Product Design

Service
Providers

De

n
sig

e
Fe

db

3PL

Aftermarket Service and Support
Figure 1.15: The Smar t Factor y of the Future

Besides quick deployment and cost savings, other advantages of cloud computing
include ease of use and operational flexibility. They also give manufacturers theopportunity to digitally transform processes. An increasing number of products
are being developed in the form of virtual prototypes in which engineering
simulation software is used to predict performance prior to constructing physicalprototypes.Cloud-based computer-aided engineering (CAE), simulation, and virtual
prototyping enable manufacturers to predict or understand modelled systems orprocesses for any given environment. Simulations are faster and more collaborative,
and revisions, fewer—supporting the ability to “fail fast” in the digital world.
To integrate physical and digital supply chains, manufacturers will need accessto a cloud-based integration platform that can connect a wide variety of devices,
equipment, and software. An M2M API or middleware that sits between the piece ofequipment and the supply chain management environment will provide the link between
physical and digital supply chains. Common standards will have to be developed toachieve this.

Standards are only one part of the equation, as ways to process the information beingtransmitted between devices must also be developed. The key challenge to widespread
adoption of the IoT lies in achieving seamless interoperability and common standards
that allow machines to communicate across different systems, borders, and cultures.
In North America, an alliance of 10 companies is working to lobby the U.S. governmenton the importance of developing open standards that will encourage broad adoption of
the IoT with a focus on addressing cybersecurity threats and issues.
23

CHAPTER 1

With its combination of smart sensors, wireless communication, and big data analytics,
the Industrial IoT is creating the architecture that will shorten manufacturing timescales
from years, months, and weeks to hours, minutes, and seconds. When the Industrial
Internet unites factory equipment through a common data platform, it does more thanjust centralize information; it enables machines and people to optimize performanceacross entire systems, including the global supply chain.

In the following feature, iTAC Software AG uses analytics to enable smart factories inthe digital world.

Digital Changes Everything

The convergence of digital technologies discussed in this chapter is heralding in
the Fourth Industrial Revolution. Technologies being introduced today will transform
tomorrow’s manufacturing operations and supply chains. Key to the success ofthese future digital supply chains will be to establish an end-to-end digital backbone.
B2B networks will evolve into more intelligent business networks where connected
devices can share structured and unstructured information seamlessly withback-end enterprise systems and big data repositories. To succeed in the digitalworld, manufacturing organizations will need to determine the value of disruptive
technologies and how they can expand their abilities to compete in their markets.

Based on the progress of the past and the present rate of change, how will digitaltechnology transform business models to meet the needs of consumers, partners,
and marketing channels in the manufacturing industry? What will the manufacturing
enterprise look like in the digital world? How will it operate? The following chapter
examines this in greater detail.

24

I N N O VAT O R S T O R Y

iTAC Software AG
Using analytics toenable smart factories
in the digital world

Figure 1.16: iTAC Sof t ware AG

Since its founding in 1998, iTAC Software AG (Internet Technologies and Consulting) has
been specializing in providing internet technologies for the manufacturing industry. The
manufacturer of standard software and products for cross-company IT applications is anindustry leading system and solution provider of Manufacturing Execution Systems (MES)
for the entire supply chain. Implementing the Internet of Things and Services has been
the focus of the company’s strategic direction right from the beginning. Its philosophy isconnecting people, data, and systems.
To offer its customers the greatest possible transparency and decision-making capability
for production control, and to meet growing demands related to the Internet of Things (IoT),
iTAC wanted to integrate Business Intelligence (BI) and analytics software into iTAC.MES.
Suite. Doing so would support customer demands for manufacturing intelligence, quality
control, and traceability. In addition to rapid, effective implementation and seamlessintegration, iTAC required the customization of reports, analysis, and dashboards withfull interactivity and security. All these needed to be web-based, offer transparent
personalization for various applications, and be available through different channels.

With Analytics, iTAC has the BI, operational, and analytical capabilities it needs tosupport customer demands for greater intelligence, quality control, and traceability
throughout the entire manufacturing process. The solution ensures transparency inmetrics management and supports product lifecycle management, budget control,and quality assurance, as well as field activity management. The company’s clients
can access and analyze large amounts of data centrally with extensible support for
future expansion, delivering competitive advantage as well as the ability to prepare for
the German government’s Industry 4.0—a national strategic initiative to drive digitalmanufacturing forward.
25

C H A P T E R

2

MANUFACTURING AS A DIGITAL BUSINESS

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

While the disruptive technologies discussed in Chapter 1 are enablers for digitization,true transformation requires that manufacturing organizations evolve from traditional,
stand-alone entities into digital manufacturing businesses that support a digital
supply chain and function within a manufacturing ecosystem. This chapter explores
manufacturing as a digital business.

CHAPTER 2

Manufacturing as a Digital Business“Manufacturers are going to face really fierce competition over every scrap of market
share available and there will certainly be winners and losers.”1

New technologies, globalization, regulations, and the emergence of the digitalconsumer are causing disruption across all sectors, and manufacturing is no exception.
Despite being an $11 trillion industry, much of manufacturing is lagging behind otherindustries in adopting digital technologies. 2 In the coming decades, competition will befierce. Manufacturing organizations in all sectors will need to disrupt their operations
or risk being replaced by more nimble players.

These market entrants are using new business models to deliver products andservices. Startups like Boxed, DeepMap, and Misty Robotics are challenging the statusquo and pushing the limits of innovation and imagination—all while meeting (and, attimes, exceeding) consumer expectations. Boxed, the Costco for Millennials, is using
machine learning to predict when customers will run out of a product and pre-emptively
places orders for home delivery. DeepMap, an autonomous vehicle mapping service
founded by ex-Googlers, is outpacing large automotive manufacturers, through agile
development and more accessible licensing. And Misty Robotics, the makers of Star
Wars’ BB-8, is vying to put a personal assistant robot in every home and office with
Misty—the world’s most advanced open source robot.

In light of the threat that new technology-based companies present, establishedmanufacturers are looking to disrupt their operations. In fact, 84 percent of
manufacturing suppliers expect to be challenged by new competitors. 3 In theautomotive industry alone, leading manufacturers are adopting new business models.
Audi, for example, has made a fleet of luxury vehicles available to customers as an ondemand digital service for improved convenience.

Manufacturer

Supplier

The
Traditional
Enterprise

Figure 2.1: A Traditional Linear Value Chain

28

Retailer

CustomerM A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

While the disruptive technologies discussed in Chapter 1 are enablers for digitization,true transformation involves much more than adopting new technologies. Along withupfront investments to modernize and consolidate enterprise systems, new businessmodels, process support, and the requisite skills (in understanding massive data
pools and the workings of cognitive or AI systems, for example) are essential fortransformational success. To succeed in the digital world, manufacturing organizations
will be required to evolve from traditional, stand-alone entities with linear value chains(illustrated in the previous figure) into digital manufacturing businesses that support
a digital supply chain and function in the context of a larger manufacturing ecosystem(as shown in Figure 2.2).

The Digital Manufacturing Ecosystem

As part of a global ecosystem, manufacturers are better equipped to transition frommass producing “dumb” products for consumers to delivering customized, “smart”
products and service-based offerings.
An extended digital manufacturing ecosystem is composed of three layers: the external
trading partner community (shown in purple), the internal enterprise community(represented in blue), and the Internet of Things (IoT) layer (highlighted in teal).

Distributors

MFT

Manufacturing

XML
PFTP2

HTTPS

SuppliersANSI
EDIFACT

Utilities

PLM

Corporate Customers
Procurement

Analytics

Experience

Design

3PLs

iDOC

FAX

Production

Discovery& Security

Business
Network

HQ

MarketingSupportContent

SWIFT

AS2
ERP

Process

Big Data

Sales

Big Data

OfficeIoT Gateway

Production

Information from Connected IoT and Edge Devices

Figure 2.2: The Extended Digital Manufacturing Ecosystem

29

Banks

FTP
HULET

Warehouse

Insurers

CHAPTER 2

In global manufacturing, trading partners are typically located across disparate
industries and regions with different requirements for information exchange,
connectivity, and compliance. An external trading partner community connects the
supply chain to trading partners and facilitates both collaboration and the efficientexchange of information.
The internal enterprise community combines enterprise departments and systems,
such as Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM)
applications that support the business. These systems can be brought together using
an Enterprise Information Management (EIM) platform in conjunction with Business-toBusiness (B2B) integration.

The IoT layer pulls in information collected from connected devices and sensors
across office equipment, production machinery, and warehouse and logistics
equipment. This information must also be captured and processed in real time, or
archived for downstream processing by other business systems. As the number ofdevices requiring immediate or high-volume data processing continues to increase,the combination of the Cloud and edge computing will provide the agility andinfrastructure needed to support the ever-expanding IoT universe.

A digital ecosystem is billions of people, businesses, and devices communicating,collaborating, and transacting—all gaining efficiencies through the smarter use oftechnology. The potential is huge—from digitizing paper and manual processes tomoving applications to the Cloud to applying analytics for greater insight and deeper
engagement. As supply chains morph into dynamic, collaborative systems, a culture of
information sharing is required to connect all stakeholders. Data and standardization
are fundamental for the development and sustenance of digital ecosystems. Whenbusiness networks are reliably and securely connected, they can be layered withintelligence. As information is added, the ecosystem and opportunities for growth will
only increase. To function effectively in these global ecosystems, manufacturers will
have to operate as digital businesses.

Components of a Digital Manufacturing BusinessA digital manufacturing business is characterized by an open, flexible value chain madeup of an extended ecosystem of suppliers and partners. As a digital manufacturer,
every process, from "create to consume," is digitized throughout the complete lifecycleof a product. Information is managed using a common digital platform that allows all
stakeholders to access any type of information from anywhere, at any time. Becoming
a digital manufacturer necessitates using digital technology to increase output
efficiency, produce better products, reduce product lifecycles, seamlessly engage
with business partners and, ultimately, satisfy digital consumers.

30

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

The figure below breaks down the lifecycle of a product into component stages orprocesses with the digital consumer at the hub. While lifecycle activities may vary by
sector in the manufacturing industry, some of the common activities involved in the
lifecycle of a product include new product design and prototyping, manufacturing andproduction, logistics and distribution, consumer engagement, sales, and aftermarket
services and support. At each stage of a product’s lifecycle, different technologies
generate different types of information. All this information must be managed in orderto maximize output, performance, and insight. From product specifications at thedesign and engineering stage, like prototype-based information from a digital twin, topurchase orders exchanged across the supply chain to connected-machine data at theplant maintenance stage, invaluable information is exchanged from various sourcesin a variety of formats. Volumes of information are associated with the manufacturingof a product and this is only increasing as new data formats are being introduced bydisruptive applications of technology, such as the IoT.

For information that is generated to be useful, it must be accurate, secure, andaccessible. Only then can it be used to develop collateral in support of retail sales andmarketing, for example, or to issue the appropriate certifications during aftermarket
service and support. In a digital manufacturing organization, these processes are
streamlined and all of the associated information can be captured, managed, archived,
made accessible, and in some cases, processed in real time, across the digital
supply chain.

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

Figure 2.3: The Components of a Digital Manufacturing Business31

CHAPTER 2This book explores digitization across each of these stages. Chapter 3 discusses
the requirements for different lifecycle activities, including product design andengineering, plant maintenance and asset management, and aftermarket service andsupport. Chapters 4 and 5 examine the digital supply chain and distributor, retailer,and customer engagement respectively. Chapter 6 focuses on requirements forgovernance and compliance in the industry, while Chapter 7 describes EIM as thefoundational digital enterprise platform for transformation. And, finally, Chapter 8
provides strategies for change management across the enterprise and supply chain to
help manufacturers succeed in the digital world.

The Drivers of Digital Transformation

Behind the requirements to digitize manufacturing information and processes is thecontext that is driving change in the industry today. In the last decade, new disruptive
technologies have broken down barriers to create a more connected world, allowing
businesses to expand operations internationally. As a result, manufacturers face
increased pressure to comply with a growing variety of regulations. Additionally, ageographically dispersed network of supply chain partners and customers poses
unique format and language challenges, underscoring the need for the standardizationof information exchange between all trading partners.
To respond to changing requirements with agility, manufacturing organizations
must consolidate and modernize their enterprise IT infrastructures. With the proper
technologies in place, manufacturers can form robust business ecosystems to deliver
the products and services that meet the complex demands of today’s digital consumers.
Several market factors are accelerating the adoption of digital technologies and driving
the transformation of traditional manufacturers. These include: Digital technologies

 Globalization and international expansion
 Regulatory pressure and compliance Standardization

 Consolidation and modernization
 Digital consumers

32M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

Standardization

Compliance

Globalization

Drivers of Digital
Transformation

DigitalTechnologies

DigitalConsumers
Consolidation &Modernization

Figure 2.4: The Drivers of Digital Transformation 4

The Nature of Digital Technologies

As explored in Chapter 1, applications of emerging technologies are disrupting the
manufacturing industry. Many of these disruptive technologies are being deployed toautomate production. For example, in one of its facilities, Philips “employs” 128 robots
to produce electric razors. Because robots require little-to-no human involvement anddo not need the lights on to perform tasks, overhead costs associated with traditional,
man-powered production like heating and electricity can be significantly reduced.

Companies that automate production are realizing substantial benefits from theirearly efforts. BMW predicts it will boost productivity by more than 10 percent byautomating 99 percent of its newest body shop 5 , while Canon estimates automation
will cut production costs by 10 to 20 percent and reduce assembly costs by at least
50 percent. 633

CHAPTER 2

As impressive as these examples are, the manufacturing industry is still in the earlystages of adopting disruptive digital technologies. As manufacturers digitally mature,they will be better able to innovate at scale and expand their ecosystem. To get to thispoint however, manufacturers will need to integrate digital technology into every facetof the business. As shown in the following figure, this level of digital transformation
will yield sought-after outcomes such as differentiated customer experience andoptimized manufacturing processes.
Superior customer experience and service

62%

Manufacturing process optimization

62%

Ability to innovate

60%

Efficient collaboration between internaland external parties

59%

Figure 2.5: Top Outcomes Sought by Manufacturers Looking to Digitally Transform7

Globalization and International Expansion

Advances in transportation and telecommunications over the past 50 years havebeen instrumental in the globalization of manufacturing enterprises. Continuous
improvements in both have given manufacturing organizations the opportunity to
expand into international markets. Using enterprise technologies that support thereal-time exchange of information, manufacturers have been able to consolidate theirproducts and services, sell anywhere in the world, and support operations aroundthe clock.

As globalization intensifies, capital, economic power, and influence will shift fromestablished economies to emerging economies. Since 2001, there has been a focus on
Brazil, Russia, India, and China (collectively referred to as BRIC countries). But recent
macro-economic trends, such as increased wage costs, labor strikes, and a desire to
exploit growing markets, have led to the emergence of four new regions with significant
economic potential: Mexico, Indonesia, Nigeria, and Turkey—or the MINT countries (asshown in Figure 2.7).
The following feature highlights how steelmaker ArcelorMittal is leveraging digitaltechnology to accelerate the customer onboarding process, improve collaboration
between partners, and increase visibility across its global B2B network.

34

I N N O VAT O R S T O R Y

ArcelorMittal"A global footprint is very
important to us as we need
to be able to connect to acustomer anywhere in theworld. B2B Managed Services
increases global visibility
across our base of B2Btransactions and delivers
considerably improved
monitoring capabilities."

Figure 2.6: ArcelorMittal

ArcelorMittal is the world’s leading steel and mining company. Guided by a philosophy to
produce safe, sustainable steel, it is the leading supplier of quality steel products in all
major markets including automotive, construction, household appliances, and packaging.
ArcelorMittal is present in 60 countries, has an industrial footprint in 18 countries, andranks as today’s only truly global steelmaker.

The company wanted to accelerate the process of onboarding new partners to its B2B
e-commerce network while enhancing their capability to deliver new solutions. In addition
to being time consuming, running B2B applications in-house was proving to be costly. As
such, the company also sought to reduce the support and maintenance costs of older
mainframe-based B2B applications that had been developed in-house. Outsourcing apatchwork of fragmented B2B trading networks via B2B Managed Services emerged as
an effective and powerful way to address all of these challenges.

Entrusting B2B Managed Services with the management of more than 100,000 monthly
Electronic Data Interchange (EDI) messages between global trading partners has
eliminated the need for in-house B2B technology expertise. It has resulted in smootherand more reliable core business processes, increased global visibility across thebusiness network, and improved monitoring capabilities. Based on the initial success
ArcelorMittal has experienced, the company plans to extend the reach of B2B Managed
Services to include additional trading partners.

35

CHAPTER 2

Gross Domestic Product 2012
16.24
8.23
5.96
3.43
2.61
2.47
2.25
2.01
2.01
1.84
1.82
1.53
1.32
1.18
1.13
0.88
0.79
($trillions)

0.26

Ranking
U.S. 1 China
China 2 U.S.
Japan 3 India
Germany 4 Euro area
France 5 Brazil
U.K. 6 Russia
Brazil 7 Japan
Russia 8 Mexico
Italy 9 Indonesia
India 10 U.K.
Canada 11 France
Australia 12 Germany
Spain 13 Nigeria
Mexico 14 Turkey
South Korea 15 Egypt
Indonesia 16 Canada
Turkey 17 Italy
Nigeria 39

Estimated Gross Domestic Product in 2050

9.71
8.01
7.37
6.95
6.04
5.69
5.36
5.22
4.91
4.45
3.61
3.47
3.42

24.98
22.51

34.58

52.62

Source: World Bank, Goldman Sachs

Figure 2.7: Rise of the MINTs 8

Over the past few years, Mexico has established itself as a key automotive
manufacturing hub, with automakers investing a record $3.62 billion in the first halfof 2017 alone. 9 Meanwhile, Indonesia has the potential to become a powerful player inhigh-tech over the next decade, which is why it has invested significantly in upgrading
its mobile infrastructure to deliver high-speed connectivity across the country.10
The investment has paid off. Companies looking to avoid the increasingly expensive
Chinese labor market are already investing heavily in Indonesia. Other MINT countries
are working to upgrade their utilities and telecommunications infrastructures toencourage business development. If Nigeria were to improve its utilities infrastructure,for example, it is estimated the country could double the size of its economy inapproximately six years.11
Moving manufacturing operations overseas and offshoring product development tocountries with young, skilled, and affordable labor can help lower production costs. A
presence in the global market creates opportunities for growth outside of the domestic
market, which can lead to economies of scale. At the same time, disruptive technologies
are reducing the dependency on cheap, outsourced labor, which diminishes the need
to offshore. As disruptive technologies mature and globalization becomes morecommonplace, time will tell if automation will render outsourcing obsolete.

Regulatory Pressure and Compliance

In a digital world where manufacturing operations span the globe, a final productis often the result of a worldwide effort. Materials can be sourced from multiple
countries, shipped to an assembly plant to be manufactured, and then distributed to
any number of other countries. In an industry with no shortage of regulations, where
the ramifications for non-compliance can be devastating, the international nature ofmanufacturing goods and services can make complying with regulations grueling.
36

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

As the figure below illustrates, manufacturers must comply with numerous regulations
concerning the safety of products, the health and safety of employees, environmental
impact, data protection, export controls, anti-corruption, IT safety and security, faircompetition, and employment law.12 To further complicate things most regulations varyby region, and the emergence of new materials, production methods, technologies,
political motives, and even scientific research can cause them to change.

More than 100,000 rules and regulations and growing
North America

Europe & Asia

Global• Canada Consumer Product Safety Act• Dodd-Frank Conflict Minerals Law• OFAC• US FDA• AMS (Agricultural Marketing Service)• USDA• COOL (Country of Origin Labeling)• USDA APHIS• FTC• FCPA• NHTSA• OHS• SEC• Sarbanes-Oxley Act• Australian Design Rules (ADRs)• EU REACH• India Motor Vehicles Act• National Labour Law• UCPL (Unfair Competition Prevention
Law)• UK Bribery Act• EMEA-FDA (European Medical
Evaluation Agency)• IMPs (Manufacture of Investigational
Medicinal Products)• GMP (Good Manufacturing Practice)• FCPA (Foreign Corrupt Practices Act)
• GDPR (General Data Protection
Regulation)• ISO/IEC 27001• Third Party Risk
• ISO 9000
• ISO 9001
• ISO 45001

Figure 2.8: A Complex Landscape of Global and Regional Regulator y Pressures

Manufacturers around the world are subject to intense scrutiny by regulatory agencies
that monitor compliance all along the product lifecycle. Consider the standard vehicle
tire. In the U.S., for example, a tire’s compliance journey begins before the product iseven created. Tire manufacturers must ensure the raw materials they source, suchas natural and synthetic rubbers, cements and solvents, comply with a variety ofenvironmental regulations as specified by the United States Environmental Protection
Agency (US EPA). At various points throughout the manufacturing process, testing andmonitoring must be conducted to ensure compliance with Natural Emission Standards
for Hazardous Air Pollutants (NESHAP). The finished, road-ready product must meetthe requirements as outlined by numerous federal regulatory bodies and standards
organizations, including the Department of Transportation (DOT), the National Highway
and Traffic Safety Administration (NHTSA), the Uniform Tire Quality Grading System(UTQG), and the Tire and Rim Association (T&RA). The ramifications of non-complianceat any stage in the production process can be severe, including fines, product failure,and costly recalls.

37

CHAPTER 2Emerging technologies are impacting the regulatory landscape. New regulations willneed to be created to adequately govern and protect everyone, from manufacturers
to consumers. The increased adoption of drones, 3D printing, autonomous cars, androbots will be a catalyst for a host of new regulations. In response to the rapid adoptionof drones, for example, the U.S. Federal Aviation Administration (FAA) has implemented
conditions for use by e-commerce giants like Amazon and Alibaba.13 Similarly, 3D
printing will introduce opportunities for patent infringement and Intellectual Property(IP) theft, autonomous cars will call into question liability when accidents occur, androbots may present the ethical dilemma of establishing fault in the case of accidental
death. To take full advantage of these technologies, manufacturing organizations will
require the flexibility and responsiveness to comply with regulations as they are created
and revised. Adopting industry standards and ensuring that critical information isgoverned can make meeting regulatory and compliance requirements more achievable.

Standardization

Industry standards are a set of manufacturing criteria that relate to the standard
functions and operations in respective fields of production. They have been designed
to help manufacturers meet the established requirements for the safety, quality, andreliability of a manufacturer’s products. Both the International Labour Organization(ILO) and the International Organization for Standardization (ISO) are examples
of standard-setting bodies that promote worldwide proprietary, industrial, andcommercial standards to maintain safe, efficient, and common ways (standard units ofmeasure, for example) to work.

Standards have played a fundamental role in the evolution of manufacturing,creating the foundation for the modern assembly line and supply chain growth.14 As
well as providing common ways to work, they also deliver a common language forbusiness partners, to exchange information electronically. In the current landscape,manufacturers must juggle regional EDI standards (such as EIAJ, VDA, EANCOM, andTradacoms), vertical industry standards (like OAGi and ebXML), and ERP application
formats (including SAP IDoc, Microsoft AIF, and Oracle TIF). Each of these offers a
different combination of security, performance, and reliability to satisfy different
user requirements. Many of these standards are still based on those established in
the 1970s and 1980s. The development of modern standards and architectures willbe essential for the integration of physical and digital supply chains into an effective
ecosystem and the widespread adoption of the IoT.

B2B integration streamlines business data exchange between business partners,
giving manufacturing companies access to standardized transactional solutions
that automate and simplify communications. With the complexity and frequency ofbusiness transactions, B2B integration involves a heightened degree of coordination,
data synchronization, and automation. When combined with standardization, B2B
integration helps manufacturers coordinate the flow of commerce and communications
across an entire business network.
38

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S SConsolidation and Modernization

Enterprise infrastructure is becoming more complex. It is expected to support new
media, social networking, mobile access, portals, integration with ERP systems,
content management solutions, process automation, analytics, connected devices,and much more. A growing reliance on emerging technologies means that enterpriseapplications must be integrated across a variety of systems. All this adds up to a digital
dilemma for manufacturing CIOs: How can they embrace disruptive technologies
and new business models, while ensuring a stable enterprise platform that supportsbusiness continuity? In the digital world, CIOs are challenged to overcome theseobstacles and keep costs low. This is exemplified in the following figure, which shows
key barriers to manufacturers adopting the IoT.
65%
60%
67%

Lack of interoperabilityor standards

64%

Security concerns
Uncertain ROI(e.g., insufficient business cases)

Legacy equipment(e.g., no connectivity or embedded sensors)

24%
21%
27%

Technology immaturity(e.g., large-scale analytics)

Societal concerns(e.g., economic dislocation)

38%

3%
5%
3%

72%

47%

19%
14%
20%

Privacy concerns
Lack of skilled workers(e.g., data scientists)

33%

53%
53%
50%

60%

15%
12%
20%

Overall

North America (n=43)
Europe (n=30)

Source: World Economic Forum Industrial Internet Survey, 2014

Figure 2.9: Key Barriers to Adopting the Internet of Things15

Whether supporting Just-in-Time (JIT) production in the automotive industry orreverse logistics process in the high-tech industry, having access to a single, common
B2B platform through which standardized information can flow seamlessly is a key
objective for digital manufacturing companies. A consolidated infrastructure makes
standardization achievable and ensures operational consistency across services,
providing the foundation for future business growth, as illustrated in the followinginterview with Lear Corporation.

39

TRANSFORMATION IN ACTION

Lear Corporation

Lear Corporation was founded in Detroit in 1917 as American Metal
Products. More than a century later, Lear is one of the world's leading
suppliers of automotive seating systems and electrical distribution
systems, ranking 154th on the Fortune 500. Its world-class products
are designed, engineered, and manufactured by a diverse team ofapproximately 150,000 employees located in 37 countries. Serving every
major automaker in the world, Lear’s content can be found on more than
400 vehicle nameplates.

Figure 2.10: Lear Corporation

What follows are excerpts from an interview with Don Guibord, IT Manager, EDI at
Lear Corporation.
“Lear is made up of two divisions: E-systems
and Seating. We are one of only four
suppliers with the global capacity todeliver complete automotive electrical
distribution systems for traditional electricalarchitectures, as well as emerging highpower and hybrid systems. We are also
one of the world’s only fully integrated
manufacturers of the entire seat. With sales
exceeding $18 billion, we are one of theleading tier-one suppliers of automotive
seating systems and electrical distribution
systems in the industry.

As an industry leader, we have a global
business network of over 3,000 uniquesuppliers and more than 7,500 suppliers
that we exchange information with on aregular basis. That’s a large supply chain,and exchanging information along it fromend to end is challenging. As the IT Manager
for Electronic Data Interchange (EDI), it’s
my job to make sure that all the systems,
processes, and contracts are in place
to facilitate the seamless exchange of
documents that communicate needs andorders from business to business, or more
40

TRANSFORMATION IN ACTION

specifically in our case, between Lear andour partners who are major automakers
around the world.

document standards. As I mentioned, we
have more than 7,500 supplier relationships
around the world and each month we
exchange between three and four million
kilocharacters across our businessnetwork. In the past, communicating withsuch a large and diverse partner network
was a challenge. There were the obvious
hurdles, like language and time zones, butalso technical ones—which were often
the most challenging to overcome. With
standardization, those challenges arebehind us. I know, depending on what region
my supplier or OEM is, which document
format to use.

Our key differentiator is that we manufactureand ship our seating products in sequence.
In other words, the order in which we build
and ship our seats corresponds with theorder the cars take in the assembly line at
the OEM plant. So rather than building seatsmonths in advance and storing them, webuild the seats as they are needed, or Just inTime (JIT). EDI supports JIT manufacturing
processes because it provides visibility into
inventory levels and can receive broadcast
notifications. For example, we’ll receive
periodic notifications—or triggers—from
the OEM plant to let us know where eachcar is during the manufacturing process.
So, if we get a notification that a particular
car has just come out of paint, we know that
we need to load that seat onto the truck fordelivery at that moment in order to get it to
the plant “just in time.”

The Cloud has helped us to further
standardize, and even automate EDI. Whendata is sent via EDI, it needs to be translated
into its final proprietary file format—in otherwords, into the final format that will live in
the ERP system. We upload our Intermediate
Documents (IDocs) to our cloud-based
business network solution, and that’s where
the magic happens. Based on criteria, or
rules that we’ve established, the solution
translates the IDoc into the appropriate
format and routes it to the intended
recipient. This has eliminated the need fortranslation software behind our firewall,
sped up communications, and significantly
improved our supplier relations. We are
currently in the process of taking this one
step further with canonical maps. This will
enable us to outsource the mapping of ourB2B program while seamlessly integratingwith partner applications. Ultimately, thiswill reduce costs and speed up partner
onboarding. The more we outsource andautomate processes, the more efficient wecan become.

Many processes within departments areautomated, but different departments areusing different systems, so there are gaps
in processes that need to be filled. Right
now, we rely on people to bridge those gaps,
but we’re working to correct this so that we
can automate processes across the entire
enterprise. Within my department, we’ve
successfully digitized the order cycle fromstart to finish. The order cycle is a little
more complicated since Lear acts as not
only the supplier, but also as the customer.
This means we communicate both with theOEMs as well as our suppliers. We receive
orders, query our inventory levels, order
required materials, fulfill, ship, bill, andcollect payment. This allows us to speed
up our order cycles and fulfill orders withgreater accuracy. We’re able to do thisbecause of standardization.

Cars have come a long way from the Ford
Model T. We’ve moved from mechanically
timed ignitions to electronic ignitions todigital ignitions. Cars are evolving fromproviding a means of transportation tocomplete software platforms. The moredigital- and software-driven they become,We’ve been using EDI in automotive for
decades. It’s to the point where we’ve
standardized down to a handful of41

TRANSFORMATION IN ACTION

the quicker they will evolve. It’s Moore’s
law in action, and this is forcing automotive
companies to transform to keep pace
with, or ideally, outpace the competition.
Beyond adopting technologies to digitize
the enterprise, they’re hiring engineers
and acquiring software companies andIntellectual Property (IP) to fuel innovation.
Autonomous-driving cars are already being
tested on the road. I think it’s just a matter oftime, a few years really, before they becomecommonplace. Cars will be designed tobe so intelligent, so intuitive and cognitive,
and plugged into their surroundings, that
it will be safer to have autonomous-drivingcars on the road. Intelligent machines will
replace humans, they’ll be replaced withperfectly accurate and impartial softwareand sensors.
We’re in the middle of another industrial
revolution where digital is replacing
analog. The shift is already happening.
For example, the military is now training
more drone operators than pilots. Soon,
automotive manufacturers will hire more
software engineers than manual laborers,
and we’ll have more self-driving cars
than manned vehicles. The technology
already exists; it’s the infrastructure that’s
lagging. Smart cars require smart cities.
Roads will have to be able to exchange
information with these self-driving cars
for everything to run smoothly. So, there’s
still a fair bit of investment required in theareas of infrastructure, standardization,and innovation that has to happen before
technologies like self-driving cars arecommonplace, but the automotive industry
is transforming, so it won’t be too long.”42

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

Typical global manufacturers run on mainframe systems with tightly focusedtechnology stacks and siloed information, which makes them slow to respond tochange. Legacy platforms are expensive to upgrade and require special skill sets tomaintain. Often, the more outmoded they become, the costlier they are to manage.
Integrating old systems with new systems can add up to significant long-term
investment and operating expenses. Adopting a modern platform results in process
efficiencies that reduce IT operating, development, application and infrastructure, andservice costs. Platform modernization empowers manufacturers to respond quickly
to make changes to products, customize existing ones, or introduce new ones, while
reducing time-to-market.

In a highly competitive industry, the solution is to replace legacy systems withinvestments in digital technologies and channels. Digital strategies based on
integration, collaboration, and modernization will be most effective in balancing the
mandates to grow the business and reduce costs.

Aging Back-office
Systems

Operational
EffectivenessOpen Source
Adoption

Figure 2.11: Back-of fice Modernization

Delivering superior responsiveness will depend on tight synchronization of data as wellas the movement of information, transactions, and processes between partners, basedon modernized systems and infrastructures. As such, manufacturing organizations willneed to embrace new types of network infrastructure, new devices connected to these
networks, and new forms of digital information generated by these devices. This willallow for improved operations with external partners and enable greater collaboration
across the digital supply chain or ecosystem.
Technologies like AI, robotics, sensors, and the IoT have provided the technicalbackbone for business networks to expand into full-fledged ecosystems thatexchange information in real time and transcend geography, industry, and language
to create exponentially more opportunities for digital manufacturers. From within theextended manufacturing ecosystem, businesses can assemble new or complementary
capabilities from other suppliers and more easily pivot their operations to meet
consumer demands.
Back-office modernization not only results in operational efficiencies, it alsoenables greater collaboration between partners and suppliers through increased
digital capabilities as well as substantial cost savings, as shown in the following
MillerCoors feature.
43

I N N O VAT O R S T O R Y

MillerCoors

In just one year,
OpenText B2B Managed
Services has removed
2.5 million labor hours
from the distributorto-retailer supply
chain, resulting in an
estimated $50 million inlabor savings

Figure 2.12: MillerCoors

MillerCoors is a joint venture of the U.S. operations of SABMiller and Molson Coors. With
more than 450 years of combined brewing heritage, MillerCoors boasts an impressive
portfolio of industry-leading beers. With nearly 30 percent of U.S. beer sales, MillerCoorsis the second-largest beer company in the United States. The company operates eight
major breweries, as well as several craft breweries.

Miller Brewing (a legacy company of MillerCoors) found its distributor-to-retail supply
chain was falling short of the industry standard and, more importantly, user expectations.
The company needed to modernize and standardize their inefficient and documentintensive processes to remain competitive in their complex and consumer-driven market.
Using B2B Managed Services, Miller Brewing connected more than 400 distributors with
25 different business systems into a cohesive EDI platform. Doing so enabled their entire
distributor network to conduct business with any retailer that required an EDI capability.

Today, B2B Managed Services provides the technical foundation for a seamless, endto-end EDI platform for all of MillerCoors’ supplier and banking connections. Critical
documents are received, processed, and seamlessly exchanged to deliver efficiencies,
cost savings and, of course, beer. In just one year, the business transformation eliminated
1.2 million hours of labor for distributors and 1.3 million hours for retailers, for a totalof 2.5 million labor hours removed from the distributor-to-retailer supply chain. The
time savings translates to an estimated re-allocation of 1,200 full-time equivalent (FTE)
resources to other tasks, freeing up potentially $50 million in labor savings.

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M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

Digital Consumers

The rapid adoption of digital technologies has created the digital consumer—customers
who expect much more from manufacturers than simply products. They want digitallyenabled services from any place at any time via the channel of their choice. What used
to differentiate the enterprise—economies of scale, distribution strength, and brand—
have faded in importance. In their place, manufacturers are developing deeper, direct
relationships with customers that exceed a one-time buying experience, giving themaccess to the potential lifetime value of loyal customers.
As powerful technologies become more widely available, they will change the industry
forever. For example, 3D printing will deliver convenience by reducing wait times withonsite manufacturing, customization will transform consumers into co-creators, anddrones will fulfill the need for immediacy with same-day (even same-hour) deliveries.
These technologies have the power to disrupt entire supply chains and disintermediate
manufacturers. Personal 3D printers, for example, are democratizing manufacturing,making it possible for customers to print basic products, such as toy blocks forchildren, quickly and easily from the comfort of their own home. Customization isproviding manufacturers with the opportunity to create deeper, lasting relationships
with their customers. With its NIKEiD program, a multi-channel experience that allows
consumers to design bespoke footwear, NIKE has successfully established a direct
link to its customers while extending engagement into the design, manufacturing, anddistribution phases.
Product and services like autonomous vehicles, same-day delivery, wearable
technologies, and connected homes all point to the growing consumer demandfor immediacy, convenience, and the ability to make real-time, informed decisions.
These new demands are pushing manufacturers to re-evaluate traditional design andproduction processes and leverage information technology to support new levelsof flexibility, operational excellence, and engagement. In the quest to satisfy digitalconsumers, manufacturers will need to find a balance between what is technicallypossible and what is operationally sustainable. Digital manufactures that can strike
this delicate balance and deliver products and services that meet these new demands
will succeed in an emerging digital ecosystem.

New Business Models Emerge“Manufacturers must start thinking about how they can add new pools of value to theircustomers and then leverage all of the technologies at their disposal to rapidly deliveron that value.”1645

CHAPTER 2

The drivers of digital transformation are rendering well-established business models
obsolete. Platforms-as-a-Service (PaaS), a subscription-based services economy,
and monetizing data are just a few of the new business models that are enabling
manufacturers to transform their operations. In the digital world, success will hinge
on a manufacturer’s ability to deliver services-based offerings in place of stand-alone
products, to convert one-time transactions into recurring interactions over the lifetimeof a product, and to uncover new streams of revenue from their business data.

Platforms-as-a-Service

The combination of disruptive technologies and digital customers has resulted in a
growing trend for consumers to seek out more direct relationships with manufacturers.
This trend is driving manufacturers to move away from delivering traditional standalone products to provide service-based offerings via digital platforms. A good
example of this is LG’s SmartThinQ platform, which gives customers added control of
their smart appliances.17 Using it, they can do everything from checking refrigerator
inventory to preheating the oven remotely. The service helps customers to monitor,
maintain, and even troubleshoot their connected appliances from virtually anywhere.

Platform-as-aService

Stand-alone
Product

Product+
Remote Support

Product+
Value-add Service

IoT Services Roadmap
Figure 2.13: New Business Models Emerge
46

Customer Engagement

Revenue Expansion

As illustrated in the following figure, the closer manufacturers move to PaaS offerings,
the greater the business potential for customer engagement and revenue expansion.
To support digital services, manufacturers need to invest in digital platforms. These
platforms will not only provide customers with a way to control a product or service, theyalso create direct relationships between customers and manufacturers, diminishing
the need for the middleman.

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

While PaaS offerings deliver added convenience and control for consumers, they cancomplicate things considerably for manufacturers. Where in the past the middleman—an appliance salesman at a department store, for example—owned the customer
relationship; with the new PaaS model, the manufacturer does. Based on this new
relationship, manufacturers can sell value-added services to increase customer
stickiness. But this new direct-to-consumer relationship also presents a new set ofchallenges. In addition to modernizing IT infrastructure to support digital service
platforms, manufacturing organizations must also update their operations and culture
to enable new customer-centric, services-based business models.

A Subscription-based Services Economy

Digital customers are consuming products and services in new and disruptive ways.
This behavior is affecting the manufacturing value chain, forcing manufacturers to movefrom a traditional product-centric business model to a service-centric, subscriptionbased model.

The need to own a product is declining. Younger generations of consumers, especially
Millennials, prefer to access a product rather than own it. This is shown by increasing
investments in subscriptions offered by innovative companies like Spotify, Netflix,
Zipcar, and Rolls-Royce. Jet engines are costly to purchase outright, so Rolls-Royce
gives its customers access to engines via the TotalCare® program, which charges them
only for active engine use time. In essence, customers are purchasing engine thrust as
a subscription-based service. With this model, convenience is a priority, as consumers
subscribe to music, movies, cars, and even jet engines. Organizations that make use ofthis business model are able to convert one-time transactions into a recurring revenue
stream and collect valuable data in the process.
Making the move to a subscription-based model is not as easy as attaching a monthly
price to an existing product and calling it a service. The shift will require the adoption of
new technologies and practices to support every stage of the product lifecycle—fromdesign through aftermarket products and services—and interactions throughout the
supply chain ecosystem to deliver the flexibility and reliability digital customers want.
In the following interview, food-technology company, Local Line, is using an
e-commerce platform to disrupt the supply chain and disintermediate the middleman,offering suppliers alternative and direct routes to market.

47

TRANSFORMATION IN ACTION

Local Line

Local Line is a food-technology company that provides an e-commerce
platform for local food suppliers and their customers, which includes
farmers, wholesalers, vineyards, butchers, bakers, brewers, and more.

Figure 2.14: Local Line

What follows are excerpts from an interview with Cole Jones, Founder and CEO ofLocal Line.
“Our platform is made up of three products,
LocalSell, LocalHub, and LocalMarket. And
it’s based on the premise that if you are
selling food, you’re one of three things. You
could be a seller looking to move products,
like a farmer with grass-fed cattle who
needs to sell them into the market. Or abuyer and a seller, so a wholesaler with awarehouse, who is buying products fromlocal folks and needs a hub to sell. And
finally, you could be a community or farmers’market organizer that aggregates many
suppliers and buyers but does not facilitatepurchasing or distribution between thoseparties. We designed our product line tomeet these needs. One for sellers, one forbuyers and sellers, and one for markets, aswell as broadline distributors, such as big

food businesses, who are looking to create
a local market and showcase local products.
We started the company based on research
we did on food systems. We were examining
supply chains in North America, and wetraced the transport of food—in otherwords, where it was moving to and from.
Some interesting stats emerged. One ofwhich was that the average food producttravels 4,500 km and changes hands 12times before it arrives in Ontario—which
we thought was crazy. And the same yearthat we conducted this research (in 2014),
Ontario lost just over 4,000 family farms outof a total 51,000 in the province. So that’s
approximately eight percent of the total
farms in Ontario. While some may have been
“lost” to consolidation or other larger
48

TRANSFORMATION IN ACTION

operations, we found that regardless, theonly way farmers could operate effectively(and profitably) in the current food system
was to work with very big middlemen.

time an order was processed through a new
relationship built on Local Line. A significant
amount of “food miles” are reduced. Firstand foremost, though, our goal was to try
to help these farmers or producers findtheir customers and markets—to build theirbusiness—and the system we introduced isa very sustainable one.

These big middlemen take different forms.
Sometimes they are a large processor or
distributor that provides the infrastructureneeded to move food around. When we
looked at the local food suppliers, it was
obvious to us that the current model
appealed to about one percent of the large
producers and manufacturers that could
sell into a large distributor and service themvery well. But it wasn’t a good model for theother 99 percent of family farms, butchers,
wholesalers, or vineyards.

The big driver for us was increased sales,
so that’s what we push for when customers
enter our program, new customers or
increased business from current customers.
Our toolset helps our customers do thisand then track and support that process.
And it gives our customers information
they need to know about their products,
whether they’re in the middle of the field
or a driver on the road. They have answers
to questions like: “What’s in inventory?
What’s ordered? What’s not? Where do I
stand with my customers? What productdid my customer view and not order?” This
information could be important for an upsell
opportunity. The system offers a lot ofopportunities to improve efficacy.

So, we spoke to as many farmers as we
could—around 200 to be specific. We satat their kitchen tables and their challenges
surfaced very quickly. They wanted to gettheir products to market while retaining
control of their sales, marketing, andbrand, but this was hard to do. They could
move their products to market, but basedon the current model, it was through a
massive distributor or processor, andthey would have to give up 25 percent of
their margin, as well as control over theirbrand, and become disconnected fromtheir customers.

Many of the local suppliers are concerned
about security. They’re very protectionist
about their information, and with goodreason. The decision to use our software
is a very important one. They are putting
our system between themselves and theirmost valuable asset—their customer. If they
don’t have confidence in us, the relationshipwon’t work.

What we did was disintermediate themiddleman, which has happened in every
industry. We figured out that the foodindustry needed an infrastructure to enable
this 99 percent of small and medium foodsuppliers to get their products to market in
the best way possible.

Our platform that connects everyone is
how we are improving the industry. Our
solution had to be good for everyone in
the network—from the big processors to
the customers who want to “shop local”.
It was important that our network benefit
everyone—that’s really the only way it canbe successful. We offer suppliers a directline to customers and we offer the larger
companies access to a big supplier base.
It’s less about trying to disrupt one side

For us, the sustainability and thetransparency were just a byproduct ofbuilding a good system that worked fora range of people. Based on the averageorder for a food product travelling 4,500 km,
we could figure out, per pound of product,
how much distance could be saved every

49

TRANSFORMATION IN ACTION

of an industry and more about a holistic
view of an industry and making it better for
everyone involved.
We’ve got customers in four provinces
and two states now: B.C., Alberta, Ontario
and Nova Scotia in Canada, and Maine andMassachusetts in the U.S. Now that we havebuilt up a good presence, we’re trying totarget more specific information about aproduct. So, for example, we might examine
what the demand and supply for Ontario
potatoes is in the City of Guelph in July. And
what’s the difference between the two? In
other words, is there an oversupply andwhat impact does that have on the price?
Our software gives us a platform that we
can run analytics on to discover certain
metrics and insights into the industry.
This is a long-term play for us, deepening
understanding based on a critical mass ofcustomers and data.
Right now, I’m excited about the impactthat the IoT will have on every industry.
The IoT interests me because it provides
marketplaces with the opportunity to build
themselves as decentralized networks. Thisis something that is really important. It’s
peer-to-peer in every sense of the word.
Direct seller to direct buyer, the relationshipis direct. Markets need the infrastructure
to support this. The e-commerce company
Stripe has done this. They’ve taken a very
decentralized model on payments. The
IoT and blockchain gives us opportunities
to build truly decentralized networks,
and this is a very compelling conceptthat is central to our philosophy. Thereis a lot of opportunity to do this in the
agricultural industry.”50

M A N U FACT U R I N G A S A D I G I TA L B U S I N E S S

Monetizing Data

Technologies like sensors, RFID tags, and IoT-connected devices are continually
collecting valuable information from billions of data points. While all of this information
can be challenging to manage, it gives manufacturers the opportunity to monetize
their data.

As in the abovementioned TotalCare example, Rolls-Royce collects a massive amountof data from the engine services it provides. It uses more than 60 million kilobytes
of data generated each year by its 12,500 engines to uncover patterns pertaining toengine health, as well as insights into how customers use the engines.18 Analyzing
this information exposes new ways to improve product design and service delivery
and create additional revenue streams. Rolls-Royce sells this data back to customers
as add-on services that can predict when engines will need maintenance before
issues occur, eliminating unscheduled repair and reducing potential downtime due to
breakdowns. Similarly, Italian tire manufacture, Pirelli is successfully monetizing thedata it collects on tire pressure with Cyber Fleet, a service that gives drivers and fleet
managers the ability to monitor their tires continuously to help detect irregularities andensure proper maintenance.19
Applying disruptive technologies to enterprise data delivers numerous benefits,
including the ability to monitor performance, mitigate risk, and foster innovation andgrowth—all of which can benefit manufacturers. It also creates competitive advantage
by allowing manufacturers to uncover new streams of revenue by monetizing their data.

EIM: The Digital Backbone for Transformation

Success in the digital world will depend on a manufacturing organization’s ability totransform into a digital manufacturing business. To do so, manufacturers will needto re-evaluate (and, in many cases, redesign) existing processes, acquire new skills,
adopt new business models, and invest in new technologies.
Digitization is not simply a defensive strategy. Established manufacturers mustacknowledge, respond to, and allow digital technologies to transform their operations
from the inside-out if they want to remain competitive and relevant in the digital world.
EIM and B2B integration will be essential to transforming traditional manufacturers into
connected, information-driven manufacturing enterprises.
The disruptive technologies and drivers for digital transformation discussed inthis chapter come together to form a comprehensive framework for the digitalmanufacturing business of the future. This framework, enabled by digitization and theunderlying technologies, processes and structures, facilitates the seamless flow ofdata across traditionally siloed enterprise systems while providing an integrated viewof an asset throughout its entire lifecycle. This concept of connecting the “digital
thread” from creation through to consumption, and the digitized processes andinformation involved, will be explored in greater detail in the following chapter.
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C H A P T E R

3

EIM AND THE DIGITAL THREAD

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

A digital manufacturing business digitizes activities throughout the complete lifecycleof manufactured products. This chapter describes how EIM provides an integrated,cloud-based platform in new product design and engineering, plant maintenance andasset management, and aftermarket service and support.

CHAPTER 3

EIM and the Digital Thread“Digital manufacturing technologies will transform every link in the manufacturing
value chain, from research and development, supply chain, and factory operations tomarketing, sales, and services. Digital connectivity among designers, manufacturers,
workers, consumers, and physical industrial assets will unlock enormous value andchange the manufacturing landscape forever.”1
As discussed in the previous chapter, disruptive applications of technology areenabling manufacturing companies to transform from regional manufacturers into
global, connected enterprises that provide better products at lower costs. As thelinear value chain is eclipsed by an ecosystem of partners and suppliers, transforming
into a connected manufacturing enterprise requires new processes, skills, andinvestments in technology. The success of a digital manufacturing enterprise depends
upon effective coordination across all stages in a product’s development, from design
and production through to aftermarket services. This series of data-driven events
is commonly referred to as the ‘digital thread’: a single, seamless strand of data thatstretches from the initial design concept to the finished product.
Data is the lifeblood of smart business operations. The manufacturing industry
generates more data than any other sector of the economy. 2 To compete in the digitalworld, manufacturers will be required to manage and analyze their vast stores of
information at each stage in the manufacturing process. When information is treatedas an asset, it leads to greater insights, higher customer satisfaction, accelerated
time-to-market, new opportunities, and competitive advantage. In the Fourth Industrial
Revolution, information is a key strategic component for every manufacturer. Future
supply chains will rely on Enterprise Information Management (EIM) as the enabling
digital backbone and B2B integration platforms to connect information at every
juncture, or to interlace the digital thread throughout the manufacturing process.

EIM manages the flow of information across the enterprise—from engagement toinsight. It empowers manufacturing organizations to digitize their processes so thatthey can mitigate strategic risk and uncertainty, while creating new value. Whether
process or discrete, food and beverage, Consumer Packaged Goods (CPG), technology
companies, or retail organizations, EIM helps organizations anticipate opportunityfrom disruption, enabling true transformation to occur.

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E I M A N D T H E D I G I TA L T H R E A D

How Much Data?

Manufacturing machinery produces a staggering amount of data. A Boeing 737 aircraft
generates 333 gigabytes (GB) of data per minute per engine, so a flight from Los Angeles
to New York generates approximately 200 terabytes (TB) of data. A drilling rig produces
seven to eight TB of operational data a day. Self-driving cars produce one gigabyte (GB)of information a second. A smart factory might generate over one petabyte (PB) a day,which covers a range of information generated, relating to everything from productionlines to processes to machinery to the environment. 3

In general, manufacturing plants produce, consume, and exchange volumes of data
every day. Connected automobiles, for example, are anticipated to generate morethan one petabyte (PB) of operational data every day. 4 From sensors to machines tosoftware systems, a general range of manufacturing information is illustrated in the
figure below.
Installation of Various
Sensors on Production
Facilities and Machinery

Connect &collaboration
externally

Expandable
infrastructure

Real-time Monitors

Tap commercial
innovation

Securephysical &cyber assets

Connect
engineers withmachines

Maximize
uptimeAutomation

Link information& operational
technology

OptimizeassetsEnvironmental Monitoring

Figure 3.1: Data Generated at a Manufacturing Plant 5

The proliferation of technology applications used in every aspect of manufacturing—from create to consume—is producing volumes of data. Information comes from manysources, both internal and external. Data is housed in Enterprise Resource Planning(ERP) systems and generated by Manufacturing Execution Systems (MES) on thefactory floor, Product Lifecycle Management (PLM) programs, Process Development
Execution Systems (PDES), and machine controllers on the assembly line. At the55

CHAPTER 3

device level, data is created by motors, pumps, drivers, and robots. Sensor technology
is making intelligent products more accessible and these are producing data at
exponential rates. When sensors are combined with the IoT, they collect data frommachines and equipment and send it to other enterprise systems. At the customerfacing level, Customer Relationship Management (CRM), and Digital Asset Management(DAM) systems house information that must be retained and archived for compliancepurposes. All this data needs to be secure and accessible to maximize opportunity andminimize risk.

While manufacturing generates huge volumes of information, few companies areharnessing it. According to a recent survey, only 40 percent of U.S. manufacturers arecollecting and using data generated by smart sensors to improve their manufacturing
and operating processes. Many are in the early stages of using sensors to gain bettertransparency into their operations. The same survey also found that 20 percent of
manufacturers are using data-driven technologies across their value chains—in thefactory, warehouse, along the extended supply chain, and to interact with the customer.

37.9%

We have already implemented
Plan to implement within a year

5.8%
10.7%

Plan to implement within 3 years

14.6%

Plan to implement but do not have a timeline

31.1%

Do not plan to implement

Figure 3.2: Almost For t y Percent of Manufacturers are Embedding Sensors in their Products 6

By nature, manufacturing is "data rich but information poor," which means that althoughmassive amounts of data are generated, it is short term (or real time) and often, it resides
in silos. Take welding images, for example, information that is captured in a factory sothat it can be checked for defects. Once a production run is completed and no defects
are found, the information is deleted. Increasingly, manufacturers are investing in datadriven technologies to improve productivity, product quality, and even service that isdelivered after the product has left the factory. General Electric (GE) has implemented
over 20,000 sensors in their wind turbines, which generate 400 data points per second.
This information is analyzed in real time to optimize performance and predictive
analytics are applied for proactive replacement. As volumes of data in manufacturing
grows, so will a focus on implementing cloud-based applications and infrastructure.
These implementations are prerequisites for information exchange, analytics, and thedevelopment of new products at a scale that is required in the digital world.7
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E I M A N D T H E D I G I TA L T H R E A D

Connecting the Digital Thread—From Create
to Consume

Manufacturing is complex, involving an array of design, engineering, production,
distribution, and service activities. Comprehensive, end-to-end processes are
essential for operational efficiency and product quality. This has led to extensive
investments in business process reengineering programs and software applications
like ERP, PLM, and Supply Chain Management (SCM).

While adopting these systems has resulted in many benefits, it has also reduced
organizational agility because the flow of information is interrupted across disparate
legacy systems and applications. The digital thread describes this flow of data
throughout the manufacturing process, including design, modeling, quality assurance,
manufacturing, and post-production sales and services. It is the information that iscollected, communicated, and analyzed at each stage in every process. As a body ofknowledge around a product grows, gaps in connectivity prevent the manufacturer fromgaining full visibility into processes and overall performance. Having the appropriate
digital infrastructure—one that can store, access, digitize, and analyze vast amountsof data and interoperate across multiple systems and processes—is critical.

Connected
Workers

Monitoring

Analytics

Platform
Security

Network

Smart Assets

Connected
Operations

le Managem
ent

Apps

Connected
Enterprise

yc
Lifec

ess Process
Busin

Connected
Supply Chain

Connected
Services

Sensors

Connected
Products

Figure 3.3: The Information-driven, Connected Manufacturing Enterprise

In the following feature, Coca-Cola Refrescos Bandeirantes has extended their reachglobally and automated key processes for improved efficiencies using B2B integration.
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I N N O VAT O R S T O R Y

Coca-Cola
Refrescos Bandeirantes
More reliable, global
B2B communications
and integration

Figure 3.4: Coca-Cola Refrescos Bandeirantes

Founded in 1987, Coca-Cola Refrescos Bandeirantes is responsible for the exclusive
production, distribution, and sale of Coca-Cola products in Brazil. The company also
resells brands such as Heineken and other beverages like teas, energy drinks, isotonic
and chocolate milk. Coca-Cola Refrescos Bandeirantes is part of Grupo José Alves based
in Goiânia and has more than 2,900 employees and another 5,200 indirect collaborators.

The company needed to improve its EDI processes with its retailers and decided tomigrate from their legacy system to a solution that enabled a more global reach and morereliable B2B integration. Refrescos Bandeirantes faced issues relating to orders received
from retailers that contained invalid purchase orders (POs) and a lack of overall visibility
into the files used throughout the accounts payable process.

With the successful deployment of B2B Managed Services, Refrescos Bandeirantes
organized its web-based EDI service to provide better management capabilities for dataexchange between the company and its distributors. By restructuring orders and sales,
they improved process speeds significantly, giving the company a more competitive
internal system. For Refrescos Bandeirantes, EDI processing is now operating under aglobal platform that provides greater visibility and centralizes mapping infrastructure.
An important business rule is now in place to check all POs received from retailers toensure that it no longer receives invalid invoices. Because the solution is outsourced,
the company can avoid issues with software reinstalls and potential strategic data loss.

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E I M A N D T H E D I G I TA L T H R E A D

Manufacturing processes are becoming more sophisticated, and the data inputs andoutputs of manufacturing systems, sensors, and technologies will demand more robust
information management. This is made more crucial as quality management programs
and compliance require real-time monitoring, controls, and archiving. Enterprise
Information Management protects and validates parts-related data, enabling each partto have an associated body of knowledge or digital twin.

EIM technologies are helping to ensure greater levels of integrity and traceability.
In industries such as food and beverage, for example, regulations require companies
to track and analyze products from create to consume. Even in the most traditional
industries, manufacturers are burdened with making better use of their data to improve
quality and efficiency. The automotive industry, for example, is constantly managing
quality control with many of the major companies recalling millions of vehicles any
given year. As explored in Chapter 6, information plays an important role in protecting
manufacturers against the risks of non-compliance and litigation.

EIM is the platform that enables manufacturers to link together disparate systems. It
connects the digital thread across processes, providing a structural backbone thatcomprises multiple facets, such as security, standards, interoperability, intellectual
property and privacy, records management, and analytics. As digital information isused to support the documentation of a product from “cradle to grave,” deploying aneffective EIM platform is critical for any manufacturing operation. A comprehensive
digital EIM platform unites typically siloed business systems, so that information canflow seamlessly throughout the entire product lifecycle. From engagement to insight,
EIM enables digital communication and the exchange of data across the value chain.
This end-to-end approach allows for competitive advantage and organizational agility
as analytics can be applied to every process and throughout the supply chain, withpartners, suppliers, and customers.

In the following interview, Columbia Sportswear emerges as a digital innovator, using
digital systems and technologies to manage the lifecycle of their products—from data
generated in design, prototyping and sampling stages to portfolio management—in a
DAM system to extended supply chain solutions that connect factories, warehouses,and distribution management solutions.

Digitizing Processes

To rise to the challenges of a digital economy, manufacturing and retail companies
must digitize their business processes. This goes beyond merely converting paper
records to electronic or automating process steps. It requires close examination of key
corporate processes, understanding the needs of all stakeholders, determining new
outcomes based on these needs, then working back and leveraging digital technology
to fundamentally re-invent processes.

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TRANSFORMATION IN ACTION

Columbia Sportswear

Founded in 1938, Columbia Sportswear Company has grown from asmall family-owned hat maker to one of the world's largest outerwear
and active wear brands and the leading seller of ski wear in the UnitedStates. Today, Columbia Sportswear is a $2.3 billion company that
employs more than 5,300 people around the world and distributes andsells their “tested-tough” family of products to over 13,000 retailers inmore than 103 countries. Columbia has become a leading global brandby channeling the company's passion for the outdoors into technologies
and performance products that keep people warm, dry, cool andprotected year round.

Figure 3.5: Columbia Spor tswear

What follows is an excerpt from an interview with Fred Pond, former Vice President andChief Information Officer at Columbia Sportswear, and Mark Barrenechea, Vice Chair, Chief
Executive Officer and Chief Technology Officer of OpenText.
really evolved since then into a portfolio ofbrands today. We have Mountain Hardware(our premium line of outdoor ski wear andclimbing gear), Sorel (our popular line offall and winter footwear), prAna (our casual
outdoor lifestyle brand focused on yoga,

MARK BARRENECHEA: Columbia is ahousehold name. Can you tell me a bit
more about the Columbia brand?

FRED POND: Columbia started off as a hat
company more than 75 years ago, and has
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TRANSFORMATION IN ACTION

rock climbing, and swim wear), and ofcourse, the largest, our Columbia brand of
outdoor and active wear. So, we’ve reallymorphed into an umbrella for multiple
brands. We’re more a house of brands thana branded house.

Are you using any solutions to help
manage all the assets that come withmultiple brands and the associatedproducts? Give me a sense of yourproduct portfolio.

When I describe our IT environment, I always
start at the beginning, where we design
and build a product (think of it as CAD/
CAM for clothing). We use a product data
management system for our designers
and developers to work in and hold all the
specifications for our products. Once wehave a product designed and ready, we build
prototypes and samples and then, using
digital photography, build our portfolio ofdigital assets. These are not only shotsof all the individual products, but also
assortments of products and video of the
products being used.

Can you give us an idea of the sorts ofchallenges that come with managing
multiple brands?

In addition to supporting our four
major brands, we also support multiple
channels. We sell wholesale to retailers
and distributors around the world, we havetraditional standalone retail and outlet
stores, we sell to customers online (directly
through our websites and through partners
like Amazon and Zappos), and we also havewhat we call a “shop-in-a-shop” (a spacewithin a department store in some markets,
mostly in Asia).

We use a DAM solution to store all of ourdigital assets associated with our products
and their use. We are working towards
making the solution the one single place
where our digital assets are centrally
stored. That way assets can easily besearched and shared internally (acrossour marketing, advertising, stores, ande-commerce sites). External partners also
have access to this solution, so they canconveniently download assets on a selfserve basis for their advertising, catalogs,
and marketing. So that is the beginning ofour product and digital lifecycle. Productdata then flows into our demand and supply
solution, our ERP solution, our extended
supply chain solutions that connect ouroutsourced factories, and our warehouseand distribution management solutions.
That is our integrated back-office footprint.
And that doesn’t even touch on reporting
and analytics, which is a whole other set oftechnologies we use to make sense of all
the information in these systems, so we canmake more accurate and quick decisions.

Ten years ago, we were 95 percent
wholesale, selling mostly through partners
like DICK's Sporting Goods, REI, Academy,
and all the big retailers in Europe and Asia.
But we have morphed into having moreof our own direct-to-consumer channels,
although we make it very clear that weare not and will not be a pure-play retailer.
Globally, we have a little over 500 stores thatare branded Columbia, Mountain Hardware,
Sorel, or prAna and these are standalone
retail stores or shops. Obviously, our web
presence has grown over that same period,
and today almost ten percent of our global
revenue is based on e-commerce. Online is
our single fastest-growing channel. We havelots of ways to reach the consumer, and wewant to be able to play and succeed in allof them. So, the challenge becomes how
to leverage the tools we have across all thebrands, channels, and retail formats in a waythat delivers a consistent brand experience
for the customer.

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TRANSFORMATION IN ACTION

When it comes to the customer-facing
technologies, we use a variety of systems.
For e-commerce, for example, we run about
60 global sites in 15 countries and in about
six languages, using Software-as-a-Service(SaaS) along with many other partners.
For our retail stores, we have five different
systems that run in different parts of theworld—one set here in North America,
one in Europe, and three in different
locations across Asia. So, right now, we're
not very standardized. But what we lack instandardization, we make up for with great
products and customer service—we are
currently expanding our mobile informationand solutions.

SaaS, Cloud, or managed services; but westill have more than 100 applications in our
portfolio that we run on premises. So, right
now we are definitely a hybrid company,
but looking to move to the Cloud where it
makes sense.
In the coming years, are there any
particular technologies—from M2M, GPS,
IoT, to any platforms—that could reallyimpact your industry?

Something that is really fascinating for us
is three-dimensional printing and design
work, and the prospect of moving away fromhaving to do prototypes and samples. We
could potentially print 3D prototypes. We
still complete a lot of drawings manuallyand then digitize the process. We areplaying with some tools that will give us acompletely digital delivery of everything 3D
into our DAM without building prototypes
and samples to photo shoot. We may evenhave 3D printed samples available and thiswould move us away from building all sorts
of prototypes and samples as part of our
product lifecycle.

It sounds like you’re working towards
becoming a digital company. How far
along are you on your journey?

We’re looking to standardize our global
systems. For example, we are consolidating
our systems into a standard, global set ofback-office and supply chain solutions. To
date, we’ve got 83 countries operating on
the same set of systems. It’s taken us three
and a half years to get to that point. Also, we
have made a couple of acquisitions over the
past few years (Outdry and prAna) and thosebusinesses are still operating on legacy
systems. We still have 20 countries to go tofinish our global transformation. Our goal isto have everyone on one set of consolidated
technologies within the next few years.
We also need to start that same journey tostandardized global solutions across all ofour direct-to-consumer businesses.

What does technology “Nirvana” look likefor you/for Columbia?

The ideal future is an environment that isdigitally integrated from end-to-end, thatmakes it incredibly easy for customers to
get what they want, and that allows us tostrengthen our customer relationships, nomatter which channel, at each touch point
along the customer lifecycle.

Let’s talk about the Cloud. Is Columbia an
on-premises, cloud, or hybrid company?

There are good places to outsource andleverage the Cloud and if we don’t believe
we gain any strategic advantage by keeping
a workload in-house, we look to move out tothe Cloud. Right now, we probably have 100
to 120 applications that are either

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Information is delivered across business processes—from supplier engagement,
manufacturing, logistics, asset management, to human resources (HR), finance,and sales and marketing—as a part of a larger ecosystem of applications. Ideally,organizations should digitize core business processes from end-to-end, in their
entirety. When companies digitize portions of a process, they may achieve improved
outcomes but fail to produce an overall seamless experience. A team comprised ofexternal stakeholders and representatives is essential to ensure changes are fully
evaluated and cohesive, and to take further action to redefine operating models,organizational structures, and roles.

Supplier

Product

Asset

Employee

Finance

Customer

Analytics

Information
Processing

Information
Management

Information
DeliveryInformation Control
Figure 3.6: Information-fueled Business Processes

In the digital world, technology enables processes to operate seamlessly, efficiently,
and rapidly to meet the heightened expectations of customers and drive competitive
advantage. The benefits of digitizing information-intensive processes are numerous.
Costs can be reduced by up to 90 percent and turnaround times improved by several
orders of magnitude. 8 Errors can be reduced. New channels and new routes to thecustomer can be leveraged. Replacing manual paper-based processes with digitizedprocesses and documents allows businesses to collect data to better understandprocess performance, costs, and risk factors.

Digital transformation requires not just integrated processes in a factory, but tightcoupling between suppliers, customers, and the manufacturing organization. This
provides greater levels of customer engagement and better control over work inprogress and raw materials, however the expectation will be towards greater flexibility
and agility in the ecosystem. This implies a unified information strategy—across theorganization and the supply chain. Once information is created, it can reach multiple
audiences. Mixing advanced analytics of enterprise business data with operations
technology data is central to delivering better, more powerful business applications.

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CHAPTER 3

Embedded Analytics

In the digital economy, information and analytics are the oil fueling every businessprocess. In fact, of all the disruptive technologies, big data analytics, B2B cloud
networks, and the Cloud are already mainstream. 9 Big data analytics is in full use
across supply chains in 37 percent of discrete manufacturers and 31 percent of hightech manufacturers.10

Analytics will be a mainstay in smart factories of the future. Insights based on
analyzing information empowers manufacturers to act on this information in real timeand automate their decision-making processes. Applying advanced analytics gives
manufacturers a better understanding of their transactions and interactions, and canhelp improve outcomes. For this reason, 42 percent of manufacturing companies havecited analytics as a top priority moving forward.11 The figure below illustrates wherethese organizations plan to apply advanced analytics.

Where manufacturing organizations are seeking to leverage advanced analytics:
ERP

59%

(Enterprise Resource Planning)

MES

39%

SCM

38%

(Manufacturing Execution Systems)(Supply Chain Management)

PLM

36%

(Product Lifecycle Management)

EAM

33%

(Enterprise Asset Management)
0%

10%

20%

30%

40%

50%

60%

70%

Figure 3.7: Leveraging Data with Analy tics in Manufacturing

Revenue from sales of big data and analytics is projected to be $187 billion in 2019,up from $122 billion in 2015. One of the sectors that will benefit greatly from this is
the manufacturing industry, with revenues projected to reach $39 billion by 2019.12
According to one recent report, manufacturers could realize $4 trillion of value fromthe IoT by applying analytics to data flows for increased revenues and lower costs.13
When information is collected and analyzed, manufacturers can develop moreinnovative products and services, adopt new business models, improve operational
performance, and increase customer satisfaction with after-purchase services
and maintenance. As well as dissecting information that is “at rest,” there is also arequirement to track, monitor, and act on dynamic data that is generated by sensors
and processes. The IoT offers great potential for streaming data to be analyzed,
bringing greater accuracy and real-time decision making.
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E I M A N D T H E D I G I TA L T H R E A D

Structured & Unstructured
Information

Pervasive
Visibility

B2B Transaction Trading
Data
Partner Data

Procurement

Proactive
Replenishment

Manufacturing

Predictive
Maintenance

Logistics

Customers

Logistics
Data

Regulatory Sensor
Data
Data

Enterprise IoT Platform
Experience

Business
Network

Process

Content

Discovery& Security

Analytics

Insight

Multimedia
SocialData
Media Data

Engagement

Identity Access Management
Inventory
Data

Supply Chain Data Lake
Figure 3.8: Mining the Supply Chain Data Lake for Insights“The ability to extract meaningful insights about products, processes, production,yield, maintenance, and other manufacturing functions, as well as the ability to makedecisions and take proactive action—when it matters—can deliver tremendous growthand profitability results.”14
Some manufacturers have invested in creating the necessary infrastructure tocapitalize on their information, creating data lakes rather than storing information indata warehouses. In data warehouses, information is kept in large repository file orfolder format, whereas in data lakes, information is maintained in its most raw format.
This kind of information will help make analysis quicker and information more actionable
as advances are made in computing, chipsets, real-time streaming, and data pipelines.
Manufacturers can use these to visualize trends and patterns, and maximize the valueof their data.

The figure above illustrates a “supply chain data lake,” highlighting the types of
information, both structured and unstructured, that comprise the lake. This includes
information from every connected device—from the vehicles delivering finishedgoods to customers to the pallets carrying the goods. All of this information could beremotely connected to an IoT platform. Manufacturers can leverage this information indifferent ways to help drive IoT-enabled supply chain processes, allowing for a macrolevel of supply chain visibility to be achieved. Deciding which supply chain assets need
to be connected to the IoT platform, what type of information needs to be obtained
from the connected device, what B2B transactions need to be accessed, and what tomeasure will then determine the type of analysis and reporting that is required.
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CHAPTER 3

In addition to the data in enterprise resource planning, product lifecycle management,
enterprise manufacturing intelligence and manufacturing execution systems, the IoT
generates an incredible amount of data. A single sensor monitoring one element ofa production line can be producing thousands of datasets every minute. These arestored in massive data pools, which are often siloed by enterprise application, businessdivision or operational process, with analysis conducted for tracking purposes,
rather than business improvement. It is unsustainable for an organization to retain
vast amounts of data from every connected device over a long period. By deployingedge analytics—analytics conducted at the device or network point level—allied to
information governance policies, data with long-term strategic value can be identified.
In the following feature, steel manufacturer North Star BlueScope Steel is using
analytics to gain insights into costs, monitor performance based on plant delays andbottlenecks, and ultimately, forecast utility requirements and sales opportunities.

EIM Impacts Every Manufacturing Process“Industrial companies are in the information business, whether they want to be or not.”15
A digital manufacturing enterprise digitizes activities throughout the complete
lifecycle of manufactured products and the facilities used for production anddistribution—from end to end. Information is critical for every lifecycle activity. The
following sections describe how EIM provides an integrated, cloud-based platform
for information and process management in product design and engineering, plantmaintenance and asset management, and aftermarket service and support.

New Product Design and Engineering

The lifecycle of a manufactured product begins with information created in the designand engineering phase. Design departments rely on PLM solutions to build complete
digital representations of their products. These are based on 3D digital informationthat is used by many different departments in the manufacturing enterprise. Providing
a centralized digital information hub, a platform that is available and accessible by any
type of device, enables convenient access by partners on a worldwide basis.
Modern PLM solutions support information sharing with production groups and the
products they use to program machining centers. Some also support the developmentof prototype models utilizing the latest 3D printing technologies or even virtual
prototyping. But today’s need for design information has expanded far beyond these
traditional production activities.

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I N N O VAT O R S T O R Y

North Star BlueScope Steel
Steel band
manufacturer makes
costing clearer
through analytics

Figure 3.9: Nor th Star BlueScope SteelA subsidiary of Australia-based BlueScope, North Star BlueScope Steel produces andsupplies hot-rolled steel bands for coil processors, cold-rolled strip producers, pipe andtubers, original equipment manufacturers and steel service centers. Founded in 1997,
the company is the largest scrap steel recycler in Ohio, recycling nearly 1.5 million tonsof scrap steel every year.

North Star BlueScope Steel needed a more efficient tool to help it more accurately
understand its costing data and workflow, so the company could use it to engage withcustomers, conduct market-based analysis, and build purchasing breakdowns. The
technology would have to eliminate the manually intensive process and collect data
automatically from a variety of sources—including databases and the company’s electricarc furnaces (EAF)—allowing it to reallocate staff and save on resources, all while better
meeting customers’ needs.
The company opted for Big Data Analytics (BDA) to automatically access, blend, explore
and analyze data. The solution allows North Star BlueScope Steel to apply algorithms
to extracted information to generate a final monthly report, reducing their reliance on
manual work. Using BDA, the company can compare month-to-month data to analyze
how events such as plant delays and bottlenecking might affect profitability. Embracing
the IoT, the company hopes to integrate BDA into data points coming directly from its
instruments, to analyze electricity consumption, weather patterns, material usage andsteel prices for a better idea of future needs and sales potential.

67CHAPTER 3

Figure 3.10: Rapid Protot yping with 3D Printing

The design and scan phase describes a product’s inception into the digital realm. This
process also includes the digital twin. Gartner predicts that by 2020, there will be morethan 20 billion connected sensors and devices, and digital twins will exist for billionsof things.16

A digital twin is a dynamic software representation of a piece of equipment or
system that emulates the original’s materials, measurements, component parts,and behavior. More importantly, a digital twin also includes data that is unique to theasset it represents. Data is incorporated into a unit part’s digital twin and records
anomalies from the digital reference model that may affect the product’s lifecycle. This
information can grow by orders of magnitude, and thus it is important for organizations
to understand their requirements so they can selectively store, reduce, and analyze
data created during the build.

Digital twins are created and maintained to allow simulation, analysis, and control.
Sensors can be used to feed data to the digital twin. As more information is acquired, thedigital twin gains accuracy. Initially developed by the military for aircraft, digital twinsare gaining traction in other industries, such as renewable energy and manufacturing.
The GE Digital Twin has created cloud-based computer models of wind farms whichconnect wind turbines, collecting and analyzing data to make them 20 percent more
efficient.17 Black & Decker has digital twins of assembly lines and materials in one of
their factories and has reported labor utilization improvements of 12 percent and a 10
percent increase in throughput.18
Over the next year, organizations will use digital twins to boost efficiency, optimize
design and performance, and improve quality. Over the next five years, billions of objects
will be represented by digital twins, including equipment, facilities, environments,
processes, and even people. For every physical asset, there will be a virtual copy
running in the Cloud. Their potential lies beyond demonstrating proof-of-concept tomirroring an entire supply chain to support globalization and promote economic gain.
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E I M A N D T H E D I G I TA L T H R E A D

Figure 3.11: The Digital Twin of a Wind Turbine

New product development depends upon design information that is accessible fromanywhere at any time. This allows everyone within the connected manufacturing
enterprise—whether internal to the company, outside suppliers, or third-party contract
designers and manufacturers—to have access to information they can trust. This
information must be securely archived to support the growing need for full traceabilityof every component in every product. Manufacturers are required to preserve design
information for an extended period of time—often up to 10 or 20 years. As recent events
have shown, products that fail or cause harm to a user can create incredibly expensive
recall situations for manufacturers. A centralized archiving process for all designrelated information can help companies resolve recall issues quickly and maintainconsumer confidence. Governance, risk, and compliance initiatives introduced bygovernments around the world require secure information management and archiving.

EIM systems help meet the needs of product design and engineering by providing
a consolidated view of all related information, including 3D CAD/CAM models, 3Dvisualization models, product bills of materials, testing reports, specifications, videos,renderings, and more. Extensive archive and version control are offered for each ofthese file types, helping to ensure compliance with regulations and QA requirements.
Different groups and departments are able to access and share these documents andcollaborate using mark-up capabilities from leading PLM solutions and other businessapplications. Finally, processes are streamlined as review and approvals can be
automated for all design-related information. As with product design and engineering,
information accuracy, security, and accessibility are paramount in plant maintenanceand asset management.
In the following interview, Enterprise Content Management (ECM) is helping
Multiconsult bring together digital and analog—uniting the two worlds of 3D modellingand documents—to keep projects on schedule and on budget, and its clients satisfied.
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TRANSFORMATION IN ACTION

Multiconsult

Multiconsult is one of the leading firms of consulting engineers anddesigners in Scandinavia. With roots going back to 1908, the company
has played an important role in Norway’s development and economic
growth. Thanks to its 2,800 highly skilled members of staff, the company
is able to provide a range of services including multidisciplinary
consulting and design, project engineering and management,
verification, inspection, supervision, and architecture—both in Norway
and overseas.

Figure 3.12: Multiconsult

What follows are excerpts from an interview with Ole Meyer-Skjølingstad, Head ofInformation and Document Management at Multiconsult.
"As the Head of Information and Document
Management at Multiconsult, my job isto ensure that we accomplish effective
information management in our projects.
We manage massive amounts of projects
in many industries, including Buildings& Properties, Transportation, Oil & Gas,
Industry, Renewable Energy, Water &Environment, and Cities & Society.

years—like projecting building facilities likehospitals. Engineering documentation is
primarily unstructured data comprised ofengineering or CAD drawings, 3D models,health and safety procedures, contracts,
regulatory rules and regulations, equipment
instructions, calculations, geophysical data,
analysis results and financial projections. An
increasing amount of our projects involveus using virtual 3D models. These models
contain a lot of information about specificobjects or facilities. One of our biggest

Our projects range from small projects thatlast hours to large ones that last for many70

TRANSFORMATION IN ACTION

challenges is bringing all this information
together. We’re continuously developing
better methods of how to control the quality,
how to manage, and how to connect the twoworlds of 3D models and 2D documents.

the final products produced using theseapplications would be uploaded to ourdocument management system. We areworking hard to increase adoption andestablish rules or governance for usage tobe as effective as possible in our data flow.

Three-dimensional modelling gives us alot of options—we can build structuresthat would not be possible to produce with
two-dimensional methods. It also gives
the involved parties a better way to give
early input and review of the project when
it is modelled in 3D. Our customers are
increasingly asking for 3D models to be
included as part of the project deliverable.
In some infrastructure projects that we’ve
worked on, our customers want to extract
the data coordinates housed inside themodel and use these directly in production
out in the field to create the final product.
So, we have to make sure that the qualityof this information is good enough andaccurate enough to allow them to do this.

For many of our projects we need to keep
the documents for more than 10 or 15
years. In practice, we have a policy of notdeleting anything today, which is not asustainable path because the volume of
information just keeps growing. When I
started in my position, I wanted to see thenumber and types of documents I would
be managing—and I discovered that we
had 1.8 million documents in our content
server. If we include all the versions, thenumber is likely closer to 2 billion, which
we are well over today. Plus, we have allof the information on a file share. And, ofcourse, there is duplication between the
two. When I discovered all this informationand its disparate sources, I spent half ayear building a three-year roadmap to help
manage this information and to develop
our solution and best practices to support
our operational needs. At the end of thethree years, our goal is to have the building
blocks for a robust and user-friendly ECM
system in place. After that, we will haveto help our engineers become digitalengineers—where lifecycle management
and automation are part of their processes.

We have some drawing-free projects, inwhich all the information is contained inthe 3D model. That’s happening a lot thesedays. In some projects, 3D modelling canbe used to replace the CAD drawings or atleast a large amount of them. This allows
our customers, or entrepreneurs, or any
other stakeholder to extract the data fromthe model, generate a level plan on the fly,take measurements, or click on an object for
more information, like specifications. There
are a lot of options available because themodels are filled with relevant information.
CAD drawings are still used because they
are very portable and traditional processes
are based around these, but we can reduce
the number of drawings with 3D modelling.

We have a company-wide project for
digitization. It runs across all the industries
we cover and all areas of the business. This
includes our project for automating theprocess for quality control. But it also goesbeyond this to embrace more disruptive
technologies and identify the ones that are
most important to us or the ones that would
give us a competitive advantage. This will bea continuous project for us so we strive tonurture an environment that keeps us on the
cutting edge of technology.”

We use ECM to manage all our documents
in projects, mostly office and PDF formats.
Engineering departments often operate
in silos with specialized applications.
Engineering documentation and drawings
have special characteristics and complex
inter-relationships. In an ideal world, all
71CHAPTER 3

Plant Maintenance and Asset Management

Maintaining high availability of production assets has never been more important
to manufacturers. The cost of facilities has skyrocketed and manufacturers needto maximize the use of every production line to achieve Return On Investment (ROI)
goals. The shift to customized products and new manufacturing strategies like Lean
and Just-in-Time (JIT) drastically reduce inventories and increase the importance ofpredictable production schedules.

The impact of any disruption can ripple through supply chains and undermine customer
confidence. For example, JIT production environments across the automotive industry
have two basic requirements: first, there must be a steady stream of parts delivered
to a plant from outside suppliers and secondly, production equipment, assembly lines,
and associated utilities supporting the facility must be highly available. If a key piece ofrobotic handling equipment suffers a failure or a back-up power generator fails to kick induring a power outage, these can have serious impacts on the production of parts, andmore importantly, could negatively affect deliveries and customer satisfaction levels.

There is a direct relationship between asset availability and the quality ofasset information. Studies have shown that the cost of poor asset information
management can exceed 1.5 percent of a plant’s revenues in some industries. This
doesn’t even consider the impact that poor maintenance could have on safety andenvironmental compliance.19
To ensure safe and reliable assets, today’s factory-based maintenance teams needaccess to all digital information associated with machinery, as well as all utilities
servicing the plant, such as electricity, gas, and water supplies. There is also a growing
need to effectively manage the day-to-day relationships with all on-site contractors
and indirect suppliers of spare parts used to repair plant equipment. Maintenanceteams must also embrace a growing number of health- and safety-related complianceregulations. Advances in digital technologies, for example, the introduction oflightweight, ruggedized tablets that can remotely connect to centralized maintenanceinformation, are transforming how production facilities are managed and increasing
the uptime of production equipment.

Traditionally, plant maintenance windows would be factored into production operations
to ensure that key pieces of production machinery are proactively maintained. The aimof this has been to minimize downtime of plant-related assets, such as robots, lathes,
milling machines, and assembly handling equipment. However, the introduction of new
and disruptive technologies such as the IoT is changing how production equipment ismaintained. These new technologies are transforming the plant maintenance sector
from one that has traditionally been reactive and preventative to one that is proactive
and predictive.

72

E I M A N D T H E D I G I TA L T H R E A D

AcquirePlan

DeployAsset Lifecycle

DisposeManageFigure 3.13: Plant Asset Management

An effective EIM solution for asset lifecycle management improves the quality andconsistency of asset information and work instructions, provides remote, mobile
access to plant-related asset information, and allows for higher asset uptime andreliability through extensive analysis of equipment data. Information can be easilyarchived to satisfy compliance requirements. As well, predictive maintenanceprocedures can be implemented to improve equipment availability.

The need for an organized information management strategy will expand in the
future as manufacturers adopt new Industrial Internet of Things (IIoT) capabilities
for equipment maintenance. This will increase the number of sensors on production
equipment and enable organizations to implement more predictive maintenancestrategies that identify problems before they occur, as discussed in Chapter 4. Big
data and analytics are central to this approach and will lead people to require accessto additional data, analysis tools, and alerts. They will also take a more vital role indelivering aftermarket services and support once a product has left the plant floor.

Aftermarket Services and Support

Manufacturers of products, whether aircraft, vehicles, or consumer electronics, needa service and support infrastructure with broad capabilities and high availability.
Excellent product service and support helps companies maintain and improvecustomer satisfaction levels. In many cases, such as the production of jet engines,
a manufacturer can make more money through maintenance over the lifetime of theengine than on the original sale.

73

CHAPTER 3

Product Quality
Improvements

Increase Service
Revenues

Custom App
Store

Fleet and Driver
Analytics

Targeted Sales

Location Based
Services
Usage Based
Insurance

Figure 3.14: Af termarket Ser vices on an Automobile

Field service engineers, whether working on an aircraft in a maintenance hangar
or a vehicle in a garage, must have access to all digital information associated withthe product or piece of equipment. Being able to remotely download product orreplacement part information, whether images, videos or documents, is becoming astandard requirement in today’s aftermarket service sector.
Having the ability to access a complete digital archive or representation of a productis becoming a condition of doing business in the digital world. Archiving all service
records and test or compliance certificates is important for transparency, especially if
a major recall is initiated at some point during the lifetime of a product.

Field service engineers may also need to place an order for a replacement part andhave it shipped to a specific location. The ability to remotely access a web-based
spare parts portal is becoming standard in the aftermarket service sector. However,new disruptive technologies, such as the IIoT have the potential to transform theaftermarket service sector for good. As more products are shipped with onboard
sensors and Wi-Fi connectivity, it means that a product or piece of equipment canremotely inform a service center of a problem before it becomes an issue. These kindsof advanced developments will drastically increase asset availability and reduce thecosts of service calls.

74

E I M A N D T H E D I G I TA L T H R E A D

Standard applications like ERP, PLM, and SCM help manufacturers optimize individual
business processes within finance, production, design, and distribution. But this is notenough for a successful, connected manufacturing enterprise. Today, manufacturingorganizations are as driven by information as they are by processes. They need
information access and sharing that is not encumbered by departmental boundaries
and static business processes. Implementing manufacturing applications on acommon, enterprise-wide EIM platform is essential for digital transformation.
In the following interview, leading chemical manufacturer Solenis is adopting
transformational technologies and approaches to digitize processes, as well as its
supply chain, from end to end.

EIM Enables the Digital Manufacturing Enterprise

The need for more effective enterprise information management is apparent in lightof how manufacturing organizations are struggling to accelerate product lifecycles,
digitize global supply chains, offset high offshore labor costs, offer more customized
products, and comply with regulations. In the digital world, information is a key
differentiator, helping innovative manufacturers scale their operations, restructure
their supply chain, evolve their products, and adopt new business models.
To compete in today’s global economy and respond rapidly to threats andopportunities, digital manufacturing enterprises need end-to-end business processes
and applications that transact across a dynamic, fully-connected ecosystem ofglobal partners. Every partner needs trustworthy information, but access has to beflexible enough to enable a broad base of partners. Partners should be able to share
information easily with other entities in the connected manufacturing enterprise.
Every exchange should be tracked and stored for overall control, governance, andregulatory compliance.

EIM enables manufacturers to manage their stores of information across their digital
supply chain. It binds together the digital thread, allowing multiple, federated systems
to interact with one another so that information contained within the enterprise canbe shared across every manufacturing process, from create to consume. EIM helps
to ensure that each connected stage of the manufacturing process communicateseffectively, regardless of protocols and file formats. By connecting data-driven
processes, EIM promotes supply chain evolution, enabling effective informationexchange between numerous manufacturers, distributors, and designers. This will be
discussed in greater detail in the following chapter, “The Digital Supply Chain.”75

TRANSFORMATION IN ACTION

SolenisSolenis, formerly Ashland Water Technologies, is an American
manufacturer of specialty chemicals for the pulp, paper, oil and gas,chemical processing, mining, biorefining, power and municipal markets.
Headquartered in Wilmington, Delaware, in the United States, thecompany operates 30 manufacturing facilities which span 118 countries
and five continents and 3,500 employees. Its product portfolio includes
a variety of process, functional and water treatment chemistries, as well
as monitoring and control systems.

Figure 3.15: Solenis

What follows are excerpts from an interview with Charles Wallace, Senior Vice President(SVP) and Chief Information Officer (CIO) at Solenis.
“Our focus is heavy industry. Solenis isa $2 billion global chemical processing
company, we manufacture specialty
chemicals for the pulp and paper and water
treatment businesses. As SVP and CIO of
the company, I lead the company’s global
Information Technology (IT) group.

that operated for many years, so weinherited all the legacy systems, platforms,
and technologies that belonged to thesecompanies—and the business processes
were as disparate at a global level asthese systems. We are embarking on thedigitization of key processes related to M&A,
for example, to make conducting related
processes and transactions much morecost-effective.

Before we became Solenis, we belonged to
a combined group of many companies
76

TRANSFORMATION IN ACTION

With digitization, we have the challenge—
and the opportunity—to clean up our data
house. We want to do business with ourcustomers much more cost-effectively and
one way to do this is to implement a B2B
portal. We can’t do that until we get ourhouse in order. This requires cleaning up
our master data and really understanding
how our business processes work. It’s notefficient to have five different ways to doorder-to-cash or purchase-to-pay, which iswhat we have in place today.

responsiveness and agility. The game haschanged, significantly. Our commitment
to SaaS and Platform-as-a-Service(PaaS) were elements that lit the fire foraccelerating that value-add that we’rebringing to the business.
Externally facing, a transformational goal
is to digitize our supply chain, from end toend. In the chemical manufacturing industry
particularly, it’s not something that canbe accomplished easily. We want to giveour supply chain partners visibility into
an order, logistics, and invoicing, etc., andthis has to happen electronically. Again,
we’re working on getting our house in orderinternally and putting a solid foundation inplace to build on. We’re working on the plans
and architectures we need to deliver thesame services externally to our customers
and suppliers.

We were lucky at Solenis because, whenthe merger happened, we were given theopportunity to start with a fresh mindset.
We’ve only been around for a few years.
Our approach was to do things differently,
so we set up IT differently to how you mightfind it in other organizations in the same
industry. I started with a commitment tousing a consumption-based model like
Software-as-a-Service (SaaS) and hiringa staff of leaders. As an organization, IT
would have scalable versions of our mailand calendaring systems. We wanted to do
as much as we possibly could in the Cloud,excluding ERP systems, of course, because
we’re just not there yet. But we will be.

Right now, our internal customers are
comfortable doing what they’ve always
done because that’s what they’re used
to. Many of the business units need to bebrought to the table to have a discussion
about digital transformation and its benefits.
In some cases, this is going to be easy,
depending on where in the world, what
region, or what part of the business we’refocusing on, like marketing, for example.
Technically, transformation is not achallenge, it’s the cultural change requiredthat is the challenge. So, we spend a lot oftime on that.

The transition from ERP to EIM is happening.
Up until now, ERP systems have dominatedthe industry because there hasn’t beena reasonable alternative, but those days
are gone. We are still reliant on legacy
technologies because we house criticalinformation in these systems, but we aredecommissioning the ones we can for now.

We’re already achieving someunderstanding with the low-hanging fruit—processes that we digitized with clear,demonstrable value for internal business
users. We have a leadership team in place inour organization that truly understands thevalue of digital transformation. So, I don’t
have the challenge of selling the concept
or trying to help our leadership teamunderstand the value. When we did have thisconversation they said, “Yes, yes. How fast
can you do it?” In my experience,

The business value of technology isunderstood much more now as it pertains
to chemical manufacturing, whereas
previously, the value-add was perceived
to be more for other industries, especiallythose dependent on mobile devices likebanking and retail. Manufacturing is using
technologies like portals, mobile devices,and digital systems and solutions and there
is an understanding of value in terms of77

TRANSFORMATION IN ACTION

it’s unique to have this level of support fromthe CEO and the rest of the organization.
IT is not going to be pulling them along, infact, in some ways we have set a high levelof expectation.
Cognitive technologies are being slated as
the next big technology trend. We’ve put
sensors into our manufacturing plants andwe’re ready for a cognitive platform. We’realready taking advantage of the IoT andgoing forward, it will become part of ourbusiness model. Based on its ability to scale
and proximity to raw materials, 3D printing
has the potential to disrupt manufacturing.
This won’t happen tomorrow but it’s not 15
years away either; it will more likely happen
in the next five to seven years.
The advice that I would give to my peers in
the industry, and even in others, is to moveto a hosted or managed services model. I
would share this especially with IT leaders
who are managing their own data centers,
platforms, and infrastructures. Of course,
there’s no value in moving to the Cloud justfor the sake of moving to the Cloud. From a
CIO perspective, if the business needs you
to move to the Cloud, that’s what you should
do. And the conversations should be about
what the business needs are.
When SaaS was relatively new, I sat on apanel at Temple University and they weredebating the Cloud. I thought to myself,“This is not a debate about what, but when—because it will only be a matter of time until
business starts to move there.” I realizedthat technology was going to be much more
services-oriented and we would have tochange our IT organization to accommodate
this. We would have to adopt more hosted
services in the Cloud. There’s a place formanaging internal IT services and networks,
but to remain critical to the business andcontribute to top-line growth, we would
have to disrupt our current IT infrastructure
and model. IT has to follow the business tostay relevant.”78

C H A P T E R

4THE DIGITAL SUPPLY CHAIN

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

As activities are digitized throughout the lifecycle of a product, several components inthis process are streamlined through integrated EIM and B2B services, including theDigital Supply Chain, Digital Manufacturing and Production, Logistics and Distribution—all of which will be explored in this chapter.

CHAPTER 4

The Digital Supply Chain“It’s not the organizations that are competing. It’s the supply chains.”1

New digital technologies are allowing even the smallest supplier to work electronicallywith their customers. Cloud, mobile, big data, and the Internet of Things (IoT) are thecornerstones of today’s efforts to digitally enable global supply chains. If manufacturers
want to quickly build flexibility and scalability into their global operations, implementing
a digital supply chain strategy is no longer an option—it is essential.

To effectively orchestrate today’s outsourced and distributed digital supply chains,organizations must tightly coordinate the flow of goods, communications, andcommerce across business partners. With the intricacy and frequency of business
transactions, this involves a high degree of coordination, data synchronization, andautomated transactions.
Co-creation and Collaboration

New

Goods

Old
Suppliers

Manufacturers

Distributors

Consumers

Figure 4.1: The Digital Supply Chain is a Complex, Dynamic Net work 2

Incredible value can be derived by collecting, managing, and analyzing informationfrom various business applications across the network. Integrating transformative
enterprise platforms, such as Enterprise Information Management (EIM), Businessto-Business (B2B) integration, the IoT networks, along with internal systems, allows
manufacturers to optimize the flow of information across the digital supply chain.
The end result is a comprehensive and automated platform for the management andexchange of digital supply chain information.
80

D I G I TA L S U P P LY C H A I N

Transformational Challenges

Digital’s potential for evolving the supply chain is enormous. The proliferation of IoTconnected devices, for example, will significantly alter operations, providing digitalenterprises with the opportunity to make or save upwards of $3 trillion throughoptimized logistics and next-generation, digital supply chains. 3 Eighty percent of
manufacturing and supply chain executives believe the digital supply chain will be thepredominant model by 2022, while 16 percent recognize that it already is. 4
ManagedOpportunistic

Ad Hoc7%

Laggard24%

Explorer

Repeatable

34%

27%
Optimized
PlayerDigital Maturity

Transformer

9%

Disruptor

Figure 4.2: The State of Digital Transformation Maturit y in the Supply Chain 5

Despite acknowledging the pivotal role that disruptive technologies play in their overallbusiness success, as illustrated in the figure above, the majority of manufacturers are
currently unable to leverage them to enhance existing business models and create newones for competitive advantage. Typical barriers to adoption include uncertainty about
which solution to choose, a culture that is resistant to change, and a lack of skilledemployees to adequately use new technologies. In addition, competing IT projects canalso slow the adoption of new technologies. These barriers, when combined with thenumerous disruptive technologies impacting the industry, can make defining a digitalstrategy challenging.
To overcome these challenges, manufacturers will need to embark on extensive digital
supply chain projects to enable enterprise-wide digital transformation, deliver end-toend visibility across the supply chain, facilitate information exchange and collaboration
across the business network, and simplify expansion into new markets.

The Impact of Globalization

Along with emerging technologies, globalization is another trend that is impacting
manufacturers. Over the last decade, manufacturing has expanded into emerging
markets, resulting in a truly global industry. As wealth rises, global consumption andcross-border trade is increasing, especially in emerging markets, such as the BRIC
(Brazil, Russia, India, and China) and, more recently MINT (Mexico, Indonesia, Nigeria,
and Turkey) regions as illustrated in the figure below.
81CHAPTER 4

Regional Marketing & Sales

Global HQ

Sales

Research& Design

Distribution

Manufacturing

Manufacturing

Sales

Distribution

Manufacturing
Shared Services
Sales

Shared Services‘BRIC’ Markets Expansion

Near-Shoring

China Globalization

2000 Onwards

2010 Onwards

2014 Onwards(BRIC= Brazil, Russia, India, China)

Sales‘MINT’ Markets Expansion
2014 Onwards(MINT= Mexico, Indonesia,
Nigeria, Turkey)

Figure 4.3: Changing Trends in Globalization

As global trade increases, the nature of goods will change. Physical goods will
be increasingly digitized into services and there will be more knowledge-based
exchanges. These activities involve a high R&D component, highly skilled labor, andthe transmission of information, ideas, or expertise among exchanging parties. A key
challenge for supply chains will be to support these growing volumes of cross-bordertransactions while maintaining performance, security, and compliance with both
local and international regulations. Only by leveraging digital technologies, such as
B2B platforms, will manufacturers achieve the levels of speed, accuracy, and agility
required for operational excellence.

Interest in nearshoring remains strong, but overall, the trend may be slowing down. The
cost savings of moving production closer to consumers are attractive, but concerns
about safety, security, and the availability of skilled labor are making executives
think twice before investing. These risks can potentially impede the adoption of B2Btechnologies like Electronic Data Interchange (EDI) across the entire supply chain.
Consequently, for supply chains to operate smoothly, it is imperative that every trading
partner has the ability to share their business documents electronically.

In the following feature, Carhartt leverages an integrated EDI solution to support digital
information exchange with international supply chain partners.

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I N N O VAT O R S T O R Y

Carhartt“When you increase speed
to market, you’re increasing
your value-add to partners.
We’re onboarding a lot morepartners every year, andwe’re onboarding them withease. Our B2B platform,
BizManager, makes us aheck of a lot more efficientand so we’re bringing morevalue to the business asa result.”

Figure 4.4: Carhar tt– MARK HURT, MANAGER OFENTERPRISE INTEGRATION, CARHARTT

Weathering the challenges of time, competition, and fluctuating markets, Carhartt has
expanded its business; however, the company’s EDI was struggling to keep up. The ability
to quickly and easily exchange information with suppliers, distributors, retailers, andother business partners is vital, and documents such as purchase orders, invoices, andadvance ship notices are critical to the business. Their EDI process was not streamlined
and they used multiple tools to support transactions, which didn’t allow communications
and direct connectivity with partners. As a result, the company experienced delays in theprocess and sometimes, delayed shipment dates.
Carhartt sought a comprehensive solution that would provide full EDI value-added
network (VAN) services, including communication and mapping functionalities. Afterevaluating several solutions, the Carhartt team selected BizManager, a comprehensive
platform for managed file transfer, messaging, mapping, translation, tracking, andauditing. By sharing technology with the world’s largest B2B network—and incorporating
and simplifying industry standards—the solution ensures the uninterrupted flow of
information and direct, secure transport of all types of data and documents. With morethan 200 trading partners now on the platform, Carhartt can connect and control its
information exchange to maximize efficiencies and reduce cycle times. Improved
performance has enabled them to support seasonal spikes in transactions, almost
doubling their typical total with 725,000 transactions in the month of December.

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CHAPTER 4

How Supply Chains are Embracing Digital Disruption“Businesses cannot unlock the full potential of digital without reinventing their supply
chain strategy.”6

Efficient supply chain performance ensures customer satisfaction and continued
business success. Since the 1990s, lean has been the guiding principle for mostmanufacturers. Using lean practices, organizations have been able to eliminate excess
waste from the supply chain. While lean may have dominated the past three decades,agile will be the way forward.
Agility is achieved when supply chains are built with technologies that support rather
than inhibit the flow of information across the business. The figure below highlights
the top 10 transformative technologies currently being adopted across supply chainsglobally and projected growth rates over the next three years. These technologies
allow manufacturers to create digital supply chains that are connected, intelligent,scalable, and real time—all of which work together to unlock the power of digital.7
Big Data Analytics

22%

B2B Cloud Networks

11%

17%

Cloud Applications

13%

12%
22%

Smart Mobility

20%

Not using

13%

20%

14%
14%

25%

0%

Early pilots

10%

21%

20%

30%

In one functional area

19%

13%

16%

15%
17%

50%

15%

22%

24%
24%

15%

40%

15%

30%

12%

28%

Machine Learning

25%

23%

37%

3D Printing

25%

23%

47%

Wearables

21%

31%

12%

27%

25%

25%

22%
17%

Drones

24%

24%

10%

IoT (Use of Sensors)

Robotics

18%

60%

70%

13%
16%

26%

In more than one functional area

12%

14%

80%

90%

100%

Full use across the SC

N=254 – Source: OpenText Digital Transformation in the Supply Chain Survey, IDC, December, 2016

Figure 4.5: Top Disruptive Supply Chain Technologies 8

Adidas, for example, has integrated digital technologies into its supply chain, resulting
in a double-digit percentage increase in sales in just 24 hours. What started as a trial“click-and-collect” program that allowed customers to pick up online purchases instore has turned into Adidas Russia’s most-used online shopping method. 984

D I G I TA L S U P P LY C H A I N

Improved supply chain performance is a top business priority, but merely adding digital
capabilities to existing supply chains will not be enough. Manufacturers rely on the
supply chain to enable new capabilities and business models with digital technologies
like the IoT, AI and analytics, and blockchain. These disruptive technologies empower
manufacturers to transform their supply chains from vehicles for reducing costs andincreasing efficiencies into tools for driving sales, growing profits, delivering value,
and improving customer satisfaction.

B2B and EIM Integration: Impacting Every
Manufacturing Process

A digital manufacturing business digitizes activities throughout the complete lifecycleof manufactured products and the facilities used for production and distribution—fromend to end. Several components in this process are streamlined through integrated
EIM and B2B services, including the Digital Supply Chain, Digital Manufacturing and
Production, and Logistics and Distribution—which the following sections describe.

Digital Supply Chain

A digital supply chain provides a seamless way for manufacturers to connect with a
global network of trading partners. As companies expand into new markets around theworld, their suppliers also have to extend their operations to support new markets. To
simplify this complexity, automating processes is critical for supply chain efficiency.
B2B integration provides the complete network of supply chain partners with acollaborative, secure, and automated solution for dynamically managing business
transactions and delivering the “perfect order”—the right product delivered in full, on
time, every time.

“Our relationships with our trading partners makes our supply chain
operations much more complex than an organization that controls its entire
route-to-market. So, making sure that our trading partner processes aretightly aligned is a huge priority for us. It allows us to seamlessly executecomplex activities, like limited-time offers. Carrying out these offers requires
an incredible amount of coordination and information sharing across all ofour partners. Most stores that carry our beverages receive our products
from multiple distributors—many of which are not company-owned. In
these cases, it’s incredibly important that all of our partners have the rightinformation, especially about a special price over the holidays, for example.
Our integrated business model makes getting the right products andinformation into our customers’ hands much easier.”– VP IT FOR A LEADING NORTH AMERICAN REFRESHMENT BEVERAGE COMPANY

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CHAPTER 4

Today’s CIOs must juggle modernizing IT infrastructures while managing complex
B2B environments. Forty percent of companies cite competing IT projects (such as
ERP) as the primary barrier to B2B integration. As such, two-thirds are considering
an outsourced approach, where they rely on B2B managed services to seamlessly
integrate external trading partners with internal enterprise systems.10 Doing so
provides additional resources and expertise to manage their B2B environment while
freeing up internal resources to focus on strategically managing the business androlling out new digital initiatives across the extended enterprise.
As the supply chain becomes more digitized, the demand for B2B integration will rise.
While large companies continue to mature their B2B integration strategies, smallto-medium businesses (SMBs) are feeling the pressure to connect digitally as well.
Increasingly, large businesses prefer to do business with trading partners who canconnect digitally. Digital connectivity ensures that B2B communications are easyand secure.

Increasing security concerns across the end-to-end supply chain will escalate theneed for Identity and Access Management (IAM) solutions. It is estimated that the IAM
market will grow by nearly 10 percent in 2018 to $4.7 billion.11 As more companies start
to adopt cloud-based B2B networks and establish a single digital backbone to connect
external trading partners to internal enterprise resources, there will be an increasingneed to re-evaluate secure access to these resources, especially supply chain assets
connected to IoT platforms. Being able to secure IoT endpoints across the supply
chain will drive further adoption of IAM solutions as companies look to secure theirdigital ecosystems.

Connected, Intelligent, and Secure Supply Chains

As the IoT and IoT-connected technologies become more pervasive, they become
more powerful. The real value in the IoT is its ability to connect the entire supply chain
for end-to-end visibility. An IoT-enabled supply chain has the potential to deliversignificant benefits and gains through improved inventory management, supply chain
visibility, supply chain responsiveness, logistics order tracking, fleet optimization,energy monitoring, asset utilization, and health and safety.
In the following interview, a North American retailer of pet goods and services
is integrating their supply chain to bring the best products and services totheir customers.

86

TRANSFORMATION IN ACTION

A North American
Specialty Pet Services andSolutions Retailer

What follows are excerpts from an interview with an e-commerce andsupply chain director at a leading North American pet services andsolutions retailer.
“I am responsible for supply chain andoperations on the e-commerce side of
the business. Our goal is to provide quality
service to our customers through efficient
e-commerce operations and a streamlined
supply chain. Our supply chain purchases
over $5 billion in inventory and processing.
We move more than 1.5 billion units per
year to brick-and-mortar locations, so that
doesn’t include our e-commerce base.
The e-commerce side of the business is
responsible for 20 to 30 percent of thebusiness per year and is growing.

We achieve this by partnering with amanaged services provider, which gives us
a secure environment for processing andanalyzing data as it is exchanged, or as EDI
transactions occur. This has enabled us totake our e-commerce business to the nextlevel to support our growth model.
We are also working to digitize our supply
chain. The end goal is to digitize theentire supply chain so that processes
and partnerships are automated andstandardized. This is where we are headed.
At this point, we have around 100 vendors
out of 600 that are digital. This number
will increase as vendors travel to tradeshows and introduce their products. When
we standardize and digitize our businessmodels, the barriers to entry are lowered
and we can do more business with more
suppliers or retailers. So, any supplier cansign up using our portal, execute theirorders, send the data back—and this all
happens through a standard EDI processthat looks the same regardless of supplieror retailer. This is particularly valuable forour smaller partners that only have an online
presence. We don’t have to limit ourselvesfrom these opportunities just because they
can’t support traditional EDI processes oradditional overhead.

Our customers have different expectationsof our supply chain than they did ten years
ago. In many cases, they’re driving the
supply chain and they expect immediate
service. That means you need to havethe right inventory in the right place whencustomers demand it. It’s a same-daydelivery model, whether that’s in the store
or delivered, it’s more than just a package
arriving in the mail. This has ramped up thepressure on us to offer faster, more efficient
services to our customers. What we thought
was pushing the boundaries of our supply
chain just five years ago is becoming thenorm today.
As part of our transformation journey, we’repiloting a new service where products areshipped in just a few hours to meet thegrowing demand for same-day deliveries.

B2B managed services provides a clean,efficient digital model that enables us to87

TRANSFORMATION IN ACTION

exchange information with these suppliers
just as easily as we can with our larger
retailers. In this way, digital is opening up
new opportunities for both us and thevendors we partner with. It not only helps
us optimize our processes and make our
supply chain more nimble and transparent,
it also gives us the chance to work withcompanies we typically might not work with.
It’s win-win.
Traditional supply chains are evolving
into demand networks. To remaincompetitive, we need to digitize our entire
e-commerce supply chain to support
process automation, standardization,and customization. Customization is very
important to us because it’s important toour customers, and it provides us with somuch more opportunity to connect withthem. They’re using digital channels like
Facebook, Twitter, Google, etc. to provide
feedback and tell us what they want—from
customized dog food to personalized dog
beds, collars, and leads. We want to engage
with our customers no matter what channel
they use, whether they’re after a productor a service, and the experience has to beconsistent and satisfying. From inventory
to shipping to marketing campaigns andforecasting—all of this is contingent on
an agile, efficient, and increasingly digital
supply chain.
Good customer experience drives our
supply chain. So, when we engage with ourcustomers, we want to form a relationshipwith them. For sure we are retailers, but wewant to build trust with our customers sothat they trust us for all their pet needs.”88

D I G I TA L S U P P LY C H A I N

An IoT-Enabled Supply Chain

To illustrate how an IoT-enabled digital supply chain delivers value, let’s examine three
IoT-focused business processes: pervasive visibility, proactive replenishment, andpredictive maintenance.

Pervasive
Visibility

Proactive
Replenishment

Predictive
MaintenanceEnd-to-end visibilityof shipments frompoint-of-manufacture
to point-of-delivery

Optimization andautomated ordering of
inventory at theultimate point-of-saleSelf diagnostics identify
failing components
resulting in automatedordering of parts

Figure 4.6: IoT-focused Business Processes“As far as the IoT goes, the potential it presents is limitless. The challenge is
to make sure that the timing is right and the business case is there. We are
currently exploring how we can apply IoT technologies in our supply chain to
make our pull systems more efficient. For example, we are looking at how we
can use scan data or point-of-sale information to improve performance. If
we can produce items inexpensively and track unique pieces of information,
the opportunities for monitoring things like performance, consumption, andforecasting will be plentiful.”– VP IT FOR A LEADING NORTH AMERICAN REFRESHMENT BEVERAGE COMPANY

Pervasive Visibility

Pervasive visibility provides transparency into and management of information thattravels across the supply chain and is related to product orders and shipments. The
ultimate goal of pervasive visibility is to enable manufacturing organizations to respondin a timely manner with real-time decision-making and trade-offs for timely orderfulfillment, increased profitability, and reduced risk. If a parts shortage is identified,for example, parts can be replenished but existing supply can also be allocated, and/or
customer demand steered away from products containing that part—all according toan automated process.
89CHAPTER 4

Bosch, for example, is using the IoT to support its virtual supply chain. The environment
takes the output from various Radio Frequency Identifications (RFIDs) and othersensors located across both their factories and their third-party logistics (3PL)
providers for a complete view of shipments as they move from point-of-manufacture topoint-of-delivery. Bosch is using the IoT to invigorate RFID technology, since a barrier
to adoption has been the lack of a global RFID reader infrastructure. The IoT, withbillions of connected devices, could potentially change this.

Proactive Replenishment

Improved real-time monitoring of inventory levels and consumption trends helps
to optimize the replenishment process. The IoT can automate replenishment via
connected devices with the ability to initiate procurement processes and order
goods directly from suppliers. Recently, a vending machine was developed that could
recognize a customer, make suggestions for their next purchase, and highlight outof-stock situations that prompt an order for replenishment. Information from thevending machine was stored, allowing a supplier to monitor consumer buying patterns
and trends across a network of connected vending machines. In the context of amanufacturer, this could be applied to aftermarket parts replenishment or monitoringstock in a warehouse that is part of a production process.

Predictive Maintenance

Applying IoT technologies such as sensors and analytics to industrial equipment, andbeing able to process the information coming from the sensors in real time, helps to
identify trends in data and predict when a component is likely to fail. If a faulty component
is replaced as part of a predictive maintenance routine, the piece of equipment is lesslikely to experience any unexpected downtime. For many organizations, a one percent
reduction in equipment downtime could translate into million-dollar returns.12

For example, let’s assume a bracket on an airplane’s wing flap mechanism is going to
fail due to a hairline crack. If a sensor was able to detect the crack as it develops (oreven predict that it will develop), this information could be transmitted to the airplane’s
destination airport. In the digital world, a new 3D printed part would be manufactured
onsite in the maintenance hangar, and, once heat-treated, could be fitted to the aircraft
when it lands.

This scenario describes a zero-length supply chain, in which a part is manufactured
without requiring a logistics infrastructure. Alternately, an automated process could beinitiated to order a replacement part. Reducing the time it takes for a part to be shipped
to a maintenance hangar, which could be located anywhere in the world, would save theairline a considerable amount of money. A similar process could be applied to repair acar, military vehicle, or any serviceable asset that needs to be maintained to maximize
uptime and use.

90

D I G I TA L S U P P LY C H A I N

Predict crack inwing-flap mechanism

Analytics

Service Staff

Workflow

3D Print Part

Cloud

Data from
airplane wingTechnician

Notification to change
bracket on wing flap.
Save lives and $$s.
Figure 4.7: Predictive Maintenance

The AI and Analytics Infused Supply Chain

Manufacturers in all industries are shifting their focus to improving decision making
based on better business intelligence through AI and analytics. AI technologies allow
manufacturers to explore data lakes for sophisticated insights and help ensure thatprocurement activities align more tightly with customer and market demand. Examplesof other AI applications include automating purchasing/replenishment of certain typesof goods, detecting fraud in the supply chain to reduce costs and risk, increasing
forecast accuracy for use of goods in manufacturing or for the sales of goods in retail.

Like AI, analytics are a top priority for supply chain organizations to ensure theirability to support digital business. Manufacturers in all sectors are leveraging
analytics to deliver powerful intelligence to optimize supply chain efficiencies, identify
opportunities, and mitigate risks before they disrupt business.

From a supply chain analytics point of view, the most useful information is either
operational based or business specific. Manufacturers can apply analytics tooperational data, including purchase orders, invoices, Advanced Ship Notices (ASNs)
and order acknowledgements, to help forecast potential order volumes, allowing them
to be better prepared for seasonal, market, or regulatory fluctuations.

91CHAPTER 4

Avoid problems, suchas late deliveries,
expedited service
requirements,
increased inventory

Evaluate theperformance of
suppliers against
KPIs, proactively
collaborate toimprove

Ensure that futuresourcing negotiations
take performance andquality into accountAward more businessto high performers(quality, timeliness,and other KPIs)

Manage more partners
with automatedprocesses andscoring/analysis tools

Figure 4.8: Embedded Analy tics Allows Manufacturers to Make More Informed Decisions

Applying analytics to business-specific information, such as the delivery address,
shipment details, quantity, sender details, etc., contained in an ASN, provides indirect
insight into consumer demand in different markets around the world, which canpotentially help a business to determine “ASN timeliness,” invoice accuracy, pricevariance, and so on. If there are any exceptions or errors then the business can takecorrective action and resolve problems much sooner. Automotive manufacturers areusing analytics for everything from monitoring trends and exceptions to keeping JIT
production lines running smoothly based on ASN timeliness.

Applying AI and analytics to the information flowing across a business network
provides a complete 360-degree view of supply chain activities, offers deeper insights
into transaction-based trading partner activities, provides earlier identification of
exceptions, and allows for more-informed business decisions to be made. It also
increases responsiveness to consumer demands, helping manufacturers to ensurethat inventory levels are aligned with expected demand levels. When coupled with otherdisruptive technologies like blockchain, the fully digitized supply chain is becominga reality.

Leveraging Blockchain Technologies

Blockchain is an open, distributed ledger that records transactions between two
parties or “blocks” in a verifiable and permanent way, based on requirements fortransactions and collaboration. Companies today are looking for ways to apply
blockchain technology to the supply chain. Good fits include supply chain finance, foodtrack-and-trace (for both authenticity and food safety), shipping container tracking(most blockchains for tracking also include using IoT technology to help automate
tracking) and tracking raw materials from point-of-origin to prove the absence of
conflict minerals.
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D I G I TA L S U P P LY C H A I N

The distributed and secure nature of blockchain makes it ideal for managing the endto-end supply chain finance process as every participant in a supply chain involved
with the movement of goods can append the block with information. More importantly,
it introduces a whole new level of transparency to supply chain processes andinformation flows. The movement of goods can be registered on a global ledger oftransactions, along with all relevant information. Each link in the chain ensures that the
goods are received by recording their movement across the supply chain, where they
are stored, and how they are distributed.
Blockchain and the IoT will lay the foundation for the "Autonomous Supply Chain." Theability for a supply chain to become self-governing and able to respond to situations
based on real-time inputs from connected IoT devices will transform how companies
optimize their supply chains. Taken individually, the IoT, AI and analytics, and Blockchain
are interesting technologies but when combined, they stand to radically transform how
supply chains will operate in the future.

Digital Manufacturing and ProductionMore and more companies are forming partnerships that complement or enhance theircapabilities to bring innovative products to market. This is perhaps most pronounced
in the automotive sector where carmakers are partnering with technology companies,
ride-sharing firms, and even each other to revolutionize the industry. For example,
Toyota has recently expanded its telematics partnership with technology giant,
Microsoft. General Motors has invested $500 million in the ride-sharing firm, Lyft.
And the Daimler-Renault-Nissan alliance of automakers has expanded to explore
autonomous vehicle-related technologies.13

For partnerships like these to be effective, all parties involved must be able tosynchronize their master data, gain visibility into each other’s supply chain operations,and coordinate efforts to fulfill orders. While these activities have historically occurred
via B2B integration on private EDI networks, many manufacturing organizations are
decidedly shifting their operations to the Cloud.

Collaborating in the Cloud ensures all business partners have access to a common
source of master data. Currently, 70 percent of companies are using B2B cloud
networks across their supply chains.14 Despite this high adoption rate, the majority of
manufacturers are still in the early stages of defining their cloud strategy. In the coming
years, we will see a continuous increase in the number of manufacturers relying on B2B
cloud platforms to streamline business process and enhance supplier connectivity,
like BRF in the following feature.

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I N N O VAT O R S T O R Y

BRF“The most amazing part is that thebusiness doesn’t really need IT
to bring new clients on anymore,which gives them more flexibility
and autonomy to bring newpartners to the system.”– DANIEL KELLER, REGIONAL IT MANAGER, BRF

Figure 4.9: BRF

Listed among Forbes’ top 100 innovative companies in 2012 and 2013, BRF produces
foods that reach five continents. With more than 115,000 employees working in plants
and distribution centers in South America, Europe, Southeast Asia, and The United ArabEmirates, BRF strives for efficient, sustainable operations to support its supply chain
network across more than 150 countries and multiple languages.
Partway through implementing an Electronic Data Interchange (EDI) project in Europe,
the BRF technology team realized that the finished product would fail to meet thecomplex business needs of an international company. The new EDI solution would
only be able to support two standards of connection, communications lacked thesophistication required by clients and partners, and the onboarding of new partners was
still a cumbersome process. What the company really needed was an innovative service
that could support a wide variety of standards, as well as the secure exchange of datawith partners and suppliers in multiple languages and geographies, both of which would
make it easier to onboard and collaborate with new partners around the world. To meetthese complex and demanding business requirements, the company sought out a B2B
managed services provider.

Working with a B2B Managed Services provider, BRF has been able to offload tediousdaily activities like mapping, testing, and onboarding, enabling the company to focus on
adding partners to the EDI network rather than managing it. In less than one year, BRF hasestablished EDI connections with 35 trading partners and plans to expand to 130 in thenear future. Other benefits include access to reliable tools and expertise that enhance
the real-time exchange of information and collaboration. Multi-language support
around-the-clock links BRF teams and trading partners across the globe—regardlessof language, industry, or time zone. Finally, streamlined integration tools and services
provide end-to-end visibility into EDI flows, resulting in improved service levels andsatisfaction. With a reliable B2B managed services partnership, a connected businessnetwork, and an empowered workforce, BRF is well-positioned to scale for future growth.
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D I G I TA L S U P P LY C H A I N

Supply Chain Orchestration

As digital technology continues to evolve, manufacturers will pursue supply chainorchestration. This involves outsourcing end-to-end supply chain activities to asingle entity for intensified levels of automation and synchronization. The shift fromcollaboration to orchestration occurs in various phases. Historically, supply chain
processes have been performed by core business applications executed within a
corporate function or silo which provide enterprise visibility into specific functional
processes for production and logistics.
The first phase of transformation involves an “integration” phase in which ERP is
deployed for additional functionality to connect data within the silos and allow multidirectional interactions within the enterprise.

Next, to enable multi-enterprise collaboration across the supply chain, tools such as acollaboration hub or control tower technology for logistics allow every partner acrossthe supply chain access to a “single source of the truth.” An EIM platform provides the
secure repository with rules-based access required to enable collaboration between
all partners in the supply chain.

Orchestration occurs above and beyond collaboration. When a digital businessecosystem can provide tight tracking, synchronization, and the secure exchange ofgoods, communications, and commerce, all partners involved can make more informed
decisions and better satisfy their customers. As described in the following interview,
DistributionNOW, a global distributor, is using B2B managed services for improved
supply chain orchestration.

Logistics and Distribution

Getting products from a transportation hub to their final destination, or the “lastmile,” consumes over 50 percent of a manufacturer’s total delivery costs.15 Digitaltechnologies that connect logistics teams to back-end systems and customers toorder information such as delivery confirmation, provide the visibility manufacturers
need to optimize their logistics and distribution processes.

For example, GPS devices can map out the quickest routes, electronic signatures
can speed up time-to-cash, and apps that relay real-time updates to consumers canenhance customer satisfaction. These digital technologies are transforming logistics
and distribution into a competitive advantage.

Amazon is using drone technology to improve last-mile delivery, and ultimately
increase customer satisfaction and lower returns.16 Like drones, AI and the adoption ofautonomous vehicle technology is expected to revolutionize supply chain operations
as companies continue to look for ways to improve end-to-end visibility of shipments
across the supply chain.

95

TRANSFORMATION IN ACTION

DistributionNOWDistributionNOW (NYSE: DNOW) is one of the largest distributors andsupply chain solution providers to the energy and industrial sectors. With
approximately 4,600 employees and more than 285 locations acrossmore than 20 countries, the company stocks and sells a comprehensive
offering of products for the upstream, midstream, downstream, andindustrial market segments. They offer more than 300,000 stock
keeping units, including pipe, valves and valve automation, fittings,
instrumentation, mill and industrial supplies, tools, safety supplies,
electrical products, drilling and production equipment, artificial lift,
pumps, fabricated equipment, and industrial paints and coatings. DNOW
also provides supply chain solutions such as procurement, inventory andwarehouse management, logistics, industrial vending technology, safety
and turnaround support services, project management, and businessprocess and performance metrics reporting.

Figure 4.10: DistributionNOW

What follows are excerpts from an interview with Calvin Leong, Director, BusinessTechnology and eBusiness at DistributionNOW.

96

TRANSFORMATION IN ACTION“My role is to oversee DistributionNOW(DNOW) core technologies, including
SAP technical teams, eBusiness (suchas B2B electronic transaction systems),
e-commerce, and all application
development for branch locations andcorporate functions.

efficient transaction processes andnew technologies. For example, on our
e-commerce front, we created a platform toenable users in the field to easily place anorder and monitor its status via their mobile
devices. Giving employees and customers
the ability to place and track orders fromanywhere we deliver materials allows ourbranches to more effectively manage
operations and fulfill customer orders.

Our current focus is on digitaltransformation and creating newopportunities, from market and revenue
growth to operational excellence. We also
bring cost-saving opportunities for both
DNOW and DNOW’s customers throughinnovation and process automation. Oneof our digital initiatives is to broaden ourelectronic connections rapidly and enable
customers to more easily do businesswith us.

Global distributors face the common
challenges of managing millions of SKUs
and fulfilling orders in the right time at theright locations. In our digital transformation,
we are improving the inventory visibility andfinancial matrix for our global locations tohave better accuracy and predictability. We
are excited to explore the future of a new
set of processes and tools—like big data,
the Industrial Internet of Things (IIoT), andanalytics technologies—to improve how
our branches and distribution centers will
operate in a robust and scalable manner.

We partnered with a B2B integration
and B2B Managed Services partner forthe technology, scalability, and costsavings necessary to meet our specificrequirements and IT goals. The Managed
Services partnership takes care of repetitive
tasks like onboarding, mapping, testing,and deployment, which in turn allows us
to remain focused on B2B strategy andprioritization with our trading partners.

For more than 150 years, the oil andgas industry has had a nature of
disconnected and tough environments,
taking considerable time to embrace any
new supply chain technologies. We arestarting to see the trend of applying newtechnologies like the IIoT on equipment
to monitor performance and allow forpreventative maintenance. Yet on the supply
chain side, we see lots of opportunities for
digital disruption to apply new processes
and technologies and enable new ways ofdesign thinking. At DistributionNOW, westay ahead of the digital disruption curveand provide end-to-end solutions that
prepare our customers for the adoption ofdigital technologies.

Our B2B-related technologies wereoriginally hosted in-house and required
frequent upgrades. Most are now hosted ina third-party B2B integration cloud, allowing
us to shift the investment to other areas aspart of our overall cloud strategy.
From a B2B perspective, we continue
to reduce paper invoicing and eliminate
manual processes wherever possible.
We encourage our more than 300
trading partners, via Direct-connected orMarketplaces, to embrace digitization andelectronic transaction business models.

On the digital front, I believe many of theprocesses used today can be digitized—anyof the predictive maintenance or demandand forecast planning of materials andservices, at both offshore and land rigs canbe optimized. Digitization would also

We are challenging and transforming the
traditional oil and gas industry service
model through easier, more

97

TRANSFORMATION IN ACTION

make collaboration much easier if everyone
could access sensors, equipment, anddata remotely. User experience continues
to be challenging, though. Field workers
could not use a touchpad effectively on the
job—they use a pencil, and it doesn’t matter
if they drop it or get it dirty—so we’re stilltrying to figure out a safe way to digitize therelated processes.

market trends. We want to make more datadriven decisions by creating more analytics
and intelligent capabilities.
We always treat information security asa priority. In our managed cloud strategy,
all our partners must provide sufficientcapability to protect our data and access.
At DistributionNOW, we desire transparency
in a secure way. We focus a lot oncybersecurity and end-user education withmeasurable controls. We often conduct
assessments around improving our security
to help ensure that our customers feel safe
storing their data with us. EIM gives us theability to maintain this level of trust based on
its high number of certifications.

Every procurement process could be
unique. For example, a fully efficient online
catalog for centralized buyers in an officewould be the best way to place an order,
but not for contractors on drilling rigs. We
understand these challenges and design
our capabilities to solve unique problems.
Our ultimate goal is to enable our customers
to reduce cost and time. The faster anyone
can order, the faster our suppliers or
merchants can help them match theirworkload, and the more cost efficientthey’ll be.

I’ve been in IT for 30 years now, and myadvice to any executive when it comesto digital transformation is to keep an
open mind and focus on the customer
experience. You need to have a reverse
engineering mindset. There also needs tobe a balance between disruptive technology
and executable solutions that are a good
fit for your culture. When you’re designinga new business model, the technology
should support an agile, fail-fast,
iterative approach.”

Adopting what we see from Businessto-Consumer (B2C), our objective is toprovide omni-channel experience tomobilize everything—access to information,
catalogs, ordering, transactions, etc.
Business-to-Business (B2B) has a wholeother set of objectives. Our customers stillneed omni-channel experiences, but eachcustomer has very distinct requirements,
and that makes it more complex. That’s
where digital EIM technologies canhelp to revolutionize the B2B industry,including analytics.
DistributionNOW has been using a traditional
Business Intelligence (BI) solution; there’s
a lot of room for us to grow in terms ofmashing up data in the public domain andstructured information in our ERP systems.
Predictive analytics has great potential tohelp us manage our inventory and customer
demand. We help our customers manage
thousands of suppliers, so the information
we collect could provide great value—from
known product issues, to shortages, to98D I G I TA L S U P P LY C H A I N

Reverse Logistics

While customer expectations like next-day, same-day, and even same-hour delivery areprompting manufacturers to make significant investments in logistics and distribution,
reverse logistics (or returns) is often overlooked—despite being one of the mostimportant aspects of a good supply chain strategy.

With more than half of global consumers preferring to buy online, digital has become
the dominant retail channel. As digital sales surge, so too does the volumes of returns.
At a staggering $642.6 billion annually, the value of returned goods worldwide would
rank as the world’s 21st largest economy.17 Yet, only 33 percent of retailers have theinfrastructure in place to deal with the increasing volume of returns.18

Traditional supply chains (even those implemented as recently as 10 years ago) that
focus on the forward flow of products are not equipped to support the high volumes ofreturns that e-commerce generates today. As a result, supply chains that support the
movement of a product from its point-of-consumption to the point-of-origin (referred
to as reverse logistics) are rapidly becoming a business requirement—especially inretail, where returns can account for up to 10 percent of total sales.19

A digital supply chain provides the flexibility and end-to-end visibility to intelligently
support reverse logistics, enabling manufacturers to accommodate multichannel “buyanywhere, return anywhere” consumer behavior while minimizing the costs associatedwith returns. 20
These last-mile expectations are creating opportunities for new entrants to apply digitaltechnologies in innovative ways. In the following interview, Envoi is using analytics and
AI to provide competitive, demand-based delivery solutions and services.

Bringing it All Together

In the digital world, EIM, B2B integration, and the IoT are the fundamental infrastructurebuilding blocks required to support digital manufacturing operations.

The IoT presents an opportunity to connect digital and physical supply chains together todevelop more closed-loop business systems that are responsive to changing businessenvironments. But in order for an IoT platform to successfully support supply chain
business processes, manufacturers must have the following crucial IT competencies,
or cornerstones, in place: device management, information management, analytics,
integration, and security.

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TRANSFORMATION IN ACTION

Envoi

Envoi was founded in August 2017, as a successor to the founders’first company Citius Solutions—a B2B logistics optimization company
that serviced transportation companies, using routing and schedulingsoftware that has been shown to improve operational efficiency by up to
32 percent.

Figure 4.11: Envoi

Below, Maarij Rehman, Co-Founder of both Citius Solutions and Envoi, describes how they
adapted and evolved their business model based on market responses to become Envoi.
“We were focused on route optimization,but our suite addressed the entire “lastmile,” which is everything that happens
to a package, from the time it arrives at a
local postal warehouse to the time it getsdelivered to your door. It might arrive ata warehouse on a trailer where a team ofpeople sort the packages. This includes
manually matching postal codes to see whoshould deliver the package and loading the
package on to a specific driver’s truck. This
happens for every package that comes inevery day. When you do this for more than
5,000 packages, it can take more than six
hours to complete.
Once the package is placed on a truck,
drivers must complete the same process,looking at all the packages, putting theaddresses down on a physical map, andthen eyeballing the best delivery route. This
process, called routing, takes about an hour.
But the last mile doesn’t end with routing.
There is also something called “pickups on
the fly,” which involves customers needinga package picked up. Throughout the day,when drivers are out on their deliveries, thedispatcher doesn’t know which driver isclosest to pick up an order or if they haveenough space to accommodate a pickup.
Citius Solutions addressed all three ofthese: sorting, routing, and pickups.
We applied analytics in two ways to help withthe route optimization. One was throughreal-time optimization. If there was a pickup,
for example, the driver’s route would get
recalculated based not only on the new100

TRANSFORMATION IN ACTION

pickup, but also on factors like construction,
accidents, and road closures. The second
way was to analyze the manpower required,or how many drivers should be assigned to agiven shift.

come to expect same-day delivery. Globally,
41 percent of consumers demand sameday delivery, but only 14 percent of retailers
offer it. Capitalizing on this opportunity,
Envoi was born.

Citius was founded based on theinefficiencies in the current industry. We
started out working to digitize the existing
pen-and-paper system for the last mile—
the sorting, routing, and pickups—which
was a fairly disruptive move for the courier
industry. We spoke to executives atmulti-million-dollar trucking companies
and discovered this manual system wascosting them millions (in some cases, even
hundreds of millions) of dollars. But they
were hesitant to implement a new solution
because the change required was of sucha magnitude, it would take a lot of timeand effort to roll out. So, there was market
pushback in the beginning, even fromdrivers and dispatchers. Our software, in away, implied that they were not doing theirjobs efficiently. Even though we had data
to back up our claims, they were reluctant
to adopt any kind of automated solution
because their jobs were on the line. We
were trying to influence market behavior
and it wasn’t working. After trying to license
the software to this market for about a year
without much success, we realized we had
to change our business model.

That opportunity was based on providing
our services outside of the typical operating
hours (between 9 a.m. and 5 p.m.) that mostcourier companies offer. So, we focusedon optimizing last-mile delivery after 5
p.m. Doing this allowed us to eliminate
UPS and Canada Post as competitors. We
also democratized the process of courier
pickup and delivery by cutting out the
middleman, essentially, we are enabling
direct retail-to-consumer.

We decided to address the problem anotherway. We knew we were good at solving thelast mile, so instead of offering it to courieror trucking companies, we brought thetechnology in-house so that we could serve
their clients more directly and efficiently.
We shifted our business model, whichmeant that our former customers were now
our competitors.
Based on the infrastructure of couriercompanies being ill-equipped to manage
the last mile effectively, we followed thedemand online. People are becoming moreaccustomed to shopping online and have

Like Uber, our employees are regular people
with their own cars. When a bundle is readyto be picked up from a retailer and delivered
to a customer, they receive a notification
via an app. Our software does all thesorting and routing, and we deliver goods
without requiring any overhead for trucks
or warehouses. From here, we can easily
update customers by text regarding when
they can expect their package. Instead of
between 9 a.m. and 5 p.m., it’s between 7:15
p.m. and 7:30 p.m. It’s in real time and far
more efficient—especially if we consider
the manual processes involved with larger,
traditional couriers, which is why, with
Canada Post, for example, there can be a
24-hour delay between when something is
physically picked up and delivered and when
the company says it can be delivered.
Our key customers went from being couriers
to retailers. This model works really well as
brick-and-mortar stores closing and moreretailers are looking to use their storesas small distribution centers. We service
retailers who want to meet consumer
demand for same-day delivery, at a pricepoint that either matches or beats what they
currently pay for standard shipping. That’s
our key differentiator—affordable, same-day
delivery based on consumer demand.”101

CHAPTER 4

DeviceManagement

Information
Management

Analytics

Integration

Security

How do I efficiently
and safely provisionlarge numbers of IoT
devices?

IoT data is morevoluminous anddiverse than
traditional master data
– how do I govern it?

How do I deliver
improved operational
intelligence using
real-time IoT device
feeds?

How do I seamlessly
integrate IoT data,
events, and analytics
with back-end
systems?

What approach should
I take to extend
existing security
policies to my new IoT
solutions?

Device &Identity
Mgmt

Experience

Content
Services

Analytics

Discovery

Business
Network

Process

Device &Identity
Mgmt

OpenText EIM Provides the Foundation for an IoT Platform
Figure 4.12: The Five Cornerstones of an IoT Platform 21

With these five cornerstones in place, digital enterprises can layer the following EIM
capabilities for added value: Experience solutions deliver device management via web portals and mobile

apps, allowing manufacturers to remotely configure and manage IoT-connected
devices (such as sensors) for added control.

 Content solutions provide a centralized hub for information management,

enabling companies to manage and archive the volumes of information collected
and generated by IoT-connected devices.

 Analytics can be applied to mine sensor data and identify trends to trigger event-based supply chain processes and uncover insights.

 B2B integration provides a secure, digital platform to exchange trading partner

information and seamlessly integrate with enterprise systems, devices, and apps.

 Process solutions can be applied to ensure sensor-based information aligns withand supports key supply chain processes, such as a Vendor Managed Inventory(VMI) process. Additionally, process solutions can enhance security by ensuring
information is getting to the right person, in the right place, at the right time.
Identity and Access Management solutions help to “wrap” a security layer aroundconnected devices.

As this chapter demonstrates, EIM provides the technical backbone manufacturers
need to reinvent their supply chains. When enterprise systems, B2B platforms, andIoT networks are integrated to control the flow of information across the entire supply
chain with partners, suppliers and customers, manufacturers can unlock the fullpotential of digital.

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The Digital Supply Chain: A Strategic Imperative

The manufacturing industry is experiencing a significant period of transformation.
International expansion, changing consumer needs, and new forms of digitaltechnologies are forcing manufacturers to restructure supply chains and IT
infrastructures so that new technologies and consumer-driven market conditions canbe embraced with ease.
To ensure they have the flexibility and scalability to succeed in the digital world,
manufacturers will need to re-imagine their traditional supply chain and implement
an integrated enterprise information strategy that embraces cloud, mobile, and otherdisruptive technologies. Combining enterprise, B2B, and IoT platforms with disruptive
technologies gives manufacturers the insight they need to compete in a digital world.

A digital supply chain delivers the intelligence and agility required to effectively scale
operations, support global collaboration across the extended enterprise ecosystem,
provide end-to-end visibility for supply chain optimization, and rapidly respond to everchanging market and customer demands. A manufacturer’s ability to meet—and, ideallyexceed—customer expectations is wholly dependent upon its supply chain. Infusing
the supply chain with digital technologies will enable manufacturers to continually
improve performance and outpace their peers while creating customer experiencesthat delight, resulting in significant competitive advantage. This, along with distributor
engagement, is the focus of the next chapter on Digital Engagement.

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5

DIGITAL ENGAGEMENT

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

This chapter describes how EIM supports the exchange of information between
manufacturers, distributors, and retailers, while providing the controls needed tomaintain a consistent customer experience.

CHAPTER 5

Digital Engagement“Not only are intelligent machines on the verge of taking over, but consumers want themto. Indeed… by 2025, AI will power 95 percent of all customer interactions, including live
telephone and online conversations that will leave customers unable to 'spot the bot'.”1
Disruptive technologies are triggering the convergence of physical and digital worlds.
In addition to mobile and social channels, IoT-related technologies like sensors,
beacons, and wearable devices will add hundreds of ways for organizations to engage
with their employees, partners, and customers. According to the above quote, in the
future, only five percent of all customer interactions will require human contact. 2
Customer experience will expand to include augmented and virtual reality, holograms,
digital wallets, virtual shopping assistants, digital mirrors, algorithmic retailing, 3D
printing, and more. These technologies and channels will make the customer journeymuch more complex.

Today’s fast-moving consumer market is putting pressure on manufacturers to beable to share digital product information seamlessly and quickly across retail anddistribution channels. The challenge for manufacturers and retailers will be to integrate
all communications across multiple channels.

To deliver a seamless experience for distributors, retailers, and customers,
manufacturers need to take a holistic view, bringing communication channels,
information, and technologies together in a single, unified “hub.” A winning approachrequires a comprehensive EIM solution—one that incorporates all aspects of digital
engagement, from processes and information exchange with distributors to theautomated delivery of personalized content to consumers. Only EIM securely integrates
Customer Experience Management (CEM) solutions like Digital Asset Management(DAM) with process management, real-time data platforms, and analytics for true
digital transformation and business agility.

Distributor Engagement

Today’s global manufacturers are developing channel partnerships with local retailers
and distributors to get their products to consumers. This strategy has been extremely
effective helping manufacturers in emerging markets capture up to 35 percent moreavailable market share. 3 While partnering with retailers and distributors is proving to
be a profitable strategy, it is not without its challenges. Many global manufacturers
struggle to efficiently exchange information, such as product specifications,promotional videos and brochures to support a product launch, for instance, acrossthe extended enterprise.
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Product

Information

Finance

Retailer

Shopper

Supplier

Manufacturer

Distributor

Product

Information

Finance

Figure 5.1: EIM Suppor ts the Two-way Exchange of Business Information

An integrated, digital EIM platform addresses this challenge by establishing acentralized approach to managing the exchange of enterprise information, enablingproduct-related data to become pervasive across channel partners. EIM supports
the two-way exchange of information between manufacturers and local retailers anddistributors, while providing the controls needed to maintain a consistent customer
experience. When information can flow freely in both directions, manufacturers can
extract added value by gaining insights, such as local market trends, performance,
consumer preferences, and customer feedback. In the following feature, automotive
supplier MOBIS is applying analytics to deepen distributor engagement.

Supporting the Omni-Channel Experience

Omni-channel excellence is supported by a centralized DAM platform that helps
to simplify the distribution of information across the enterprise. In the digital world,a manufacturer’s ability to penetrate new markets depends in part on its ability
to effectively exchange information with channel partners. When combined withother transformative enterprise platforms like B2B, the IoT and the Cloud, EIM
provides the digital platform required to seamlessly engage with a global network ofchannel partners.

Today’s market is heavily consumer driven and new technologies, such as mobile
smart devices are allowing product information to be accessed in many different ways.
This means that all web-related assets need to have a consistent look and feel andmust be accessible by any device, any time or anywhere. In addition to managing all
product information through a centralized archive, web-related assets should ideallybe centrally managed as well.

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MOBIS“From a logistics side, we are able
to get clear visibility on business
operations by integrating informationfrom the back end to the front end of
the BI system, allowing us to analyze
the information coming from the
back-end system.”– SUBODH PATIL, IT MANAGER, MPAU
Figure 5.2: MOBISHeadquartered in Seoul, South Korea, with subsidiaries in approximately 40 countries
worldwide, MOBIS manages the supply chain for automobile industry heavyweights
Hyundai Motor Company and Kia Motors. The company created a parts production systemdesigned to ensure quality and savings throughout the supply chain—from purchasing
and inventory to sales and logistics—helping its clients stand out in the competitive
automobile industry. MOBIS Parts Australia Pty Ltd (MPAU) is the automotive supplier’s
Australian subsidiary.

The automotive industry has ongoing competitive challenges, with other brands coming
up with new products, new sales strategies, and new pricing methodologies. As a result,
MPAU has to ensure that they have adequate systems and technologies in place to keep
products competitive and operations agile. To react responsively to changing demands
or competitors’ offerings, the company needed a new business intelligence systemthat would support real-time inventory and dealer network reporting, monitor sales
performance and pricing offers from vendors, and offer analytical capabilities to predict
future sales and inventory requirements.

After testing several systems, MPAU ultimately chose an Analytics Suite based on its
robust functionality, as well as its ease of use. The latter was a key factor to ensure end
users would take to the system naturally to deepen distributor engagement by integrating
seamlessly and intuitively into the day-to-day operations of approximately 140 to 160
users and dealers. The solution was able to integrate with data sources throughout the
MPAU operations and dealer network with dashboards that offered each department,from inventory and warehousing through to sales and logistics, a snapshot into their
daily activities. Analytics capabilities give the company competitive advantage, with theability to not only view historical sales and inventory but to forecast future needs as well.
Now, instead of relying on a cumbersome reporting process and inaccurate predictions,users can compare historical data to current sales information in close to real time andproject future sales. The result is a more efficient business environment with informed
decision-making that allows users to access and interact with data more reliably and thecompany to operate with greater agility in a competitive market.
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Manufacturing products is becoming increasingly complex. This is not just in thenumber of parts they may contain, but also based on the sheer volume of digital
information supporting each component part of a manufactured product. Associatedcontent could include a concept sketch, 3D CAD Model, 3D printing model, highresolution photo realistic image, 3D animation or an assembly/disassembly video. This
information needs to be managed and archived in a centralized DAM environment,
where multiple versions can be controlled to ensure that the very latest digital asset isbeing used. As illustrated in the figure below (step number 10), if a car manufacturer islaunching a new model to market, they need to ensure that their dealer network has all
digital assets in place. From a centralized and secure hub, each dealer can download
related content as part of a dealership marketing campaign.

How EIM support the lifecycle of a vehicle

1Market/Customer
Requirements

12

Recalls &Warranty Repairs2

Vehicle Prototype
Testing & Compliance

How EIM support the lifecycle ofa vehicle& Support

Retailer/Dealer
Engagement

3

4

5

11 Aftermarket Service

10

Vehicle Design &Engineering

9

HR
Logistics &Distribution

Legal
8

Finance
Plant Maintenance &Asset Management

67

Supply Chain
Enablement
Manufacturing &Engineering
VehicleProduction
Vehicle QA &Certification

Figure 5.3: Retailer/Distributor Engagement

Along with distributor networks, some consumer packaged goods companies like Nike,
Adidas, or Columbia also support retail networks. Columbia headquarters, for example,
could be introducing new sportswear and would need to ensure that outside parties(their own retail network, third-party retailers such as DICK’S Sporting Goods, andonline retailers) have access to the appropriate photos, specs, or videos, so that the
product could be properly promoted.

Sharing Assets Across the Digital Media Supply Chain

Due to sheer size of certain digital assets, such as video files for example, organizations
need a secure and efficient way to exchange these files across what can best be
described as the Digital Media Supply Chain. Many companies are using cloud-based
file transfer solutions to exchange large files between different stakeholders in thedigital media supply chain. These Managed File Transfer (MFT) solutions are ideal as
they help to ensure that files are secure as they are being exchanged.
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Digital product information can be created in a multitude of different software or
cloud-based applications. Users across the extended enterprise may need to gain
access to these files to view and mark up information, perhaps as part of a design review
or product launch process. Ensuring that all digital assets associated with external
websites and aftermarket services and support portals are managed effectively isequally as important as managing supply chain processes. Leveraging a centralized
information management platform can help manage web-based digital assets andimprove the customer experience.

The simplest application available on every desktop PC, laptop, or mobile device isthe web browser—a common window into a digital information hub that helps drive
consistency in terms of accessing, viewing and collaborating on product-related
information. Using responsive design, organizations can manage a single site thatcaters to all device platforms, sizes, and resolutions. Consistently branded content
creates a more satisfying end-user experience and enables organizations to positively
impact the customer journey. This is illustrated in the following interview with the CIO
of a leading energy drink producer.

Consumer Engagement

Over the past two decades, Internet shopping and mobile phones have shaped thedigital consumer. Technically savvy and always connected, these consumers expect
convenience, flexibility, and choice in their shopping experiences. Millennials (thoseborn between 1980 and 1995) are overtaking Baby Boomers as the world’s largest
group of shoppers. By 2025, they will comprise 75 percent of the workforce. 4 Theseso-called “digital natives” are defined by their familiarity with technology and theirlifestyle, bringing together the physical and digital worlds.

Current Technology Uses for Shopping

How do you use technology to help with your shopping?”

Consumer Behavior

Research competitor products/services online
Read reviews while I’m online
Read reviews while I’m in-store

59%
45%

26%

Use apps while in-store to research discounts or offers

22%

Never buy anything in-store without browsing online first20%

100 Percent

Figure 5.4: Current Technology Uses for Shopping
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TRANSFORMATION IN ACTION

Leading Energy
Drink Company

What follows is an excerpt from an interview with the Chief Information
Officer at a leading energy drink company.
“Our philosophy is that we’re a lifestyle firstand a product second. That’s been our
guiding principle since our launch and it’sworked well for us. We’ve been on an upward
trajectory for growth, both in terms of sales
and content.
As we grew, our volumes of content grew,
and it was becoming harder to find assets
and repurpose this content in a timely
manner. When we partnered with a global
soft drink company and incorporated theirenergy brands, we realized that to be able tocarry those brands forward and to continue
to manage ours, we would need to migrate
and manage our combined assets in a
Digital Asset Management (DAM) system.
We needed to come up with a solution tobetter manage our collective assets—one
that included supporting historical content.
As an organization accumulates assets,
these assets become the rings of a treethat show the history of a brand and how
it has evolved into current marketing andpositioning. Porting these assets into the
DAM system as soon as possible was one of
our key objectives.
The energy/alternative beverage space isleading edge. There are so many players,
it’s very competitive. We’re always trying
to catch somebody’s tail and somebody
is trying to catch ours. Because we haveto be agile and stay one step ahead of thecurve, innovation is part of our lifeblood, anddisruptive technologies play a big part inenabling that. But even in a company

like ours, one that seems very edgy, very
Millennial, at our core, we’re still a very
conservative company. We have to run
our business in the best interest of ourshareholders and other stakeholders.
My role as CIO is all about change,
innovation, and disruption. Getting people
to accept the change that comes with
disruption and adopt new solutions canbe extremely difficult. I’ve been pleasantly
surprised at how well people have adopted
the DAM solution. Early on in the project, we
had people ask if they could be part of thedesign team so they could help shape thesolution. Their participation was critical toits success. Phase one of the DAM rollout
was so successful that we can’t move fastenough for phase two. People are so excited
to have this solution in place.
The impact of the system has been
profound. It touches more people insideand outside our organization than our
ERP ever will. So, when people think about
implementing a DAM solution—it’s notjust a graphic support solution, it’s notjust an asset solution— it’s a solutionthat will impact pretty much everybody inthe organization and allow them to worksmarter, not harder.
Every creative project and asset createdsince the DAM solution’s release has been
managed through the system. This gives
us better control of our content, not only interms of accessing and storing but also interms of brand equity and111

TRANSFORMATION IN ACTION

consistency. As we grow, one of the things
that’s very important to us is to ensurethat proper logo treatment and the rulesof usage are maintained. The systemgives us consistency around the globe.
We can even automate brand usage andguidelines. Our Legal teams on the IP sideand brand protection are thrilled that we’re
implementing a solution and working on
strategies to engage them in the approval
process. As you can imagine, we sponsor a
lot of athletes and promote a lot of events.
If whatever we use comes out of the DAM
system, we can be confident that all thechecks and balances are in place and that
we’re using those assets correctly.
Right now, the mobile user is our key
demographic. Our digital media group is
doing a lot of creative work in that space,like gamification, for example, to digitize thecustomer journey. Our demographic doesn’treally sit at a PC to consume content, so
the mobile experience is hugely important.
We’ve got great traction there, but we’re likeeverybody else. We’re moving as fast as wecan, and we’ve got a lot of great technology
in place, but every time you think you’ve
made it, a new disruptive technology
emerges. It’s kind of like painting the Golden
Gate Bridge: by the time you get to one end,
you have to start repainting the other. This isjust a reality for us.
Change doesn’t come easily. People
get comfortable with what they know. In
order to ensure that implementation of
new technologies is successful, I haveto be more than just a CIO. I have to be asponsor, an advocate, and a cheerleader. It’s
important to get out and communicate thebenefits that transformation will have on theorganization as a whole—not just the impact
it will have on the individual. I think whenpeople understand that adding a few steps
to a process on their end will save 50 steps
across the organization, and how saving 50
steps will benefit the organization, they’remuch more willing to embrace change.”112

D I G I TA L E N G AG E M E N T

Disruptive technologies like mobile and wearable technologies are revolutionizing
the customer experience. Mobile functionality is combining with mobile payments
to deliver a convenient end-to-end shopping experience. With options to completea transaction using Apple Pay® and digital wallets, today’s consumers want deeper
experiences across many channels, digital or otherwise. 6

Consumers are driving transformation in retail. Along with mobile devices, wearables
have great potential to enhance the overall shopping experience. They provide new
ways to engage; consumers will eventually search for products using voice, image,and gesture. Along with communicating promotional offers or events, wearables
such as smart watches help consumers save time, alerting them about busy times orlong lineups.

As consumer expectations change and technology progresses, the global retailindustry is in the midst of a significant shift in operations. New technologies are forcing
manufacturers and retailers to re-engineer business processes, and these include theInternet of Things (IoT), automation, and robotics. By 2021, 70 percent of U.S. retailers
are expected to invest in the IoT, 68 percent in machine-to-machine (M2M) learning or
cognitive computing, and 57 percent in automation.7 These technologies will enableorganizations to deliver more compelling customer experiences with the end goal
being to completely customize the experience.

The IoT and related location-based technologies like sensors and beacons will be used
to deliver targeted information, products, and services in the customer’s momentof need. Connecting with consumers using M2M technologies like beacons allows
retailers to know when a customer is near a store location, where they are in the store,
track their movements (and items of interest) in the store, and optimize the visit withtargeted products and promotions. By combining customer data with location-based
information, M2M technologies ultimately help retailers and manufacturers better
understand, engage, and satisfy their consumers.

Technology Trends Shaping the Future

Percentage of respondents planning investments by 2021

2021 | 70%

Internet of Things

Giving a digital voice to people,
processes, and things to improvethe customer experience, enhance
supply chain visibility, and expand
revenue opportunities.

2021 | 68%2021 | 57%

Analytics and predictive models to
help personalize customer
experiences and enhance inventory
demand, forecasting, and visibility.

Automation for packing andshipping orders, inventory
tracking, checking in-store
inventory levels, and assistingcustomers in finding items.

Machine Learning /Cognitive Computung

Automation

Figure 5.5: Technology Trends Shaping the Future of Shopping 8113

CHAPTER 5

When analytics are applied to the data collected by disruptive technologies,
organizations can transform business intelligence into actionable insights to deepen
engagement. As shopping becomes more automated and AI-driven, customer loyalty
and repeat purchases may be harder to secure. Algorithms will be able to comparatively(and objectively) shop online for the lowest prices available. Sensors in an appliance,
for example, will locate replacement parts based on the best price and availability
without consideration for brand loyalty. To differentiate themselves, manufacturers
and retailers will need to apply analytics and AI in order to tap into consumer
habits, behavior, and need—ultimately giving them the ability to create experiencesthat delight.

The following interview with Tata Consultancy Services Ltd. below examines how digitalconsumers are forcing organizations to deliver simplified, yet compelling experiences
to meet their evolving and sophisticated expectations.

Combining Physical and Digital Worlds

As the digital revolution advances, customer centricity is eclipsing the decadesold, traditional product-centric approach to merchandising. Consumer behavior isevolving, and to stay competitive, manufacturers will be increasingly required to put
the consumer at the center of all their operations—from design through to marketing,
distribution, and support.
CIOs will be required to deploy a modernized technology foundation to bring together
physical and digital experiences and create new value streams for competitive
advantage. Although the physical store will remain at the center of multi-channel
operations, top manufacturers and retailers will strategically blend physical anddigital operations, creating an ambient, immersive user experience in what has beencalled the “digital mesh.” Virtual Reality (VR), Augmented Reality (AR), wearables, theIoT, and sensor-rich devices will create connected rooms and spaces to enhance the
shopping experience.

As consumers push the demand for a more digital sales experience, brick-and-mortar
stores are closing their doors. In early 2017, over 8,600 physical store locations shut
down in the U.S., including retailers Bebe, JCPenny (JCP), and Payless ShoeSource. 9
Macy’s announced plans to close 68 stores at the expense of 10,000 jobs.10 Hudson's
Bay, owner of Saks Fifth Avenue and Lord & Taylor, plans to reduce its workforce by
2,000 jobs.11 In the U.S. alone, physical store traffic and sales are declining in the wakeof increasing competition from online sellers like Amazon and Zara.

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Tata Consultancy
Services Limited

Tata Consultancy Services (TCS) is an IT services, consulting andbusiness solutions organization that delivers real results to global
businesses, ensuring a level of certainty no other firm can match. TCS
offers a consulting-led, integrated portfolio of IT, BPS, Infrastructure,Engineering and Digital services. This is delivered through its unique
Global Network Delivery Model™, recognized as the benchmark of
excellence in software development. A part of the Tata group, India’s
largest industrial conglomerate, TCS is listed on the BSE (formerly
Bombay Stock Exchange) and the NSE (National Stock Exchange)in India.

Figure 5.6: Tata Consultancy Ser vices

What follows are excerpts of an interview with Vipul Mohile, ECM Consultant at Tata
Consultancy Services.
“At TCS, we believe that customer
experience defines the brand, analytics
overrule instincts, and innovation, insight,
and agility—not size—defines winners.

As an ECM Consultant, I handle theDocumentum Center of Excellence. I
work closely with our customers, making
recommendations around ECM roadmaps
and blueprints to provide them with115

TRANSFORMATION IN ACTION

architecture solutions. I also support ourpresales and delivery teams.
In my role, I collaborate with colleagues,
partners, and customers across allindustries. Meeting ever-changing customer
expectations, cost reduction, and speed-tomarket are the driving forces for any digitaltransformation journey.
Customer expectations are changing
daily. There’s a bit of a dichotomy at playhere because, while customer needs are
becoming more sophisticated, customers
also desire simplification. Consider mobile
technologies. Mobility has completelychanged expectations around customer
experience. Customers want to be able toaccess systems and information from any
device, from anywhere, and at any time.
But, they also want the experience to be
intuitive and seamless. This means thatorganizations must figure out how to deliver
simplified, yet compelling experiences thatmeet sophisticated expectations. And this iscausing business models to change. Omnichannel is a great example of this. Whendone right, omni-channel experiences canbe used to deliver a consistent customer
experience across different channels—
regardless of whether a customer starts atransaction on a laptop and then switches toa mobile device.
As I mentioned, cost optimization andspeed-to-market are also drivers oftransformation. Customers want more forless. So, organizations must juggle meeting
ever-changing customer expectations with
optimizing costs. To complicate things, theymust also try to find innovative ways to bringproducts and services to market faster thantheir competitors. All of this can be very
difficult to do—and this is where customers
turn to TCS for help.

when it comes to the Cloud, with more andmore companies embracing cloud services.
The Cloud is quickly becoming a business
requirement. This is because the byproductof many new technologies, such asmachine-to-machine communications andIoT-connected devices, is data. The more
ubiquitous these technologies become, themore data organizations will be required
to manage. Cloud solutions and cloud
managed services deliver the flexibility
and control organizations need to store,
manage, and mine this data. For this reason,
analytics is also becoming increasingly
important to business.
Earlier, organizations would store enterprise
information into repositories. So, they
were collecting the data, but they weren’t
extracting any intelligence, or value,
from it. Organizations are realizing that
applying analytics to this data can help
them to resolve certain issues and makebetter, data-driven decisions faster—
both of which can help them stay aheadof their competition. We are seeing a lotof traction in analytics. Our customers,
especially those in the retail industry, areintegrating intelligence capabilities thatcertain products provide with their ECM
repositories so that they can present
actionable insights to senior-level
decision makers.”

The Cloud is also helping organizations tosimplify operations and reduce costs. We
are seeing a shift in customer mindset
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Figure 5.7: Combining Physical and Vir tual Worlds

The largest Internet retailer in the world, Amazon, has led the charge in reshaping theindustry. Convenience, cost, and satisfaction define their brand experience—they sell
everything from A to Z, shopping is fast and easy, prices are competitive, and consumers
can opt for same-day delivery in 35 global cities. Having surpassed major retailers inmarket cap, the company is now setting its sights on brick-and-mortar. In June of 2017,
Amazon acquired high-end grocery store chain Whole Foods, giving them access to
a network of distribution hubs across North America.12 On January 22, 2018, Amazon
announced the opening of its first physical grocery store, AI-powered “Amazon Go”
in downtown Seattle. Shoppers scan their smartphone at a turnstile, cameras andsensors track the items they purchase, and they are billed after leaving the store.13 As
a disruptor, the company is recognized for embracing new technologies to enable new
business models, such as drones for delivery and 3D printing on-demand to transform
its delivery trucks into mobile manufacturing centers.14
Like Amazon, Zara is reshaping the retail industry. As the world’s largest fashion
retailer, the key to their success is their unique business model—or what they call “fastfashion.” A slick logistics operation moves clothes from design to shops in three weeks,
less than half the average time it takes most retailers.15 Global stores experience stock
turnover twice a week and orders arrive in just 48 hours. Zara effectively combines
the physical with the digital through features like a smart mirror that allows customers
to “try on” clothes without actually putting them on. Despite these innovations, it is
the connections between stores, designers, and factories that are the true secret toits success.16

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The retail model is being further disrupted by innovations like Moby Mart, anautonomous mobile supermarket that brings the shopping experience right to theconsumer’s front door. Developed by Wheelys Inc., a Swedish start-up company, Moby
Mart is run entirely using AI and sensors, features a hologram cashier, and enables
shoppers to scan items using mobile phones. This futuristic grocery store demonstrates
just how seamless and convenient consumers expect the shopping experience to be.17
While the physical store will play its part in the omni-channel experience, making
shopping convenient, real time, and relevant is the goal. Consumers today haveultimate control over the customer experience—what channels they use, how they pay,
and how items are shipped. Manufacturers and consumer packaged goods companies
that have adopted direct-to-consumer models offer their customers flexible options
for browsing, payment, shipping, and aftermarket service. As consumers use morechannels to complete these processes, they expect the entire experience to beconvenient and seamless—across a myriad of channels and at every touchpoint withthe brand.

A seamless customer experience requires that underlying operations and processes
be aligned. This is incredibly complex to achieve. As explored in Chapter 4, digital
capabilities must align with physical supply chain execution. Customer centricity
is key to achieving this, along with implementing the right technologies—from thewarehouse through to the storefront—all capable of supporting shoppers, fulfillingorders, completing shipments, and delivering highly personalized and satisfying
customer experiences.

Creating Consistent Omni-channel Experiences

Reaching consumers today requires a complex, multifaceted approach across manychannels. Disruptive technologies have given consumers so many different ways toconnect with sellers that the path to purchase has become more complex. Customer
engagement has transitioned from a multi-channel experience to an omni-channel
experience. Multi-channel engagement pushes content to consumers regardless of
their device or location. Omni-channel delivery takes this one step further by focusing
on consumer need and behavior in the moment (or in real time), pulling together
programs to provide a consistent brand experience across channels, platforms,
and devices.

As consumers become more mobile, a uniform experience becomes more critical for
success. If a customer visits a retail website on a computer at home but switches to amobile device at the time of purchase, the brand experience should maintain the same
look, functionality, and content. Customers do not see individual devices or channels;
they look for a consistent and familiar brand experience. This is dependent on marketing
program alignment, consolidated information and systems, and an effective Businessto-Business (B2B) platform to ensure the timely fulfillment and delivery of both online
and in-store purchases.
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Omni-channel Excellence Starts with the Supply Chain

Omni-channel retailing has been one of the main trends to impact retailers in recent
years. The adoption of online mobile retail has changed the dynamics of consumer
buying patterns and retail distribution. Retailers need to be able to source goods atcompetitive prices as well as ensure they are working with responsive suppliers thatcan meet consumer demand.

78%

Rate importance of integrating
e-commerce and in-store experiences
as important/business critical

Connect customers’ activities
online with what they do in store

76%

Figure 5.8: Integrating Operations is Critical to Achieving Omni-channel Excellence18

With a keen focus on optimizing customer experience, manufacturers are streamlining
their siloed supply chain processes on top of B2B platforms to unite the factory withthe showroom. Omni-channel excellence depends on more than just combining digitaland physical channels. A digitized supply chain enables omni-channel execution,
especially at the store level.

Superior omni-channel support requires 90 percent inventory accuracy.19 If
merchandise is out of stock, digital consumers can find availability and competitive
pricing in just a few clicks. Many manufacturers and retailers are investing intechnologies like sensors on shelves, automated inventory verification, cameras
and video analytics, and RFID for greater inventory control. Winning strategies makeinventory available using as many channels as possible, regardless of the physicallocation of merchandise.
As well as inventory accuracy, giving consumers convenience and choice in orderfulfillment and delivery processes are also key. According to the "UPS Pulse of theOnline Shopper" report, more than half of global consumers prefer to buy online.
Online shopping and the direct-to-consumer model has introduced buying patterns
like “click-and-collect,” which entails purchasing online with the ability to pick-up or
return goods in-store. Brick-and-mortar store locations are expanding to serve as
distribution centers. Alongside shipping direct or to a consumer’s workplace, clickand-collect models continue to expand to include retrieval of online or mobile orders at
a store locker or drive through, click-and-collect remotely from the store, and reserveand-collect instore. Over 65 percent of retailers today are experimenting with different
delivery models. 20
119CHAPTER 5

65%

Exploring innovative
delivery services
such as deliver towhere the customer
is: workplace, home,parked car

Omnichannel Conversion and Fullfillment
47%

49%

54%

89%

90%

88%

Buy in store,
ship from store to home

Buy online,
pick up in store

42%

Buy online,
ship to home

32%

27%

Buy in store, return by
mail with return label
from retailer’s website

Buy online, pick up at
third-party locationsuch as convenience
stores and lockers

77%

85%

Buy online,
return to store

2016

2021

75%

Figure 5.9: Omni-channel Conversion and Fulfilment 21

The Home Depot uses its store locations as mini-warehouses to fulfill approximately 35
percent of its online orders. 22 With online competitors like Amazon and Whole Foods,
Walmart plans to run pilots in the U.S. with ride-sharing services Lyft and Uber delivering
online grocery orders to customers' homes on the same day that they’re ordered. 23
In addition to their mobile pre-order and pay feature, Starbucks has partnered with
Postmates to deliver coffee. Using the Starbucks mobile app, consumers can pay
using a credit card, Apple Pay, or their Starbucks card and then request to have thecoffee delivered. 24
Manufacturers and retailers must satisfy customers who purchase from one channel
and receive fulfillment from another while supporting returns back into the supply
chain. On the back end, as discussed in Chapter 4, supply chains must be flexible, agile,and support digitized processes from end to end.
In the following feature, Argos is embracing different delivery models, including “Check& Reserve” to help attain their digital transformation goals.

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I N N O VAT O R S T O R Y

Argos“With Media Management,
we will see our digitaltransformation vision
become a reality.
Indications are that thesolution will provide afull return within two to
three years.”– ANDREA MILLERS, DIGITAL ASSETMANAGER, ARGOS LIMITED

Figure 5.10: Argos

Argos is the U.K.’s leading multi-channel retailer, selling a range of more than 53,000
products through 840 stores, by phone, and via its website and mobile apps, forcollection or delivery. The Argos website—argos.co.uk—is the U.K.’s second most visited
retail website, with more than 900 million visits last year. Customers can use the highly
successful “Check & Reserve” service to reserve products online and collect them thesame day from a store of their choice. Ninety percent of the U.K. population lives within
10 miles of an Argos store. Same-day delivery services are also available.
Since 1973, Argos has been well known for its printed catalog of products. However, in2012, Argos began a five-year business journey to reinvent itself as a digital retail leader,
the largest retail transformation in the U.K. The aim was to make its in-store, online, andmobile experiences work together, with digital at the heart of the business, to better
serve its customers’ needs with more choice and faster availability. Planned growth in thenumber of products, plus new requirements for channels such as kiosks, and the shortest
possible lead times for click-and-collect and same-day delivery services, meant a new
DAM solution was a must.

The new DAM solution integrates seamlessly with existing Product Information
Management (PIM) and dynamic imaging services to provide a single source of the truth
for digital assets—including the nearly 300,000 assets migrated from the old system. It
allows more than 1,000 suppliers to upload between 300 and 400 assets a day directly
into the system. Argos is looking to expand the solution’s capabilities to accommodatea growing number of products from 50,000 to more than 100,000, each with an averageof six or seven assets. By automating the process, DAM is helping Argos realize its digitaltransformation vision by ensuring that the right asset makes it to the customer’s chosen
channel and device in a consistent, convenient, and streamlined manner.
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Digitizing the Customer Journey

The customer journey describes the experience a customer has from initial desire
through to fulfillment. All of the touchpoints encountered constitute the brandexperience. Over the next five years, we will witness a “radical integration” of thecustomer journey across physical and digital environments. 25 It is already being
impacted by the IoT, web technologies, and analytics.

In the digital world, companies that succeed will implement digital end-to-end
strategies to create breakthrough customer experiences. The focus is on engaging
the customer with relevant information, served up on the right channel, at the right timeon their journey.

Customer journeys are based on data collected across various touchpoints—
transactions, interactions, social media sites, devices, sensors, videos, and more.
Analyzing this data leads to customer insights, and these can be tied back to actions
that drive automated, internal processes and the delivery of content and services.
This should all happen on the fly, in response to customer needs, to influence theirbuying decisions.
Every touchpoint provides the opportunity for an organization to engage. For ideal
customer experiences, organizations need to engage customers at every stage of
their purchasing journey because two-thirds of the decisions that customers make areformed based on their experiences. 26

The figure below illustrates possible touchpoints on a customer journey for thepurchase of a car. A prospect conducts research online before setting foot in the
dealership—potentially watching a commercial on the dealer’s site or reading car
reviews that link to the manufacturer’s website. This might be followed by a virtualroad-test and finally, a trip to the showroom as a GPS system on their mobile device
finds the closest location. Analytics along the journey help manufacturers and sellers
determine car buyer preference and habits. As part of a larger, digital ecosystem,banks and insurance companies can be incorporated to provide pre-approved loans or
insurance rates based on driving habits. Post-purchase, sensors might alert the driverwhen service is due. The entire journey should be orchestrated to capture preferences
and facilitate a seamless experience. The value of the information collected at eachtouchpoint can be used to deepen the experience and provide insight.

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83% Online Research

37% TrustAutomaker
Websites

Repurchase

57% Trust
Driverless Car

74% Share
Driving Habits

55% VirtualInteraction with
Dealer

64% Automated Dealer
for Service
Figure 5.11: Touchpoints in a Car Buyer’s Journey 27

Effectively managing customer data is critical to optimizing a customer journey. If amanufacturer or retailer can predict customer behavior, it has a better chance atdelivering what a customer expects. To deliver a contextual experience, organizations
rely on technologies that combine historical (buying behavior including barcodes orclick-throughs on a website), situational (geo-location), and demographic (profilebased) data. Content is targeted and personalized, anticipating the needs and buying
behavior of each consumer to offer location-based products or services at the mostopportune moments to buy. Sellers that digitize customer journeys can apply analytics
to gain a true, 360-degree view of the customer.

Analytics: A 360-degree View of the Customer

Consumers now control the shopping process. As more disruptive technologies push
the limits on current business models, organizations will turn to advanced analytics
to differentiate and deliver winning customer experiences. By applying analytics todata, manufacturers and retailers will gain better insights into their customers’ buying
behavior, sentiments, and needs. In a time of dwindling brand loyalty and heightenedcompetition, analytics will be a game changer in securing competitive advantage.

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While consumers may sit in the driver’s seat, organizations are looking to makeinvestments in technology to gain back some power in the purchasing process. The
figure below shows that retailers plan to invest heavily in IoT-related sensors by 2021.
IoT-related technologies will give organizations even greater volumes of customer
data, based on inventory tracking, customer footpaths, transactions, sentiments, andmore. When this data is added to demographics, transaction histories, social media
comments and likes, ratings and reviews—organizations will have access to richer
information to allow for deeper engagement and greater satisfaction.

Percentage of Retailers Planning to Invest in Analytics

79%

Camera and video
analytics for
operational purposes

75%

Predictive analytics

79%

78%

Loss prevention andinventory visibility

Software analytics
for loss prevention,
price optimization

75%

72%

Cameras and video
analytics for customer
experience

Visual analytics formaking sense out of
IoT data

77%

Big data solutions forstoring and analyzing
IoT-generated data

72%

Cognitive computing
to drive optimizations
and insights

Figure 5.12: Future Analy tics Investments 28

Having more granular information about how consumers behave will enable retailers toprovide more targeted communications and bespoke products and services. Locationbased marketing will satisfy customer desires in their moment of need. If a retailer’s
website knows the consumer has clicked on more information and reviews about adishwasher and detects that they are close to a store location, targeted promotions or
notifications can be sent out via an app, alerting the consumer that the same item is onsale in a nearby store.

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Advanced analytics can effectively comb through data using sophisticatedquantitative methods, such as statistics, descriptive and predictive data mining,
simulation, and optimization. The insights produced move beyond traditional BusinessIntelligence (BI) to analyze the data, glean insights, and recommend a course of action.
Analytics brings together interactive data visualization, pattern matching, and machinelearning. For example, a large U.S.-based retailer applied smart-pattern matching
and machine learning to an inventory program to quickly identify a performanceissue related to a new product. As a result, the company was able to avoid customer
dissatisfaction and reduce returns. Based on their findings, the retailer cited a quality
issue and returned the merchandise to the manufacturer.
The need to improve real-time business decision making will force retailers toacquire self-service and big data discovery capabilities. In fact, managing big data isrecognized as being business critical by 73 percent of global retailers. 29 When asked
where analytics would impact their strategic goals, they ranked market-based insights,
customer segmentation, and centralizing their customer information as top initiatives.

In the digital world, a deeper understanding of the customer has become a strategic
objective for organizations in the manufacturing, retail, and consumer packaged
goods industries. Sophisticated analytics platforms can transform volumes ofdata into advanced intelligence that forms the basis of marketing strategies, newbusiness models and revenue streams, and new product and service development. As
consumers depend increasingly on technology to augment their shopping experience,
manufactures and retailers will integrate information management and advanced
analytics into their operations. Those that do will benefit from productivity and profit
gains that are five percent higher than competitors that do not. 30

In the retail sector, consumer buying patterns and supply chain operations are
intrinsically linked. The use of big data analytics in the retail sector will continue to growexponentially as retailers look for different ways to mine consumer information andalign with transaction-based shipping information from supply chain operations. From
analyzing consumer buying patterns based on loyalty cards to monitoring the endto-end performance of a “last mile” third-party logistics provider, having a complete
360-degree view of the customer can literally make or break a retail business.

Targeted Customer Communications

Streamlined communications give retail and consumer packaged goods companies
the opportunity to engage with their customers using the right channel at exactly theright moment in their buying journey. The most effective way to do this is to target
different audiences with different messages and focus on products and services withthe greatest appeal for each segment.

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Dynamically generated customer communications give marketers direct, handson capabilities for creating and launching marketing campaigns as well as ongoingpromotions. Information is consolidated from multiple back-end systems to createa single portfolio view of each customer. This information is then combined withthe context of the customer’s current situation to automatically produce targetedcommunications. When correspondence is part of a digitized process, manual
handling and human error are significantly reduced, increasing overall efficiency andcustomer satisfaction.
Every customer wants to be treated as a known individual. This is dependent on making
sure that recommendations are relevant to a person’s profile and history—their data,
preferences, and past shopping behavior. Streamlined communications based on
accurate data helps organizations produce more timely exposure to offers.

Seamless Information FlowsAs digital engagement progresses beyond point and click, organizations can streamline
communications based on integrated information flows across the business. In orderto deliver a consistent end-to-end experience across many touchpoints, they needto integrate front- and back-office technologies and processes with a complete
information strategy that delivers individualized customer experiences at each pointof engagement.
Within many manufacturers and retailers, the current technology layers that support
customer engagement are numerous and disjointed, often consisting of different
applications from a variety of vendors. At the customer interface, rich digital solutions
are required to support the evolution of a brand’s publishing points—from tablets
to displays to mobile devices. Behind the customer-facing applications are thesystems ranging from Web Content Management (WCM) to Customer RelationshipManagement (CRM) and various BI and analytics tools. Ideally, each technology should
work to optimize digital engagement and extend to the virtual business network. The
connections between these systems should be relatively easy to track, but how does
the digital enterprise bring this all together for accuracy and consistency?

A Customer Experience Management (CEM) platform combines software applications
that help organizations create richer, more interactive digital engagement acrossdevices and channels without sacrificing information governance and compliance. CEM
empowers the digital enterprise to capture audience expectations, process requests,
search for relevant content, curate user-generated content, assess consumer data
for analysis, and present actionable data to create exceptional digital experiences.
Video, rich media, and personalized content can be created collaboratively, publishedseamlessly, and shared ubiquitously to surprise and delight customers at every turn.

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r

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Dig
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An

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peri
ag
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MarketingAutomation &l Marketing
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Figure 5.13: Disjointed Digital Engagement

EIM Drives Engagement

Exceptional customer experience is the key differentiator that delivers competitive
advantage. Manufacturers and retailers must engage in transformation that is built on
a foundation of customer insight to create experiences that are relevant, personalized,
consistent, and exceed expectation. Customers who are fully engaged bring additional
revenue, greater market share, and the potential to deliver a lifetime of value.

Improved customer experience relies on an effective CEM solution and an underlying
EIM strategy. Armed with these solutions, an organization can transform unstructured
data sources into levers of competitive advantage and profitability. When CEM
solutions are consolidated on a single engagement platform, manufacturers are
empowered to maximize the potential of their information to reach new markets. By
taking this approach, organizations can effectively manage the customer experience,
whether it involves human interaction or relies solely on automation or AI. Ultimately, it
results in more fulfilling customer experiences and a business that is ready to embracetrue digital transformation.

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Brand
Experience

Community
Experience

MarketingExperience

Information
Exchange

Service
Experience

BuyingExperience

Figure 5.14: CEM Creates Value across the Customer Lifecycle

In the digital world, manufacturers and retailers have to work harder to engage andsatisfy their distributors and consumers with an end-to-end digital strategy. They need
to be able to extract value from their information, optimize and personalize the deliveryof this information, and manage it securely. To transform and drive growth, organizationsin the manufacturing and retail industries must deliver compelling experiences while
adhering to established information governance policies and standards to guarantee
security and privacy. The following chapter on Digital Governance, Risk, Compliance,
and Certification describes how to achieve this in greater detail.

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6

DIGITAL GOVERNANCE, RISK, COMPLIANCE
AND CERTIFICATION

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

Manufacturers in every sector need to carefully manage and protect their information, at
every stage of the product lifecycle. This chapter examines how Enterprise Information
Management (EIM) enables a unified approach to Governance, Risk, Compliance andCertification, helping digital manufacturers operate more efficiently, safely, and costeffectively for competitive advantage.

CHAPTER 6

Digital Governance, Risk,
Compliance and Certification“Every company is just one bad decision or one ‘bad employee’ away from scandal,
one scandal away from a salacious headline, and one headline away from a flood of
lawsuits.”1 – William Lytton, former EVP and General Counsel of Tyco International
Manufacturing organizations are operating in a new environment—one in which oldworld challenges like systems integration and consolidation are colliding with the
new-world challenges of globalization, digital disruption, and constantly evolving
regulatory compliance requirements. In short, today’s manufacturers must function in
an environment that is inherently complex.

Globalization, for example, has exposed the growing intricacies of the extended
enterprise ecosystem to an ever-more sophisticated set of security risks. Digitalassets and resources once secure behind firewalls now need to be made accessible toemployees in globally distributed facilities, as well as to a changing group of suppliers,
partners, distributors, logistics providers, and other ecosystem partners.

Web
Apps

Supplier

Users need accessto collaborate with
OEMS to resolve
parts quality issues

Distributor

Allow distributors toaccess applications
such as inventory,
marketing,procurement, etc.

SaaS
Full suite ofengineeringand businesssystems

Parts warranty
tracking andcollaboration

MobilePortalInventoryordering andmarketingcampaign

Your Company

Product
inventory,
smart auctions

DealerAllow authorizedusers at dealership
access to buy/sell
products, goods

Joint VentureManage and allow
contractor-based
workforce access

RemoteWorkerPolicies,
procedures,
recordkeeping, etc.

Collaboration
servers andcustomer or
supplier portals

BYOD
Cloud
Storage

Mashup
App

Franchise/
Agent

IoT
Devices

Run the business incompliance withcorporate

Contractor

Third-party partners
and contractors
collaborate on field
operations

Figure 6.1: Access to Information in the Extended Enterprise is Highly Distributed130

D I G I TA L G OV E R N A N C E , R I S K , C O M P L I A N C E , A N D C E R T I F I C AT I O NAlong with globalization and other factors, manufacturers are undertaking significant
digital transformation initiatives to automate processes in a bid to increase bothproductivity and the pace of innovation. These involve the integration of Information
Technology (IT) with Operational Technology (OT) to facilitate the seamless exchangeof business information, which can bridge security domains through direct connections
with value chain partners, as illustrated above. While digital transformation initiatives
deliver significant value, more enterprise information is generated by IoT-connected
devices or global supply chain partner data, for example, which increases anorganization’s security threat surface.

In an industry where non-compliance can have devastating consequences—ranging
from the erosion of brand equity, crippling fines, unsafe products, recalls, lawsuits, andeven loss of life—digital manufacturers cannot afford to overlook the integral role thata Governance, Risk, and Compliance (GRC) program plays in shaping the enterprise.
For this reason, analysts predict that the GRC market will more than double in the next
few years, with the majority of spending occurring in the Americas.1

Americas50%Europe, Middle
East & Africa

31%

Asia-Pacific19%

Figure 6.2: GRC Spending by Region 2

As a sustainable platform for GRC, EIM empowers the digital enterprise to put policies
and controls in place that address compliance issues, while making critical information
available to improve performance and deliver competitive advantage.

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A Complex and Evolving LandscapeThe nature of business has evolved dramatically in the past few years. Disruptive
technologies have introduced systems integration, information management, andsecurity concerns to the enterprise. At the same time, new business models (including
PaaS, a subscription economy, and data monetization) are forcing manufacturers to
adopt new practices and leverage digital technologies to connect with partners andcustomers in new ways.
As business evolves, so must the internal policies and external regulations that govern
how an organization operates. In the digital world, manufacturing enterprises are underincreasing pressure to control the acquisition, management, retention and disposalof all enterprise information, both structured and unstructured, to mitigate risk andhelp to ensure compliance. The expectation is that manufacturers follow GRC bestpractices, while enhancing performance, keeping pace with competitors, and meeting
growing expectations from a variety of sources, including consumers, partners, andbusiness stakeholders.
As the following figure illustrates, compliance is a multi-faceted concept thatencompasses a number of broader areas, including product safety, health,environmental safety, data protection, employment law, export controls, faircompetition, IT security, and anti-corruption. Together, compliance activities acrossthese areas help to guarantee the quality of an organization’s products and services,
the safety of its employees and consumers, and the security of its data.
Product
SafetyHealth, Safety,
and Environment

Data Protection

Anti-corruption

IT Safety andSecurityCompliance
Employee Law

Fair Competition

Export Controls

Figure 6.3: Compliance is Multi-faceted132

D I G I TA L G OV E R N A N C E , R I S K , C O M P L I A N C E , A N D C E R T I F I C AT I O N

To further complicate matters, compliance requirements in any of these key areas
can change at any time. As such, manufacturing organizations must build agility andflexibility into their enterprise systems and processes to be able to quickly respondto sweeping changes. For example, the 2014 introduction of the Dodd-Frank Conflict
Minerals Law impacted export controls requirements, making end-to-end supply chaintransparency a necessity. In 2017, Sapin II (the French anti-corruption law addressing
transparency, anti-corruption, and economic modernization), mandated companies toestablish an anti-corruption program to identify and mitigate the risk of corruption.
Manufacturers must be resolute in their GRC practices. Once they have addressed the
intricacies of Conflict Minerals reporting and Sapin II, new regulations like the General
Data Protection Regulation (GDPR), and geo-political influences, such as Brexit pose awhole new set of business challenges.

The General Data Protection Regulation“52.8 percent of companies consider data security and breach notification standards tobe the most important component of GDPR.”3
In 2016, the European Union (EU) introduced the General Data Protection Regulation(GDPR) to bring personal data protection into the digital age. While this new legislation
imposes stringent requirements for how companies store and handle the personal
data of European citizens, its legal reach isn’t defined by geography, but by the useof the personal data of European residents—which means that the GDPR applies toany organization anywhere in the world. Compliance mandates will be far reaching andimpact everything from how organizations obtain consent to how they use cookies on
their website to the “right to be forgotten.” The GDPR will essentially affect every partof an organization.

The ability to locate personal information is the first piece of the GDPR puzzle.
Sophisticated file management solutions can help organizations find the proverbial
needle in the haystack by searching, identifying, and reporting on personal informationthat is dispersed among many sources. This allows manufacturers to manage enterprise
information based on value and risk, and apply retention and disposition policies as
mandated by the GDPR and other compliance regulations.

Data minimization, or collecting the smallest amount of personal data for the shortest
period of time and deleting it quickly after it has been used, is the second piece ofthe puzzle. The less data that manufacturers hold on to, the less data they have toprotect and govern. As a facet of EIM, Enterprise Content Management (ECM) provides
the digital platform required to manage and govern personal information securely
in a central, repository. Records Management (RM) capabilities further support data
minimization by identifying and eliminating unnecessary information, even if it isgenerated and stored in a separate ERP system or application.

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Compliant preservation and access is the final piece of the GDPR puzzle. Consolidating
static information that contains personal data into a single repository for a “single
source of the truth” delivers tighter security and control and easier access andretrieval, which enables organizations to fulfill “privacy by design” requirements andreduce the risk of GDPR violations.

BrexitWhile updating policies and practices to comply with the GDPR will be an elaborate
undertaking, it helps that the rules and requirements are clearly outlined. For many
global manufacturers, the U.K. vote to leave the European Union—referred to as“Brexit”—will pose an even bigger challenge.
At this point, Brexit raises more questions than answers and, for many manufacturers,
represents the unknown. What is certain is that this geopolitical event will usher insignificant legal and regulatory change across all industries, including manufacturing.
While, at first blush, Brexit might not appear to have much to do with information
governance, it is, in fact, an area that stands to be significantly affected. Brexit
promises to impact records retention, data protection and privacy (with laws, like theGDPR), contract governance, HR process, and customer communications. Fortunately,
these are all areas that organizations can proactively tackle in preparation for theuncertain future.

Take records management, for example. The majority of U.K. recordkeeping
requirements are mandated or heavily influenced by EU directives, including those in
the manufacturing industry. However, after Brexit, the U.K. will have the potential tocreate different rules. Affected organizations will need to diligently follow any changes
in laws to assess and update their records retention schedules accordingly to ensurecompliance with new laws.

With regards to contracts, specific country requirements for business and revised U.K.
laws based on trade relations may have a massive impact on how manufacturers relatewith suppliers, third parties, and partners—both in and outside the U.K. Organizations
will need to negotiate and update contracts and the processes that govern them. A
centralized contract management system that stores, manages, tracks, shares,
and reports on contracts will give organizations the power to make decisions aschanges happen.
Brexit may impact HR processes such as hiring and recruiting. For instance,
manufacturers that employ EU citizens to work in the U.K. will, in effect, be employing
foreign citizens. Global manufacturers will need to ensure that their HR policies,
processes, and documentation comply with the reporting requirements that are
introduced by regulatory changes.

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Customer communications—such as bills and statements—may need to be modified toreflect any potential regulatory changes. This can mean creating an additional versionof communication, further increasing the complexity of generating and maintaining
documents, introducing excessive labor, cost, and risk. Smart organizations willleverage automation to help streamline the production of critical customer documents.
Manufacturers that employ agile and adaptable business processes, such as countrycompliant invoicing documents, will have the upper hand—smoothing the transition
with Brexit while continuing to foster positive customer relationships.
These are just two recent examples of how regulatory reform and geopolitical events
can disrupt global manufacturing operations. As a platform for GRC, EIM delivers theflexibility that organizations need to manage occurrences like these. In the followinginterview, a world leader in titanium technologies, fluoroproducts, and chemicalsolutions discusses how process automation, consolidation, and records management
deliver the agility required to balance regulatory compliance with continuous innovation
in a highly regulated industry.

Drivers for GRC“The average cost of non-compliance runs organizations around $9 million a year.”4
There are many reasons for manufacturing organizations to adopt a GRC program.
Regulatory compliance is the top-cited business driver for obvious reasons.
Non-compliance can lead to poor performance, financial penalties, and evencriminal charges.
Compliance with legal, audit andregulators’ rules
Preventing data losses, privacy
breaches and confidentiality issues
Creating searchable knowledge for
future reference
Reducing storage space /defensible deletion
Securing intellectual proprietary,competitive or sensitive information
Supporting or defending litigation
or disputes
Ability to respond to requests, e.g.
FoIA, personal data, etc.
Defining staff responsibilities fordesk, home and mobile security

0%

10%

20%

30%

40%

50%

60%

70%

Figure 6.4: Top Drivers to Create and Enforce GRC Policies 5

While compliance is arguably the biggest driver for GRC, it isn’t the only one. As thefigure above shows, preventing data loss, knowledge sharing, managing storage
through defensible deletion, process efficiency, and productivity are also drivers.
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The Chemours Company

The Chemours Company is a world leader in titanium technologies,
fluoroproducts, and chemical solutions. The company is focused on
its differentiated portfolio of premium products positioned to help
its customers respond to developed and developing market needs.
Chemours is a new company with over 200 years of history, created from
DuPont’s performance chemicals businesses.

Figure 6.5: The Chemours Company

What follows are excerpts from an interview with Robert Siegel, Solution Portfolio Manager
at The Chemours Company.
“Chemours has a rich history that goes backover 200 years in an industry that is almost
300 years old. As a portfolio manager at
Chemours, I have strategic oversight for
all of the systems and applications we use
to manage information—anything fromengineering information to SharePoint torecords management and retention. We
also have legacy systems, architecture,and information from the Dupont days
(Chemours was a spin-off from Dupont).
A portion of this involves how to integrate
processes into our ERP systems,
for example.

Our industry is very highly regulated. Not
only do we have to comply with regulations,
we have to make sure all related informationis accessible to regulatory agencies
upon request. We follow processes toprotect our information, such as records
control schedules based on data types,
like invoices, customer correspondence,research, or plant maintenance. For
example, any information that is related
to a manufacturing location or piece ofequipment has to be managed for the life of
the facility, so this might be anywhere from50 to even 100 years. There is a regulation

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TRANSFORMATION IN ACTION

in Europe, the Registration, Evaluation,
Authorization and Restriction of Chemicals(REACH), that requires companies to share
information about a regulated chemical
throughout the entire industrial supply
chain, and to keep any information related toa chemical a company manufactures for 10
years after its last manufacture, sale, or use.
Obviously, this too could be for many years.
Some countries like Germany have financial
audit requirements for immediate access todata by auditors, who will use our systems torecreate how we came up with specific data.
Technology helps us digitize and manage
these information-based processes.

Union but by region and individually
determined sectors as well. Before we shipor sell a product, it has to go through manydifferent kinds of regulatory reviews and thiscan be a lengthy process.

As a global leader in titanium technologies,
fluoroproducts and chemical solutions,when Chemours manufactures chemicalcomponents, our processes produce paper
trails that stem from scientific research.
We have to manage volumes of information
related to the lifecycle of a product, fromresearch and testing, and so on. To dothis, we use a separate data system thatrecords electronic laboratory notebooks. As
materials are tested, data is produced. Allof this information is extremely confidential,
and much of it is already in digital format.

We are bringing structured and unstructured
data together, and we are looking toanalytics to get more insights from thisinformation. As a first step, though, andthis is the tricky part, we have to decide
what data we want to mine. Dashboards
were popular a couple of years ago to show
data points, but not everyone understoodthem. The next challenge will be how to use
artificial intelligence to analyze volumes of
information to look for patterns, similarities,
or anomalies. Even to tell us what we shouldbe measuring. This will help us create andinnovate—to make new products thatmeet customer demands or markets. It’s achallenge because you need to be creative
to model what you can’t see. What we’d liketo do is run analytical reports directly fromour central ERP system. We’re exploring how
to open up our reporting right now, to movebeyond the limits of data extracted from one
system to analyzing data from the source
system for real-time insights.

Product data is a whole other set ofdata that is generated and needs to be
managed for compliance purposes. We
have to register the material(s) we’re going
to sell, and in Europe for example, what
product it’s going to be used in, how it’sgoing to be used, etc. We couldn’t sella product to another company that isgoing to manufacture or repurpose it asa cleaning product without that new use
being registered. The volume of a regulated
product sold in Europe under the REACH
regulations is also part of the registration,
so once a certain threshold is reached, theregistration needs to be updated to meetthe next tier of requirements. We have tohave the processes in place to monitor thevolumes of materials that are regulated in
not only every country in the European

I’m not convinced that consolidating
enterprise information into a single system
will ever happen. Different applications
have separate databases and regulations
dictate that we treat HR-based informationdifferently from financial data, for example.
As far as security goes, a centralized,
single database can be more vulnerable
to a catastrophic attack. There are many
information security threats today. Oneis from hackers accessing information,
another from people leaking confidential
data. Sometimes stolen information is used
to extort money from a corporation in orderto prevent its publication. Another threat,emerging quickly, is ransomware attacks,
which use malicious software to encrypta corporation’s data to block access to it.
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extortionist hackers who demand money
to decrypt the data. Employee educationis critical to effective security, as well as
securing and monitoring our systems to
make sure breaches aren’t happening.
We don’t store or manage our highly
sensitive information in the Cloud. We
have a hybrid solution—partly in the Cloudand partially on premises. We do put in a
number of access requirements if there
is confidential data in the Cloud—it’s alayered security approach. We can still use
our information to innovate and create new
products, but access is tightly controlled,
and we ensure that we protect our
information as it is generated.
True digital transformation is basedon addressing a business issue withkey business stakeholders, a desired
business outcome, and a vision of the
future state. IT can often operationalize
this vision and make it real, but the drivefor transformation needs to come frommanagement as strategic insight, with aneye towards its benefits. It’s most effective
when the originator of a digitization projectis a business leader. And in the end, they
represent the users as well, so if they’rebehind the project, adoption will be easier.”138

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Recent hacks, information leaks, and security breaches have raised the profile ofGRC. According to a recent survey, GRC ranks very high on the agenda of more than
one-quarter of senior managers, and more than half of organizations are undertaking
new initiatives to build out their programs. Despite the growing awareness aroundthe importance of governance programs, 57 percent of respondents say senior
management is only interested in GRC when things go wrong. 6

GRC is a means to manage risk, ensure compliance, and achieve operational excellence.
Taking a reactive approach, or waiting until “things go wrong” is ill advised. Governanceis about leveraging information to conduct business. As such, a critical part of GRC isensuring that the right information is presented to the right people at the right time.
It follows that governance starts with understanding the organization’s informationneeds, what structured and unstructured information an organization has, where it is,
and why it’s needed.

The relationship between compliance and governance is reciprocal. Complianceserves as a driver for information governance, and information governance, in turn,can simplify compliance. This is why more and more manufacturers are realizing thebenefits that a strategic GRC program can deliver and are starting to view it as a means
to boost operational effectiveness, rather than a burden.

Not Just a Necessary Evil

In a recent survey, 69 percent of organizations said that they expected an increase in
their total compliance budget over the next year.7 While many organizations bemoan theeffort and investment required to establish a solid information governance program,
research shows that it is well worth the effort. It is estimated that non-compliancecosts 2.65 times what compliance costs (or $3.5 million versus $9.4 million). 8 And intoday’s competitive and highly regulated business environment where just one noncompliance penalty or one breach made public can sink a business, manufacturers
cannot afford not to invest in a GRC program.

In the face of growing volumes of data, there is a strong need for programs to helptransform organizations to enable them to benefit from the better management of theirinformation. Manufacturers that have implemented GRC are realizing the opportunities
it gives them to drive business transformation efficiently and successfully.

In the following feature, leading global manufacturer MAN Diesel & Turbo is using
records management and ECM to apply governance and achieve compliance.

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MAN Diesel & Turbo
Digitized processes
provide legal security

Figure 6.6: MAN Diesel & TurboMAN Diesel & Turbo, headquartered in Augsburg, Germany, is the world’s leading
manufacturer of large-bore diesel engines and turbomachinery. The company employsaround 14,900 staff at more than 100 international sites, primarily in Germany, Denmark,France, Switzerland, the Czech Republic, India, and China.
Diesel engines in container freighters or luxury liners are some of the largest products inthe world and among those with the longest lifespan. They have to function for decades
and be regularly maintained. One of the world’s leading manufacturers in this field, MAN
Diesel & Turbo, needs to keep important technical documents for a minimum of 30 years
and sometimes indefinitely. The company was looking for an information management
solution to ensure high-quality maintenance and successfully refute any claims forliability arising from alleged construction faults.
To help achieve compliance, MAN Diesel & Turbo turned to records management
capabilities contained within an Extended ECM solution, along with Application
Governance & Archiving (AGA). The combined solutions bring together diverse
applications to preserve information in context. Approximately 1,000 service staff inGermany and Denmark use it to archive over 4,000 process-related transaction files
every day. In many service processes, paper-based transactions are now a thing of thepast as existing paper files are being digitized. MAN Diesel & Turbo is saving valuable
time spent on searches and maintaining paper archives along with the large number of
their digital archives. The integrated solution is also reducing maintenance requirements
through the replacement of legacy systems, enabling the company to modernize its
infrastructure, digitally transform key processes, and comply with regulations.

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Total Quality Management and Certification

To compete in a global economy, an organization’s products, systems, and services
must be of a higher quality than the competition’s. Total Quality Management (TQM) is
part of the GRC equation. As a complex, ongoing manufacturing imperative, there aremany degrees of quality which must be prioritized, from the implementation of bestpractices to adherence to regulatory policies and standards, such as the International
Standardization Organization (ISO), Federal Drug Approval (FDA), Standards Council
Canada (SCC), and the Institute of Electrical and Electronics Engineers (IEEE).
Laboratory
Test andInformation
Specification Management
Quality
Management System (LIMS) Instrument
Inspection
Management
Workflow

Audit
Management

g
rin t
n

Inspection
Management

Total Quality
Management

No

Non-Conformance
Tracking andTracingncerma
nfo ent
Co em
n- naga
M

Supplier
Selection

Supp
lie& Ma r Mo
nag niem toeSupplier
Rating

Non-Conformance
Advice andDecision

Corrective andPreventive
Actions

Figure 6.7: Total Qualit y Management

The success of a TQM strategy relies upon corporate consensus and tight control overthe implementation and management of a quality program. Processes need to be put
in place and procedural guidelines created, documented, approved, and disseminated.
Each time a procedural change occurs, all related documents must be modified, andthe changes distributed and communicated globally.
Leveraging existing IT infrastructures, a TQM system ensures that Quality Control
becomes fundamental to all business processes, resulting in reduced wastage andincreased profits. Furthermore, seamless and transparent visibility into critical Quality
Control and Quality Assurance processes allows organizations to proactively monitor
manufacturing variability, track product quality trends, and manage non-conformanceacross the supply chain to bring the enterprise one step closer to achieving
Predictable Output.

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New business models like PaaS and disruptive technologies that create a directconnection between manufacturers and consumers are causing the line between
products and services to blur. This presents manufacturing organizations with theopportunity to provide better aftermarket support for products and services. For
example, manufacturers can issue over-the-air updates to improve the quality andperformance of a product, such as a refrigerator. Similarly, service centers could be
informed of a problem with a vehicle before the driver becomes aware, which could
revolutionize the way in which car manufacturers conduct vehicle recalls.
A connected, cloud-based service environment allows manufacturers to use TQM as ameans to deliver improved product development and customer services. It also enables
them to reduce defects, avoid non-compliance, and even prevent product recalls.

Product Recalls

The direct costs of non-compliance are steep. But they pale in comparison to the costof product recalls. Research shows that, in the food industry, 52 percent of recalls
average more than $10 million in direct costs and are one of the biggest threats toprofitability. 9 While the direct costs can be staggering, the indirect costs—such as
litigation fees, government fines, lost sales, and damage to brand or reputation—areoften far more detrimental.
Recalls can range from bio-contamination of food to accidental toxic contaminationof pills to flaws in engineering designs, such as wiring problems that cause airbags to
deploy or faulty cellphone batteries that spontaneously combust. Regardless of theissue, the ability to trace, audit, and alert is paramount. In the event of recalls, a highly
trusted single source of the truth enables manufacturers to isolate the origin of theissue. In some cases, it may be a particular facility or a single supplier, as was the casewith a recent pet food recall where the presence of a drug used to euthanize animals
was discovered in canned dog food. Fortunately, the pet food manufacturer was able totrace the introduction of the drug into its food back to one manufacturing facility and asingle supplier in its supply chain.

A GRC program helps keep employees up-to-date regarding safety and quality
standards and the enterprise compliant with regulations to minimize recalls and mitigate
risks. Given the penalties and perils associated with recalls and non-compliance, GRC
programs are increasing in importance, as is the role of the Compliance Officer (CO).
Compliance Officers have never had a higher profile than they do now. Pressure on thecompliance function has been steadily increasing. For example, in a recent survey, 60
percent of organizations say they expect the personal liability of compliance officers
to increase in the next year.10

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Compliance Officers don’t need to be technology experts but they do need to know how
to leverage GRC solutions to streamline associated processes. Critical steps include
ensuring enterprise policy frameworks are up-to-date and that employees and partners
understand and are trained on their compliance responsibilities. The CO strives to put
airtight policies and controls in place to ensure that compliance, centralized policy
management, discovery and holds, early case assessment, and defensible dispositionof content are all working in harmony to reduce and prevent risk.

Information Security in Manufacturing“The cost of a data breach is $3.62 million—money you could invest back in yourbusiness. So why take the risk?”11
There is a systematic correlation between investing in compliance and enforcing
information security. In many sectors, the ever-present threat of security breaches isdriving investments in information governance. Digital technologies are introducing
concerns about fraud, ethical behavior, and data security. As mobile technologies andIoT-connected devices become ubiquitous, many manufacturing organizations have
lagged in implementing security safeguards to counter mobile threats.
BYOD and IoT

90%Percentage oforganizations not“fully aware” of all
network devices, IoT
creates significantly
more identities to be
trackedInsider Threat

34%

Percentage ofcybercrimes
committed by aninsider, compared to
31% by people withno valid relationship—
exacerbated by
growth of third parties
and contract labor

Cloud

5-10X

Number of times
more cloud services
are being used than
known by IT,
exponential growth ofaccounts to be
managedPasswords

61%

Percentage of users
who report using thesame password on
multiple sites,
corporatecredentials are likely
being used on
external, online email
systemData Breach

1 in 4

Number ofcompanies that will
have a major data
breach within the next
two years

Figure 6.8: The Securit y Threat Landscape12

With the evolution of digital technologies comes evolving information security
threats. Attacks today are multi-stage, hard to discover, and highly targeted. Somesecurity threats can be accidental, stemming from unauthorized employee access,for example. Others can be malicious and sophisticated, like “Operation Ghoul”—acybercrime operation that targeted manufacturing and pharmaceutical companies inover 30 countries using email phishing tactics.13 Vulnerabilities permeate all levels ofenterprise IT systems, and manufacturers must be prepared to deal with both internaland external security threats.
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The extended manufacturing ecosystem continues to grow, adding suppliers, partners,
customers, and connected equipment and products. This means more endpoints,
identities, and data that must be handled in a compliant manner. Manufacturing is
now one of the most frequently hacked industries.14 Cyberespionage is by far themost common type of breach in manufacturing, with attacks typically originatingfrom competitors or nation-states trying to steal business plans, trade secrets, andIntellectual Property (IP).
Each year, the number of data breaches increases. But not all breaches are a result ofcyberespionage and hacking. Many are inadvertent and the result of insider privilege
and misuse. As discussed later in this chapter, Identity and Access Management (IAM)
and Identity and Access Management as a Service (IDaaS) will play an important role inenabling organizations to securely manage the growing number of digital identities anddata associated with connected technologies.

AI, quantum computing, and quantum cryptography are particularly promisingcountermeasures against cyberattacks and breaches. AI (in the form of machinelearning) is being used to monitor networks and associated devices for anomalies,
and report deviations in real time. Quantum computing can sift through the more than
150,000 daily threats an organization’s network generates to identify which events are
the riskiest.15 And quantum cryptography can ensure secure communication. Theseemerging technologies are redefining cybersecurity and, moving forward, will be thebest line of defense against sophisticated cyberattacks.

Network Defense Centric (Firewall)

Security Paradigm

Identity & Data Centric

IDaaS, advanced EDR,
Data Centric Security(Fraud, Message,
Transaction, etc.)
Web SSO, EDR,
Encryption, DLP
Remote Access:Firewall, IDS, Provisioning,
Authentication, Computer Forensics

Data/Apps/People Inside and Outside“Perimeter Disappearing”

Internal MF and C/S:
MF AC (RACF, ACF2, TS)

Data/Apps/People Inside“No Holes in Perimeter”

InsideData/Apps/People/Things Everywhere“No Perimeter”

Data/Apps Inside andPeople Inside and Outside“Perimeter Remote Access”

Data/Applications/People

Security Holy Grail

Who has access to what?
What is happening in the environment?
What to do about it?
OutsideFigure 6.9: The Securit y Paradigm Shif t– From Net work Centric to Identit y and Data Centric

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In addition to redefining cybersecurity, emerging technologies coupled with new
business models are causing the network perimeter to vanish. As illustrated in the
figure above, the result is a paradigm shift where the focus is moving from a networkcentric defense strategy (that protects data, apps, and users behind the firewall) to an
identity and data-centric strategy (that protects data, apps, people, and connectedthings everywhere). As the number of endpoints in the extended enterprise ecosystem
grow, and data moves outside the firewall to the Cloud, the more vital next-generation
technologies like AI-driven automation, quantum computing, IAM, and cloud security
will become.

Information security challenges vary from company to company and region to region.
In the following interview, Africa’s biggest sugar producer highlights the uniqueinformation security challenges it faces operating in sub-Saharan terrain.

Identity and Access Management“Effective IAM can save organizations up to $1 billion in compliance penalties andreduce excessive privileges by up to 60 percent.”16Over the past decade, manufacturers have become more global and have decentralized
non-core business functions, transitioning them to an ecosystem of suppliers,
factories, warehouses, and other stakeholders. As a result, the value chain has become
more complex and vulnerable.

Digital manufacturing companies are pursuing multiple strategies to maximize thevalue of the distributed functions across multiple external businesses. Most frequently,
value is maximized by increasing supply chain efficiency through digital transformation
projects, such as application integration between the OEM and suppliers, as well
as direct access by external users to OEM applications. Regardless of whether theapplications are Product Lifecycle Management (PLM), engineering, ERP or any otherfunction, each integration or access grant bridges multiple security domains. Thesecan present potential points of access for unauthorized users looking to exploit
security flaws with malicious intent—or simply accidental information access by
unknowing users.
The number of endpoints and digital identities is only going to increase, especially withthe explosion of connected devices from the IoT. Manufacturers must figure out how tomanage all the identities that access information across the extended enterprise, how
to give users access to the information they need for only as long as they need it, andhow to keep all interactions compliant and secure, regardless of access channel. For
most organizations, this is much easier said than done.

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Illovo Sugar Group

Illovo Sugar Group is Africa’s biggest sugar producer and has extensive
agricultural and manufacturing operations in six African countries.
The group produces raw and refined sugar for local, regional African,
European Union (EU), United States of America (USA) and world markets
from sugarcane supplied by its own agricultural operations andindependent outgrowers who supply cane to Illovo’s factories. Highvalue products manufactured downstream of the sugar production
process are sold internationally into niche markets. The group is awholly-owned subsidiary of Associated British Foods plc (ABF), adiversified international food, ingredients, and retail group operating in
48 countries.

Figure 6.10: Illovo Sugar Group

What follows are excerpts from an interview with David Schaller, Group CIO, Illovo
Sugar Group.
“Illovo Sugar Group is the largest sugarfrom-cane manufacturing company inAfrica, producing close to two million tons ofsugar per year. We operate in six countries
in Africa, including South Africa, Swaziland,
Mozambique, Malawi, Zambia and Tanzania
and, in five of the countries, we are theplanter and the miller. We’ve got quite a lotof vertical integration from land preparation
through the entire agricultural cycle fromharvesting and milling, packaging, sales anddistribution, and marketing. At our peak, we
employ about 35,000 people.

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As Group CIO, I look after IT for all of theoperations in all countries. We support over
3,000 users of IT in the Group, including
the languages specific to all six countries
that we operate in. The company is actually
made up of 17 small-to-medium enterprises(SMEs) with between 100 and 300 users.
So, I essentially manage 17 decentralized
computer rooms. When these numbers areaggregated, the volumes of informationfrom our systems (ERP, mail, documents,etc.) are equal to enterprise-scale.

sub-Saharan terrain in Africa, they can be
unreliable. A lot of our factories don’t evenhave an Internet broker, so they connect
to our WAN. We’ve got layers and layersof security starting at the very bottom.
We have a separate service monitoringfor intrusion-type activity and external
agencies like Deloitte come and performsecurity audits. As a result, we’ve never hada real incident of any consequence. And
none of these outbreaks that hit the firewall
have ever affected us. The only real issue wemight have would be user-dependent, so abreach from the inside out.

We’ve realized huge gains in efficiencies
in not sending paper manually around ourorganization. It’s now digitized and mapped
to a workflow, where we can measure it,
track it, ensure it’s consistent, high quality,
and complies with regulations. And weinterface this result straight into our ERP
system, bypassing the need to capture—so
it is completely digitized.
We’re also planning to automate thelifecycle of our medical records. Our sugar
mills operate in villages and we build thehouses, supply the electricity, and provide
primary healthcare. We own approximately
four hospitals and 15 clinics and employ
roughly 30 doctors and 150 nurses. So, we
end up as the primary healthcare provider ofchoice for the entire population within about
a 100-mile radius of our business. We see
a lot of cases of malaria and HIV/AIDS, dolung function tests and audio tests etc., andthen, treat everything. We need to be able
to manage these medical records in a waythat allows us to access them, protect them,and then keep them for the allotted amountof time to comply with regulations. So, if
someone leaves the company, for example,
we have to keep these records for ten years.
We’ve been on an information security
journey for some time now. All of the sites(even the remote sites) are connected by aWide Area Network (WAN) but the lines arevery thin and expensive. Taking geography
into account, they are spanning

We’re looking to get insights from ouragricultural database on how the agriculturaloperations are performing. We have aproject called a “Group Reporting Layer,”which is essentially a light version of a data
warehouse. We put data into an application
layer, we then aggregate data at the milllevel into what we call a mill layer, and these
are then aggregated into a reporting layer.
We can access a single view across thesegroups using analytics tools. When we
have a more mature view of this reporting
layer, we’ll use data scientists to analyze
it. At the moment, we’re harvesting a lot ofdata based on our factories and their digital
control systems.
We’ve identified dozens or hundreds ofpotential applications for the Internet ofThings (IoT). The IoT would give us the ability
to expand vertically. In other words, we can’t
expand horizontally or laterally because
we’re confined to farm the land we own.
But we could increase our yield of cane
per hectare. If we’re currently getting 100
tons of cane per hectare per annum and weincrease this to 125, we can add 25 percent
to our revenue line without expanding
the area of the cane or increasing our
fixed costs, and multiply this by all of ouroperations. Increasing the yields is asustainability and survival imperative andleveraging the IoT and information can help
us achieve this.

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My advice to any executive who isembarking on this journey of digitization
would be twofold. First of all, if it’s not abusiness project, don’t bother doing it.
There really is no such thing as just an IT
project. As soon as something becomes an
IT project, the business disowns it or fails
to engage. If you can’t find an enthusiastic
and committed business champion who isgoing to own the project and its outcomes,
then move on until you find one. And thesecond piece of advice I would give is tounderstand where the value is in your value
chain. Start with your high-priority projects
and demonstrate the value to the business.
Once you get traction, then you gain
momentum. Then, more and more businesspeople will climb on board. It’s not reallyabout the technology, it’s about solving abusiness problem.”148

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Tier 2Tier 1OEM

Figure 6.11: The Digital Manufacturing Enterprise is Highly Complex, with Multi-tiered Par tners andUser Relationships

Identity and Access Management (IAM) is a technology framework consisting of a setof policies and processes. Manufacturers can implement the framework to help ensurethat the right people in an enterprise have the appropriate level of access to resourcesat the right time for improved security, efficiency, and visibility. As companies move
more of their workloads and data storage to the Cloud, Identity and Access Management
as a Service (IDaaS) will allow organizations to simply and securely manage digital
identities across virtually any combination of internal or external systems and end usergroups, regardless of where they are within the enterprise value chain.

Cloud Security and Information Privacy“By 2020, 75 percent of all manufacturers will participate in industry clouds.”17
The Cloud in its varied forms, be it private, public, virtual, or hybrid, is quickly becoming abusiness imperative. It can help manufacturers more efficiently pursue strategic goals,
such as addressing key areas of the user experience, M2M integration, automation andother aspects of a productive work cycle. Cloud computing helps manufacturers reachnew markets faster. As manufacturing organizations continue to migrate infrastructure,applications, and information to the Cloud, they will need a sound strategy for privacy
and data security.

Securing data is critical, and cloud computing itself can be an efficient way to protect
digital data. Cloud computing programs that include provisions for data-breachprotection and data location help to ensure that enterprise data is secure, its location
is known, and it is easily accessed when needed. Whether data is stored in an offshore
or onshore cloud repository, in a known but outsourced data center, or on premises,
defensible standards of security protection need to be applied to ensure private data
is protected as per legislation and regulations.
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For example, data sovereignty laws, such as those in Germany, France, and Russia,
mandate that citizen data be stored within the country’s physical borders andon physical servers. Growing regulatory and competitive pressures will require
manufacturers to rethink and reprioritize security and governance strategies forenterprise information. These requirements will be driven by emerging global
regulations (such as the GDPR), increasing amounts of Internet users and privacyrelated issues, big data, and the IoT.

Traditional Security

Cloud-ready
Security

Designed for static
devices behindtraditional network
protection

Designed forelastic cloudenvironments

Figure 6.12: Is Your Enterprise Securit y Cloud Ready?

The IoT has the potential to increase the number of devices on an enterprise’s networkby an order of magnitude. In many cases, information is currently exchanged over a
network without requiring human-to-human or human-to-computer interaction, basedon M2M communications. With almost half of manufacturers using mobile apps fortheir connected products, and three-quarters using Wi-Fi networks to transmit data
to and from those connected products, digital manufacturers have a considerably
vulnerable—and sizable—threat surface to monitor.18 Many of these devices will be
used in manufacturing facilities, on factory floors and productions lines, while others
will find their way into the consumer marketplace in the form of connected products.

In the coming years, manufacturers will increasingly rely on the Cloud. Experts predictthat by 2019, 50 percent of manufacturers will be collaborating directly with consumers
regarding new and improved product designs through cloud-based crowdsourcing,virtual reality, and product virtualization. And, by 2020, 80 percent of supply chaininteractions will happen across cloud-based commerce networks.19

The retail industry is expected to experience the highest growth rate in the cloudsecurity market over the next five years due to the need to protect customer-sensitive
data and the digital identities associated with each customer record stored in the
Cloud. 20 With more partner and consumer engagement taking place in the Cloud,
manufacturers will need to store and analyze valuable information flowing in throughvarious sources.
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The Cloud can be very secure and very compliant if it is well managed. Developing acloud strategy is an exercise in understanding an organization’s business processes,
workloads, security rules, compliance requirements, and user adoption. A cloudbased EIM platform empowers enterprises to maximize the value of their data, provide
cloud security, and automate business processes—from customer engagement tobusiness insight.

Top manufacturers are already formalizing their cloud strategies and leveraging cloudinfrastructure to manage critical business processes, increase efficiencies, achievecompliance, mitigate risk, and improve their bottom line. In the following feature,a leading French food distributor uses a secure, cloud-based e-billing solution to
overcome international compliance challenges and better serve its customers.

Removing Risk via Information Management
and Analytics

The volume of digital data will surge to a trillion gigabytes by 2025. That’s 10 times the16.1 zettabytes of data generated in 2016. 21 While keeping everything may seem like aprudent approach, this “hoard-everything” mentality can lead to over retention, which
can increase storage, infrastructure, and eDiscovery costs.
As part of a GRC program, manufacturers should instead create or redefine clear
policies on defensible deletion, which defines when content is governed, understood,classified, and managed consistently, as well as policies around retention and privacy.
An added benefit of a defensible deletion program is that it makes organizations
more efficient by reducing the amount of irrelevant information that users have to siftthrough to get work done.
An effective strategy for digital manufacturers is to apply analytics to data from theirrisk management systems to get a “big picture” view of the state of their operations. Thiscan help manufacturers identify where the biggest risks lie. In terms of impact on thebusiness, critical asset failure is a top operational risk for manufacturers. By applying
analytics to connected-asset data, a digital manufacturer can detect and remediate
vendor-related risks, like a materials shortage, to avoid supply chain disruptions.
While information presents great opportunity, it can also bring risk. Data breaches,
privacy concerns, and growing eDiscovery costs continue to force organizations
to rethink their approach to controlling their business data while balancing worker
productivity. Deploying a risk management solution allows manufacturers to implement
data-driven information governance to improve business intelligence and manage risk
and compliance.

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DavigelDavigel automates
secure and regionallycompliant e-invoicing
for more than 65,000
global customers
Figure 6.13: Davigel

Davigel SAS, owned by SYSCO, is a leading producer, importer, and distributor of brandedfrozen and chilled food products across the commercial, social, and airline catering
sectors. The company provides an innovative range of products and solutions for morethan 65,000 customers around the world.
Shortly after being acquired, Davigel partnered with a Managed Services provider tomigrate its trading partner community of customers and logistics providers to its own
B2B trading platform. Building on the success of the B2B migration, Davigel expanded its
Managed Services relationship to include an integrated e-billing solution.

A key factor in electronic billing is ensuring that each invoice is compliant with local
regulations. Every country in the world has legislation to regulate electronic invoicing,
and while regulations are often similar in purpose, the specific requirements can varysignificantly by country. For example, data archiving requirements can vary from 6 to
11 years depending on which countries are involved. In addition, having to manage thecountry-specific value-added tax (VAT), security, and archiving requirements for every
customer significantly complicated the billing process.
To address this challenge, Davigel deployed a secure, cloud-based e-billing solution
with the capability to automate invoicing and compliance in more than 45 countries.
Compatibility with the company’s recently migrated B2B trading platform enabled
Davigel to establish an e-invoicing program that could support data validation, data
signatures, archiving, and delivery—all while providing employees and auditors withaccess to the archive via a simple, intuitive web portal. Thanks to the e-invoicing program,
Davigel can now confidently issue over 120,000 invoices to more than 65,000 global
customers securely and in accordance with regional regulations.
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D I G I TA L G OV E R N A N C E , R I S K , C O M P L I A N C E , A N D C E R T I F I C AT I O N

Effectively safeguarding enterprise data and mitigating risk requires a strategic
combination of technologies, processes, and people. The protection of enterprise
information should be unified, covering all bases to avoid risks that might violate
legislation, cause non-compliance, or adversely impact the organization's ability
to perform. Protecting sensitive data in an enterprise IT environment is a continual
challenge. EIM permits access to information on a “need to know” basis while preserving
an overall integrated archive of information.

EIM: A Unified Approach to GRC

As illustrated in the figure below, governance, risk, and compliance should be regarded
as three gears working in unison to power a machine—the intelligent and connected
enterprise. The best GRC programs work in the background, seamlessly integratingwith operational processes and enabling employees to work how and where they want
to without disruption while achieving compliance with internal organizational policies
and external regulations.

Content-enriched
Business
Processes

ERP Integration

B2B Integration

Information
Lifecycle
Management

Risk

Secure Information
Exchange

GovernanceAnalysis andassessment of risks

Corporate governanceand control

Compliance

Compliance withlegislations, regulations
and company policies

Figure 6.14: A Unified GRC Powers the Digital Enterprise
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Analytics & AI

Engagement

CHAPTER 6

EIM delivers a seamless GRC solution that connects procedural guidance with
documentation, process execution tools, reporting and audits, and integration with
ERP systems. It acts as a central nervous system to capture, track, and report on
regulatory requirements. EIM brings consistency and scale to the management andpreservation of information by incorporating records management with solutions forarchiving, email management, search, and eDiscovery.

Many GRC procedures are centered on documents and document processes. For
this reason, Records Management (RM) plays a strong role in addressing GRC issues.
Effective records management is not just about information preservation; it is also
about adding value to manufacturing activities throughout the entire product lifecycle.
Content such as emails, documents, and paper files can be classified as businessrecords and managed—from capture to archive—to comply with governance andregulatory requirements.

When corporate information sources are brought under central information
governance, there is a level of consistency that is not possible with disparate systems.
Structured data, unstructured content and emerging data types, such as social
media, can all be managed across multiple sources to establish a single source of thetruth. Policy can be consistently set and enforced across all the content sources. By
providing a structured and transparent way to maintain records from creation throughto eventual disposition, records management enhances corporate accountability,
ensures regulatory compliance, and minimizes the risks associated with audit
and litigation.
In the event of an audit, eDiscovery solutions can enhance an organization’s capacity
to both “find” and “remember.” eDiscovery incorporates information and records
management with solutions for archiving, email management, auto-classification,and search to help manufacturers reduce litigation, risk, and storage costs. By
linking enterprise information across multiple formats and sources—eDiscovery lays
the foundation for analyzing large volumes of information in real time with superior
accuracy. At the same time, organizations benefit from security, user productivity,
time-savings in addressing the need to classify huge volumes of legacy content, as
well as compliance—which is one of the most significant challenges for manufacturers.

As the volume and variety of enterprise information increases and regulations continue
to evolve, digital manufacturers will be required to ensure information systems, and therecords they store, are protected and individual rights are respected. Organizations
that can get this right will keep a step ahead of their competitors.

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D I G I TA L G OV E R N A N C E , R I S K , C O M P L I A N C E , A N D C E R T I F I C AT I O N

CaptureClassify

ManageDiscoverArchive

Figure 6.15: Complete Lifecycle Management of Records

Corporate Social Responsibility and Supply
Chain Sustainability

There is a growing emphasis among leading manufacturers to become more sociallyand environmentally responsible. In fact, approximately 95 percent of the world’s 250
largest corporations currently produce Corporate Social Responsibility (CSR) reports
and improving corporate environmental sustainability ranks as a high-to-criticalbusiness priority. 22

Digitizing paper-based supply chain processes and transactions, exchanging
information via integrated B2B networks, and conducting business in the Cloud are
all vital steps in developing greener, more sustainable supply chains. For example,
automating one million paper-based transactions can save up to 9 metric tons of paper(or 228 trees), save 186,117 gallons of water, and defer 22,215 pounds of solid waste.*
Automating and digitizing paper-based processes offer savings and efficiencies thatcan exceed sustainability investments. Plus, more efficient and digital operations drive
growth and reduce risk.
In addition to better positioning organizations to fulfill CSR initiatives, digital supply
chains can deliver increased resilience. Regardless of where the disaster may beoccurring, having a single global B2B network that connects all trading partners canallow manufacturers to quickly identify points of weakness across the supply chain
and take action as required.

Balance Matters

EIM helps digital manufacturing enterprises manage compliance, risk, and governancethrough established controls for information policies, procedures, business rules,
roles, and responsibilities. Internal controls are typically based on processes designed
to manage industry consolidation, capitalize on the opportunities globalizationand disruptive technology present, promote employee and product safety, ensure
information security, and adhere to applicable laws and regulations throughout theentire manufacturing product lifecycle.
* Calculations were made using Environmental Paper Network’s paper calculator
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CHAPTER 6

While most manufacturers recognize the need for improved technologies for better
innovation and differentiation, impending timelines and uncertainty surrounding
regulatory developments like GDPR and Brexit can make it difficult for many to balancecompliance spending with customer acquisition, digital transformation, and developing
new products and services. A unified approach to governance, risk, and compliancecan accelerate compliance with new regulations while offsetting operational andinformation risk.

Assess Controls

Testing

Deficiency
Management

Scope & Identity Risk

Assessment

Figure 6.16: Internal Process Controls

The following chapter explores how EIM technologies are part of an overall strategic
approach for digital transformation and how its component technologies work together
to balance innovation and opportunity with risk and compliance in the creation of theintelligent and connected enterprise.

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C H A P T E R

7

EIM – BUILDING THE INTELLIGENT AND
CONNECTED ENTERPRISE

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

EIM is the digital platform for transformation. This chapter illustrates how each EIM
product suite enables the digitization of processes, information, transactions, andinteractions that occur throughout the lifecycle of manufactured products and thefacilities used for production and distribution.

CHAPTER 7

EIM – Building the Intelligent andConnected Enterprise“Digital transformation is not a quick-fix solution within rigid manufacturing processes
and resources, but a long-term commitment and imperative.”1

Computing has changed• Always on, connected, real time
• Visual and has sensors• Workforce is fluid and global• Takes one finger to use• Users are changing the way IT works• Wicked smart

e
itiv
gn
o
C

ation
tom
Au

Artificial
Intelligence

Calculation

Mainframes
Monolithic

DigitalClient Server
Client ServerInternet

Cloud

Web Services

Micro Services

Figure 7.1: The Nature of Computing Has Changed

We are in the Cognitive Era of computing. Recent innovations in technologies that
range from Artificial Intelligence (AI) to mobile apps to the Internet of Things (IoT) arechallenging the established rules of business.

For the intelligent and connected enterprise, information is a strategic asset. It has
replaced size, scale, access to resources, and geographic presence as a key driver ofcompetitive advantage. Manufacturers that leverage their information to innovate andgrow will be the ones that succeed. Throughout this book, we have illustrated how digital
information lies at the core of interactions, processes, transactions, and experiences.
When information is harnessed and protected, manufacturers are empowered toreach their maximum levels of efficiency, impact, and value while reducing security,
compliance, and litigation risks.

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EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

The goal for every modern manufacturing organization is to leverage their informationand disruptive digital technologies in order to transform into an intelligent andconnected enterprise. But how can they unlock the power of their information withoutcompromising productivity and security? Enterprise Information Management (EIM)
helps manufacturers innovate and thrive in the digital world. This chapter explores EIM
as an integrated set of technologies and outlines an agenda for digital transformation.

EIM: The Digital Platform for Transformation

EIM is a set of methods and technologies that help customers to maximize
the value of their information while minimizing its risks.
Most manufacturers keep their information in vast repositories. These repositories
house information of significant volume that compounds daily. Information and data,and often the processes that underpin them, are fragmented. Information flows acrossthe enterprise are interrupted and disconnected, their paths are not clear, vulnerabilities
lay hidden, and opportunities are lost. In the digital world, many organizations areunable to realize the strategic significance of their information.
An intelligent and connected enterprise is one in which digital technology is both
pervasive and central to its overall success. It is a business that manages its information
across its extended network to drive value and competitive advantage. The intelligent
manufacturing enterprise adopts EIM as its foundational digital platform for change.
EIM enables manufacturers to secure their information across the diverse and complex
landscapes of organizational departments, legacy systems, corporate and regulatory
policies, business content, and unstructured big data. As an integrated platform ofsuites, EIM assembles information flows and expands them beyond simple tasks to
add value as information moves through the enterprise.

The core technologies of EIM work together to create an end-to-end platform for sharing,collaboration, analysis, and decision-making, based on the effective management of
information, enabling manufacturers to harness its potential while mitigating its risk.
OpenText EIM bundles the following core technologies together:

OpenText™ Content Suite is an integrated group of Enterprise Content Management(ECM) solutions that work together to create a centralized, unified information grid thatconnects information across the enterprise. Fully integrated with 187, 204, , Oracle,
Salesforce, and Microsoft applications, it improves content control with governanceand security functionality.

159CHAPTER 7

Figure 7.2: EIM – The Digital Platform of the Future

OpenText™ Discovery Suite introduces discovery analytics to enterprise content
for fast access to key documents, contract terms, personnel with expertise, andearly insights. Using unstructured data analytics, machine learning, and interactive
visualizations, organizations use this platform to support litigation, investigations, due
diligence, compliance, and better decision-making.

OpenText™ Analytics Suite helps organizations improve decision-making, gain
operational efficiency, and increase visibility using interactive dashboards, reports,
and data visualizations. Leveraging all data—whether structured or unstructured,internal, Customer Relationship Management (CRM), big data, IoT, or social media—inrelevant, interactive visualizations, increases opportunities for growth.

OpenText™ Experience Suite delivers personalized content and engaging
interactions along a continuous customer journey. As an integrated set of
applications, it brings together critical capabilities such as Customer Communications
Management (CCM), Digital Asset Management (DAM), Workforce Optimization, andWeb Content Management (WCM) to drive higher customer satisfaction and better
customer engagement.
OpenText™ Process Suite combines digital process automation with powerful,flexible process orchestration, content-rich execution, and low-code development.
Manufacturers can take advantage of customizable and extensible businessapplications or quickly build custom, natively mobile business applications using a
low-code application development platform and pre-defined building blocks.
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EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

OpenText™ Business Network delivers a comprehensive product set that
accelerates time-to-transaction. It integrates messaging and B2B integration services
such as secure mail, large file transfer, fax, and Electronic Data Interchange (EDI) within
a single platform—enabling any-to-any transactions. Cloud or on premises, BusinessNetwork enables businesses to streamline and control how information is delivered—increasing the security and reliability of sensitive or complex communications.

In addition, a development platform called OpenText AppWorks™ helps users tocreate purpose-built applications across all EIM suites. These include departmental
applications like invoice management, industry-specific applications, such as
regulated documents, as well as active applications for supply chains, such as Active
Community, Active Orders, Active Catalogue, and more.

The OpenText Cloud is a purpose-built cloud environment that spans information
management, compliance, and B2B integration. Each suite is available in the Cloud, on
premises, or as a hybrid of both. Our cloud-based IoT platform helps manufacturers
dynamically integrate multi-tiered supply chain communities and build enterprise IoT
solutions for greater efficiency, agility, and new value-added services.
This chapter describes how these core component EIM technologies work together
to support the complete manufacturing lifecycle. It includes stories about howorganizations in the industry have embraced EIM to address key business challenges
and capitalize on the potential of their information.

In the following interview, a leading, global chemicals company describes how ECM—
as a combination of process and information management—is central to their digitaltransformation strategy, along with ensuring compliance in a highly regulated industry.

EIM Technologies Support the Product Lifecycle

A digital manufacturing enterprise supports activities throughout the lifecycleof manufactured products and the facilities used for production and distribution.
Information is critical for every lifecycle activity.

Across every stage in a product’s lifecycle, EIM transforms the manufacturingorganization into an intelligent and connected enterprise—from capturing customer
needs and wants in new product design to manufacturing, logistics, and aftermarket
service. Every transaction, every process, and all of the data that flows in between
is digital—from internal ERP and Manufacturing Execution Systems (MES) to external
partner and supply systems in an extended ecosystem in the Cloud. Its underlying
systems are fast and configurable. It supports technologies that enhance automation,
like sensors, M2M communications, and AI. When processes and data are fully
integrated, predictive analytics can be applied to add value all across the enterpriseand its supply network—for insights into better performance, customer behavior, andproduct innovation.

161

TRANSFORMATION IN ACTIONLANXESSLANXESS is a leading specialty chemicals company with sales of €7.7
billion in 2016 and close to 20,000 employees in 25 countries. The
company is currently represented at 75 production sites worldwide,
including 24 in North America after the acquisition of Chemtura. The
core business of LANXESS is the development, manufacturing, andmarketing of chemical intermediates, additives, specialty chemicals,
and plastics. Through ARLANXEO, the joint venture with Saudi Aramco,
LANXESS is also a leading supplier of synthetic rubber. LANXESS islisted in the leading sustainability indices Dow Jones Sustainability Index(DJSI World) and FTSE4Good.

Figure 7.3: L ANXESSWhat follows are excerpts of an interview with Stefan Linke, Process Expert Documentum
at LANXESS.
“I am responsible for Document
Management at LANXESS and this involves
the coordination and implementation of
infrastructure projects, as well as businessdriven projects. We work closely with otherdepartments in the company, like IT.

As a chemical company, we don’t competewith the larger players like DOW because
our market focus is a niche one, but, given
our expansive areas of focus, we have a lotof Intellectual Property (IP) that we have tomanage. It is critical to the company and a
key differentiator.
162

TRANSFORMATION IN ACTION

Our aim is to explore opportunities for
digitization where they make sense andto streamline processes internally to help
reshape the transformation of the chemicalindustry as a whole. To this end, we areworking on a global digitization strategy
that is geared to the specific requirementsof the company, our customers, and our
employees. Our understanding is that The
Fourth Industrial Revolution, also called
Industry 4.0, calls for independent andfresh access to business processes. At
the moment, we are examining projects
that we believe are good candidates fortransformation, with a focus on the quick
wins. Many of the projects impact otherprojects and schedules, so they have to
be considered very carefully. Overall, thechemical industry is not an early adopter ofdigital business models or technologies, so
we are in the early stages of digitization.

is critical because with 20,000 employees
we have to keep everyone on a clear path
to a shared end goal. With integrationand interoperability, we can reach our
objective for a “single source of truth” in ourenterprise information.
Given the complexity of our portfolio,
when we manufacture products (chemicalintermediates, additives, specialty
chemicals, and plastics), our processes
leave paper trails that stem from scientificresearch through to sales and marketing.
A typical starting point for research occurs
when a customer requests a new productfeature. Typically, we would then conduct
research with an external partner, so there
would be requirements around secureaccess and collaboration.

Because we are a company that
manufactures and distributes globally,
our products, operations, and paper trails
Process improvement is a central theme
have to comply with global regulations.
of our digitization strategy, and thisAn ECM platform helps us to ensure
includes process standardization. A few
that information is compliant—from theyears ago, for example, we establishedresearch conducted to the procedures thatthe "Commercial & Supply Chain" initiativeengineers establish to manufacture at scalefor excellence in process standardization,
master data quality, and the consequent use to the construction and operation of a plant,of the leading IT systems in marketing, sales, and finally, through to sales and marketing.
We deal with volumes of paper every day.
and the supply chain. Our objective was tostandardize the entire value chain in order to Each step in a process has to be compliant
and well documented, especially given that
equip us to react quickly to ever-changing
we operate in 25 countries and each one
requirements from both our customers
has a different set of regulations. This isand suppliers.
so important to us that we have assigned
Information also plays a key role in our
document controllers to oversee anddigitization strategy. It needs to be managed protect specific documents.
and assessed. Without Enterprise Content
Compliance is a benefit as a result ofManagement (ECM) any worthwhile
effective information management,
transformation is beyond reach. We havealong with efficiency and productivity—
been using ECM solutions for nearly 15
specifically being able to find information
years now for lifecycle management, rights
more quickly. To realize these benefits,management, collaboration, and to help
we have to show our internal customers
us achieve information governance andhow using the technology will make theircompliance. We are using it to help us bringjobs easier. ECM delivers the tools wetogether our structured and unstructured
need to balance compliance and security
information and automate the processes
with usability.”
involved. Standardization
163

CHAPTER 7

New Product Design

OpenText Content Suite enables manufacturers to manage content throughout its
complete lifecycle, from capture to archiving or disposition. The solution delivers
concurrent revision control and secure collaboration for all digital product design andengineering process information, including 3D CAD/CAM models, 3D printing files, 3Dvisualization models, 2D drawings, production information, product bill of materials,
materials specifications, product specifications, videos, animations, renderings,
and more.
As a complementary system, Content Suite integrates directly with industry-leading
Project Lifecycle Management (PLM) solutions, enabling manufacturers to share,collaborate, and mark up design information. Centralized access to all design andengineering information for a new product delivers a single version of the truth for all
product design and engineering information. Full traceability of design information
helps manufacturers comply with increasing legislation. Design and approval processes
can be automated to improve efficiency, reduce costs, and drive digital transformation.
Annot
ate

e
Shar

Co
lla
b

W
or

e
at
or

ow
kfl

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t

en

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nt

et

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r

M

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re

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ive
Arch

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se

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Per
m

is si o n

Versio

s

n

an
Tr

s

Figure 7.4: Manage and Secure the Complete Lifecycle of Product Content

164

EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

Due to the volume and velocity of data, content solutions for manufacturing need tobe massively scalable and capable of identifying and accessing data—structured
and unstructured—from many sources both inside and outside the factory walls.
By applying predictive algorithms to this information, manufacturers can generate
accurate, forward-looking insights to help them make better decisions.

The OpenText Analytics Suite supports both product design and quality management
processes when costs are high and the failure rate for new industrial products is morethan 50 percent. 2 During a quality management process, for example, analytics cancapture sensor-based information to increase production yield and throughput. Dataon how many products are manufactured and at what cost and effort can feed into
quality systems to quickly identify problem areas and predict issues in real-time, rather
than using root cause analysis to learn what has historically gone wrong. When quality
defects in production can cost as much as 30 percent of a manufacturer’s revenue,
analytics can help improve production while significantly reducing costs. 3

OpenText Magellan, the flexible AI and analytics platform, combines open sourcemachine learning with advanced analytics, enterprise-grade Business Intelligence (BI),and the capabilities to acquire, merge, manage, and analyze enterprise information.
As drag-and-drop AI, Magellan cost-effectively gives manufacturers access to
unparalleled insights by removing the limits of conforming data to a particular schema.
Armed with tools like analytics and AI, manufacturers can more precisely address
customer demands, predict factors that will impact business continuity, such as
weather, and gain insights into product or asset performance.

Product Prototype and Testing

Creating prototypes is a highly practical phase in the manufacturing process, helping
to test for design flaws, usability, and overall safety—each of which impacts the bottom
line. As physical or digital renderings of a product, prototypes typically undergo
rigorous operations and testing. Information gathered from a prototype, such as stressanalysis reports, environmental test reports, or materials testing reports, can be used
to make improvements to the actual product. Since different types of prototypes can be
helpful at different stages of the product development cycle, managing the information
associated with each prototype is critical to the overall success of the product.
As well as designing a product and building prototypes or samples, there is also therequirement to manage the complete portfolio of all digital assets related to a product.
These assets can range from product specifications to images and videos of prototypes
being used. OpenText capture technologies are used to preserve and manage content
as the by-product of prototyping. As a required part of digitization, OpenText Capture
Center uses the most advanced document and character recognition capabilities
available to turn documents into machine-readable information.

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ChequeApplication

Order

Claim

Figure 7.5: Capture - Sophisticated OCR, ICR, IDR, and Adaptive Reading

Once assets have been ingested, a Digital Asset Management (DAM) system stores
all digital assets associated with products and their use. OpenText Digital AssetManagement solutions serve as a centralized, secure and accessible repository,
whether cloud-based or on premises. Ingestion and storage mark the beginningof the lifecycle of product information, with data flowing from the DAM system into
integrated ERP and extended systems that support outsourced factories, warehouses,and distribution centers. Scalable for the largest organizations, DAM solutions offer
capabilities to manage the entire content lifecycle with workflows and features
for creative production, collaboration, publishing, and distribution to drive value
for manufacturers.

Many manufacturers still complete manual drawings and then digitize the process.
In a digital world, manufacturers are moving away from building prototypes to using
additive manufacturing approaches like 3D printing or even augmented and virtual
reality. As part of this approach, rapid prototyping, or fabricating a scale model of aphysical part using 3D-aided design (CAD) data reduces development cycles andimproves time-to-market. As discussed in Chapter 3, digital twins can also be used asdigital replicas of products, although they are learning systems as well, incorporating AI,
machine learning, and analytics with data to alter (or self-assemble) their components
or features in relation to their physical counterparts.
In the following interview, the President of a Capture Division at an IT consulting
company describes how critical capture is as a first step to implementing a digitaltransformation strategy.

Digital Supply Chain

Manufacturers can improve communication with global trading partners by exchanging
business documents electronically. OpenText Business Network solutions enableorganizations to control how information is delivered across mission-critical businessprocesses, such as supply chain and logistics.
166

TRANSFORMATION IN ACTIONHMB

HMB is an IT consulting company with offices in Columbus, OH,
Washington, DC and Louiseville, KY. The company has four linesof business, three of which focus primarily on custom application
development for specific market segments. Over 180 developers
support customers in these lines of business. HMB’s fourth line ofbusiness, Capture, focuses on the reselling of hardware and softwareto help companies throughout North America execute their enterprisecontent management strategies. HMB also has a managed services
division which serves as an outsourced IT department.

Figure 7.6: HMB

What follows are excerpts from an interview with John Paider, President of the Capture
Division, HMB.
“I am the President of the Capture Line ofBusiness and oversee all aspects, including
sales, marketing, operations, finance,engineering, and support.
The effective management of informationis critical to enabling digital transformation.
I can give you an example of this bydiscussing specific projects. For example,
we have a current customer who works withus on our ECM 360 program. They ingest asignificant amount of paper from both theircustomers and partners. Using scanning

products, we digitized their documentation.
We combined their electronic files andperformed data management, extraction,and business workflow through the
deployment of software. This means that
all of their information is digital. We thendeployed another software application tobetter organize their digital information andto provide enterprise-wide access for those
who need to use the information.
As a final step, we implemented a solutionthat enabled them to distribute their
167

TRANSFORMATION IN ACTION

information outside of the enterprise in asecure and trusted way. We wrapped allof this up with several onsite developers
who worked with them to create acustom application to manage, monitor,and communicate the effectivenessof the processes to their stakeholders
and shareholders.

notifications and messaging components
assigned to data are much more beneficial
to the business.

Enterprise information exists in many
formats that ultimately need to be captured
and transformed to be well understood,
governed, and leveraged to maximize value.
For the role it plays in critical businessprocesses, “Capture” does more than
the name suggests. Capture does collectinformation, but more importantly, it
activates it. It brings information that resides
in a paper document to life so that it can beused by multiple entities to meet a varietyof business objectives. Capture actually
collects, enables, and distributes the rightinformation to the right people in the mostefficient way possible.
Capture helps organizations achieve better
efficiency, accuracy, and security. The
sharing of information needs to happen inreal time, not at 4 p.m. tomorrow, and so
this information needs to be digitized. The
information must also be shared securely
and in a way that is easy to consume.
Capture also plays a key role in integrating
structured data with unstructured
information. There are two steps involved.
First, we need to allow structured andunstructured data to co-mingle so thatsearch can be performed throughout
all data types. Metadata strategies havereally improved this capability. Second, weneed to provide data visualization. This issignificantly more difficult than most people
think because this information needs tobe active and it needs to be pushed to theright consumers and users of this data at
the right time based on specific outcomes.
Almost anybody can create a dashboard ofpie charts and stacked bar charts but

Overall, I’m not convinced that there are
too many disruptive technologies, there
are more disruptive processes. Smartpeople look at these processes differently
and apply technology to address businessproblems in a new way. I would suggestthat we focus on disruptive businessleaders. For example, cloud or peer-to-peer
technologies are nothing new. It simply
required Mark Cuban to create CyberDust
to leverage both technologies to solve a
problem of having people’s confidential
information stored somewhere out of theircontrol and thus risk exposure.
For Capture, we will continue to refine
our product mix so we can leverage ourdevelopment culture and expand our
professional services offerings around
valuable ECM solutions. We are expanding
our Managed Services offerings to
Chicago and Washington DC, and we lookto supplement our organic growth with
continued strategic acquisitions. HMB
as a whole will continue to build on its
award-winning reputation as the best techcompany in the markets it serves, as well as
the Best Place to Work.
The advice I would give to organizations
and peers that are undertaking digitaltransformation is to approach businessproblems like a four-year-old would. In otherwords, keep asking questions that drive to abusiness outcome. Most people stop talking
when a problem has been identified, but I
recommend to continue being curious until
an understanding about why the problem
exists is reached, along with the measurable
bad thing that happens because of the
problem, and the vision of success and its
value. Once this understanding is reached,
it’s time to get to work, deliver value, andmake money.”168

EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

Exchange technologies facilitate the efficient, secure, and compliant exchange of
information across the enterprise and its business network, from faxes and cloudservices to EDI and large Managed File Transfers (MFTs). These services generatemassive amounts of data, including supplier information and procurement contracts.
Through integration services, the OpenText™ Trading Grid™ and B2B Managed
Services, the Business Network provides end-to-end visibility into supply chain
operations for real-time decision making and the improved orchestration of operations.
The Business Network’s cloud-based solutions help to onboard 100 percent of
the trading partner community. Manufacturers can reduce operational costs andstreamline supply chain processes with an outsourced approach to managing a B2B
infrastructure. Integration with back-end enterprise systems, such as ERP improves
efficiency. The end-to-end visibility of all supply chain transactions helps address
regional compliance initiatives, such as electronic invoicing, and the adherence to newindustry initiatives, such as conflict minerals compliance.

Distributors

Corporate Customers

3PLs

Suppliers

Banks

Manufacturing

ERP

Insurers

TMS

WMS

SRM

CRM

Figure 7.7: Connecting the Extended Manufacturing Ecosystem

With more than 24 billion transactions a year, $8 trillion in annual commerce, andmore than 600,000 trading partners, the OpenText Business Network provides afoundation for digital business and secure e-commerce. It delivers the integration layer
manufacturers need to support disruptive technologies such as the IoT, automation,
analytics, and AI systems. Global manufacturers are using the Business Network
to drive business value through the efficient, secure, and compliant exchange of
information—inside the enterprise and across the manufacturing ecosystem.

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All across the supply chain, OpenText Analytics Suite includes high-performing,
on-premises, and cloud solutions for big data and predictive analytics. It gives
manufacturers an easier way to access, blend, explore, and analyze supply chain data
to better understand customers, markets, and business operations without requiring
data experts or additional IT resources. When analytics are applied to the BusinessNetwork, the information flow moves from systems of engagement and systemsof record to systems of insight. Business Insight is gained by capturing, combining,
and transforming information to identify relationships, risk, and new opportunities
for growth.

Tra
ck
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Se

Monitoring
AlertsSegmentation
Modeling
Analysis

Dashboard
ReportingAd-hocervi
ceInteractive Data
Visualizationlf

SHow successful
are the sales
channels?

How much waslost to fraud?

customers’ habits?

edHow much
was sold?

UnderstandWhat’s the next bestAd
product to offer?
vancedWhat are my

Engagedd

How close
am I to myannual goal?

ce
an
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or

s
tic
aly
An

How did mymarketing campaign
perform?

Why arecustomersleaving?

Can a suppliershow me ourspending history?

be
Em Can we personalize
purchase orders andaccount statements

Figure 7.8: Analy tics Drive Understanding and Engagement

Digital Manufacturing and Production

To truly transform into intelligent enterprises, manufacturers must develop flexible andhighly-scalable IT infrastructures with a centralized hub of digital information. Once
information is digitized, organizations can automate processes around this newly
created information for greater efficiency and agility.

OpenText Process Suite is a set of components for building process and casemanagement applications. It includes the OpenText Process Platform, out-of-thebox applications, and add-on products that gives manufacturers the ability to build
applications that leverage a wide variety of EIM capabilities.

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EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

When information is secure, it can be effectively routed through process applications
to improve efficiency and performance. OpenText Process Suite offers solutions
for flexible, agile business process automation and case management systems thatenable employees, customers, and partners to collaborate, streamline operations andwork more efficiently.

Review and approval processes can be remotely accessed and expedited using
smartphones, wearables, and tablets. From contract to deliver, OpenText solutions
help to effectively manage risk, renewals, and scope changes across the entire supply
ecosystem. Costly reworks and errors can be all but eliminated. EIM helps to ensurecompliance of processes and information with strict Health, Safety and Environment(HSE) and regulatory reporting requirements. Collaboration is simplified and operational
excellence improved with rich supply chain analytics and Key Performance Indicators(KPIs) across the extended trading ecosystem with OpenText Business Network.

Analyze

MonitorDesignOrchestrate

DeployFigure 7.9: Digitizing Business Processes for Improved Time-to-Results

In the digital world, globally distributed teams are fragmented. The potential to slow
down projects is a source of frustration for both manufacturing and production teams.
Delayed production slows milestone payments and reduces production revenues,
while the complex handover of a project can delay time-to-business value for bothcontractors and manufacturers.

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EIM enables end-to-end digitization, bringing together unstructured and structured
information, business process automation, and a digitized supply chain on a single
digital platform. OpenText Collaboration technologies provide a secure environment
where manufacturing processes and projects can be safely archived, moderated,managed, and explored for greater value. The solution helps document control
managers, engineers, external collaborators, and subsequent operations personnel
efficiently control all manufacturing information, work processes, and risk across the
lifecycle of projects and operations to help accelerate production and time-to-revenue.

OpenText Core, the digital platform for next-generation collaboration technologies,
combines social communications, channels, intelligent bots, secure file sharing,and project management. Manufacturers can improve ROI and project completion
through improved exchange and collaboration, both within projects and throughhandover to operations. OpenText collaboration technologies like Core enable theefficient exchange of large volumes of content with internal and external parties whileproviding secure, high-speed transmission, which improves project lifecycles. Costsand environmental impact are reduced, while productivity, reliability, compliance, andworker safety is increased.

Governance, Risk, Compliance and Certification

EIM provides the backbone for an effective Governance, Risk Management, andCompliance (GRC) program. When manufacturers have weak governance enforced
across disparate systems, complying with laws and regulations becomes very difficult.
Using manual processes to capture and track compliance requirements is timeconsuming and error-prone. Many manufacturers have home-grown systems to do thiswhich are not efficient or effective.

Supply chains and sub-contracted operations are becoming increasingly complex,
particularly in the manufacturing sector. Extending internal control and visibility into
the supply chain may involve a wide range of contractors, suppliers, partners, vendors,
and other third parties. Associated vendor information is rarely stored in a centralized
location. Many manufacturers are struggling to keep an inventory of their suppliers,
and to classify them by risk profile. In some instances, they do not complete formal
vendor on-boarding or conduct reliable assessments to ensure that the third parties
they work with are compliant.
EIM connects procedural guidance with documentation, process execution tools,
reporting and audits, and integration with ERP systems—across the supply chain. It
brings consistency and scale to the management and preservation of information byincorporating records management with solutions for archiving, email management,
search, and eDiscovery.

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Manufacturing content needs to be governed throughout its complete lifecycle, from
capture to disposition. OpenText Content Suite enables manufacturers to integrate
critical content with business processes, to help ensure the security, integrity, andaccessibility of manufacturing data. When an electronic investigation (audit or legal
review) is initiated, systems have to be examined, information identified, and policies
well understood and documented. When policies are centrally maintained, one central
source can be easily understood, documented, and defended.

The expense and time associated with traditional legal or other information discovery
is very high. Having a set of Discovery tools available to reduce time spent finding
materials and improving the accuracy of data sets retrieved represents immediatesavings for manufacturing organizations. By linking structured and unstructured
information across multiple formats and sources—OpenText Discovery Suite lays
the foundation for analyzing large volumes of information in real time with superior
accuracy. Incorporating information and records management with solutions forarchiving, email management, auto-classification, search, and eDiscovery helps
manufacturers to reduce litigation, risk, and storage costs. At the same time, they
benefit from improved compliance, security, user productivity, and time-savingsin addressing the need to classify huge volumes of legacy content, email, and even,social media.
EIM gives manufacturers the confidence to apply governance across departments,
content, application silos, and networks to align operations, meet certain standards,
and achieve compliance.

Plant Maintenance and Asset Management

Today’s manufacturers need to ensure their production facilities are available 24/7.
Ensuring that production lines are operating smoothly, associated utility supplies
are maintained correctly, and production stoppages are minimized can significantly
reduce the operational costs and boost the profits of manufacturing operations.
For plant assets and equipment to be maintained effectively, it is important to haveaccess to a single source of the truth for all digital information relating to the asset
concerned. Careful management and archiving of digital information at the designand engineering phase of a new asset will help transform how the asset is maintained
through its life. Many manufacturers of industrial factory equipment are starting toprovide their customers with a full “digital model” of their products. For example, anindustrial robot manufacturer can provide a full 3D model of a robotic arm, which allows
maintenance engineers to become familiar with all aspects of the robot, even before
it has been installed on a production line. Ensuring that maintenance teams have thecorrect versions of all digital information associated with the robot can help to minimize
any potential downtime.

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EIM provides a complete 360-degree view of factory asset information, process,and performance data. Easy access to all plant-related information like maintenanceprocedures, assembly and disassembly videos, 3D plant design models, 3D CAD
equipment animations, 2D equipment drawings, 2D utilities diagrams, and equipment
test procedures helps maintenance teams minimize plant downtimes to avoid
production stoppages. The quality and consistency of asset information and work
instructions can be improved, and HSE risks minimized as more stringent compliance
procedures are archived and more easily managed.

The application of analytics in plant asset management is transforming the processfrom one that has been reactive to one that can accurately predict future asset
performance based on historical data. This helps to increase the uptime andefficiency of robot work cells, machining centres, assembly equipment, and utilitiesrelated infrastructures.

Logistics and Distribution

OpenText EIM solutions enable secure collaboration between employees, partners,
and customers, empowering them to add value to information to improve thetransportation, warehousing, and packaging of products. By consolidating information
in a secure repository, EIM gives manufacturers and their partner’s rules-based accessto information for secure collaboration. It also integrates with back-end manufacturing
programs for streamlined logistics and distribution activities.

B2B integration is a set of technologies that facilitate the real-time, automated transfer
of information, money, and goods and services, creating an “information supply chain”
for the intelligent and connected enterprise. It empowers a tightly integrated networkof employees, suppliers, and partners to exchange communications, products, andcommerce in ways that are rapid and accurate.

With supply chains becoming more complex, many organizations are outsourcing B2B
integration to a third party. OpenText B2B Managed Services is a hosted B2B cloudservice that provides the expertise, technical infrastructure, and process support
for critical B2B programs to meet current and future business needs. Managed
Services covers activities like mapping, connectivity, onboarding, testing, monitoring,and end-user support to quickly connect business partners and resource projects
on an as-needed basis. Outsourcing implementation, maintenance, and upgrades
help manufacturers overcome skill deficiencies while enhancing agility, increasing
efficiency, reducing risk, and improving ROI—all while opening up new, global
business opportunities.

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EIM – BUILDING THE INTELLIGENT AND CONNECTED ENTERPRISE

ERP

Global System Visibility, Alerting,
ERP
Management
Analytics
Integration

Data & Processing
Intelligence

Customers
Suppliers
Service
Providers

WMS

Distributors

TMS

Banks
3PLs

Custom Apps

Internal

Mapping &Translation

Partner
Onboarding

ProgramManagement

Insurers

24/7 Monitoring& Support

OpenText B2B Managed Services

External

Figure 7.10: Managed Ser vices for Outsourced B2B Integration

B2B Managed Services increases visibility and mobility and reduces delivery
times, empowering manufacturers to transform logistics and distribution into acompetitive advantage.

Digital Engagement with Retailers, Distributors,
and Customers

Fast-moving consumer markets are dictating how quickly and seamlessly informationneeds to be shared. To meet this need, manufacturers in the automotive, consumer
electronics, and consumer packaged goods sectors need to be able to sharedigital information relating to their products across global retail and distribution
networks. Digital assets need to be transferred securely between users and thecustomer experience must be consistent across all platforms. For example, themarketing department of a consumer electronics manufacturer might need to sharemany different types of digital assets across a global retail network. This could
include product specifications, high-resolution product images, demonstration andpromotional videos, complex 3D product animations, along with countless brochures
in PDF format.
Over the years, retailers have relied on their suppliers to provide up-to-date digitalassets so that goods can be promoted effectively across different retail channels
and sold into the consumer market. The challenge for manufacturers has been to findan effective way to distribute digital assets, for example, to support the launch of anew product.

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Mobile

Web

C

on

Print

te n

ti o

n

Socialyer

Omnnel De
cha
liv
ni-

t P ro d u cMediaStatements

Figure 7.11: Empowering the Intelligent Enterprise with Experience Suite Solutions

As part of the OpenText Experience Suite, a centralized DAM solution helps tosimplify the distribution of digital information across the supply chain ecosystem.
Ideally, retail or distribution networks need access to digital information stored in acentral archive. A centralized hub allows a global network of retailers and distributors
to access product information in real time. This becomes important when trying tocoordinate global marketing efforts. In addition to retail and distribution networks,
other stakeholders need to access product-specific information. This could include
video production companies, advertising agencies, graphics companies, and otherorganizations involved with the product release.

As well as distributing digital assets across a retail or distribution network, digitalproduct information needs to be made available through a variety of go-to-market
channels. In the digital world, reaching consumers requires a complex, multifaceted approach across many channels. New digital technologies have created newcustomer touchpoints with opportunities to deepen engagement for more satisfying
customer experiences.

Manufacturers are using the OpenText Experience Suite to bridge these channels anddigitize the entire customer journey. OpenText Experience Suite is a comprehensive,
integrated suite of products that includes Web Content Management, DAM, Customer
Communications Management (CCM), and social technologies, working together tocreate compelling and consistent brand experiences, and consolidate information fordeeper insights into customer preference and buying behavior.

In the following feature, retail giant Marks and Spencer is using a Digital AssetManagement (DAM) system to centralize its assets and deliver more consistent
brand experiences.
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I N N O VAT O R S T O R Y

Marks and Spencer

A centralized DAM
system helps Marksand Spencer streamline
time-to-production,
save money, and meetcustomer demand for
multichannel delivery

Figure 7.12: Marks and Spencer

Founded in 1884, Marks & Spencer (M&S) has grown into an international, multi-channel
retailer, with more than 1,000 stores in the U.K. alone. The company sells clothing, home
products, and food sourced from 3,000 global suppliers, with 85,000 employees. Its
website, marksandspencer.com, receives 8.3 million visits each week.

As a large retailer, M&S was looking for a centralized DAM solution for their 20,000 listed
products and associated digital assets like videos and images. With disparate systems
in place, it was a challenge to locate assets, efforts were being duplicated, and with noreliable, definitive source to establish if an asset was available for use under the termsof a licensing agreement, they were having rights management issues. Working withmultiple external agencies and internal departments, M&S sources, reviews, approves,and manages up to 2,500 assets per day—meaning that its DAM needed to provide an
efficient, easy-to-use solution for 800 U.K.-based and international users.

The DAM system M&S selected provides a fast, efficient means for submission, review,
and approval of digital assets, and ultimately publication and ongoing management. It
streamlines and accelerates operations by reducing the amount of manual processing
needed. The simplicity of the system helps M&S meet a key objective by ensuringthat assets can be approved and put live on the website as quickly as possible.
Avoiding unnecessary asset recreation, users can quickly locate assets and makeany required changes within the DAM system, without going back to the originatorand starting the process again. This speeds up publication significantly and prevents
unnecessary expenditure.

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Aftermarket Services and Support

Many companies today are looking for ways to improve their aftermarket service andsupport processes, as this is a key way to help improve customer satisfaction. Ensuringthat field service teams have access to a complete digital representation of a productor piece of equipment can significantly improve the uptime and ongoing maintenanceof serviceable products.
Maintaining an accurate and up-to-date archive of all information relating to the productat the design and manufacturing stages of a product’s lifecycle benefits downstream
service and support activities. Centralizing this archive into a single source of truth
for all information about a product simplifies all through-life related interactions withdigital product information.

OpenText Content Suite helps manufacturers manage and access product-related
digital information for aftermarket service and support—from repair and test
procedures to warranty recall procedures to fault diagnosis routines to replacement
parts ordering. Any type of digital file can be viewed and marked up remotely using
mobile devices. All service records, such as certifications and test reports arecentrally archived for the entire lifecycle of a product, allowing for traceability andregulatory compliance.
For every manufacturer, equipment performance needs to be proactively monitored
and acted upon. OpenText Analytics can be used to provide predictive analytics tools
to optimize maintenance procedures and reduce downtime.

EIM: A Digital Business Strategy

EIM is the platform that underpins a deployable digital strategy. The core sets oftechnologies and services described in this chapter equip manufacturers to digitize
key processes at each stage of a product's lifecycle and navigate their digitaltransformational journeys with success.
In the digital world, the requirements for transformation are complex and consist of
the digitization of all processes and information, consolidation of information across
many systems, alignment and seamless integration of business networks, creation of
wildly exciting customer experiences, compliance with global and regional regulations,and the discovery insights that change the ways that people work with technology tocreate and innovate.

As they start on a multi-year journey toward digital transformation, manufacturers inall sectors are looking to IT for leadership. To help articulate vision and execute on aplan for digital re-invention, strategic leaders will need to work together to implementchange across the enterprise. The next chapter explores change management
strategies to help executives transform their organization into an intelligent andconnected enterprise to lead and succeed in the digital world.
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8STRATEGIES FOR CHANGE MANAGEMENT

Aftermarket
Services &SupportNew Product
DesignProduct
Prototype &Testing

DigitalEngagement

Logistics &Distribution

Plant
Maintenance &AssetManagement

DigitalConsumer

Governance,
Risk,
Compliance &Certification

DigitalSupplyChain

DigitalManufacturing& Production

This chapter discusses how EIM approaches, strategies, and best practices deliver a
strategic blueprint for transformational success in digital manufacturing.

CHAPTER 8

Strategies for Change Management“Industrial companies that don’t invest in data now will eventually be like consumer
companies that missed the Internet: It’s going to be too late.”1 – Bill Ruh, Chief Digital
Officer of GE and CEO of GE Digital

The world is changing at an incredible pace with new technologies causing upheavals inevery industry. In the next few years, as many as one-third of all industry leaders will findthemselves disrupted by a third-party platform competitor. 2 Despite this prediction,
only 15 percent of manufacturers are actively planning a digitization strategy. 3
While disruption implies risk, the opportunities for businesses to grow, differentiate,and compete have never been greater. As customer requirements change, continuous
innovation will be critical for survival. The disruptive mindset puts the customer frontand center, and manufacturers will have to shift their focus from engineering new
products to customer experience and centricity. Top management will be required
to define new business models and follow digital strategies fearlessly and withimagination. And they must be ready for a substantial shift in culture based on
openness, innovation, and trust. Visionary leaders will apply the technologies describedthroughout this book to digitally transform the enterprise.

Managing and harnessing information is essential to driving an agenda for innovationand growth. Stakeholders throughout the supply chain ecosystem will need access to
information from a variety of sources, including the Cloud, mobile, IoT, smart meters, 3D
printers, and mobile devices. The demand for this information will grow as it expands informat and volume. EIM is a fundamental enabler of digital transformation based on an
integrated infrastructure that delivers secure information and services. As outlined inthis chapter, a transformational strategy can be effectively guided by EIM processes,
principles, standards, and effective leadership.

Transformational LeadershipTo achieve a digital advantage, business leaders will be called upon to motivate theircompanies around a strong, unifying vision articulated through an achievable and wellgoverned digital strategy. Typically, executives build their visions based on operational
effectiveness (inside-out) or superior customer experiences and sales (outside-in).
Centralization and digitization are integral to both approaches.

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Digital transformation in itself is not disruptive. Many digitization projects are
implemented to improve performance or efficiency in the near future. The key is
to identify the processes and organizational structures required for long-term
success. Different scenarios can be created or explored to deepen understandingof a business problem. Business cases can then be created to drive short-term,measurable outcomes.
A business case should link business challenges to a strategic driver or businessgoal. Transformational business leaders need to establish a business case for digitaltransformation. Most projects do not move forward without a scrutinized businesscase. A business case should be based on existing processes, industry best-practices,and the positive impact an EIM solution can have on performance.

Most organizations have existing performance goals and objectives. These may be
defined as Management by Objective (MBO) or as a Balanced Scorecard. Defining goalspresents an opportunity to identify the processes that will directly influence objectives
and demonstrate how improving the processes can improve overall business success.
The ability to align process improvements directly to corporate objectives provides
a clear and effective framework for illustrating business value and gaining executive
sponsorship. C-level commitment is critical for any transformational project’s success.

“Change management is a problem for everybody. We have customers
across multiple horizontals and verticals. Each has very different business
requirements. Our approach is to provide digitization solutions to meet thosecustomers’ specific requirements. We try to engage business stakeholders
early and often so that we have buy-in and they have a vested interest in the
success of the project that they’re undertaking to automate their businessprocesses. To be successful, each software project needs a champion fromthe business side. That person is responsible for implementing the changethat is required—the development and deployment issues of the application.
Without that person, the solution might as well be shelf-ware.”– STEVE MARKMANN, VICE PRESIDENT OF COUNTERPOINT CONSULTING.

The operational goals of any business could not be achieved without strong leadershipbased on a coherent strategy. A strategy accounts for cultural shift and technology
infrastructure challenges while supporting engagement across departments, partners,
suppliers, and customers. A transformational leader has to overcome outmoded
structures and old management styles to empower employees to self-direct, makedecisions, experiment, generate ideas, and take risks.

To build a digital business strategy, executives need to shift their focus away fromcost efficiencies and tactical operations to providing value for customers throughinnovation, developing new products and services, and overall business growth as partof their arsenal of transformational strategies.
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Transformational Strategies

The manufacturer of the future will be holistic and expansive to include digitalvalue chains and an extended ecosystem of customers, partners, and suppliers. IT
infrastructure will be consolidated and processes streamlined to support superioromni-channel experiences and employee engagement. To implement transformational
strategies, manufacturers should:
 Invest in emerging, digital technologies

 Integrate enterprise infrastructure (align IT/OT) Obsess about the customer Develop agile processes Expand the digital ecosystem
 Build capacity

 Focus on information as an asset

Investments
in Digital
Technologies

Information
as an Asset

Skill Sets
andCapacity

IT/OT
Alignment

Transformational
Strategies

DigitalEcosystem

Customer
Centricity
Agile
Processes

Figure 8.1: Transformational Strategies

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Invest in Emerging, Digital Technologies

In the digital world, digital technologies will force organizations to explore new ways
to engage with customers, create new products and services, and accelerate timeto-market. This moves beyond merely digitizing processes and, in many cases, will
require radical shifts in core competencies, especially in IT. Strategic leaders willneed to position their IT, support, and marketing organizations in relation to emerging
digital technologies.
CIOs will lead their organizations on the digital transformation journey. They will haveto meet the challenges of digital disruption by adopting key technologies for growth,
especially around information management. CIOs will be forced to make investments asthey transition away from legacy apps and toward consolidating on a digital backbone.

According to Forrester, tech spending is on an upward trend and will surpass $3
trillion globally and $1.5 trillion in the U.S. next year. 4 Now more than ever, CIOs in
manufacturing companies have the opportunity to invest in agile approaches and unify
software development and operations. They can partner with service providers to
outsource expertise in technology integration, deploy new architectures based on APIs
and microservices, and demonstrate strategic vision based on digital transformation.

There are major technological hurdles to implementing digital transformation. Fourout of five manufacturers believe that transformation revolves around major new
IT projects. The figure below illustrates the breakdown of investments made when
digitally transforming the supply chain. Consolidating multiple IT projects was the
top response (for 47 percent of respondents), followed by moving to the Cloud (43percent), implementing a digital backbone (38 percent), and upgrading ERP systems (31percent). 5 These findings point largely to manufacturers creating an IT infrastructurethat enables automated processes and better end-to-end flow of information acrossthese processes.
Consolidating multiple IT systems
Moving to the cloud
Implementation of new digital backbone to provide
integration layer across our business

32%

Hiring IT-savvy workers

43%

31%

ERP upgrade

30%

Technology outsourcing

27%

Process outsourcing
Automation (i.e. adding sensors)

20%

SCM upgrade
Go-to-market changes

13%

New leadership
0%

38%

47%

5%

10%

26%

19%

15%

20%

25%

30%

Figure 8.2: Steps Taken to Allow for Digital Transformation
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35%
6

40%

45%

50%

CHAPTER 8

Many manufacturing core processing systems were implemented pre-Internet andbefore mobile devices became ubiquitous. In the digital world, manufacturers will betransformed through the consolidation of technology onto platforms that allow for
rapid application development of next-generation products, replacing developmentthat moves at the speed of “zero-fault” tolerance. Continuous iteration, rapid featureenhancement, and short-term solutions will be developed as cheap, fast, and scalable
pilots, replacing longer deployment cycles and the IT backlog that hinders the ability tocapitalize on new opportunities.
Front-line and back-office employees will need to be empowered with the technologies
to make their jobs easier and more efficient. This will entail monitoring advances inemerging technologies, along with the information required to operationalize thetechnology. As mobile, smart devices, and AI become standard, processes will haveto evolve to support them. Technology will continue to force manufacturers to adopt
new business models quickly and partner or outsource capabilities such as noncore business processes or system development and maintenance. One of the mostimportant approaches the CIO can take is to align technology with business operations,or Information Technology (IT) with Operational Technology (OT).

Integrate Enterprise Infrastructure (Align IT/OT)

As the following figure illustrates, over a third of manufacturers have a “segregated”
approach to IT and OT integration. This means that many facilities operate in silos, witheach making technology decisions based solely on the needs of their facility, rather
than the entire enterprise, which results in disconnected systems across the business.
While many (42 percent) manufacturers have adopted “coordinated” enterprise
integration models based on a common platform to manage operations at an execution
level, there is room for improvement. Research suggests that in the next five years, themajority of companies will make the move to an “integrated” IT/OT approach where IT
and OT share the control systems.
7%
35%

40%

42%
53%
23%

Today

In 5 years

Segregated. Each facility makes independent
investment decisions about technology in the plant.
Integration to corporate systems is asynchronous(batch) and is usually limited to demand download andfinished product upload.

Coordinated. Based on a common platform to manage
operations at an exception level, with governancethrough PMO. Support is handled by IT with a local“power user” at each plant. The plant continues to makecontrol-level decisions.

Integrated. The company sets up a standing center of
excellence (COE) with permanent staff, from the businessas well as IT. The control systems are shared between IT
and OT.

Figure 8.3: The Status of IT/OT Integration7184

S T R AT E G I E S F O R C H A N G E M A N AG E M E N T

Manufacturers will need to think about how they integrate their B2B platform to backend ERP, Transport Management, and/or Warehouse Management systems. More than
one-third of information that typically enters an ERP environment comes from outside
the business. 8 Therefore, having a highly available, integrated business network thatprovides seamless connectivity to an outside trading partner community is paramountfor today’s digital manufacturers. To achieve this, many organizations are opting for an
outsourced, Software-as-a-Service (SaaS), or Platform-as-a-Service (PaaS) managedservices approach for their B2B integration activities to reduce the complexities ofconnecting with partners, supporting multiple information exchange protocols, anddealing with messaging and security standards.

There are many aspects of manufacturing that require highly specialized technologies
to gather data from or send information to IT systems. This interconnection between
IT and OT goes beyond data transmissions and interacts with a variety of otherprocesses. Any change to IT infrastructure can impact machinery, automation andcontrol networks, specialized equipment, or other manufacturing tools. Ineffective
change management in this area can lead to major operational challenges, as issues
emerging in areas where IT and OT intersect can derail operations in a number of ways.

For manufacturers to fully embrace an end-to-end digital supply chain strategy,
everything—from IoT-connected assets to enterprise systems to globally dispersed
partners, suppliers, and employees—must be unified by a secure digital backbone.
EIM, along with B2B integration, provides a solid digital backbone for manufacturers,
enabling them to leverage the Cloud to access, manage, and exchange information allalong the supply chain.

Obsess about the Customer

In the digital world, consumers have come to expect higher levels of service. The
traditional product-centric approach to merchandizing and marketing is being
revolutionized. The fight for differentiation will be won by excelling at customer
experience and this can only be achieved through customer-centricity.

While it is true that technology has given consumers more choice than ever before,technology is only an enabler. The key to success lies in customer-centric approaches,
disruptive technologies, and new business models. Over the coming year, digitalleaders will shift from marketing digital products and services to embracing customercentric operations. They will invest in IT to become more responsive. Customer-led
self-service will be a requirement, along with AI and predictive analytics, innovation,and the agility needed to adapt to changing customer needs.
In the following interview, Tom Roberts of SAP discusses how customer requirements
are disrupting entire industries and driving business transformation.

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TRANSFORMATION IN ACTIONSAP

As a market leader in enterprise application software, SAP helps
companies of all sizes and industries run better. From back office toboardroom, warehouse to storefront, desktop to mobile devices, SAP
empowers people and organizations to work together more efficiently
and use business insight more effectively to stay ahead of thecompetition. SAP applications and services enable more than 296,000
customers in 190 countries to operate profitably, adapt continuously,
and grow sustainably.

Figure 8.4: SAP

What follows are excerpts from an interview with Tom Roberts, Global Vice President, SAP
Third Party Technologies, SAP.
“I am the global VP of third-party solutionsfor SAP. We take about a dozen EIM
products and combine them with SAP’s
products and we sell them to our customers
as a total, end-to-end solution to bring
the worlds of structured and unstructured
information together. And the volumes of
information that this solution manages are
vast. In one example, 350 million documents
were managed and 112 terabytes archived
in just one year.
If we look at an asset-heavy industry, likea manufacturing plant, we know that when
there’s a problem in the plant, there’s still a
big piece of paper (a blueprint) that’sused as a reference for a broken pump,for example. In North America, a lot ofBaby Boomers are retiring as Millennials
enter the workforce. We’re seeing theseasset-intensive industries make a really big
push to digitize and capture what’s in theiremployees’ minds and put that into theirenterprise asset management systems like
SAP. Getting information into the system,
like a mental note that there’s a higher failure
rate on a certain pump due to its position in
the plant, prevents it from “walking out thedoor” and allows people to search on thisinformation and retrieve it at a later date.
Taking this one step further, the younger,
more digitally savvy workforce

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TRANSFORMATION IN ACTION

wants to be able to find this information,and then manipulate it with a touch screen
for example, and that’s the direction we’removing in.
One of the key drivers of transformation ismeeting the needs of the digital consumer.
An SAP SlideShare called “99 Facts
About the Future of Business in the Digital
Economy,” states that “By 2020, 50 percent
of digital transformation initiatives will faildue to lack of an end-to-end customer
experience operating system.” Systems
today are expected to support the customer
journey from end-to-end, and support
omni-channel delivery for a more fulfilling
customer experience.
The retail landscape has shifted. Walmart,
who once dominated, is now under pressure
from Amazon—and this is all based on thecustomer experience. Amazon can create
great customer experiences based on theirsearch component. An effective search isbased on two things: metadata and volume.
We tend to forget about volume. Volume
is the whole reason that Google became
the dominant search engine. The more
information you can get, obviously thebetter the search. Google realized that themost important outcome was the input of
information or the act of searching itself.
The terms that people search on helps to
identify priorities. Selecting somethingfrom a search results list can help the next
customer. Amazon also understood thisearly on. But to do all of this, you need adigital infrastructure in place. You have to
get the metadata and associated images,
essentially a catalogue, right and positioned
correctly. Brick-and-mortar retailers haveto realize the importance of metadata andimages, and learning about your customers
based on what they’re searching for. Theseare early indicators of demand.
But it’s not only retailers that are wrestlingwith this. Any company that interfaces with
their customer has to take them on ajourney that starts with search and ends
with the shopping cart and delivery. The
catalogue and images are central, so therelationship between our commerce engine
and Digital Asset Management (DAM) is thelinchpin. SAP is managing transactions and
EIM is managing all of the content.
Let’s say you want to buy a new snowboard
and you’re searching on a retailer’s site. You
follow your favorite pro to see what gear shehas. The site should help you with factors
like weight and height, and skill level—
and you should be guided throughout anomni-channel experience. If you shop at
the physical store and you see that same
snowboard, the prices better synch up andthe experience better be the same.
Our customers are in the business ofbrewing beer, making shoes, running a bank,etc., they’re not in the business of adopting
the latest technologies. Many customers
are making do with technologies thatshould have been retired 5-10 years ago.
Some customers, however, are surprisingly
cutting edge and ahead of the curve. They
have CIOs that are driving the agenda for
digital transformation. Others are riding oldtechnology to keep their margins down. For
years, retail was an IT backwater. They would
hang on to technology forever. Walmart
changed that because they exploitedtechnology for competitive advantage.
That changed a lot of minds and thattrickled throughout the industry and they’ve
become more aggressive about things likestate-of-the-art point-of-sale and omnichannel delivery.
When you’re undertaking digitaltransformation projects, it’s critical tocomplete a worst-case scenario. In otherwords, what would put you out of businessor break your back, and then put a strategy
in place to do it to yourself and disrupt yourown company. It’s disrupt or die. Status quo
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To succeed, manufacturers and retailers must execute across physical and digitalchannels. As consumer shopping habits and technology continue to evolve, businessmodels will have to keep pace, incorporating sensors, beacons, robots, and more.
Putting customers at the center of all decisions will involve continuous collaborationand innovation, development speed and iteration, embracing disruptive technologies
and new ideas, along with a reliance on accurate, real-time information.

Customer centricity is enabled by the ability to understand customer behavior
and the seamless flow of communication across all channels. To truly transform,
manufacturers, retailers, and consumer packaged goods companies will have to create
networked environments and implement agile marketing based on new engagement
models to empower all stakeholders across the supply chain. This agility depends
on using data and analytics to capitalize on opportunities. A North American retailer,
for example, was able to increase customer satisfaction by 30 percent through theirapproach to agile marketing, which involved running hundreds of tests simultaneously
and ensuring that the appropriate data was collected to deliver personalized
experiences across all channels. 9
New engagement models often lead to a richer exchange of ideas and opportunities.
In the digital world, cross-functional collaboration will be critical. Collaborative EIM
technologies arm marketers to engage in innovative ways in order to meet customer
needs more effectively. Engagement helps with workflow optimization. Effective
collaboration eliminates information and process silos. As a result, other departments
are more inclined to engage with IT to adopt new technologies, automate processes,
and advance transformation.
Customer centricity is what keeps Tarkett’s focus on delivering exceptional customer
service, as described in the following feature.

Facilitate Agile Process Development

New business models drive transformational change. As explored in this book, many
manufacturers are expanding their value propositions to include services. They are
moving from a traditional sales model to a more holistic, ecosystem-driven approachwith fully integrated mobile services. This approach is based on underlying processes
that are automated, flexible, and align with online and mobile channels to improve
productivity and efficiency while reducing costs. Agile development and dynamic
processes that are cross-functional and repeatable will help manufacturers stay
nimble and focused.

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Tarkett“In the past, locating
an asset could takedays, now it’s minutes
at most.”– RICHARD BURBAUD, IT FRONT OFFICESOLUTIONS DIRECTOR, TARKETT

Figure 8.5: Tarkett

Headquartered in France, Tarkett prides itself on providing outstanding customer
service. With diverse products, breadth of expertise, and technical support tocustomize solutions to complex spaces and specific usages, the company sells 1.3 million
m² of flooring each day. The company has grown organically and through acquisition andhas 34 manufacturing sites in 17 countries, operations throughout Europe, the Middle
East, Africa, Asia, Latin America, the Commonwealth of Independent States, and North
America, employing 12,000 staff and serving more than 100 countries.

Tarkett’s key objective is to deliver ‘The ultimate customer experience.’ With tensof thousands of product lines, including current and discontinued products, Tarkett
maintains technical and marketing descriptions, product certifications, and images foreach. In the past, this was handled on multiple systems by region, which led to difficulties
in locating the most current version of assets. This was further complicated by productsthat required documentation in 30 or more languages. Managing multiple documents fora product was time consuming and prone to error, and many duplicates existed. To meet
its high standard for customer service, comply with industry regulations, and reducetime-to-market, Tarkett implemented a global Digital Asset Management (DAM) system.

One of the most welcome features of the new DAM solution is the faceted search. Users
can quickly narrow down their search by filtering the metadata captured. In the past,
locating an asset could take days; with the new system, it takes minutes at most. With
all of the assets centralized, users are confident that they have the latest, approved
version. The system is eliminating duplication, which has lowered the costs associatedwith storage requirements. The first phase of the project was foundational, with thenext phase expanding usage out to other departments, covering 6,000 staff members,
helping to ensure accuracy of information across the company on a global basis.

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Human Resources Accounting

MarketingLegal

Call Center

Figure 8.6: End-to-End Process Agilit y

EIM can be used to rapidly create new processes that support customer service—
within hours—without requiring IT support or software development skills. By
combining well-structured modules with pre-built components, an application-factory
approach allows a line-of-business manager to build new processes easily. Alternately,an existing process can be used as a template and modified to suit business needs.
This means that employees can be creative in anticipating service requirements anddesigning ways to address them. An on-demand environment is supported by a flexible
EIM infrastructure, new technologies, and the ability to re-engineer evolving customer
processes and services.

In the digital world, the IT landscape will become more multidimensional and complex—
based on new business models, shifting corporate strategies, industry transformation,organizational changes, skill shortages, a multi-generational workforce, and digital
disruption. To generate value for the business, manufacturers will have to determine
if current IT activities and projects contribute to the digital strategy and corporate
objectives for growth. To master an infrastructure in flux, business leaders will haveto examine current processes, explore new business and engagement models, andembrace digital disruption—while maximizing security and minimizing risk. It’s a tallorder, but with a sound EIM infrastructure in place, manufacturers are well equipped todigitally transform the enterprise.
In the following feature, Bumble Bee Foods has digitized its procure-to-pay process
to fulfill its mandate to deliver customer satisfaction through quality products at
comparable prices.
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Bumble Bee Foods“We decreased invoiceprocessing costs by over
50 percent, driven mainly byheadcount redeployment,
but also due to instituting amore automated process that
reduces errors.”– FARRAH GOLDBERG, GENERALACCOUNTING MANAGER, BUMBLE BEE FOODS

Figure 8.7: Bumble Bee Foods

Bumble Bee Foods was founded by a handful of dedicated fishermen in 1899. Today,
privately held and headquartered in the United States, Bumble Bee Foods, LLC is North
America’s largest branded shelf-stable seafood company, offering a full line of cannedand pouched tuna, salmon, sardines, and specialty seafood products marketed in the
U.S. under leading brands, including Bumble Bee®, Brunswick®, Snow’s®, and Beach Cliff®,and in Canada under the Clover Leaf® brand.

Bumble Bee’s mandate is to be a low-cost operator without sacrificing quality—a goalthat requires an ongoing commitment to internal efficiencies and cost reduction. To thisend, the company sought to digitize its procure-to-pay process. The AP department
was decentralized and different plants in the United States, Canada, and Puerto Rico
all managed separate processes. Invoice processing was 100 percent paper-based,
resulting in a lack of process visibility and inefficiencies. Invoices often went missing and
AP clerks spent about 80 percent of their time searching for invoices and responding toinquiries. Auditor requests took weeks to fulfill.

To address these challenges, Bumble Bee implemented a digital Vendor Invoice
Management (VIM) solution that would allow them to eliminate manual processes andstandardize and consolidate operations. The solution integrates seamlessly with their
ERP and Optical Character Recognition (OCR) systems, offering a streamlined processthat enables users to easily manage and route invoices for approval. Within 16 monthsof deployment, Bumble Bee achieved some remarkable results. They consolidated
their global AP processing centers from six to two, invoice processing operations weredigitized from end to end, and they reduced staff from 13 full-time equivalents down to
five. The solution gives employees full visibility into where invoices are at each stage ofthe process. They can more easily resolve issues on purchase orders and ensure that
items no longer slip through the cracks. The digital solution has helped transform AP
from a transactional role to a more value-based one, with its employees looking for ways
to continually improve operations.
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Expand the Digital Ecosystem

Traditional manufacturing companies are focused on the efficient design, development,
and delivery of physical goods. As more manufacturers shift from products to services
and customer centricity, they will need to likewise shift their operations and processes
to incorporate digital ecosystems. Supply chains will become supply networks.
We have already discussed how critical collaboration and innovation have becomefor digital manufacturers. Globalization has forced manufacturers to compete on
many fronts. Software competence is becoming a key requirement. In the automotive
industry, for example, the leading, global manufacturers will partner increasingly withnew entrants like Apple and Google, as well as with specialized OEMs (especially forelectric cars). This will lead to consolidation of the industry as manufacturers become
part of a scalable, ecosystem in order to stay ahead of the disruption curve.
Partnership strategies will include outsourcing in the form of managed services for
integration support. This is not just because manufacturers do not have the internal
skills needed to understand and implement new technologies, but because the
distraction of managing existing IT projects may preclude focusing on new and existingtransformative business opportunities, such as the need for consolidating multiple IT
systems or the need to move to the Cloud. Part of the transformation process involves
knowing core competencies, where the business is in terms of digital transformation,
and what can be outsourced.

In some ways, the technology barriers are the easy ones. Barriers such as lack oftechnological expertise or lack of bandwidth can be remedied with partnerships
with external providers to integrate and adopt new technologies. Digital leaders will
be required to research and build partnerships with startups, technology vendors,
developers, and whole ecosystems. In an intensely competitive landscape, the speed ofbusiness will call for faster times to innovate—and this will all be driven by technology.

Build Capacity

Manufacturers are aware of their resource limitations when facing digitaltransformation projects such as digitizing the supply chain. As illustrated in the figure
below, lack of technology skills and expertise is the greatest challenge. For this reason,
more than 20 percent of manufacturers surveyed in an IDC report are outsourcing toaddress this issue.10

To successfully transform, manufacturers will have to build capacity by bringing
together people with highly specific skill sets to collaborate on projects. Moreeffective human capital management will be required, specifically by offering ways
for employees to develop the skills required by future business models. Skill setssuch as long-term strategic research and development, for example, will also improveoverall performance.

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Lack of technology expertise

54%

18%

Lack of bandwidth to explore possibilities

31%
32%

Elusive business cases/ROI

30%

Current approach meets our requirements; nochange necessary

24%
27%

What is digital transformation?

18%

27%

Do not know where to start

22%
21%

Difficulty in identifying the right partners

23%

Change management/cultural resistance

36%

0%

10%

20%

24%
23%

30%

30%

Today

Within three years
40%

50%

60%

Figure 8.8: Barriers to Digitizing the Supply Chain11

Another effective way to improve capacity is to aggressively recruit and attract
those with requisite skill sets. As Millennials and the computer literate generations
enter the workforce (displacing the Baby Boomers), this will be achieved by creating
and maintaining a culture that mirrors their values of multiculturalism, corporate
responsibility, and career development. Building up communities of practice,promoting collaboration using social networks, and allowing employees to haveflexible hours and work remotely are ways of creating a workplace that is attractive toan evolving workforce. Manufacturers will have to determine where their skills gaps lie,and either hire to fill these gaps or train and certify current staff to expand capabilities.
As technologies continue to advance at a rapid pace, the workforce will become
integrated and machines and humans will work side by side. This new, collaborative
blend of labor will combine human characteristics such as contextual decision-making
with the precision that belongs to robots for better results. Working alongside humans,
collaborative robots are likely to reshape manufacturing processes and workforces.
With new applications for automation, robots will help to give manufacturers acompetitive edge but organizations will be required to train employees to effectively
operate and maintain them.

Using AI and analytics, employers will be able to better train workers based on detailed
modeling about how people think and act in different scenarios. Programs will bemuch more tailored to suit individual needs. In the digital world, manufacturers will
rely on these learning techniques to fill skills gaps, matching resources to capability
for improved productivity and employee satisfaction. Investment in digital education
programs for executives will help to position digital as critical to overall growth andsuccess—and aid in the implementation of a digital strategy as an enterprise-wide
directive. New team goals, performance plans, and incentives will be defined and theadoption of digital technologies will help to build capacity.
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The impact of digital technologies on the workforce will be profound as entire industries
become more entrenched in using disruptive technologies. Manufacturers should act
now to prepare for the changes that digital will introduce, especially regarding themobile workforce, training and education programs, and recruitment strategies to findand retain top talent.

Focus on Information as an Asset

Future enterprise infrastructures will have to expand to support and incorporate theentire business network. Information and process integration will increase the speedof business. New processes will be deployed on premises, in the Cloud, and to support
mobile apps. Manufacturers will have to expand their function beyond the firewall todeliver value and business growth. Enterprise architecture will extend to incorporate
new business models based on the needs of employees, customers, partners
and suppliers.

An enterprise architecture provides a framework for organizational change andincludes plans for transitioning to future business models. Before resources arecommitted to implementing change, an enterprise architecture identifies capability
and risk, outlining the ways in which data and information can be integrated
with services effectively. Data integration—a critical enabling capability fortransformation—must be reliable, secure, and accessible. Data integration
connects operations and analytics to unify the enterprise, and it does so in secureand compliant ways. Enterprise architecture helps to ensure the interoperabilityof systems and the sharing of information resources across departments. As an
integrated suite of targeted functions, EIM supports digitization, consolidation, data
integration and discovery, customer experience management, secure informationexchange, and records and information management.
EIM helps to minimize and control risk. It enables manufacturers to manage disruption
caused by a mobile workforce, unstructured data, cloud computing, AI, the IoT, andthe proliferation of devices. EIM systems can deliver benefits such as better data
access, decision making and insight, consolidation and standardization, security
and risk management, cost-effectiveness, and better alignment of IT activities withbusiness objectives. But EIM does more than this—it provides a secure context inwhich innovation can happen by unlocking the value of information, from engagement
to insight.

In the following interview, Michael Carlino of Deloitte Consulting explains the importantrole information plays in digital transformation.

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Deloitte Consulting LLP

Deloitte Digital is an innovative leader in online and mobile strategy,
design and development, offering world-class knowledge and resourcesfrom the leading global business and technology consultancy.
The company works with a wide range of iconic local and globalorganizations, helping them understand and profit from the online
and mobile revolution. Their focus is on the areas of digital strategy,
mobile, social/web, content management, and managed services—allunderpinned by digital tech architecture, application implementation anddevelopment expertise.

Figure 8.9: Deloitte Consulting LLPWhat follows are excerpts from an interview with Michael Carlino, Principal at Deloitte
Consulting LLP“Deloitte as a brand consists of many
entities. I’m in the group called Deloitte
Digital and we’re a part of Deloitte
Consulting LLP. Basically, we deal withall things digital. It’s a timely organization
because right now we’re experiencing a
confluence of digital technologies, andthese are driving a shift in business models,
attitudes, cultures, the workforce, adoption,and much more. We’ve been through thisalready about 20 years ago with mobile andeven hosted services. Only this time it’sbased on much more powerful computers
and technologies.

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Along with this shift, we’ve seen a change
in data. It’s expanded beyond transactions
to include context. The value of information
lies in its context and the channels that we
can extract it from. So, the unstructured
information around structured data is
becoming more important. And it’s much
more compelling as well, making discoveries
based on all the unstructured information.
This is where analytics and cognitivetechnologies come in. If we combine
structured and unstructured data on an
information platform that we’ve never hadaccess to before and then layer this withanalytics, the cognitive solution offers
much richer potential and its capabilities
are exponential.
Digital transformation builds a bridge
between structured and unstructured
information. We focus on transforming
use cases that are very strategic to thebusiness. We examine the process flows,
and more importantly, the information
related to these flows. Once a process is
successfully automated and benefits are
realized, we can build momentum and buzzaround the project to boost adoption. Then
we move on to the next use case. It’s aniterative and ongoing process because
technologies, attitudes, and cultures arealways changing. Where we are today canbe a dramatically different place in two
years. This case-by-case approach is much
more digestible and there’s room for failure
and learning from mistakes. Once successis achieved, it’s much easier to embraceother transformational projects.

different vantage point each participant
introduces to the problem we’re trying
to solve. And not one of these is wrong,
per se, specific approaches appeal tospecific audiences and we like to takethat into account when we’re developing atransformational solution.
How we get to our end result is just as
important as the end result, and typically,
it’s from a dynamic gathering of diverse
perspectives. This is becoming more therule than the exception as organizations
become more global. A lot of our digitalprojects are global projects. So, we not
only have to take corporate cultures into
consideration, we also have to take different
nationalities into account. The world is
becoming the “global village” that Marshall
McLuhan, a media and communication
theorist, predicted over 50 years ago. Our
culture is both shrinking and expanding
based on pervasive technological advances.
One of my key areas of focus is deepening
engagement both within the enterprise andwith customers. To refer to McLuhan again,
he stated that “the medium is the message”
and in this instance, the message is equatedto the product—and that’s what digitalcontent is. The lines are blurring between
the medium and the message. The platform,
the channels are becoming as much a partof the message. And there’s a symbiotic
relationship between the two.

From a change management perspective,
we bring a diverse approach to each project.
Deloitte Digital is made up of different
groups with a variety of backgrounds—
some individuals on a team might havean agency background, others are more
technical, for example. What we often end
up with is four or five solutions for one
particular use case based on the

Another aspect—and a key part of
Deloitte—is a focus on security. Part of
Deloitte has a huge security practice.
A consistency that we’ve found is thatno matter how much changes in an
organization, it needs to have fundamentals
around security in place. This includes
frameworks, policies, and guidelines.
Governance is a big part of security, andcompliance is the next big step, no matter
what types of technologies a company
is using. We can automate some of thecompliance processes but when it comes

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down to it, most of the security breaches
that we read about today are fundamental
breaches. These are things that should havebeen taken care of, or seem obvious from asecurity perspective.
Security is a big risk that limits the adoptionof cloud technologies. Right now, it isa hybrid world. People are looking atcontent within their own organizations andassessing what is risky to outsource andwhat is not, in other words, what can be
stored safely in the Cloud. And when I say“Cloud,” I’m not differentiating between
on-premises or off-premises, because
many organizations have their own private
cloud. But this will change. As businesses
experience successful use cases and thepotential for benefits of applying analytics
in the Cloud, there will be much more
momentum and uptake. More organizations
will move to the public Cloud. We’re notthere yet—progress is slow—but in the lastyear, we’ve seen acceptance for the Cloud
increase across all industries. Even in thepast six months, it has changed. There’s
a growing appetite for the Cloud, and thisis not based on just cost savings. Whenpeople consider the benefits of applying abroad spectrum of analytics in the Cloud,they are more open-minded to outsourcing.
When they realize the benefits can be huge,they are willing to take the risk.

One of the most disruptive forces that I
find compelling is not really a technology,
but more a practice that is enabled bytechnology, and this is crowdsourcing.
Disruption happens when we bring thought
leaders together to, not just create software,
but to find a cure for a disease for example,
or for financing some social benefit. So
not crowdsourcing for an organization orindustry, but crowdsourcing for the public
good. That is a big disruption and the powerof technology, to connect everyone. It’s
more than the Cloud or analytics, it’s asharing of knowledge. At the end of the day,
if we run analytics against data and comeup with a cure for a disease, that’s pretty
amazing. That’s what it’s all about. It’s that
impact, it’s those kinds of things which aregoing to impact the way we live today. It’s asharing of knowledge and how to harness
this. The Millennials are marrying thistransparency with altruism, they are thinking
much broader than we are, but they have a
different reality. They won’t be concernedwith the same issues that we are. Driving, forexample, won’t require a license, they’ll justuse an app to locate the closest flying taxi.
And they might travel to space. But beyond
the Millennials, how will the next generation
harness all of this data? That is what I
find compelling.”

With any digital solution, including cloud
adoption, success is based on alignment
with corporate objectives. Solutions aredeveloped and implemented based on thespecific business or industry challenge.
What’s keeping business leaders up atnight? And trying to address those issues
through technologies like analytics andthe Cloud. The answer to the why is toensure that whatever we do, we are making
businesses more successful, that we aretransforming key aspects of the business.

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R E C O M M E N D AT I O NWhen implementing a transformational strategy, a good first step is to take inventoryof current enterprise information assets. This includes the following: Fragmentation - How many disconnected sources, flows, and archives doyou have?

 Velocity - Which information processes need to be accelerated?

 Variety - What kind of information, media, documents, and discussions are you

most concerned with?

 Volume - How much information are you managing?

 Security - What kind of information security risks are most threatening to

your organization?

 Governance - How are you ensuring that your digital efforts are coordinated,

efficient, and moving in the right direction?

 Compliance - Which legal or regulatory requirements and risks exist in yourcompany and your industry?

Efforts need to be prioritized and targeted—and linked to an articulated business case.
Prioritization should align with the executive team’s top business objectives, whether
they are productivity, cost reduction, revenue growth, innovation, competitiveness, orgovernance. The objective that benefits most significantly from improved information
management should be identified. These business needs are the pilot projects for
effective digital transformation.
As EIM projects or initiatives are successful, they can be expanded to encompass moreusers, technologies, and processes. The recommended approach is to start small butbase your efforts on an encompassing, enterprise vision of transformation. Whatfollows is a collection of 15 best practices to support this approach.

Fifteen Best Practices for Digital Transformation

Digital transformation is an ongoing process. Transformational leaders must be
flexible and organizations agile enough to accept this truism. Beyond structuraladjustments, a change of attitude is already underway. Many organizations are
adopting entrepreneurial, innovative approaches to communicating and collaborating
to digitize operations.
To accomplish a foundation for transformational change, manufacturers in all industries
must establish a proven methodology and tested methods. Here are 15 best practices
for the effective execution of a best-in-class methodology for digital transformation:

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1.1 Identify opportunities for transformation. Explore ways in which digital could
disrupt the industry in the next decade. Review current and new business models.
Where does the value lie for your company? Focus on core competencies anddefine how they can be transformed. Assess your current legacy systems andinvestments in information and process management/automation solutions.
2.2 Define an appropriate strategy based on goals and objectives. Clearly
articulate your vision and strategy to ensure that your organization is committed
to and aligned behind a common set of objectives. This means taking a
stakeholder view early on to identify what’s important company-wide. To know if
you’re on the right track, consider the following: Organizational mission. What’s the organization’s long-term vision? What does

it hope to achieve?

 Objectives and goals. As with the mission, objectives also flow from the

top of the organization down to the department level, and can take theform of financial goals (i.e., profits) or departmental goals (e.g., to achieve acertain level of market share). Objectives also help to shape the lower-level
metrics and Key Performance Indicators (KPIs) that will become part of theirmeasurable strategy.

 Current activities. Current activities and programs should be reviewed in orderto make decisions on how these activities will be measured.

 Capabilities required: Technology, skills, mindsets, and partners. Consider

how you will identify, recruit, and retain new talent.

3.3 Evaluate your business case. Determine costs. Outline benefits and risks to thebusiness. Engage early in discussions on governance, security, risk, and liability.
Consider current information-based processes and procedures. Measures should
be chosen based on the processes already in place. Eventually it will become
evident as to which top-level, operational, or strategic goals these measurement
areas impact. Prioritize initiatives and assign KPIs that can be measured. Have aclear understanding of your capabilities and limitations.
4.4 Have a strong champion and dedicated team. During the initial stages ofan implementation, most organizations have a champion included in theplanning process, as well as the one or two individuals who act as the system’s
administrators. The champion provides knowledge of the organization’s
strategy management history and specifies the overall goals and vision of thetransformation program moving forward. The system administrators typicallytake on the remaining responsibilities: coordinating various meetings withthe departments for measure identification, building the actual database into
the system, and organizing training. This central team manages all businessprocesses that support the program as a whole.
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5.5 Recognize that transformation is not solely a technological issue. Culture andorganizational challenges will also need to be addressed.
6.6 Start small, but plan for a journey. A long-term transformational journey
will be based on or impacted by markets, strategies and business objectives,
capabilities, and budget.

7.7 Pilot and assess your progress. Many organizations want to hit the groundrunning, taking on as much as they can at once in the hope that it will get themto the finish line faster. Trying to measure everything at the same time is often
a setup for failure. For a successful implementation, plan for a realistic pilot—
something manageable that will allow you to make sure everything is being
done correctly from the start. By choosing a specific starting point—a function,
department, or unit within a department—you will be better equipped to finetune your progress and be positioned well for success. The greatest thing about
this approach? Training often becomes easier and results can be achieved more
rapidly—allowing implementation to be rolled out to other pilot sites easily andquickly, streamlining the entire approach.
8.8 Demonstrate incremental progress. This consists of both strategic valuedriver measures (that are often delivered monthly, weekly, or daily) and leading
indicators (usually found at the departmental or divisional level). After mappingout what’s already being measured, create an overall structure of metrics,
consider what’s been overlooked in the past to see if anything else can help toaccomplish defined goals. Those goals can be made up of multiple measures
and KPIs, and it’s important to understand the activities that directly contributeto each, in order to discover, analyze, and improve—closing the loop on
transformational success.

9.9 Identify and communicate links between scorecards and dashboards tostreamline reporting and analysis. Identifying and then communicating linkages
helps everyone understand how their contribution impacts their peers and theorganization as a whole. For example, review details regarding where resources(e.g., department funds) will be directed, but also have immediate access todetails regarding the results of those activities and how they impact higherlevel goals and objectives. In a real-world context, before spending begins on
individual programs, your organization might need to establish a general plan ofaction that summarizes linkages in terms of what they want to do and what the
expected outcomes are.

10 Determine current state of skill competence and establish new competencies.
10.
Ensure that your department or project team has the right skills andcompetencies to contribute to transformation. You may need to update yourcurrent training programs to support a rapidly evolving workplace. Anotheroption is to outsource non-core services to onshore or offshore providers, or to200

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vendors in the Cloud. When skills gaps are apparent, consider partnering withstartups or even developers in your ecosystem.

11.
11 Collaborate and talk to users. Where do current processes fall short? Whatworks and what does not? As the initiative progresses and your organization
begins to understand their overarching needs and where their information iscoming from, it’s important that the team talk to the end users who will be on thefront lines of business improvement efforts. Engage with internal customers tounderstand their needs and issues for insight into how you can support them todeliver on your strategy.
12.
12 Create a digital sandbox or testing ground. This will foster the agile anditerative approach that supports continuous innovation experimentation acrossdigital channels.
13.
13 Adopt an entrepreneurial attitude and think like a disruptor. Transform
legacy shackles (e.g., technologies and branches) into strengths or remove
them altogether. Be willing to disrupt your business and adapt to a changing
environment.
14.
14 Operationalize and measure your success. Create opportunities to refine.

15.
15 Create a culture of digital innovation and transformation. This starts with theend user. A key component to making this effort seamless is having the ability
to communicate the context around the project in the form of action plans,
related decisions, and related knowledge. The right technology will provide
users with these capabilities, but will also shorten the timelines associated withtraditional troubleshooting. Set up digital units or centers of excellence so thatbest practices (for process automation, for example) can be shared, tested,
and refined.

“The most important thing we can do whenever we introduce newtechnologies is to work on changing the culture. We can only succeed when
we build a solution with users and usability in mind. It takes 10 years to build
trust, and five seconds to lose it. When we approach any project in our
digitization initiative, we partner with other areas in the company to develop asolution and share our success stories. We aim for low-hanging fruit, and we
try not to bite off more than we can chew. Once we share success stories,
we can expand and do more, but we have to continually keep our users in
the loop.”– OLE MEYER-SKJØLINGSTAD, HEAD OF INFORMATION AND DOCUMENT MANAGEMENT AT MULTICONSULT201

CHAPTER 8

The Digital Call to Action

In the current complex, digital landscape, manufacturers that adopt new digitalbusiness models will be well positioned for success in the digital world. Given thetransformational benefits of deploying a comprehensive EIM solution, future businessleaders will make information management a top priority. As champions of a digital
agenda, they will demonstrate how technology can facilitate change and investments
in EIM technology, integrated B2B services, and automated processes will transformthe industry.
In an era where change can happen any moment and disrupt whatever your businessis doing right now, change management has become a continuous journey of evolution
and adaptation. The journey to digital transformation requires a radical overhaul of
culture, organizational structures, technology, and operating models. Since this is a
new way forward, visionary leaders will need to figure out how to get there.

EIM provides a strategic blueprint for transformational success. All of the digital
innovators featured in this book tell the story of successful digital transformation.
This vision of transformation is being defined today and improved upon for future
generations. Structures and processes are evolving, and journeys down the path to
making the vision a reality will be many and variant. The good news is—as illustrated
throughout this book—the technology is available, and many enterprises have alreadytaken their first steps toward implementing a digital strategy with EIM at its foundation.

202

ENDNOTESDIGITAL MANUFACTURING

Introduction
1
2
3

4

5
6
7
8

9

Endnotes

K imberly Knickle, “10 Predictions for the Manufacturing Industry – IDC FutureScape,” IDC, November 29, 2016.
“ KPMG Now or never, 2016 Global CEO Outlook,” Forbes Insights, 2016.

M ark Knickrehm, Bruno Berthon and Paul Daugherty, “Digital disruption: The growth multiplier,” Accenture,2016.
“ The Industrial Internet of Things. Why it demands not only new technology—but also a new operational
blueprint for your business,” PwC, 2016.
“ Predictions 2018: CIOs Make The Chief Digital Officer Obsolete,” Forrester, November 6, 2017.

I bid.

S imon Ellis et al, “Digital Transformation Drives Supply Chain Restructuring Imperative,” IDC, July 2017.

“ Manufacturing’s Digital Transformation: Is Your Company Leading the Way or Falling Behind,” IndustryWeek,
2017, https://www.opentext.com/file_source/OpenText/en_US/PDF/iw-opentext-special-researchreport-2017.pdf (accessed March 2018).
“ Digital Transformation in Manufacturing: Creating Smarter Businesses,” IDC, April 2017.

1011

“ Predictions 2018: CIOs Make The Chief Digital Officer Obsolete,” Forrester, November 6, 2017.

“ Manufacturing’s Digital Transformation: Is Your Company Leading the Way or Falling Behind,” IndustryWeek,
2017, https://www.opentext.com/file_source/OpenText/en_US/PDF/iw-opentext-special-researchreport-2017.pdf (accessed March 2018).

Chapter 1
1

2

3
4
5
6
7
8

9

 rian Hartmann, William P. King, and Subu Narayanan, “Digital manufacturing: The revolution will be virtualized,”
B
McKinsey & Company, August 2015, https://www.mckinsey.com/business-functions/operations/our-insights/
digital-manufacturing-the-revolution-will-be-virtualized (accessed March 2018).

Peter Armstrong, “GM plan to hire up to 1,000 engineers in Canada a major boost for self-driving car's future,”
CBC News, June 2016, http://www.cbc.ca/news/business/gm-canada-engineers-1.3624257 (accessed April2017).
S imon Ellis et al, “Digital Transformation Drives Supply Chain Restructuring Imperative,” IDC, July 2017.

I bid.

L orenzo Veronesi, “How B2B Integration Drives Superior Supply Chain Performance,” IDC, March 2016.
D riverless car market watch: http://www.driverless-future.com/?page_id=384 (accessed March 2017).

I bid.

 atalie Kitroeff, “Robots could replace 1.7 million American truckers in the next decade,” LA Times, SeptemberN25, 2016, http://www.latimes.com/projects/la-fi-automated-trucks-labor-20160924/ (accessed January 2018).

Trevor Mogg, “Uber Wants You to Fly to Work in a Small Autonomous Aircraft,” Digital Trends, September 26,
2016, http://www.digitaltrends.com/cool-tech/uber-air-service/ (accessed April 2017).

10

11
12

13
14

L ieve Van Woensel et al. “Ten Technologies which could change our lives,” European Parliamentary ResearchService (EPRS), 2015.

Ibid.

Adrienne Lafrance, “Self-Driving Cars Could Save 300,000 Lives Per Decade in America,” The Atlantic, Sept.
29, 2015, https://www.theatlantic.com/technology/archive/2015/09/self-driving-cars-could-save-300000lives-per-decade-in-america/407956/ (accessed March 2018).
“ 3-D Printing Gets Real,” Automotive News, May 9, 2016.

Tomas Kellner, “The FAA Cleared the First 3D Printed Part To Fly In A Commercial Jet Engine From GE,” GE
Reports, April 14, 2015, http://www.gereports.com/post/116402870270/the-faa-cleared-the-first-3d-printedpart-to-fly/ (accessed April 2017).

204

ENDNOTES

15

16
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18

19

20

21

22
23

 avid R. Wheeler, “Silicon Valley to millennials: Drop dead,” CNN, March 18, 2015, http://us.cnn.
Dcom/2015/03/18/opinions/wheeler-silicon-valley-jobs/?iid=ob_article_organicsidebar_
expansion&iref=obnetwork (accessed April 2017).

I bid.

H enrik Christensen, “China is still a major growth engine,” Henrik Christensen’s Blog, August 9, 2016,
https://hichristensen.me/2016/08/09/chine-is-still-a-major-growth-engine/ (accessed April 2017).

T im Worstall, “Phew, The Robots Are Only Going To Take 45 Percent Of All The Jobs,” Forbes, September 18,
2013, http://www.forbes.com/sites/timworstall/2013/09/18/phew-the-robots-are-only-going-to-take-45percent-of-all-the-jobs/#78e32d79b0ca (accessed April 2017).
T im Bradshaw and Richard Waters, “The rise of the robots: How the market is booming,” World Economic
Forum, May 4, 2016, https://www.weforum.org/agenda/2016/05/the-rise-of-the-robots-how-the-market-isbooming (accessed April 2017).

 ichard Waters and Tim Bradshaw, “Rise of the robots is sparking an investment boom,” Financial Times, MayR
3, 2016, https://www.ft.com/content/5a352264-0e26-11e6-ad80-67655613c2d6 (accessed March 2017).

 ane Wakefield, “Foxconn replaces '60,000 factory workers with robots,” BBC News, May 25, 2016,
J
http://www.bbc.com/news/technology-36376966 (accessed March 2017).
“ The Industrial Internet of Things,” PwC, 2016.

J im Tully, “Mass Adoption of the Internet of Things Will Create New Opportunities and Challenges forEnterprises,” Gartner, February 27, 2015.

Chapter 2
1

2

3
4
5

6

7
8

9

 oug Gates, Tom Mayor, Erich L. Gampenrieder, “Global Manufacturing Outlook. Competing for growth: How toDbe a growth leader in industrial manufacturing,” KPMG, May 2016.

V ikas Agrawal, “The Impact of Big Data Analytics on Manufacturing,” Tech.Co, December 15, 2016,
http://tech.co/big-data-analytics-manufacturing-2016-12 (accessed April 2017).
C ornelius Baur and Dominik Wee, “Manufacturing’s Next Act,” McKinsey & Company, June 2015.

C onnie Moore, “The Process-Driven Business of 2020,” Forrester Research, April 16, 2012.

B ob Montgomery, “BMW’s new body shop to double size of facility,” GoUpstate.com, June 5, 2016,
http://www.goupstate.com/news/20160605/bmws-new-body-shop-to-double-size-of-facility (accessed April2017).
“ Canon seeks to fully automate camera factories in Japan,” Nikkei Asian Review, August 4, 2015,
http://asia.nikkei.com/Business/Companies/Canon-seeks-to-fully-automate-camera-factories-in-Japan(accessed April 2017).
“ Digital Transformation in Manufacturing: Creating Smarter Businesses,” IDC, April 2017.

" Rise of the BRICS & MINTs? Global GDP 2012 vs. 2050," Sumit Dutta, April 23, 2014,
https://sumitdutta.wordpress.com/2014/04/23/rise-of-the-brics-mints-global-gdp-2012-vs-2050/ (accessed
March 2018).

K arla Salinas, “Automakers invest $3.62 billion in Mexico during first half of 2017,” The Qualifind Group,
November 9, 2017, http://www.qualifindgroup.com/en/articles/automakers-invest-3-62-billion-in-mexicoduring-first-half-of-2017/ (Accessed January 2018).

10

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13

“ Infrastructure investments and a series of major projects driving growth in Indonesia's ICT sector,” Oxford
Business Group, https://www.oxfordbusinessgroup.com/analysis/growing-backbone-infrastructureinvestments-and-series-major-projects-are-driving-growth-sector (accessed April 2017).

J im O’Neill, “The Mint countries: Next economic giants?” BBC News, January 6, 2014,
http://www.bbc.com/news/magazine-25548060 (accessed April 2017).

 esource Library, Glossary and Definitions: Manufacturing Compliance, Seimens,
R
http://camstar.industrysoftware.automation.siemens.com/en/resources/glossary/manufacturingcompliance/ (accessed April 2017).

Paul Molenaar, “The Future of Compliance in the World of Disruption,” Compliance Experts, October 29, 2015,
http://www.complianceexperts.com/blog/the-future-of-compliance-in-the-world-of-disruption (accessed
April 2017).

205

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14

15

16

17
18

19

 ark Cotteleer, Stuart Trouton, Ed Dobner, “3D Opportunity and the Digital Thread: Additive Manufacturing
M
Ties it all Together,” Deloitte University Press, March 3, 2016.

“ Industrial Internet of Things: Unleashing the Potential of Connected Products and Services,” World Economic
Forum, January 2015.

 oug Gates, Tom Mayor, Erich L. Gampenrieder, “Global Manufacturing Outlook. Competing for growth: How toDbe a growth leader in industrial manufacturing,” KPMG, May 2016.

LG website, http://www.lg.com/us/discover/smartthinq/thinq (accessed April 2017).

P rofessor Lynette Rylas, “Rolls-Royce TotalCare: Meeting the Needs of Key Customers,” Cranfield School ofManagement, March 2010.

“ Pirelli introduces the “intelligent” truck and bus tyre one sensor contains all data for safe travel,”
Pirelli, January 27, 2012, https://www.pirelli.com/tyre/ww/en/news/2012/01/27/pirelli-introduces-the%E2%80%9Cintelligent%E2%80%9D-truck-and-bus-tyre-one-sensor-contains-all-data-for-safe-travel/(accessed April 2017).

Chapter 3
1

2
3

4

5

6

7

8

9

B rian Hartmann, William P. King, and Subu Narayanan, “Digital Manufacturing: The Revolution will be
Virtualized,” McKinsey & Company, August 2015.

I bid.

M ichael Kanellos, “How To Keep The Internet Of Things From Breaking The Internet,” Forbes, June 2016,
https://www.forbes.com/sites/michaelkanellos/2016/06/16/how-to-keep-the-internet-of-things-frombreaking-the-internet/#560c73646a7c (accessed January 2018).

M arcia Walker, “How the IoT Data Tsunami Is Driving Manufacturing Innovation,” Industrial Internet of Things
Institute, October 4, 2016, http://www.ioti.com/industrial-iot/how-iot-data-tsunami-driving-manufacturinginnovation (accessed April 2017).

L eopold Ploner, “Industry Insiders Report: Big Data in Manufacturing,” Renesas, https://www.renesas.com/enus/about/web-magazine/edge/global/13-big-data.html (accessed April 2017).

“ The Internet of Things: what it means for US manufacturing,” PwC, February 2015,
http://www.pwc.com/us/en/industrial-products/assets/big-data-next-manufacturing-pwc.pdf (accessed April2017).

M arc Halpern, Simon F. Jacobson, Janet Suleski, RickFranzosa, “Hype Cycle for Discrete Manufacturing and
PLM, 2016,” Gartner, August 2, 2016.
 hahar Markovitch and Paul Willmott, “Accelerating the Digitalization of Business Processes,” McKinsey &S
Company, May 2014.
S imon Ellis et al, “Digital Transformation Drives Supply Chain Restructuring Imperative,” IDC, July 2017.

10
11

12

13

14

15

16
17

I bid.

L ouis Columbus, “84% Of Enterprises See Big Data Analytics Changing Their Industries' Competitive
Landscapes In The Next Year.” Forbes, October 2017,https://www.forbes.com/sites/louiscolumbus/2014/10/19/84-of-enterprises-see-big-data-analyticschanging-their-industries-competitive-landscapes-in-the-next-year/#4c76099017de (accessed January2018).
V ikas Agrawal, “The Impact of Big Data and Analytics on Manufacturing,” Tech.Co, December 15, 2016,
http://tech.co/big-data-analytics-manufacturing-2016-12 (accessed April 2017).

“ The Internet of Things: what it means for US manufacturing,” PwC, February 2015,
http://www.pwc.com/us/en/industrial-products/assets/big-data-next-manufacturing-pwc.pdf (accessed April2017).

J onny Williamson, “Big data analytics is transforming manufacturing,” The Manufacturer, August 8, 2016,
http://www.themanufacturer.com/articles/big-data-analytics-is-transforming-manufacturing/ (accessed April2017).

“ GE’s Jeff Immelt on digitizing in the industrial space,” McKinsey & Company, October 2015,
http://www.mckinsey.com/business-functions/organization/our-insights/ges-jeff-immelt-on-digitizing-in-theindustrial-space (accessed May 2017).
D avid W. Clearly et al, “Top 10 Strategic Technology Trends for 2018,” Gartner, October 3, 2017.

G E Digital Twin: https://www.ge.com/digitaltwingame/ (accessed April 2017).
206

ENDNOTES

18

19“ The digital twin,” GE Look Ahead on The Economist, September 30, 2015,
http://gelookahead.economist.com/digital-twin/ (accessed April 2017).

“ OpenText EIM Solutions Help Enable the Information-Driven, Connected Manufacturing Enterprise,” ARC
Advisory Group, August 2015.

Chapter 4
1

2

3
4

5

6
7
8
9

B onnie D. Graham, “Digital Business Planning: Get a Grip!” SAP, February 28, 2017,https://news.sap.com/digital-business-planning-get-a-grip/ (accessed May 2018).

 imon Ellis, Kimberly Knickle, Lorenzo Veronesi, Victoria Brown, “Digital Transformation Drives Supply Chain
S
Restructuring Imperative,” IDC, July 2017.
G ary Hanifan, Aditya Sharma, and Carrie Newberry, “The Digital Supply Network,” Accenture Strategy, 2014.

R afael Granato, “80% of Manufacturing and Supply Chain Executives Say the Digital Supply Chain Will Be thePredominant Model within Five Years,” PINC, April 6, 2017.

 imon Ellis, Kimberly Knickle, Lorenzo Veronesi, Victoria Brown, “Digital Transformation Drives Supply Chain
S
Restructuring Imperative,” IDC, July 2017.
G ary Hanifan, Aditya Sharma, and Carrie Newberry, “The Digital Supply Network,” Accenture Strategy, 2014.

I bid.

“ Digital Transformation in the Supply Chain Survey,” IDC, December 2016.

D ale Benton, “Supply Chain 4.0: Adidas and Amazon re-write the rules on supply chain management,” Supply
Chain, February 10, 2017, http://www.supplychaindigital.com/scm/supply-chain-40-adidas-and-amazon-rewrite-rules-supply-chain-management (Accessed May 2017).

10
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“ Digital Transformation in the Supply Chain Survey,” IDC, December 2016.

2017 Gartner Magic Quadrant for Identity and Access Management, Gartner, 2017.

M arc Halpern, Simon F. Jacobson, Janet Suleski, RickFranzosa, “Hype Cycle for Discrete Manufacturing and
PLM, 2016,” Gartner, August 2, 2016.

J ason Kolsevich, “Autonomous Vehicle Partnerships: How Tech Companies and Automakers are Collaborating
to Innovate the Future,” Water Street Partners, May 2, 2016,
https://www.waterstreetpartners.net/blog/autonomous-vehicle-partnerships-how-tech-companies-andautomakers-are-collaborating-to-innovate-the-future (Accessed May 2017).
 imon Ellis, Kimberly Knickle, Lorenzo Veronesi, Victoria Brown, “Digital Transformation Drives Supply Chain
S
Restructuring Imperative,” IDC, July 2017.
“ Mobile-Enabling Logistics,” Capriza, 2017.

D ale Benton, “Supply Chain 4.0: Adidas and Amazon re-write the rules on supply chain management,” Supply
Chain, February 10, 2017, http://www.supplychaindigital.com/scm/supply-chain-40-adidas-and-amazon-rewrite-rules-supply-chain-management (Accessed May 2017).

A ndria Cheng, “Consumers return $642.6 billion in goods each year,” MarketWatch, June 18, 2015,
http://www.marketwatch.com/story/consumers-return-6426-billion-in-goods-each-year-2015-06-18(Accessed May 2017).

Tom Enright, “This is What Retail Multichannel Supply Chain Excellence Looks Like,” Gartner, Inc., September
15, 2015.
“ 2017 Consumer Returns in the Retail Industry,” Appriss Retail, December 2017.

I bid.

B enoit Lheureux, Mark Morley, “The Next Big Opportunity? IoT for Your Supply Chain (Webinar),” Gartner/
OpenText, October 25, 2016.

Chapter 5123“ AI will power 95% of customer interactions by 2025, says Servion,” Manufacturing and Logistics IT, March 16,
2017, http://www.logisticsit.com/articles/2017/03/16/ai-will-power-95-of-customer-interactions-by-2025,says-servion/ (accessed June 2017).

I bid.

 avid Holtmann, Michael Deng, and Joy Peters, “Distribution Debunked to Unlock Growth,” Accenture
D
Strategy, 2017.
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4

5
6
7
8
9

D ebra Donston-Miller, “Workforce 2020: What You Need To Know Now,” Forbes, May 5, 2016, https://www.
forbes.com/sites/workday/2016/05/05/workforce-2020-what-you-need-to-know-now/#5c3e4072d632(accessed June 2017).
“ The Retail Revolution Report,” PowerReview, 2017.

“ Re-inventing Retail: 2017 Retail Vision Study,” ZEBRA, 2017.

I bid.
I bid.

J ackie Wattles, “Stores are closing at an epic pace,” CNN Money, April 22, 2017,
http://money.cnn.com/2017/04/22/news/credit-suisse-retail/index.html (accessed June 2017).

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J ackie Wattles, “Ann Taylor, Dress Barn, Loft, Lane Bryant: Store closures on the way,” CNN Money, June 10,
2017, http://money.cnn.com/2017/06/10/news/companies/ascena-ann-taylor-dress-barn-loft-stores-closing/index.html (accessed June 2017).

I bid.

Pete Evans, “Amazon buying Whole Foods for $13.7B in grocery industry shakeup,” CBC News, June 16, 2017,
http://www.cbc.ca/news/business/amazon-whole-foods-1.4163661 (accessed June 2017).
“ Amazon's 1st high-tech grocery store opens to the public.” CBC News, Monday, January 22, 2018,
http://www.cbc.ca/news/technology/amazon-go-grocery-store-1.4497862 (accessed January 2018).

M ike Griswold, Tom Enright, Thomas O’Connor, “2016 Gartner Supply Chain Top 25: Retail,” Gartner, August 4,
2016.
 en Marlow, “The humble life of Zara owner Amancio Ortega is to be admired,” The Telegraph, June 6, 2015,
B
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11656753/The-humble-life-of-Zaraowner-Amancio-Ortega-is-to-be-admired.html (accessed June 2017).

G raham Ruddick, “How Zara became the world's biggest fashion retailer,” The Telegraph, October 20, 2014,
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11172562/How-Inditex-became-theworlds-biggest-fashion-retailer.html (accessed June 2017).

K aren Belz, “This company is developing a mobile grocery store that comes right to your door,” Yahoo Style,June 19, 2017, https://ca.style.yahoo.com/company-developing-mobile-grocery-store-202743931.html(accessed June 2017).
“ Re-inventing Retail: 2017 Retail Vision Study,” ZEBRA, 2017.

I bid.

I bid.

I bid.

 ike Griswold, Tom Enright, Thomas O’Connor, “2016 Gartner Supply Chain Top 25: Retail,” Gartner, August 4,
M2016.

I bid.
I bid.

 dwin van Bommel, David Edelman, and Kelly Ungerman, “Digitizing the Consumer Decision Journey,”E
McKinsey & Company, June 2014.

I bid.

“ Cisco Consumer Experience Report for Automotive Industry: survey of 1,511 consumers in 10 countries,”
Cisco, May 2013.
“ Re-inventing Retail: 2017 Retail Vision Study,” ZEBRA, 2017.

I bid.

I bid.

Chapter 61“ eGRC Market worth 43.87 Billion USD by 2022,” MarketsandMarkets, July 13, 2017,https://www.marketsandmarkets.com/PressReleases/enterprise-governance-risk-compliance.asp (accessed
March 2018).

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5
6
7
8
9

“ Global Governance Risk and Compliance Platform Market: 2017 – 2021,” Technavio, 2016.

“ Preparing for the GDPR. Survey, Glendale, California: Walker Research Solutions,” SC media, 2017.

A lison Cooley, “Preventable Disaster: The Cost of Non-Compliance,” Meridian Knowledge Solutions, November
17, 2015, https://www.meridianks.com/preventable-disaster-the-cost-of-non-compliance/ (accessed March2018).
“ Information Governance: Too Important to Be Left to Humans,” AIIM, December 2, 2015.

I bid.

S tacey English and Susannah Hammond, “Cost of Compliance 2016,” Thomson Reuters, 2016.

“ The True Cost of Compliance,” Ponemon Institute, January 2011.

“ Compliance for Food Manufacturers: The High Cost of Doing Nothing,” Nilfisk, October 17, 2016,
http://news.nilfiskcfm.com/2016/10/compliance-for-food-manufacturers-the-high-cost-of-doing-nothing/(accessed March 2018).

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S tacey English and Susannah Hammond, “Cost of Compliance 2016,” Thomson Reuters, 2016.

“ 2017 Cost of Data Breach Study,” Ponemon Institute, June 2017.

“ Secure access to enterprise information with identity and access management,” OpenText, 2017.

“ Operation Ghoul: A New Actor Hunts for Industrial and Engineering Organizations Using Off-the-Shelf
Malware,” Kapersky Lab, August 17, 2016, https://www.kaspersky.com/about/press-releases/2016_operationghoul-the-new-actor-hunts-for-industrial-and-engineering-organizations (accessed March 2018).

R utrell Yasin, “Manufacturers Suffer Increase In Cyberattacks,” Dark Reading, April 20, 2016,
https://www.darkreading.com/vulnerabilities---threats/manufacturers-suffer-increase-in-cyberattacks/d/did/1325209? (accessed March 2018).

 ike Lennon, “Enterprises Generate 10,000 Security Events Per Day on Average: Report,” SecurityWeek, May
M
14, 2014, http://www.securityweek.com/enterprises-generate-10000-security-events-day-average-report(accessed March 2018).
“ Secure access to enterprise information with identity and access management,” OpenText, 2017.

 imon Ellis and Kimberly Knickle, “IDC FutureScape: Worldwide Manufacturing 2018 Predictions,” IDC,
S
November 8, 2017.

S ean Peasley et al, “Industry 4.0 and cybersecurity: Managing risk in an age of connected production,” Deloitte
University Press, 2017.

 imon Ellis and Kimberly Knickle, “IDC FutureScape: Worldwide Manufacturing 2018 Predictions,” IDC,
S
November 8, 2017.
“ Cloud Security Market worth 12.73 Billion USD by 2022,” MarketsandMarkets, April 24, 2017,https://www.marketsandmarkets.com/PressReleases/cloud-security.asp (accessed March 2018).

 avid Reinsel, John Gantz, John Rydning, “Data Age 2025: The Evolution of Data to Life-Critical,” IDC, AprilD
2017.
 drian King, Wim Bartels, “Currents of Change: The KPMG Survey of Corporate Responsibility Reporting,”
A
KPMG, 2015.

Chapter 71

2

3

G unnar Ebner and Jochen Bechtold, “Are Manufacturing Companies Ready to Go Digital?” Capgemini
Consulting, 2012, https://www.slideshare.net/rbouter/are-manufacturing-companies-ready-to-go-digitalcapgemini-consulting-digital-transformation (accessed March 2018).
 ike Collins, “Reducing the Failure Rate of New Products,” Forbes, April 30, 2015,
Mhttps://www.forbes.com/sites/mikecollins/2015/04/30/reducing-the-failure-rate-of-newproducts/#3ee236553185 (accessed March 2018).

“ Digital Transformation in Manufacturing - Drivers, Benefits, and Challenges - OpenText,” Sapio, 2017,
http://sapioresearch.com/our-work-1/2017/7/20/digital-transformation-in-manufacturing-drivers-benefitsand-challengesopentext (accessed March 2018).

Chapter 8
1

“ Digital Transformation in Manufacturing: The CIO’s Approach,” Infor, 2017.

209

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8

9

S imon Ellis et al, “Digital Transformation Drives Supply Chain Restructuring Imperative,” IDC, July 2017.
“ Digital Transformation in Manufacturing: The CIO’s Approach,” Infor, 2017.

“ Predictions 2018: CIOs Make The Chief Digital Officer Obsolete,” Forrester, November 6, 2017.

S imon Ellis et al, “Digital Transformation Drives Supply Chain Restructuring Imperative,” IDC, July 2017.

I bid.

“ Digital Transformation in Manufacturing: Creating Smarter Businesses,” IDC, April 2017.

“ ERP Integration,” B2B Managed Services, http://www.b2bmanagedservices.com/why_use_managed_
services/erp_integration/ (Accessed May 2017).

 avid Edelman, Jason Heller, and Steven Spittaels, “Agile marketing: A step-by-step guide,” McKinsey &DCompany, November 2016.

1011

“ Digital Transformation in Manufacturing: Creating Smarter Businesses,” IDC, April 2017.

I bid.

210

BIBLIOGRAPHYDIGITAL MANUFACTURING

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219

INNOVATOR STORY AND INTERVIEW BIBLIOGRAPHYDIGITAL MANUFACTURING

Innovator Story andInterview Bibliography

ArcelorMittal, “Deploying a Seamless Global B2B Network,” OpenText, 2017, https://www.opentext.com/connect/global/sso_download_open?docpath=/corporate/customer/casestudy/Arcelor_Mittal-0415-EN2.pdf.
Argos, “Argos underpins digital transformation strategy with OpenText,” OpenText, 2017,https://www.opentext.com/connect/global/sso_download_open?docpath=/corporate/
customer/casestudy/Argos_0917_EN.pdf.
Bumble Bee Foods, “End-to-End Process Automation with OpenText and SAP,” OpenText,
2013, https://www.opentext.com/connect/global/sso_download_open?docpath=/
corporate/customer/casestudy/BumbleBeeFoods-0215-en.pdf.
BRF, “BRF feeds B2B collaboration,” OpenText, 2018, https://www.opentext.com/connect/
global/sso_download_open?docpath=/corporate/customer/casestudy/BRF-SS-0418-EN.
Carhartt, “Global workwear brand launches comprehensive B2B platform with
OpenText,” OpenText, 2018, https://www.opentext.com/connect/global/sso_download_
open?docpath=/corporate/customer/casestudy/Carhartt-SS-0418-EN.
Coca-Cola Refrescos Bandeirantes, “Coca-Cola Refrescos Bandeirantes transforms EDI
service with OpenText™ B2B Managed Services,” OpenText, 2017, https://www.opentext.
com/connect/global/sso_download_open?docpath=/corporate/customer/casestudy/
Coca-Cola-Refrescos-Bandeirantes-1015-EN2.pdf.
Columbia Sportswear Company, Interview, OpenText, 2015.
Davigel, “Davigel Selects OpenText to Streamline Global Supply Chain,” OpenText, 2017,https://www.opentext.com/who-we-are/press-releases?id=C3D06A7512E242EFB763F19
B33FD1B54.
Deloitte Consulting LLP, Interview, OpenText, 2017.
Deutchsprachige SAP Anwenderguppe (DSAG), Interview, OpenText, 2016.
DistributionNOW (DNOW), Interview, OpenText, 2017.
Envoi, Interview, OpenText, 2017.
HMB, Interview, OpenText, 2016.
Illovo Sugar Group, Interview, OpenText, 2017.

222

INNOVATOR STORY AND INTERVIEW BIBLIOGRAPHY

iTAC Software AG (Internet Technologies and Consulting), “Software Provider Better
Leverages Big Data for Manufacturing Needs,” OpenText, 2017, https://www.opentext.
com/connect/global/sso_download_open?docpath=/corporate/customer/casestudy/
itac-en2.pdf.
Knorr-Bremse, “Knorr-Bremse Enhances Analytics Platform Capabilities with
OpenText,” OpenText, 2017, https://www.opentext.com/connect/global/sso_download_
open?docpath=/corporate/customer/casestudy/Knorr_0317_EN2.pdf.
LANXESS, Interview, OpenText, 2017.
Lear Corporation, Interview, OpenText, 2016.
Local Line, Interview, OpenText, 2017.
MAN Diesel & Turbo, “Digitized processes provide legal security at MAN Diesel &Turbo,” OpenText, 2017, https://www.opentext.com/connect/global/sso_download_
open?docpath=/corporate/customer/casestudy/man-diesel-en2.pdf.
Marks and Spencer, “Marks & Spencer efficiently manages digital assets with
OpenText,” OpenText, 2018, https://www.opentext.com/connect/global/sso_download_
open?docpath=/corporate/customer/casestudy/MS_1318_EN.pdf.
MillerCoors, Enterprise World 2016 Winner's Circle, OpenText, 2016, https://www.
opentext.com/customer-stories/elite/eliteawards/enterprise-world-2016-winnerscircle#MillerCoors.
MOBIS, “Auto parts manufacturer uses analytics to gain competitive edge,” OpenText,
2018, https://www.opentext.com/connect/global/sso_download_open?docpath=/
corporate/customer/casestudy/MOBISPartsAustralia-0318-EN.PDF.
Multiconsult, Interview, OpenText, 2016.
North Star BlueScope Steel, “Steel Band Manufacturer Makes Costing Clearer ThroughAnalytics,” OpenText, 2017, https://www.opentext.com/connect/global/sso_download_
open?docpath=/corporate/customer/casestudy/NorthStarBlueScopeSteel-0816-EN2.
pdf.
SAP, Interview, OpenText, 2017.
Solenis, Interview, OpenText, 2016.
Tarkett, “Tarkett Takes Control of Digital Assets with OpenText,” OpenText, 2017, https://www.opentext.com/connect/global/sso_download_open?docpath=/corporate/customer/casestudy/tarkett-en2.pdf.

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Tata Consultancy Services, Interview, OpenText, 2017.
Thales, Interview, OpenText, 2017.
The Chemours Company, Interview, OpenText, 2017.

224

INDEXDIGITAL MANUFACTURING

Index
A

Bosch 8, 90

Brexit 133 - 135, 156

Adidas 84, 109

BRF 93, 94

Advanced Ship Notice (ASN) 13, 92

Bumble Bee Foods 190, 191

Agility 6, 21, 30, 32, 82, 103, 106, 115, 133, 135,
161, 170, 188

Business Case 89, 181, 198, 199

Business Intelligence (BI) 15, 25, 91, 98, 108,
114, 125, 151, 165

Algorithms 8, 22, 67, 165

Amazon 9, 38, 61, 95, 114, 117, 120, 187

Analytics 2, 10, 15 - 18, 39, 50, 56, 59, 61, 63 - 67,
73, 85, 90 - 93, 97 - 100, 114 - 116, 126, 137, 147,
151, 160, 169, 170, 178, 185, 188, 193 - 196, 197

Analytics Suite 108, 160, 165, 170
Apple Pay 120

Application Programming Interfaces (APIs) 19,
183

Business Model 6, 47, 78, 85, 98, 100, 101, 117

Business Network 13, 35, 38, 40, 41, 81, 92, 94,
126, 169, 185, 194

Business-to-Business (B2B) Integration 38, 51,
54, 58, 85, 86, 93, 97, 99, 102, 161, 174, 185

Business-to-Business (B2B) Managed
Services 35, 44, 58, 94, 97, 174, 175

AppWorks 161

Business-to-Business (B2B) Network 19, 34,
83, 155

Archive 4, 20, 69, 74, 102, 107, 140, 152 - 154,
176, 178

C

Argos 120, 121, 203

Capture 18, 21, 106, 122, 126, 147, 154, 164 166, 172, 173, 186

ArcelorMittal 34, 35

Archiving 74, 140

Artificial Intelligence (AI) 2, 14 - 16, 21, 29, 43,
85, 91 - 94, 99, 106, 117, 127, 144, 158, 165 166, 184, 193
Assembly Line 13, 38, 41, 55

Asset Management 56, 72, 73, 106, 111, 160,
166, 173, 176, 187, 189
Augmented Reality (AR) 14 - 15, 114
Automation 3, 15, 16

Automotive 2, 6, 7, 8, 9, 10, 15, 28, 35, 39 - 42,
59, 72, 93, 107 - 108, 175, 192

Autonomous-Driving Cars 42

Autonomous Supply Chain 93

B

Baxter 4, 16

Beacons 106, 113, 188

Big Data 6, 21, 24, 64, 80, 97, 125, 150, 159, 160,
170
Blockchain 50, 85, 92, 93

CAD 61, 69, 70, 71, 109, 164, 166, 174

Carhartt 82, 83

Certification 31, 98, 178, 189

Change Management 32, 178, 185, 196, 202

Chemical Processing 76
Classification 154, 173

Cloud 4, 6, 11, 21 - 23, 30, 41, 62, 64, 68, 77 - 80,
93, 107, 116, 138, 145, 149, 150, 155, 161, 180,
185, 192, 194, 197, 201
Cloud-based Computer-aided Engineering(CAE) 23
Cloud Computing 8, 10, 11, 23, 149, 194

Cloud Security 145, 149 - 151

Coca-Cola Refrescos Bandeirantes 57 - 58
Cognitive Systems 4

Collaboration 30, 34, 43, 81, 92, 95, 98, 103,
159, 163 - 166, 172, 174, 188, 192
Columbia Sportswear Company 60
Communities 161, 193

226

INDEX

Compliance 18, 30, 36, 56, 59, 69, 72 - 74, 82,
126, 130 - 135, 139 - 145, 151, 161, 163, 169,
171 - 174, 178, 196

Davigel 152

Defensible Deletion 135, 151

Delivery 2, 4, 13, 18, 28, 41, 51, 62, 87, 90, 100,
106, 116 - 122, 128, 152, 175, 187, 192

Connectivity 2, 10, 19, 21, 30, 36, 54, 57, 74, 83,
93, 174, 185

Deloitte Consulting LLP 195

Consolidation 48, 130, 135, 155, 178, 184, 192,
194

Consumer 3, 6, 28, 31, 43 - 45, 61, 69, 73, 90, 99,
101, 106, 109, 113, 118, 123 - 126, 150, 175, 180,
187
Consumer Engagement 31, 150

Department of Transportation 37

Deutchsprachige SAP Anwenderguppe (DSAG)
5Digital Asset Management (DAM) 56, 59, 61,
106, 111, 160, 166, 176, 187, 189
Digital Assets 61, 109, 121, 165, 175 - 177

Consumer Packaged Goods (CPG) 8, 54

Digital Business 21, 27, 91, 95, 163, 169, 181, 202Content Management 69, 126, 133, 159, 160,
163, 176

Digital Consumer 28, 31, 45, 110, 187

Corporate Social Responsibility 155

Digital Disruption 1, 2, 84Content Suite 159, 164, 173, 178
Cross-border Trade 81

Digital Customer 46

Culture 21, 30, 47, 81, 98, 168, 180, 193, 196, 201

Customer Communications Management 160,
176
Customer Engagement 32, 46, 63, 126, 151

Customer Experience 34, 88, 98, 105, 107, 110,113 - 119, 127, 175, 180, 187, 194

Customer Experience Management (CEM)
106, 126 - 128

Customer Journey 106, 110, 112, 122, 123, 160,
176, 187
Customer Relationship Management (CRM)
56, 126, 160
Cyberattack 144
Cybercrime 143

Cyberespionage 144

Cybersecurity 21, 23, 98, 144 - 145

D

Digital Ecosystem 2, 30, 45, 122, 182

Digital Engagement 1, 27, 31, 105, 126, 157, 179

Digital Enterprise 32, 126, 131
Digital Governance 128 - 130

Digital Manufacturing 54, 145

Digital Manufacturing and Production 1, 27, 31,
79, 85, 93, 157, 170, 179
Digital Media Supply Chain 109
Digital Natives 110

Digital Platform 21, 30, 102, 107, 133, 157, 159,
172
Digital Revolution 114

Digital Strategy 81, 128, 178, 180, 190, 193,
195, 202

Digital Supply Chain 1, 6, 18, 27, 29, 32, 43, 75,
80, 85, 88, 99, 103, 157, 179, 185

Digital Technologies 2, 21, 24, 32, 34, 43, 51, 72,
80, 85, 99, 103, 132, 143, 159, 176, 182, 193
Digital Thread 51, 54, 57, 59, 75

Dashboard 17, 25, 108, 160, 200

Digital Transformation 5, 32, 81, 198

Data Integration 194

Digitization 6, 7, 51, 97

Data Breaches 144
Data Lake 65

Data Mining 125

Data Sovereignty Laws 150
Data Visualization 125, 168

Digital Twin 31, 68

Digitize 6, 21, 32, 42, 54, 62, 75, 87, 98, 101, 112,
123, 137, 166, 176, 186, 191, 198
Discovery 125, 143, 160, 173, 178, 194

Discrete Manufacturing 206, 207, 215

Disposition 20, 133, 143, 154, 164, 173
227

DIGITAL MANUFACTURING

General Motors 93

Distribution 9, 12, 14, 22, 31, 40, 45, 57 - 61, 66,
75, 85, 94 - 97, 101, 106, 114, 119, 146, 157, 161,
174 - 176

Globalization 5, 32, 34, 81 - 82, 130, 192

Global Positioning System (GPS) 9, 18, 62, 95,
122

DistributionNOW (DNOW) 95 - 98

Distributor Engagement 103, 107, 108

Google 15, 88, 187, 192

Dodd-Frank Conflict Minerals Law 133

Governance 32, 66, 71, 75, 126, 128, 134, 139,
143, 150, 151, 153, 154, 155, 156, 159, 163, 172,173, 198, 199

Drones 4, 8 - 9, 11

E

e-Commerce 6, 35, 38, 47, 50, 61, 87, 97, 99, 169

Ecosystem 2, 6, 21, 29, 30, 43, 47, 54, 63, 75, 95,
103, 122, 130, 144, 161, 176, 180, 188, 192, 201

Governance, Risk, Compliance, andCertification 128

HeDiscovery 151, 154, 172, 173

Electronic Data Interchange (EDI) 35, 40, 44,
58, 82, 87, 94, 161, 169, 205

Governance, Risk, and Compliance (GRC) 1, 27,
31, 69, 129, 131 - 135, 141 - 143, 153, 157, 179

High-Tech 3, 8, 15, 36, 39, 64

Enterprise Content Management (ECM) 69, 71,
115, 133, 140, 159, 163, 167 - 168

HMB 167 - 168

Enterprise Information Management (EIM) 22,
30, 32, 51, 66, 69, 73, 77, 79, 80, 95, 98, 102,
105 - 107, 129, 131, 135, 151, 153 - 161,
170 - 174, 180, 181, 185 - 190, 194, 198, 202

Human Resources 63

Enterprise Ecosystem 103, 130, 145

Enteprise Resource Planning (ERP) 18, 30, 38,
41, 55, 57, 61, 75, 86, 95, 98, 111, 133, 136, 145,
154, 161, 169, 172, 183, 191
Envoi 99 - 101

Experience Suite 160, 176

F

Factory Floor 6, 18, 55
Fax 161

Federal Aviation Administration 10, 38
Fifth-Generation (5G) 4

Holographic Images 14

Human Capital Management 192
Hybrid 21, 40, 62, 138, 149, 161, 197

I

Identity and Access Management (IAM) 86,
102, 144, 145, 149

Industrial Internet of Things (IIoT) 73, 74, 97
Industry 4.0 25, 163

Information Exchange 30, 32, 56, 75, 81 - 83,
106, 185, 194
Information Flow 170

Information Governance 66, 126, 128, 134, 139,
143, 151, 154, 163
Infrastructure 115, 184

Food and Beverage 2, 54, 59

Institute of Electrical and Electronics
Engineers 141

Fourth Industrial Revolution 2 - 4, 24, 54, 163

Intelligent Enterprise 170

Forecast 66, 91, 97, 108
Foxbots 4, 15

G

General Data Protection Regulation (GDPR)
133, 134, 150, 156

Intellectual Property (IP) 38, 42, 112, 144, 162

International Labour Organization 38

International Organization for Standardization(ISO) 38, 141

Internet 2, 3, 7, 18, 21, 24, 39, 73, 80, 97, 110, 147,
158, 180, 184

General Electric (GE) 56, 68, 180

228

INDEXInternet of Things (IoT) 2, 4, 6, 7, 8, 15, 16, 17, 18,
19, 22 - 25, 29, 38, 43, 50, 51, 56, 64 - 67, 72, 80,
85, 89, 90, 93, 102, 106, 113 - 116, 122, 131, 143,
147, 150, 158, 160, 169, 180, 194
IoT Platform 19, 65, 99, 161
IoT Solutions 161

Interoperability 23, 59, 163, 194

Inventory 41, 46, 49, 86 - 88, 90, 96 - 98, 108,
119, 124, 172, 198
Invoice Management 161
iTAC Software AG 24 - 25

J

Mainframe 35, 43

Maintenance 6, 9, 10, 21, 32, 51, 53, 64 - 66, 69,
72, 89, 90, 136, 140, 173, 178, 184
Managed File Transfer (MFT) 83, 109

Managed Services 62, 78, 86, 94, 95, 116, 167,
192, 195
Manual Processes 30, 97, 101, 172, 191

Manufacturing Execution Systems (MES) 25,
55, 161

Marketing 17, 24, 31, 49, 54, 61, 77, 88, 109, 111,
124 - 126, 146, 162, 167, 175, 183, 188
Marks and Spencer 176 - 177
Metadata 168

Just-In-Time (JIT) 9, 13, 39, 41, 72, 92

Millennials 28, 47, 110, 186, 193, 197

K

Mobile App 120

Key Performance Indicator (KPI) 171, 199
Knorr-Bremse 16, 17

L

LANXESS 162

Last Mile 95, 100 - 101, 125
Lear Corporation 39 - 40

Legacy Systems 43, 57, 62, 76, 136, 140, 159,
199
Litigation 59, 142, 154, 158, 160, 173
Local Line 47 - 49
Local Motors 10

Logistics 2, 4, 8, 9, 13, 22, 30, 39, 63, 77, 81, 90,
100, 108, 117, 125, 130, 152, 161, 166, 174
Logistics and Distribution 1, 9, 27, 31, 95, 99,
109, 157, 174, 175

MMachine Learning 8, 16, 28, 125, 144, 160, 165,
166
Machine-to-Machine (M2M) 10, 15, 18, 23, 62,
113, 149, 150, 161
Machine-to-Machine Communications 116,
150, 161
MAN Diesel & Turbo 139 - 140

MillerCoors 44

Mobile Device 110, 116, 118, 122
Mobile Payments 113
Mobility 12, 116

MOBIS 107, 108

Modernization 32, 43, 133
Monetizing Data 46

Multiconsult 14, 69, 70, 201

N

National Highway and Traffic Safety
Administration (NHTSA) 37

Natural Emission Standards for Hazardous Air
Pollutants 37

New Product Design 1, 27, 31, 53, 157, 161, 179
New Product Development 69
Nike 109

Non-Compliance 36, 37, 59, 131, 135, 139, 142,
153
North Star BlueScope Steel 66, 67

O

Omni-Channel 98, 116, 118 - 119, 182, 187
Omni-Channel Experience 98, 118, 187
On Premises 62, 138, 149, 161, 166, 194
Open Source 28, 165
229

DIGITAL MANUFACTURING

OpenText Analytics Suite 165, 170

OpenText B2B Managed Services 44, 174

Product Prototype and Testing 1, 27, 31, 157,
165, 179

OpenText Business Network 166, 169, 171

Prototype 165

OpenText Capture Center 165

Prototyping 12, 23, 31, 59, 66, 165

OpenText Cloud 161

OpenText Content Suite 164, 173, 178

Q

OpenText Digital Asset Management 166

Quantum Computing 144, 145

Quality Management 59, 165

OpenText Core 172

Quantum Cryptography 144

OpenText Discovery Suite 173

OpenText Experience Suite 176

R

OpenText Magellan 165

OpenText Process Suite 170, 171

Radio Frequency Identification (RFID) 18, 51,
90, 119

Optical Character Recognition (OCR) 166, 191,
207

Recalls 37, 131, 142

Original Equipment Manufacturer (OEM) 9, 41,
145

Records Management 59, 134 - 136, 139, 154,
172

Regulations 10, 21, 32, 36 - 38, 59, 69, 72, 82,
132, 136, 140, 147, 149, 154 156, 163, 172, 178,
189

P

Permissions 164

Regulatory Compliance 18, 130, 135, 154

Pervasive Visibility 18, 89

Regulatory Reporting 171

Plant Asset Management 73

Responsive Design 110

Plant Maintenance 31, 32, 53, 66, 69, 72, 136

Plant Maintenance and Asset Management 1,
27, 31 32, 53, 66, 69, 109, 157, 179

Retail 2, 8, 9, 14, 31, 44, 59, 62, 77, 99, 106, 113,
116 - 119, 121, 125, 128, 146, 150, 175, 187

Retention 132, 133, 136, 151

Platform-as-a-Service (PaaS) 2, 46, 47, 77, 132,
142, 185

Return on Investment (ROI) 72, 172, 174

Predictive Analytics 10, 56, 161, 170, 178, 185

Robot 9, 15, 16, 28, 173, 174

Privacy 10, 18, 21, 59, 128, 134, 149, 150, 151

S

Portal 74, 77, 87, 152

Returns 90, 95, 99, 120, 125

Predictive Maintenance 17, 18, 21, 22, 73, 89,
90, 97

Robotics 2, 3, 4, 8, 15, 16, 43, 113

Proactive Replenishment 18, 22, 89

SAP 5, 8, 38, 97, 185, 186

Process Automation 15, 39, 88, 97, 135, 160,
171, 172, 201
Process Development Execution Systems(PDES) 55

Processing 19, 22, 30, 58, 76, 87, 177, 184, 191
Process Suite 160, 170, 171

Procurement 90, 91, 96, 98, 169

Product Lifecycle 30, 55, 145, 161

Product Lifecycle Management (PLM) 4, 30,
55, 57, 66, 69, 75, 145, 164

Samsung 15

Scalability 80, 97, 103

Search 113, 126, 154, 168, 172, 186, 189

Security 20, 25, 37, 49, 59, 69, 82, 98, 128, 130 137, 143, 147, 149 - 152, 154, 158 - 161, 163, 168,173, 185, 190, 194, 196 - 199

Self-driving Cars 3, 4, 8, 42

Sensors 3, 6, 9, 15 - 18, 22, 24, 30, 42, 51, 55, 59,
64, 68, 73, 78, 90, 98, 102, 106, 113, 117 - 119,122, 124, 161, 188
230

INDEX

Silicon Valley 15
Smart Cars 42

Three-dimensional (3D) Printing 2, 4, 7, 8, 10,
12, 38, 45, 66, 78, 106, 109, 117, 164, 166

Smart Factories 24, 25, 64

Total Quality Management (TQM) 141, 142

Smart Manufacturing 2

Trading Partners 30, 32, 35, 83, 85, 94, 97, 155,
166, 169

Smart Cities 42

Tire and Rim Association 37

Smart Factory 55

Trading Grid 169

Smart Sensors 22, 24, 56

Transaction 92, 97, 113, 116, 124, 140, 161

Smartphone 117

Transparency 25, 49, 56, 74, 89, 93, 98, 133, 197

Social Media 122, 124, 154, 160, 173

U

Software-as-a-Service (SaaS) 62, 77, 78, 185

Solenis 75 - 77

Standardization 4, 6, 30, 32, 38, 39, 41, 62, 88,
163, 194

Uber 6, 7, 9, 101, 120

Standards 6, 23, 37, 41, 59, 83, 94, 128, 133, 141,
149, 173, 180, 185

Uniform Tire Quality Grading System 37
United States Environmental Protection
Agency (USEPA) 37

Startups 21, 192, 201

Unstructured Data 70, 127, 137, 160, 168, 194,
196

Structured Data 168, 196

V

Standards Council Canada (SCC) 141

Storage 18, 135, 149, 151, 154, 166, 173, 189

Subscription-based Model 47

Subscription-based Services Economy 46

Supplier 10, 15, 35, 41, 44, 49, 63, 80, 87, 90, 93,
107, 142, 162, 169
Supplier Engagement 63

Supply Chain 2, 4, 6, 10, 13, 18, 23, 29 - 32, 38,
40, 43, 47, 54, 59, 61 - 65, 68, 75, 80 - 97, 102,108 - 110, 118, 120, 125, 131, 137, 141, 145, 150,
155, 161, 166, 169, 170 - 176, 180, 185, 192
Supply Chain Communities 161

Supply Chain Management (SCM) 57, 75

T

Tablet 171

Tarkett 188, 189

Tata Consultancy Services 114, 115
Telematics 93

Value Chain 1, 22, 30, 47, 54, 59, 131, 145, 148,
149, 163
Vendor Invoice Management (VIM) 191
Version Control 69

Virtual Reality (VR) 14, 106, 114, 150, 166

W

Wearable Devices 2, 15, 106

Wearable Technologies 12, 45, 113
Wearables 8, 15, 113, 114, 171

Web Content Management (WCM) 126, 160,
176
Wi-Fi 74, 150

Wireless 17, 24

Workflow 67, 147, 167, 188

Thales 19, 20, 21

Z

Third-party Logistics Provider 125

Zara 114, 117

The Chemours Company 136

Three-dimensional (3D) CAD 69, 109, 164, 174

Zappos 61

Zero-length Supply Chain 10, 90

231

Mark J. Barrenechea joined OpenText as President and Chief Executive
Officer in January 2012, and also serves as a member of the Board. In January
2016, Mark took on the role of Chief Technology Officer.

Mark oversees the strategic direction of the organization. Under his direction,
the Company has grown both organically and through strategic acquisitions
into a $2.3 billion technology company and has successfully transformed into
an Enterprise Information Management leader.
Mark has received many accolades recognizing his leadership and innovation
over the years including the 2011 Best Large Company CEO from the San
Francisco Business Times and the 2015 Results-Oriented CEO of the year by
the CEO World Awards.

Mark J. Barrenechea

In addition, Mark has authored several books including The Golden Ageof Innovation, On Digital, Digital Financial Services, Digital: Disrupt or Die,eGovernment or Out of Government, Enterprise Information Management:
The Next Generation of Enterprise Software, Software Rules, and e-Businessor out of Business.

P. Thomas (Tom) Jenkins is Chair of the Board of OpenText Corporation(NASDAQ: OTEX, TSX: OTC) of Waterloo, the largest software company in Canada.
Mr. Jenkins is the Chair of the National Research Council of Canada and thetenth Chancellor of the University of Waterloo. He is Chair of the Ontario Global
100 (OG100) and a co-founder of Communitech in Waterloo.
Mr. Jenkins has pioneered many of the technologies commonly used today
to manage digital information to increase productivity and governance. Mr.
Jenkins is the author or co-author of ten widely read books, most recently
Digital Financial Services, Digital: Disrupt or Die, eGovernment or Out of
Government, and Enterprise Information Management: The Next Generationof Enterprise Software. Mr. Jenkins has co-authored the book Ingenious withhis excellency, David Johnston, the Governor General of Canada, a book about
the history of innovation in Canada.

Mr. Jenkins received an M.B.A. (York University), an EE M.A.Sc. (University ofToronto) and a B.Eng. & Mgt. in Engineering Physics and Commerce (McMaster
University). He is a Fellow of the Canadian Academy of Engineering (FCAE). He is
the 2017 Companion of the Canadian Business Hall of Fame (CBHF). Mr. Jenkins
was awarded the Canadian Forces Decoration (CD) and the Queen’s Diamond
Jubilee Medal (QDJM). Mr. Jenkins is an Officer of the Order of Canada (OC)for his contributions to education and innovation in Canada.

Tom Jenkins

Disrupt or Die

Discover new opportunities with digital.
We are in the midst of what has been called the Fourth Industrial Revolution. It is being driven
by technology advancements in software, analytics, AI, machine learning, quantum mechanics,
robotics, the IoT, material science, 3D printing, automated cars, and more.
This revolution will have a profound effect on the manufacturing industry.

It is already redefining the relationship between humans and machines for significant gains in
performance, productivity, and profits. It has been predicted that IoT-connected devices alone,
for example, will allow manufacturers to save $3 trillion through optimized logistics and nextgeneration digital supply chains.
During this digital revolution, our capacity to generate and collect information is greater thanit has ever been before. As the extremes of automation, connectivity, and computing power
converge, the need to manage new types of information will be critical. Deriving meaningful
insight from this information will be the next major transformative activity for manufacturers.

As the proven digital backbone for manufacturers and smart factories around the world,Enterprise Information Management (EIM) securely brings together disruptive technologies
to manage, store, and analyze information all along the supply chain. This book illustrates how
innovative manufacturers are using EIM to digitize critical activities throughout the lifecycleof manufactured products and facilities—from design through to manufacturing, logistics,
distribution, sales and support. Read “Digital Manufacturing” and discover how to transformyour operations and evolve your supply chain—and succeed in the digital world.

“Over the next five years, digital
disruption will displace 40
percent of established market
leabers. Will you be one?”©2018 by Open Text Corporation. All rights reserved. Printed in Canada.

ISBN 978-0-9936047-8-2

9 780993 604782