Cultivate changes to guarantee the future
The ability to use flexible, high — speed digital technologies and management systems-that's what primarily affects the productivity, efficiency and competitiveness of modern industrial enterprises. But each has different opportunities: it is customary to distinguish six levels of digital maturity on the road of the business classic format of the same technological order to the company, the relevant definition of Industry 4.0. According to experts, most Russian companies that have embarked on the path of digital transformation are at the first or second levels of digital maturity. Here, the use of digitalization tools is limited to pilot projects in individual departments against the background of the dual attitude of the staff to innovations. Companies that have moved to the third level, approach the introduction of digital technologies and solutions systematically, in advance defining promising areas of development and creating a network of agents of change among employees. To control the equipment, they widely use sensors and sensor systems, and the data is processed with the help of Big Data technologies.
However, many companies are "stuck" at this level. Most often, they lack the competencies for the next step — building a modern business model that provides effective management of business processes and product life cycle. It is impossible to build such a business model without mastering the current technologies of digital transformation. While the suppliers of relevant world-class technologies can still be counted on the fingers. Infor, the world leader in the development of cloud software for SMB and enterprise ERP systems with deep industry specialization, is certainly among the leading suppliers. Infor products, including integrated ERP solutions with support for artificial intelligence technology, are used by industrial companies by more than 170 countries.
At the end of May, Infor together with its Russian partner, IPL Consulting, held the Infor Customer Day Moscow 2019 conference. The experts who spoke at the conference spoke about the latest developments of Infor, digital business transformation and methods of optimization of business processes, as well as about the effective management of the enterprise with the help of modern technologies, applications and capabilities of corporate social networks.
Phil Lewis, vice president and global solution consulting EMEA, Infor, spoke about the specifics of digital business transformation. "At least 40% of companies will disappear within the next ten years if they do not understand how they need to change with new technologies." Based on this apocalyptic quote from the former executive chairman and CEO of Cisco Systems John Chambers, the speaker moved on to a detailed analysis of the stages of digital transformation and the necessary tools. It was expected to come about ERP, but in an unexpected way for many. Traditional ERP platforms and strategies for their application cannot be a reliable foundation for a real digital business, Phil Lewis stated his position. And he demonstrated how systems have changed in recent years. Familiar to many, traditional ERP is "expensive and inflexible", it is "difficult to maintain" and "you get dependent on the vendor" with it. According to Phil Lewis, companies today need to focus on the model of the so-called post-modern ERP. Post-modern ERP is a solution that provides standardization and automation of administrative and production processes, combining the balance between the integration of individual parts of the system, its flexibility and the possibility of target specialization. All this provides a good basis for digital transformation. Post-modern ERP implements a strategy of loosely coupled portfolio of heterogeneous business applications, as well as the widespread use of cloud solutions, separate from the basic enterprise applications. And it certainly has space to grow. Namely, as the speaker explained-in the direction of Autonomous digital systems. The future of ERP is a comprehensive platform that provides a solid Foundation for a complete digital transformation and covers all levels of enterprise activity: administrative and production processes, internal corporate network, application and improvement of artificial intelligence technologies. At the same time, as Phil Lewis stressed, transformation requires not only and not so much new technical solutions, but "a competent team ready to implement ambitious ideas." According to the speaker, digital transformation is not only a technical but also a creative process. And yet-the concept that allows you to effectively integrate the business component, technology and human resources against the background of automation of existing business processes and the formation of new ones.
Phil Lewis and his colleague, consultant on key decisions Kathryn McDonald, at the conference gave Intelligent Manufacturing Journal a brief exclusive interview.
- You have been working on the Russian market for several years, what features of consulting and engineering services in your segment could you mention?
- Over the years in Russia, we have formed a very strong community of partners specializing in specific industries and segments of the industry. For example, one partner is engaged in mechanical engineering, works with clients from the industry, leads projects for the implementation of our technologies. Others work with the automotive industry, the food industry, pharmaceuticals... We believe that it is very important that local partners do business with Russian companies. Therefore, we are rarely directly involved in the deployment of solutions on the ground — our partners are very competent in their areas. We have very good positions in the manufacturing industry, in mechanical engineering, as well as in the food industry, where projects have been implemented to optimize supply chains and warehouse management. We are also looking for partners who would work with us in other industries. For example, in the fashion industry, maybe in the public sector, in health care. We have excellent solutions, but so far there are no partners through whom we could work with these segments.
- Quite a typical situation is when an advanced Russian company buys a good boxed solution for digital transformation, has all the necessary tools, and yet digitalization is stalling. What do you think the reasons are?
- This is not only a problem for Russian customers, it is a global problem. It involves the use of traditional, legacy ERP systems. We believe that at the basic level, the ERP system should provide industry specialization. The needs of the aerospace industry are not identical to those of the bakery industry, so it is obvious that a "one for all" ERP system is not the best idea. We are against the unified ERP systems usage. If you are using a universal solution, it is necessary to modify it to work effectively in a particular business environment. We fundamentally refuse to modify solutions, our company policy is zero modifications. Our customers are much faster on the path of digitalization because they have a solution that corresponds to the specifics of their industry. As we improve the solution, we can immediately provide them with new useful features, access to new technologies-without any modifications and expectations. As a result, our clients get access to the latest developments: the Internet of things, artificial intelligence functions, Big Data, predictive analytics. And this is the essence of our approach. If the client installs an old ERP system, he is immediately forced to modify it. Of course, this causes problems.
- Do you upgrade the ERP of previous generations?
- We are engaged in modernization, but not modification. We do not change the source code. We create our solutions to extend the capabilities of existing systems. That is, we can improve something, but we do not change or modify the source code. Since the core of the system does not change, it is easier to migrate, for example, to new solutions or new versions.
- What are the technological demands of the most typical for your Russian clients who want to modernize? How often do we have to adjust them - both in the direction of expanding opportunities, and simplification, greater efficiency, etc.?
- Infor has a digital transformation team. They are not programmers, they do not deal with software. This is a separate team of specialists who help to outline the digital future of the client. Such assistance is very much in demand, because it can be very difficult for companies to make the best choice from the variety of technologies offered under the brand of digital transformation. It is difficult to understand what is really needed: the Internet of things, artificial intelligence or something else. Some large clients have their own teams of similar profile, subordinated to the top manager, leading the digital direction. But smaller companies do not understand much about digitalization. Our digital transformation team helps them navigate and remove the mystical veil from technology. Thus, a unique, individual for each client digitalization strategy is developed. We have the right technical solutions and services, and people who can implement it all.
- Customer Day is, first of all, an opportunity for its organizers to present their new products. Please tell us what's new in Infor CloudSuite Industrial solutions for industry. And above all – high-tech, including for engineering and related segments.
- So, let's start with the new version of Info CloudSuite Industrial: this is the latest release, it has been improved in several ways. First, there are significant technological improvements that have enabled users to work with all the new technologies that Phil mentioned. The user interface is now simpler and more intuitive, allowing users to interact more proactively with the system. Secondly, we now offer a single version of the system. This means that our customers get faster access to new features and settings. It is an additional competitive advantage. We are constantly improving solutions with the help of such small improvements, small update packages. If we talk about changes related to the industry, it is worth emphasizing that we have included in the core of the system various industry packages: for the automotive industry, foundry, printing and packaging, manufacturing industry.
There were a lot of developments on elimination of the mistakes arising in the course of control of breakdown of goods on parties, control of serial numbers of products and production. The possibility of clear tracking is extremely important, for example, in the automotive industry and engineering.
- Everything related to the modernization of warehouses, logistics and the management of logistics complexes is very important for modernizing companies. By the way, as far as we know, Infor has taken a leading position in the "Magic Quadrant" Gartner for 2019 in the segment of inventory control systems. What made you a leader in this area and what did it give the company?
- Yes, we have become the best supplier of supply chain management solutions according to the Gartner rating. We have been going towards this for the last 5-10 years. Research "Magic Quadrant" is based on detailed interviews with companies-clients key vendors and on client assessments. These numerous interviews have confirmed that our solutions provide more opportunities to work effectively. Clients told Gartner experts about significant achievements gained through the use of our solutions.
- Let's clarify: we are talking only about logistics within the contour of the company, or including external interactions-with the connection of contractors, outsourcers, etc.?
- Both internal and external logistics. Three years ago, Infor made an important acquisition, we were joined by GT Nexus, which is engaged in cloud services. They have about 50 thousand companies, which provides excellent visibility of the entire structure of complex supply chains, their structure and hierarchy. Take as an example Adidas — the largest international company. They have almost all processes outsourced. For this reason, it is difficult to keep track of what is happening within the organization. GT Nexus` Solution, which is now called Infor Nexus, allows you to connect to a single system of all process participants: manufacturers, logisticians, freight forwarders and so on. As a result, Adidas has a complete picture of what is happening in the company, which actually consists of about a thousand organizations. We assume the acquisition of GT Nexus as a very successful investment in the future, because we see that the future (and there are many examples in the present) — is for the network structure of organizations. Therefore, it is extremely important to be able to collect and process data within such network structures.
- Yes, but here the problem of unwillingness of many of our companies — organizational, technological and even psychological — to enter into such networks arises.
- On the one hand, I agree — there is such a problem. However, the tendency is for large organizations to do so, and what is more, they set requirements for connecting to a single network for their suppliers, that is, smaller companies. This is a serious incentive. Such an approach is gradually becoming the norm and is perceived as an urgent need. How information spreads within networks can be explained in a simple example, comparing Outlook and Facebook. In Outlook, I have to notify all my contacts about the phone number change. On Facebook, information is updated once and everyone gets it instantly. The same principle works with Infor Nexus. Adidas places an order, and all authorized supply chain members immediately see it and can react to it. These are the technologies of the future that are spreading wider and wider. We believe that over time this will become a new system standard, such as EDI (Electronic data interchange).
- Could you give an example of your solution with a new interesting functionality from the field of predictive analytics in relation to industrial production? This can be, for example, predictive analytics related to equipment maintenance.
- While the term “Industry 4.0” refers to the application of state-of-the-art technologies in traditional industry, the still less common term "Equipment Maintenance 4.0" refers to the use of the capabilities of "Digit" in the field of maintenance. For example, the Internet of Things, is already widely used here. In production shops of the companies — technological leaders, by means of sensors continuous complex monitoring of all equipment is conducted. And the equipment begins to signal: for example, "I`m overheated"," I have a faulty water pump" ,"hood is fault." Thus, the possibility of more effective preventive maintenance, repair before the fault. Thanks to machine learning and Big Data technologies, we can collect and process all the information, including historical data, and predict what and why can go wrong. How to correct this situation, based on previous experience. Modern platforms enable machine learning to analyze and interpret all available information and to identify the correlation of certain events with a variety of factors, including seasonal and other changes.
One of our products in this area is Infor EAM (Enterprise Asset Management), a solution for asses management. Infor EAM works for a variety of customers: it is the largest airline Lufthansa, the urban transport system of New York, that is, the bus fleet, subway and other public transport. EAM is also used by the European Organization for Nuclear Research (CERN) to service the Large Нadron Collider. Like all Infor`s solutions, EAM runs on a single Infor OS platform. Infor implements support for IoT, artificial intelligence, machine learning, Big Data - these are the key components of the platform core, on the basis of which EAM and built "Equipment Maintenance 4.0".
- Lufthansa and New York city hall can, of course, afford the data center they need. And what about startups or companies from the segment of small and medium-sized businesses that seek to be high-tech? They just can't afford the cost, and the data flows are constantly growing. By the way, here is another interesting problem: recently Big Data was considered as an answer to all questions in terms of data collection and processing, over time, production workers have an understanding that not all data collected from equipment and infrastructure is really needed. Do you have recommendations on how to separate the information necessary for predictive analytics and not waste resources on collecting something superfluous?
- Yes, of course EAM is focused on large organizations. But we have cloud ERP`s solutions for small and medium businesses. They implement functions to manage preventive maintenance and repair of machinery and equipment. The same approaches are used here and there, the same business scenarios are reproduced. In our experience, the most serious problem for small businesses is the need for partner support: it is often difficult for small companies to decide what they really need and what they want to get from the solution.
As for Big Data, I fully agree with you. The data used for predictive analytics can come from completely different sources: it can be historical data from an ERP system, and weather data from Yandex. Weather, engineering information from EAM solutions, monitoring of social networks – it can be anything, depends on the specific tasks. At the same time, as a rule, there is no need for one-time processing and analysis of some huge amounts of information, all incoming data. Most often it makes sense to collect and store them, for example, in the form of Date Lake in order to extract and use only the necessary information. We have Infor Burst solution – BI platform. It works with multiple sources of information, generates a data schema that allows you to understand exactly what data is needed to solve specific problems, simplifies the analysis and helps to present the results in a simple and understandable form for the end user.
P.S Modern market conditions put difficult tasks for any business: it is necessary to simultaneously achieve cost reduction and continuous improvement of service quality, — said the official representative of Infor in Russia and the CIS Dmitry Martynov, summing up the conference. - At the conference Infor Customer Day we talked about the possibilities of digital transformation, that organizations need to engage customers and employees, using the most effective opportunities that will help companies become more successful in the market. We also presented solutions that will help our customers and partners to adapt to any changes as quickly as possible, improve the efficiency of business processes and expand the capabilities of accounting, planning and procurement.