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Shedding a light on Digital Transformation and its implications for the industry

| Nov. 16, 2022

Getting ahead of the game is the goal for all companies and their processes. Digital Transformation is seen as the means to keep one step ahead, but this starts with a clean business landscape and making the right decisions to ensure an optimum setup once it arrives. Michael Kantel, Executive Director & Partner, Kestria Germany interviewed Dr. Christof Schilz, Head of Operational Technology at amsOSRAM about the ‘before and after’ of Digital Transformation and what is most important in driving success end to end.

What does Digital Transformation really mean in your industry?

For me as head of Operational Technology at ams OSRAM, this has a lot to do with changing the way we look at production in general. What does that mean in detail? Data has become an integral part of the product and even offers new business opportunities for us with regard to bundling hardware and data services for customers. 

Becoming a data product in this sense means that a lot of the policies for optimizing product flows in a factory actually apply to the “data -product” as well. Just think about one of the core principles of lean manufacturing. Muda- or Waste- reduction, wrong production, overproduction, long transport times. This all translates nicely into data speak, or value stream designs as a guiding principle.

Another point is that the interoperability of data is becoming more important every year. The same data element is suddenly apparent in operations management and financial applications. Digital transformation reaches out to core business processes such as made-to-order or general end-to-end planning. Without saying it, all these requirements are calling for a data-intense digital twin of products and even factories. Another important aspect is that in recent years, the lines between classical information technology and operational technology have gradually started to blur and we are experiencing a convergence of both. This is not about technology alone but also about the teams involved and their ways of working.

What are the challenges and opportunities in digital transformation from your perspective?

One of the big opportunities coming from all technology carried forward is the ease of use. You can call this a democratization of data usage. We can build analytical manufacturing operation systems, price finding systems, etc. that are as simple to use as ordering a book via Amazon or a pizza from your favorite delivery service. 

“Data at your fingertips” is the digital promise that my teams are giving to our internal system users at ams OSRAM. The big advantage is obvious, you can broaden the user base and, to some extent, virtually everyone from a shopfloor or engineering department can make technical decisions and innovations in his area using the latest digital tools and reliable data.

However, these opportunities present considerable challenges. Central data and security management is one of them. How to ensure business continuity and safety of operation in the case of cyber-attacks or simple systemic distortions? How to manage and maintain a high level of cybersecurity, and an operation security model that ensures that controls—such as for asset management, data loss prevention, security operations, and incident response and recovery—are consistently applied? 

Other challenges come with the legacy of existing systems, namely poor documentation of data lineages and in many cases, insufficient data quality.

What are the key effective strategies for digital transformation?

Key dimensions for successful digital transformation are as follows:

  • A clear vision by C-level management of how the enterprise model should look following transformation

Where do we want to be in digital terms?

A digital transformation takes time, 3-5 years at least. The journey spans years with fluctuating business success. The only way for a transformation program to survive even in bad years is this digital vision. Otherwise, it’s just another short-lived, costly campaign. 

  • Be as technologically agnostic as possible. 

Technology is changing so fast, especially if we look at cloud technologies. We should keep technical transition roadmaps flexible to the appearance of new and maybe even disruptive new technologies. This ultimately means that building enough in-house expertise to evaluate digital trends is important before eventually buying a turnkey solution from large system houses.

  • Clean up your processes, production, PLM, and business before digitalizing them.

Digitalizing lousy processes leads to a digital mess. This is a no-brainer but demands discipline in an execution before even starting to purchase new digital solutions.

  • Don’t underestimate cyber security and data quality. 

Design them into your transition. Trustworthy data is the key to success. Data quality and data security are continuous efforts and not standalone activities. 

  • The human factor. 

In the comfortable cloud of digital automation, don’t underestimate the human factor. Transformation is done for the benefit of employees and not to disadvantage them. 

And what are the skills we need for transformation? Two main skills are most certainly needed. Obviously, the SW expert in coding and architecture puts technologies together into a solution landscape.

Of high importance is the skill to understand the user story. Transformation to achieve WHAT? What is the user experience that we want to create? This goes beyond classical requirements management, and we, therefore, need people with an openness to other industries and experience on the user side

Will Wi-Fi be replaced by Li-Fi in the future? What are the perspectives for smart lightning and Li-Fi for Digital transformation and IoT?

Will Li-Fi replace Wi-Fi? Well, working at a leading LED supplier I certainly would hope for that. But seriously, Li-Fi does indeed have some advantages over Wi-Fi, bandwidth being one of them. Lab experiments have unveiled mind-blowing data transfer rates of up to 200GB per second. The typically low latency of Li-Fi opens the door to real time decentralized decision-making in production environments where flexible layouts of production equipment are needed, and RF distortions occur (Doppler, reflections, electromagnetic interference). Li-Fi also has its advantages in terms of the security of data transmission.

A key promise of Industry 4.0 is interoperability. Everything will be connected in non-hierarchical structures: sensors, HMI devices, central data systems. This is a clear scenario where Li-Fi could be a key enabler. However, we always need to factor in that data transfer to the Li-Fi device also needs to be boosted if we want to utilize the performance of Li-Fi. Many factories have equipment portfolios stretching over decades with machines still running well under DOS 6.2 and with data transfer capabilities of 9600baud. For these, Li-Fi would certainly be a little over the top.

On the other hand, modern image-capturing automated inspection processes using high-speed cameras could be target applications for Li-Fi and a suitable Li-Fi enabled, underlying data processing grid. In summary, Li-Fi will come in certain flexible high-tech manufacturing areas but this is still a few years ahead of us.

How is smart lighting technology shaping the future for smart buildings?

The advantages of using intelligent or smart lighting are mainly on the energy-saving potential that comes with that technology. This is the case for office buildings as well as production areas and they are partly in use as integral parts of facility management systems to reduce energy consumption and therefore CO2 footprints of manufacturing sites.

Smart lighting or light management is one important step towards energy saving which again requires data systems and sensors. In those industry areas with operators, it can help to tune light properties such as color tone and optimize it for example during night shifts.

About ams OSRAM

Headquartered in Austria and Germany, ams Osram has a company history spanning more than 110 years and a team of over 24,000 employees worldwide. ams OSRAM offers a unique product and technology portfolio for sensing, illumination, and visualization: from prime-quality light emitters and optical components to micro-modules, light sensors, ICs, and related software. Their work creates technology for breakthrough applications in the automotive, consumer, industrial, and medical markets, which is reflected in over 15,000 patents granted and applied. They continually invest in their leading semiconductor expertise and world-class manufacturing network to live up to their established reputation of reliably bringing top quality to the world at scale.

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