Ensuring successful digital manufacturing during volatile times

Transcript

Stan Miller:  Hello everyone and welcome to ROKStudios.  I’m Stan Miller, I’m the PR and Analyst Relations Manager for Rockwell Automation, in the EMEA Region.  And I’m joined today in the studio by our EMEA President, Susana Gonzalez and Gotz Erhardt, he’s a Senior Managing Director at Accenture.  Welcome to both of you.

Susana Gonzalez:  Thanks.  Thank you, Stan.

Gotz Erhardt: Thank you very much.

Susana Gonzalez: So excited to have you in the studio today.  So, we’re here to talk about ensuring success in digital manufacturing during volatile times.  And first question, I’d like to address to Gotz, please.  How has volatility impacted the industry in Europe over the last few years?

Gotz Erhardt: I think there are a couple of influencing factors.  Obviously the most recent one, the supply chain shortages of components but also critical raw materials, which led to significant bottlenecks and as we have witnessed in automotive, automobile production, low volumes. It’s all good for the automotive manufacturers because they could sell the vehicles with less rebates, but not every industry was so positively affected by supply chain shortages.  Overall, in terms of volatility, there are four key topics, key themes we see for our clients. 

The first being sustainability. It’s the thing in Europe, meeting the Net-zero pledges, doing something significant and tangible about climate change.  The second one is related to supply chain, and global supply chains resiliency, how can we help our customers, our joint customers to become more resilient businesses, both in terms of supply chain as well as manufacturing. 

Then it’s business model innovation.  Some of our clients’ industries really need to completely reinvent themselves, regardless if it’s automotive, with software-defined vehicles, the move from internal combustion to better electric drive trains, in pharmaceuticals, precision, if not personalized medicine.  There are a lot of business model innovations where we are only at the starting point and need to help our clients.  And then lastly, it’s productivity.  All of our clients in Europe need to deal not only with supply chain disruption, but with significantly higher energy costs, right, the factor cost. 

In Europe, something to be considered and therefore, to be more competitive, our clients need to become more productive, and this is clearly where Rockwell and Accenture can help, in terms of automating processes and making our clients much more productive.  But Susana, what are your thoughts on the volatile environment?

Susana Gonzalez: It’s been quite interesting over the last few years.  I mean, we first had the covid, then pandemic, and then you mentioned, the supply chain shortages and lack of availability of components like chips; the war, the depreciation of the Euro – I mean, it’s been a really ambiguous time.  I agree with the things that you said and I think from my side, I know that output of it has been the faster adoption of digital tools.  The technology has been around for many, many years and we’ve been trying to introduce technology in different ways to our customers, but I think finally they’ve been forced to adopt some of these tools when it comes to remote working and you’re seeing virtual reality, augmented reality, being able to commission machines far away, from a distance. I think that, if nothing else, these volatile times and the things that we’ve been going through over the last three years has helped us make a business case that we’ve been trying to drive for a long time, and I see an acceleration of customers implementing this. I don’t know if you agree with that. 

Gotz Erhardt: No, absolutely, and I think, Susana, you mentioned a couple of the really crucial topics, because I think what has changed, and it’s also borne out by recent research, is what we call total enterprise reinvention.  There is a marked divide between our company; companies which aspire to become leaders in their industries and the ones who think with a little bit of business as usual, you can still sort of survive. I think what you mentioned, it’s the strategic thrusts when clients basically say well, we need to tackle a lot of different topics at the same time. We need to excel in manufacturing, we need to cut short on the cycle time between engineering and production, we need to know what our machines, our industrial equipment, which we sell to other customers, how it’s performing in the field, how we can service and maintain it.  So, I think digitally enabled engineering and manufacturing is now – getting more and more traction and the value proposition is also superior, I guess.

Susana Gonzalez: Yep.  It’s much clearer for the customers, that they have to do this.

Stan Miller: This is a great discussion.  We’re talking about the business climate, but also how that’s accelerating digital transformation.  I’m really curious to hear from both of you, along the lines of sustainability, which Gotz mentioned earlier, but Susana, if you wouldn’t mind if I could ask you first.  In what ways - from your perspective - in what ways can manufacturers make their operations more sustainable?

Susana Gonzalez: Okay.  First, let me start by saying that at Rockwell Automation, we look at sustainability from different angles, so we think about enabling our customers to be more sustainable, enabling our own company to be more a more sustainable company, and also drive a more sustainable community.  So, those are three pillars and then of course, sustainability’s so broad, it’s not only about the environment, but it’s also about governance and employee value proposition, so sustainability is so broad.  But if I focus more on your question, how do we help customers drive more sustainability, then we think about use cases, specifically around energy management, water management, which is one of the big topics, smart water; and waste management.  And so, right now, I think that within those three areas, we can find so many examples. We just released our new or latest report on sustainability and I was surprised with the wealth of information and the number of use cases that we have.  One of the things that I like about my job the most is that we are not focusing only one industry, we help customers across a plethora of industries, and I’m sure that you might feel the same way, that in a way, we’re so lucky, because we’re helping so many different industries and so many different customers, so it makes the job very interesting. 

So, we have lots of examples on how we’re helping customers produce in a more agile and in a more sustainable way, by helping them reduce the amount of energy that you need by having, for instance, products that are more energy efficient or by implementing AI tools that reduces the time and the spend that you need to do to maintain your operation.  So, super broad range of use cases across many different industries, they don’t look all the same which is like the interesting part, it’s like every customer is on their own path and the amount of examples that we could list, I guess, is endless.  But, do you agree with the part of the job of covering many industries?

Gotz Erhardt: Absolutely.  I mean, it’s probably one of the best times to be in everything, which is around digital industries, digital engineering, digital manufacturing.  And when I think one of the things which really sort of excites me and inspires me is the fundamental shift, right.  We were all born and grew up in a very linear world, in which you had large scale production, distribution, and nobody really sort of cared a lot about what happened at the end of the life, the useful life of a consumer product, and this has completely changed, right. 

We are clearly moving away from linear to fully circular.  And all the circular models, including products which are designed for sustainability, produced in the most sustainable fashion, upgraded so during an extended product life cycle, so that clearly all requires digital technology.

You need to have consistent measurements throughout the chain, the digital thread, if you will.  You need to have the full digital twin of the product as well as the manufacturing technology, as well as the product in use, until you finally sort of dismantle it and reclaim some of the precious or not so precious components, be it polymers or precious metals, and that’s super-interesting for our technology people within Rockwell, within Accenture, for engineers, and we are doing something good for the planet, which makes it even more exciting.

Susana Gonzalez: I couldn’t agree more.  You mentioned precious metals and recovering.  I think recyclability and that last piece of the end of life is going to become, as you said, an innovation field where we will see many more new lines of business coming out of recyclability.

Stan Miller: So, if you could, and Gotz touched on this earlier: we talked about supply chain and some of that. Maybe if you could answer this question first.  From your perspective, how can manufacturers make their supply chains more resilient?

Gotz Erhardt: It’s a little bit of a combination of classic tools as well as some digital enablers.  So, classic tools are basically supply relationship development, supplier development.  Today, let’s say one of my customers is a component manufacturer and produces industrial components for cars, for instance, like gear boxes or steering systems.  They need to understand not only what their suppliers can deliver in terms of injection molded casings or whatever the component is, but what’s the emission, the carbon footprint of a specific component. How can we make trade-offs between different alternatives, in terms of the product, and their respective carbon footprint; how can we enable our suppliers to become net zero because their emissions are our emissions or my emissions, once I start using their product.  So, that’s the total supply chain and we need to have more transparency around the total supply chain, including, and I think that’s also a change, a view on what are the manufacturing capacities, own manufacturing capacity, contract manufacturers.  And that again, helps reduce emissions.  Think about all the net working capital which is tied up in supply chains and could be reduced, right.  So, there is a huge efficiency as well as effectiveness potential, and resiliency comes from better collaboration across the supply chain. Including manufacturing.

Susana Gonzalez: I don’t know how you feel about it but, like what you just described is a big challenge for the industry and I have not seen a lot of customers or partners have that visibility across that full supply chain from the beginning to the end.  I think that that’s still the next frontier in the utilization.  We have pieces, but only a few customers are doing it already.

Gotz Erhardt: Agree and I think, what we can do, as Accenture, as well as Rockwell, is help our clients to actually get more grip on data, data architectures, processes, and advanced automation fed by data.  It remains to be seen if there will be sort of an Esperanto or common data language, or ontology, or if it will be still a lot of dialects, but a lot of AI led or AI based translation, so you probably have seen the Catena X endeavor or, it also could be a dialect, a tribal data model, but I’m firmly convinced that sustainability as well as resilience need to have these novel data architectures and processes.

Stan Miller: So, you’ve touched on this a little bit, but I’d love to get a little bit more context, and maybe Susana, if it’s okay I could ask you first.  How do you see Rockwell Automation and Accenture working together to help businesses turn volatility into potentially an advantage?

Susana Gonzalez: That’s a great question and you know, our relationship has not been that long. We, I think, specifically in our region, we’re both responsible for markets in EMEA Region and we started our engagement about a year ago.  I see huge synegies and I’m very optimistic about the first couple of interactions that we have had, because I think that is a thorough complimentary offering and it makes us much stronger when we come together to the customer.  Rockwell has knowledge of OT. We know where the data sources are, we have intelligent devices, we have 150 years of experience in the OT world, and now we are helping customers driving the digital agenda, but having somebody as a partner like Accenture, with the footprint, the amount of resources in the region, the knowledge of IT is extremely complementary, and I think this can only bring more value to our customers.

Gotz Erhardt: Yeah, wholeheartedly agree.  So, I think there are all of the elements of a very good recipe for a great meal in the partnership, so I think especially, but not limited to the Rockwell portfolio, but also the strong partnership we both have with PTC and Microsoft, so we have digital thread, we have digital twin, we have full stack engineering on the cloud across multiple applications, we have the domain knowledge in OT and automation, including the sustainability elements, and a global delivery model from Accenture, so I think that clearly is a good proposition for our clients.

Stan Miller: Susana, Gotz, thank you so much for joining us in the studio today.

Susana Gonzalez: Yeah, thank you so much.

Gotz Erhardt: Thank you.

Stan Miller: And thank you for watching.  If you’d like to learn more about Rockwell Automation or Accenture, visit www.rockwellautomation.com.