Captaining a business to success has always been about scanning the horizon for threats and opportunities and plotting the best path to navigate them.
Right now, a big wave coursing through manufacturing is the convergence of information technology (IT) and operation technology (OT).
Having joined KPMG in Ireland six months ago, following more than a decade implementing manufacturing software and solving complex manufacturing problems for facilities across Europe, from pharmaceuticals to chocolate to electric vehicle batteries, I’ve seen the benefits IT/OT convergence brings first-hand.
Put simply, it’s about ensuring that all your laptops, desktops, and the software they run can seamlessly connect and communicate with the equipment on your factory floor to improve efficiency, visibility, and decision-making. Until now these have always been separated. In manufacturing organisations office equipment was always the domain of the IT department while operational technology was the realm of electronic and automation engineers.
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If a conveyor belt or a packaging line broke down, you would not call the IT person, you would call the engineer and quite often not many other people would know about it until much later.
While production lines included some digital components, such as vision systems to count the number of cartons in a box, for example, it too was the domain of the engineer.
Sure, if its hard drive died, they would call the IT people to fix it, but for the most part, in manufacturing, IT was seen as a service provided to the engineers.
Accelerating with AI
That balance only really started to shift when computer viruses and cybersecurity issues began to emerge as serious risk factors, compelling IT to gain more ownership of equipment on the factory floor.
Another driver was the fact that the operating systems running some of these machines, such as Microsoft XP and Windows 2000, over time stopped receiving updates from Microsoft, requiring the IT department to take responsibility for patching them.
Such push factors were, incrementally, already causing IT and OT to converge. Then AI arrived and accelerated everything.
AI and Big Data are closely related but distinct. Big Data refers to the large data sets that power AI, while AI uses this data to make intelligent decisions. In manufacturing, machines are a primary source of operational data. Vision systems, for instance, can track the number of cartons that fail to make it into boxes.
This operational data, along with other data from your OT systems, is critical for making AI-driven decisions that support continuous improvement. To enable this, IT and OT must work together. IT/OT convergence allows for the seamless collection, processing, and analysis of data from the factory floor, which is essential for training AI and enabling data-driven decision-making across the organisation.
In this way, AI thrives on data from your OT layer, and IT/OT convergence bridges the gap to ensure the flow of data needed for innovation and efficiency.
The cost of divergence
To understand the value of IT/OT convergence just cast your mind back to COVID and the impact it had on global supply chains, many of which quickly snagged.
The main issue was companies did not have deep insight into what was going on, either in their own supply chains or in their manufacturing.
Data did not flow from factory floor to boardroom. In other words, companies were experiencing a costly gap between their IT and their OT.
At its most basic IT/OT convergence is about enabling the free flow of this data. It’s about being able to get access to it in a timely manner where it is actionable rather than quarterly or every six months.
Start with the quick wins. Going after the low hanging fruit in the early stages of the IT/OT convergence journey will earn you a quick return on investment, helping to build momentum internally
Having it makes you better able to compete. You can watch your costs more keenly. You can point your resources in a more effective manner towards the projects and actions that will add value. You can make the most of what you have.
In the past IT/OT convergence, where it happened, took place in a piecemeal way. Smart sensors might provide predictive maintenance, enabling you to know when a machine was likely to be in need of repair. But such activities were never part of a joined-up strategy, so for example the predictive maintenance sensors weren’t connected to your scheduling system.
Closing the gap
For those looking to work towards IT/OT convergence, the first step is to assess what you already have. Identify the target architecture you want to get to and build a roadmap plotting how you will get there.
Start with the quick wins. Going after the low hanging fruit in the early stages of the IT/OT convergence journey will earn you a quick return on investment, helping to build momentum internally. That in turn will bring your people along with you, which is vital, because the risks of not achieving IT/OT convergence are significant and growing.
After all, competitiveness is about being able to react quickly to market changes, whether that means updating the text on a carton to meet regulatory changes or responding quickly to cyber security threats.
But competitiveness is also the difference between a disengaged staff working on legacy systems that require constant firefighting, and a creative, engaged team where people see they can add value. The benefit in terms of workforce retention alone is clear.
Right now, IT/OT convergence is taking place across all sectors. In my experience the chief determinant is not the manufacturing activity involved so much as the culture of the organisation behind it.
It is about having a leadership team that understands IT/OT convergence is a step change that leads to greater agility, more motivated staff and to increased resilience to cyber security threats.
It’s about developing a more competitive business which, in turn, becomes a better business in which to invest. That’s because an IT/OT converged business is one that works off good and timely information, where all can see clearly what is happening.
It is also a business that is in a very good position to take advantage of AI and the enormous productivity gains that it is set to provide.
That’s a destination worth charting a course towards.
To get more insights, visit kpmg.ie