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To digitally transform, think like Clive Davis

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By: Ben Pring

If you’re a music fan, you probably know the name Clive Davis. If you’re not though – and heaven help you – Clive Davis is one of the most successful music producers and record industry executives of all time. He’s worked with a who’s who of rock and pop musicians, from Janis Joplin to Rod Stewart to Whitney Houston, over the last 50 years. Now 85, he’s still in the game as the chief creative officer of Sony Music Entertainment. By any measure of success and longevity in what is, after all, an extremely precarious and fickle business, Davis has earned his place in the Rock and Roll Hall of Fame.

What, you may be wondering though, does the archetypal A&R man have to do with “digital transformation?” Well, let me explain …

The “digital” alarm bell has been going off (literally and figuratively) now for over 20 years. The transition to the cloud, the slow decline of ERP, the rise of Google and Apple and Amazon, the primacy of “consumer IT,” the move to Agile and containers, the awakening to the power of data, the importance of design thinking – none of these are new. And yet, in the second half of 2017, many, many organizations still struggle to master them, let alone leverage them, to thrive in markets changing all around them faster than ever.

Related: Designing Manufacturing’s Digital Future

The question is, why? In my humble opinion, it’s because the executives running these organizations don’t think like Clive Davis.

It’s Not About You

Clive Davis’s success can be attributed, in no small measure, to his ability to separate his own personal tastes from those of the market. As an octogenarian, Davis probably favors Frank Sinatra or Tony Bennett when he’s doing the dishes or mowing the lawn (as if). But when he’s working, he’s listening like an 18-year-old and can hear the magic in Lil Uzi Vert or Rex Orange County – music that to his contemporaries must sound like the aural equivalent of a dislocated shoulder. Or at least the decline and fall of Western civilization.

Davis recognizes that he is not the target audience, that the music is not aimed at him and has nothing to say to him. He knows he wouldn’t buy the music. But yet, he can still make judgments about its quality and its commercial appeal. And he can do this precisely because he knows the music isn’t being made for him.

[Download]: Designing Manufacturing’s Digital Future

This is the mistake that is hampering so many executives in so many businesses facing the onslaught of change being rendered by digital technology. They don’t personally like the new generation of technology and technology mediated solutions, and they don’t appreciate that the new technology/solutions aren’t aimed at them.

Twitter is ridiculous. Facebook is for egotistical blowhards. What even is Snap? Why do my kids spend so much time on it? Social media is destroying a generation. We can’t do this transaction online because of the threat of hackers. Pokémon Go? Give me a break. Virtual reality? What are these guys on? The cloud? But we’ve got a data center. Monetize our customer’s data? Why? Isn’t that illegal? How does this Slack thing even work? What’s wrong with e-mail?

How to Love What You Don’t Love

To the average 50-year-old, running an insurance company, a bank, an airline, a retailer, contemporary technology, contemporary business approaches and contemporary norms are the commercial equivalent of Lil Uzi Vert – terrible, ugly, ridiculous, not nearly as good as the things we listened to, aka, the technology solutions we built and used.

These executives fail to see they are not the target audience. That new solutions shouldn’t be built for their contemporaries but for their kids. They fail to separate their own personal tastes from the tastes of where the market is going.

Doing this – separating your own personal judgments from those of the market – is terribly hard (hence why so few executives can do it). It’s tough for people who have ascended slippery career ladders to admit they don’t know something. It’s tough for them to even contemplate that they are “aging out,” that they are no longer “hip to the hop,” in touch, on fleek. But mostly, it’s hard to admit – privately to yourself, let alone publically to your staff/boss/board – that you’re no longer that interested in something and that you don’t really like X or Y.

[Download]: Designing Manufacturing’s Digital Future

To truly grasp the promise of the Fourth Industrial Revolution, you’ve got to really love it, and everything about it. Or, if you can’t, you’ve got to surround yourself with people who do. In Clive Davis’s case, this means A&R people who trawl the clubs and SoundCloud and YouTube and Spotify and SXSW. In your case, it could be a youth mentor or a digital whisperer you trust in the industry.

So next time you’re in a meeting with your team trying to inch forward with your digital transformation initiative, remember to think like Clive Davis. It’s not about you – it’s about the next generation and the stupid things they’re interested in. Play your Sinatra or Costello or Counting Crows tunes all you like at home. But don’t pretend that, now that you have the turntable (aka the digital transformation budget), the kids are going to dig what you all say. They ain’t lit with that.

This article originally appeared on the Cognizant Center for the Future of Work site.

Cognizant

Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.

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Manufacturing

How IoT is helping companies take advantage of new revenue streams

In this Q&A, Gartner analyst Eric Goodness explains how manufacturers create impact with connected devices

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Connected products create new opportunities for manufacturing companies to bond themselves with their customers, says Gartner analyst, Eric Goodness.

In a recent interview with DXJournal.co, Goodness talked about how the combination of IoT and manufacturing is helping manufacturing companies transform their processes and take advantage of new revenue streams.

DXJ: What are three digital transformation trends you’ve seen in manufacturing?

EG: The three digital trends that we’re seeing in manufacturing [include]:

  • Looking at applying IoT to operations to drive out inefficiencies and to improve asset performance
  • Applying IoT to the supply chain, again, to drive out cost inefficiencies and to gain more visibility there
  • the biggest trend, without a doubt, and where most of the revenue that we’re seeing being spent — rather than languishing in cycles of indecision — is the creation of connected products.

If you look at how manufacturers are looking at bringing connected white goods, connected industrial infrastructure, connected commercial infrastructure, connected consumer products that is by far the biggest use of IoT as an extension of the digital business technology platform that’s happening out in the marketplace.

DX Journal: Is the use of connected products where IoT technologies are creating the most impact within larger manufacturing companies?

EG: Today, it is creating the largest impact as it provides [large manufacturing companies] a new way to bond themselves with their customers, to help those customers better monitor and manage those big industrial assets that they’re acquiring from the manufacturer.

Related: Stepping into Digital with IOT – 14 Cases

And it also helps the manufacturers create a premium revenue stream from their ability to remotely monitor, manage and create performance-based service-level agreement (SLAs) with their industrial customer base that are buying those assets.

Service-based revenue is going to be far more profitable than actually selling the capital asset. It’s the creation of these connected products where we’re seeing manufacturers actually sell some industrial assets at cost or at a slight loss in favour of these performance-based long term contracts, with the maintenance and support of those assets that they’re selling.  

DX Journal: Are there any areas within manufacturing companies that are easier than others to implement IoT?  

EG: The real bifurcation that we’ve seen in the marketplace is simply those environments behind the four walls of the factory that are security instrumented and where there is significant safety of life concerns, or where there is significant intellectual property at risk from external breaches. An environment where those concerns are less so, we are seeing IoT slowly make it to the factory floor.

[Download] Stepping into Digital with IOT – 14 Cases

There are initiatives such as analytics of production lines or plants where they analyze cold data in the cloud or within the corporate data lake to find inefficiencies in production or applying an optical-visual inspection on a production line to drive out errors. But in process manufacturing where there’s hazardous chemicals or other safety of life issues it’s going to take a long time before IoT makes it within the four walls of [those] factories.

DX Journal: What are some ways that large manufacturing companies have been keeping up with emerging technologies?

EG: We’re finally starting to have the conversations where the operational technology (OT) side and the IT side of the manufacturer are coming together. We’re seeing more investments in centres of excellence that have representatives from operations and engineering as well as the CIO part of organization, and sometimes even from the product side that reports within the CTO of a manufacturer.

Inside of organizations, we’re starting to see these multi-business unit, multi-stakeholder centres of excellence work to identify short lists of relevant vendors. It’s a slow slog for these organizations to come to agreement, but it’s very encouraging to see these organizations work together.

DX Journal: Is it possible to predict what the next five years will look like in the manufacturing industry?

EG: Over the next five years, we’re going to see a lot of IoT manufacturing convection currents. IoT is going to be subsumed into other recognizable services that vendors offer to their manufacturing clients. For example, vendors are going to be increasingly introducing their own platforms to provide manufacturers with fully-formed OT and IoT solutions. Traditional OT players, like GE, ABB, Honeywell, and Rockwell, are looking to present their own IoT platforms, alongside their legacy conjunction control and automation capabilities. While players like SAP, Microsoft, and Oracle are leveraging their IoT platforms with their manufacturing execution systems, asset performance management systems, or enterprise performance management applications.

[Download] Stepping into Digital with IOT – 14 Cases

We believe that IoT is going to become an embedded capability of all legacy platforms in platform-as-a-service and integration capabilities. There is going to still be a sector of the market where you see smaller niche IoT specific companies, but if you consider yourself an SAP, Microsoft or GE, why wouldn’t you at least consider participating in a closed ecosystem of value that has a natural and virtuous integration path to make it easier to deploy IoT to your business problem.

This interview has been edited for length and clarity.

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Manufacturing

How Cummins is embracing disruptive change to stay innovative and attract talent

New skills and ideas are needed to keep up with the digital transformation of manufacturing

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“It’s really hard to say we’re a leading-edge product engineering company if our business tools are dated and do not appeal to the talent we want to attract and retain at Cummins,” said Sherry Aaholm, CIO at 100-year old engine and generator manufacturer Cummins.

Transformative tech and attracting talent are two of the main issues manufacturers need to address in order to stay competitive and grow.

Consider this:

  • 71 percent of manufacturing executives say they need to innovate faster to stay relevant, according to a Fujitsu report
  • In the U.S., the manufacturing industry needs 3.4 million workers over the next decade just to replace retirees, according to The Manufacturing Institute.

The Talent Gap

Replacing retirees is only part of the talent shortage challenge for manufacturers. The other is finding workers with the right skills.

Related: Designing Manufacturing’s Digital Future

“We will need people who are able to manage these new operations, manage the robotics, to program them and maintain them,” said François Barbier, the president of global operations and components at Flex. “People who used to produce things with their hands, they’ll start to produce things with their brains.”

Gone are the days where a high school degree is enough to have a lucrative career in manufacturing, said Cummins Chairman and CEO Tom Linebarger, speaking on a panel about manufacturing and logistics, adding: “It hasn’t been that way for a long time.”

[Download]: Designing Manufacturing’s Digital Future

Manufacturing jobs are still here, they just look different, says Linebarger. As new tech emerges, workers need to have the skills necessary to perform maintenance and programming, he says. Rather than hiring for traditional roles in manufacturing, companies are hiring for tech-oriented roles where workers are tasked with not just building, but improving.

Staying Innovative

To keep their innovation sharp, Cummins has also created a Digital Accelerator where ideas around manufacturing, the customer or supply-chain are tested and, if successful, then commercialized.  

The focus is on three key themes,” says CIO Aaholm. “How can we improve product quality and up-ime availability? How can we help with new services for our customers? And how can we find value within the company?”

[Download]: Designing Manufacturing’s Digital Future

One example from the accelerator is the Cummins X15™ engine. Cummins says it has reduced the overall cost of ownership by as much as 40 percent, compared with a Cummins 2010 ISX15 engine, and it provides between a 2 percent and 12 percent gain in fuel economy.

The focus on innovation helps attract and retain customers too. John Savage, the executive vice president of transportation services company, Savage Services, says: “Cummins has always been a technology leader, helping us to meet new emission standards whether we’re operating in California or across the nation. When it comes to reliability, Cummins is progressive. They don’t sit back on their laurels.”

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Manufacturing

Distributed Manufacturing: Next in line for blockchain innovation

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries.

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By: Jagmeet Singh

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries. Because the technology can provide an immutable digital record of contractual interactions and transactions across an ecosystem, we believe that manufacturing is likely next in line.

Blockchain is a mutually shared ledger of all transactions in a given transactional relationship. Combined with its consensus mechanisms and use of public key infrastructure (PKI) to verify and authenticate all changes made to the ledger, blockchain can enable the network itself to ensure trust among participants. The result: a whole new way to support distributed manufacturing across the value chain.

The Importance of Trust

Consider, for example, the ways in which blockchain can simplify how trust is developed within a manufacturing ecosystem. In the traditional manufacturing world, parties transacting with each other spend considerable time and money on establishing external mechanisms to ensure trust, in the form of contracts, service-level agreements, quality checks, inspections, audits, scanning, escrows and regulatory compliance reviews, to name a few. As the number of parties increases, so does the complexity. Reconciling separate ledgers, enforcing contracts, ensuring supply chain transparency and protecting intellectual property when multiple entities are involved are all laborious and burdensome processes, prone to error and vulnerable to fraud.

Related: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Research shows that companies that build a culture of trust can fuel stronger performance by enabling departments to interact better and perform better across multiple dimensions. Establishing trust betweencontracted parties has similar positive effects. All these measures, however, amount to a costly “trust tax.”

For participants in a blockchain network – product designers, production shops, 3-D printers, logistics partners, sales and customer service  – that tax is greatly reduced. A secure, distributed ledger infrastructure accessible to multiple parties enables a new level of real-time transparency and efficiency for transactions involving the transfer of anything of value – whether that means ideas, money or ownership.

In our recent global study that included 281 manufacturing professionals, in fact, “trust” was a top driver for blockchain adoption.

Distributed Manufacturing Next in Line for Blockchain Innovation

Ensuring Transparency, Security, Auditability

Blockchain ledgers are:

  • Shared: Separate entities share a common source of truth.
  • Distributed: Blockchain relies on peer-to-peer collaboration, with no central ownership.
  • Secure: Cryptographic algorithms verify, authenticate and secure transactions.
  • Time-sequenced: Data is written consecutively and is time-stamped.
  • Immutable: Once written on the blockchain, data cannot be changed, tampered with or deleted.

Through smart contracts with supply chain partners on the blockchain network – programmed agreements that are independently verifiable and automatically executed when predefined conditions are met – companies can minimize human intervention and ensure performance transparency, transaction certainty and auditability.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Within industries and even across interlocked, tiered manufacturing sectors, distributed ledger systems allow companies to develop new, platform-based process flows. A user might execute a smart contract for a custom-configured order, for example, combining designs from multiple sources. The encrypted design data would be recorded on the shared platform; materials and services could be autonomously sourced; and a shared factory could produce the customized product. Payments, including royalties to designers, would be issued when the product is delivered. A record of all transactions, from design selection to payment, remains on the blockchain.

A Rising Tide Lifts All Boats

Blockchain technology thus enables distributed manufacturing, offering participants unprecedented opportunities to develop new product and service lines, create new customer segments, enter new markets and find new ways to use and share assets:

  • Through supply chain transparency. All parties transact on a common platform, gaining real-time visibility into processes in the value chain, and simplifying materials sourcing and the interaction of design, manufacturers and other service providers. Supply chain processes, including payments and trade finance, can be streamlined and automated using smart contracts.
  • Through digital product memories. Immutable records of asset provenance, materials, production data, ownership and other data ensure authenticity and minimize transaction risk.
  • Through secure digital intellectual property. Parties to a transaction can be assured that their intellectual property is protected. Using blockchain to manage a contracted production run from a 3-D printer of ceramic components, for example, would allow a manufacturer to encrypt proprietary 3-D print files from end to end while creating an immutable history of the transaction. Similarly, escrows and royalty accounting would protect designers and other owners of IP.

There are many more circumstances in which adopting blockchain technology can deliver value. Participants can slash inventory costs and service times. They can eliminate reconciliation, and automate and speed financial and process flows. They can reduce manual interventions and reduce fraud. And they can create new ways to extend the lifecycle of products and optimize the use of assets.

What’s Next? Evaluating Readiness

As manufacturers move toward a shared and distributed model, business leaders can consider four questions when evaluating readiness:

  1. Where in the value chain, internally and externally, are we paying the highest “trust tax” in terms of excess cost, effort or lack of agility?
  2. How would the availability of a digital product memory drive value for our company, our customers and our business partners?
  3. Which types of partners, in what geographies and with what expertise, could we work with if transaction costs and efforts were lower?
  4. Which information assets (e.g., manufacturing, maintenance, operational and usage data) about our products could we monetize if there were a secure way to do so?

A blockchain-enabled, collaborative database is optimal for ensuring agreement between all participants in a value chain. It’s time for manufacturers to examine the implications for their business model. Organizations that gain hands-on experience with blockchain technology thorugh pilot projects will have an advantage as consortia start to form, and will be better equipped to lead the effort and make key decisions around structure and governance, prepare for the corresponding cultural shift, build skills and capabilities, and understand how it will impact business strategy going forward.

Get in the blocks. The race starts now.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Olesya Gorbunova, a Senior Consultant in Cognizant’s Blockchain & Distributed Ledger Practice, contributed to this blog.

This article originally appeared on the Digitally Cognizant Blog

Cognizant

Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.

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