MACH 2022, the first national gathering of the UK engineering community post-COVID-19, has demonstrated its importance to the UK manufacturing sector by selling over three-quarters of the exhibition space despite there being more than 200 days left before the live event.
Show organiser, the Manufacturing Technologies Association (MTA), said it was delighted with the response and has urged firms wishing to exhibit at the showpiece event, which takes place at the National Exhibition Centre in Birmingham between 4-8th April 2022, to confirm their booking as quickly as possible so as not to be disappointed. James Selka, CEO of the MTA, said: “MACH is the national manufacturing show, and as a content-led event it brings together the latest advanced engineering and manufacturing technologies in operation, and all under one roof. As such it will be perfect place for manufacturers to come and view the best new machines on the market. “The support we have already received from the UK manufacturing and engineering community has been tremendous and their show of faith at what is a pivotal moment for this most crucial of industries, demonstrates both the appetite to do business and the desire to restore the manufacturing industries to their rightful place at the head of the UK economy.”
MACH 2022 will be the event to connect the world of manufacturing technologies and stand as the destination of choice for companies looking to adopt and invest in the digital revolution.
“MACH is such a fantastic event for both exhibitors and visitors. Showcasing live, digital production systems in one space, it is not to be missed. Hundreds of millions of pounds worth of business is discussed, secured and completed at the exhibition, making it the must-attend event in the UK manufacturing calendar,” added Mr Selka. For 2022, there are extra incentives in place for companies looking to invest in the latest machine technology, principally the Super Deduction initiative announced by the Chancellor earlier this year.
Running until 31st March 2023, the new scheme means companies investing in qualifying new plant and machinery assets will be able to claim a 130% super-deduction capital allowance on their plant and machinery investment, plus a 50% first-year allowance for qualifying special rate assets. The super-deduction scheme will allow companies to cut their tax bill by up to 25p for every £1 they invest. The incentive scheme is intended to jump-start the manufacturing sector as it looks to bounce back quickly from the pandemic-induced recession. The Office for Budget Responsibility (OBR) has predicted the scheme could encourage manufacturers to bring forward investment plans originally scheduled for much later in the decade.
“With MACH 2022 falling right in the middle of the scheme’s two-year window, the timing of the show could not be better. Bringing forward capital investment decisions to the present will enable the industry to bounce back from the effects of the pandemic far quicker,” added Mr Selka.
Another theme evident during the show will be decarbonisation. Decarbonisation is predicted to be one of the major growth factors for the manufacturing sector in the next few decades; the Committee on Climate Change believes the UK’s commitment to net zero by 2050 alone could cost an additional 1-2% of GDP. “This is why MACH 2022 will have a strong focus on promoting the green agenda and is yet another reason why the event should not be missed,” said Mr Selka. “In addition to our growing list of exhibitors, thousands of people have already registered to the visit the show, even though it is still eight months away. With such a response, it’s vital that exhibitors book their space early to avoid disappointment.”
Despite the timeframe, exhibitors and visitors can interact with the exhibition now. As part of the MTA’s commitment to improve the exhibition experience, the association has invested in a new online platform, My Show Planner, to help people get the most from the event.
Trialled with great success during the MACH 2022 Preview Week, the platform enables visitors to filter by product type, save favourite exhibitors, speakers and content to their personal show planner. They can even make direct contact with exhibitors ahead of the event.
No other manufacturing event can bring together so many key decision makers across a five-day period, and no other event of its kind can attract over 20,000 trade visitors with real purchasing power – all looking to meet new suppliers, find new products, network and form new business relationships.
Manufacturing business growth has continued to rise over the past year, but at a much slower rate than the previous 12 months. Despite challenging market conditions and the difficulty in recruiting and retaining skilled staff, there has been a marginal one percent rise in the number of businesses reporting growth. These findings are survey results unveiled today from the annual Global Growth Index by Epicor Software Corporation—a global provider of industry-specific enterprise software to promote business growth.
For those companies who have experienced growth, maintaining it hasn’t been easy over the past year. Fifty-three percent admit it has been challenging, whilst a fifth (23 percent) have found it stressful. Thirty-five percent of businesses cite market conditions as having a negative impact on growth, and 32 percent feel that staff skills and experience have also played a detrimental part in maintaining growth.
Political volatility and uncertainty also continue to be a common cause for concern across the globe. Fifty-five percent of respondents cited the China-US trade dispute as likely to have a negative impact on future business growth. A quarter of businesses (26 percent) stated that the uncertainty surrounding Brexit is also still a big threat.
“The manufacturing industry plays an integral role in our global economy and people forget that it is responsible for delivering important products we use every day,” said Epicor CEO, Steve Murphy. “As such, the health of the manufacturing industry is something we should all be concerned about. While it’s good news to see that growth in this industry is still taking place, we need to keep a close eye on what factors are contributing to this growth and what factors are causing a lag. The information in the Global Growth Index empowers businesses so they can make strategic plans that will best position them for the future.”
The table below shows the Global Growth Index results for 2019 across six key indicators, compared with figures from 2018 and 2017. Percentages represent the median average number of businesses that have reported growth in each of the key growth metrics.
Growth performance indicator
% reporting growth
Exports and overseas sales
Average % recorded across all six attributes
Index (year one=base 100)
“Investing in the right technology, such as enterprise resource planning (ERP) solutions, can help businesses better plan for change by improving visibility and insights into current operational workflows. This can help alleviate stress and enable people to deal with challenges more effectively, by providing the flexibility, agility, and adaptability needed to respond to market conditions and customer demands. Technology can also have a positive influence on other factors including work ethic and staff recruitment and retention,” concluded Reid Paquin, research director, IDC.
In our digital, data-driven world, software—particularly enterprise resource planning (ERP) software—is one of the principal tools organisations leverage to keep the enterprise ship sailing boldly forward. By Anthony Bourne, vice president, Global Industry Solutions, IFS
In today’s accelerating and volatile global marketplace, manufacturers and high-tech companies understand that change is not only constant, but a constant challenge as well. The nature of technological innovation and prevalence of economic uncertainty have transformed the environment for manufacturers from one that was rather slow-moving and monolithic to today’s fast-paced, hypercompetitive, time-sensitive, customer-demanding, increasingly nuanced global commercial ecosystem. Competition can come from anywhere on the globe at breathtaking speed, and risk and opportunity are usually, if not always, closely coupled.
Keeping risk at bay, and identifying and seizing opportunity are traits of companies that thrive in this difficult environment and steer a steady course in seas where potential crisis lurks.
How The Right Software Addresses Business
The right business software supports manufacturing’s ability to meet emerging challenges and respond to constant change by providing the foundation for enterprise agility. The concept of manufacturing agility involves the development of manufacturing capabilities to achieve sustained competitive advantage in an unpredictable environment. Agility is the product of three foundational blocks—vision, knowledge, and flexibility—that effectively designed and developed software facilitates across the business.
As an example, one of the most prominent business challenges come from disruptive innovations, those that help create new markets and value networks, eventually disrupting an existing market and value network (over a few years or decades), and displacing earlier technologies. When new technologies emerge, the decline of industries is neither rapid nor immediate; but successful manufacturers understand that growth demands innovation, and innovation in the sector cannot occur without embracing technologically-advanced manufacturing capabilities.
Vision is the ability to link business strategy and growth aspirations to technology investment, and to make informed decisions that prove effective over time. Clear vision enables a manufacturer to correctly assess and balance the risks and opportunities of disruptive technologies. The right business software helps focus and clarify vision.
Knowledge is the ability to identify, understand, and predict new sources of threat or opportunity across daily business operations and projects. Knowledge enables business insight, the most valuable form of which comes from the ability to assemble a clear, comprehensive, and accurate view of the past, present, and future status of assets, infrastructure, and employees, across even the most complex global operations and projects. The right business software gathers, assembles, and disseminates knowledge in real time, where and when it is needed.
Flexibility is the ability to take action rapidly when things happen, expectedly or unexpectedly, founded on technology that makes rapid and responsive change possible. The right software is a critical part of this technology. Vision and knowledge are not fully empowered unless an organisation has the flexibility to rapidly change its shape or focus to seize new opportunity or mitigate risk. Flexible business technology is necessary for this, but so too is a business culture that embraces rather than hinders change and rapid response.
Ready For Servitisation And What’s Next?
Companies that have added service to their offerings, adapted their organisations to enable this and acquired the requisite technology (often in the form of integrated, full-scope enterprise software) have confronted the question of ‘What’s next?—and reaped significant benefits. In fact, adding service contributes to much of what is the very essence of good business, viz. actively looking to the future and seeking to shape it and create opportunities, rather than merely grasping those that arise.
There is a popular saying that “if you want to go quickly, go alone, but if you want to go far, go together”. These wise words are particularly applicable in manufacturing, where effective production requires the precise coordination of a variety of moving parts. Contributed by Bsquare Corporation
Historically speaking, though, this mantra has not extended across the full breadth of industrial operations. In particular, information technology (IT) and operational technology (OT) teams have traditionally worked largely independently of one another–though exceptions do exist.
Now, technological advances are disrupting the status quo. The rise of connected factories and digital transformation initiatives–specifically Industrial Internet of Things (IIoT) projects–is forcing manufacturers to rethink conventional, siloed operations. Thanks to IIoT, operational data is more accessible than ever, presenting a massive potential value in the form of opportunities for businesses to gain unprecedented clarity into operations to enhance decision-making, efficiency, and performance. Amplified by intense competition and the harsh realities of economic and regulatory demands, the allure of these benefits is driving IIoT spending to an estimated US$189 billion in 2018 as manufacturers search for an edge.
But it is not as simple as just installing equipment sensors and upgrading software. Effectively deploying IIoT in an industrial environment is a very complex undertaking that requires a careful, strategic approach. And even then, there is intense pressure to demonstrate return on investment (ROI) in short order and continue scaling across operations to maintain a competitive edge. Achieving maximum benefit in the least amount of time takes coordination and cooperation across multiple departments, and bringing IT and OT together is a critical step.
While there are both historical and current examples of successful cross-functional collaboration, aligning these two inherently different organisations is no easy task. Issues around who is responsible for what, unfamiliarity with how each other work, and lack of system organisation were also popular responses.
Enabling IT-OT For Your Business
Differing missions, priorities, culture, philosophies, education, and background are just a few of the factors shaping the contrasting world views that drive a wedge between these two organisations. Furthermore, intangibles can vary greatly from one company to the next, so there is no uniform guidebook for this relationship. That said, obvious differences in hardware, software, and operating environments provide further context for this departmental divide.
In addition to expected technological differences between companies, the perception of IT’s role and responsibilities can differ across a manufacturing organisation. Typical duties include supporting business and administrative functions and providing network access and connectivity. Their focus on a digital environment makes things like data processing speed, system reliability and security, primary concerns. As such, IT has had to embrace rapid innovation and change to keep pace with developing technology.
Focusing on production environments and interactions in the physical world often ties OT activities directly to the bottom line of the company. Reliability and longevity of business-critical assets are primary concerns, especially since output goals are often on the line. Equipment can cost hundreds of thousands of dollars and, in some cases, operate virtually non-stop, in harsh conditions, spread over great distances for decades at a time.
Additionally, automation and control systems tend to operate in isolation and correspond to a single specific machine and/or manufacturer. Maintaining long-term stability over a widely dispersed asset population running on a combination of unique or custom systems has made OT more resistant to change, and late technology adopters.
Proactive Approach To IT-OT Alignment
Nonetheless, collaboration is not unprecedented. A host of manufacturers have initiated intermittent projects that blurred the IT-OT lines throughout the years. Initiatives generally centred around adapting elements of IT for more industrial environments—such as Ethernet networking and programmable logic controllers (PLCs)—and addressing security issues. These pioneering efforts provide a hint of what cooperation can achieve, paving the way for subsequent joint ventures that are becoming progressively commonplace as technological advancement has accelerated.
The permeation of “smart” equipment has also led some manufacturers to build technology support units within the OT organisation to carry out IT functions. This approach is effective on the department level in terms of facilitating technology upgrades and can help bridge the culture divide by introducing some of the IT point of view into OT. However, it is inefficient on a company-wide level as it requires redundant personnel and resources, making large-scale implementations cumbersome.
The common thread of IT-OT interactions to this point is that each was born out of necessity. But now, to effectively seize the new opportunities advancing technologies present, manufacturers must take the next step. Adopting a proactive approach to IT-OT alignment makes it possible to unlock the full potential of IIoT– helping industrial businesses stay ahead of the curve, avoid technology-enabled disruption, and gain a competitive advantage.
Though it is been around in some form for years, the proliferation of machine connectivity has shifted into overdrive–steadily infusing OT with elements of IT. These increasingly digital assets set the stage for IIoT to provide access to previously unavailable data. But deploying new technology is only part of the equation.
True digital transformation begins once an IIoT initiative has achieved strategic importance company-wide. It is at this point that companies recognise the need to look beyond old ways of running a business and rethink conventional corporate structures. This realisation enables deeper exploration into new avenues for taking advantage of data coming from operational equipment in concert with other data sources and business systems to fully assess what is possible.
For instance, instead of focusing solely on monitoring and watching individual machines, the OT team can look at opportunities to partner with IT—along with other stakeholders—to collect and analyse data from all connected operational equipment. Such cross-functional efforts are a major step in giving companies a more holistic perspective to help identify inefficiencies and achieve objectives that can maximise ROI, like reducing downtime-producing failures, optimising performance, and promoting longevity.
Overcoming IT-OT Obstacles
There are a variety of technological obstacles to overcome to bring IT and OT together, and a quick online search will turn up volumes detailing those challenges as well as how to conquer them. However, the organisational aspect of IT-OT alignment receives far less attention, even though the structure of this working relationship is equally vital to IIoT success.
Working extensively with industrial companies provides exposure to manufacturing environments across the spectrum of IT-OT maturity. It is not uncommon to find a variety of teams toiling away on disjointed, small-scale technology initiatives. Although these may fit into the overall IIoT category, they may not be recognised as IIoT projects. With minimal communication across departments, it can take work to even identify how many of these siloed skunkworks efforts are even in progress.
A company’s level of IT-OT alignment, as well as overall IIoT strategy, is generally readily apparent very early on. And it can run the gamut from initial exploratory phase to issuing a request for proposal tied to strategic business metrics. However, while the latter will typically see value on a shorter timeline, manufacturers at any stage of IT-OT maturity can achieve ROI with the right strategy, support, personnel, and partners.
A Key Component Is Leadership
In general, IT-OT disconnects and the lack of a dedicated leadership structure go hand-in-hand. Even so, companies still recognise how valuable data is becoming. So, left to their own devices, various business units and operations teams end up tackling a surprising number of individual IIoT projects, usually focused on solving specific, small problems.
For example, IT may be prototyping a system of sensors and software to help track and manage computer and networking equipment inventory, or a system to push software updates to mobile devices. At the same time, OT may be focused on a system that generates alerts for a piece of mission-critical factory equipment to notify plant managers if something happens that will negatively impact production.
More often than not, these siloed skunkworks efforts end up on the scrap heap due to lack of scalability or objectives that do nott align with organisational priorities. And those that do survive can limp along for years in relative obscurity without generating tangible ROI. Neither is a particularly desirable result. That said, manufacturers do not have to blindly accept this fate, but avoiding it takes work. First, trying to identify these little unsanctioned projects can turn into a lengthy scavenger hunt. Then comes the exercise of figuring out a way to legitimise them, procuring the necessary funding, and securing the support they need to become a strategic part of the business.
When analysing the performance of different manufacturer’s IIoT initiative, the companies that typically succeed on the most efficient timelines are the ones that establish a cross-functional team that represents all stakeholders at the outset. This oversight organisation could take many forms–such as a steering committee, centre of excellence, digital transformation unit, or digital innovation centre.
How To Succeed With IT-OT Convergence
Here are steps manufacturers are taking to maximise IIoT ROI through IT-OT alignment:
Secure management buy-in. One of the most important elements in successfully bringing IT and OT together, and the success of any broad-scale IIoT initiative by extension, is buy-in and support from upper management. IIoT must be considered a strategic initiative from the top down in order to ensure collaboration across functional and territorial boundaries. Management must make it clear that the effort is good for the company and as such, requires agreement among the various stakeholders to work together on execution.
Create an organisation responsible for IIoT. Of the numerous companies, across a spectrum of industries, investing in IIoT solutions, a typical hallmark of the most successful is the presence of well-defined overlay organisations. Viewing IIoT initiatives—and IT-OT alignment by extension—as ongoing is a key factor, as constant monitoring, maintenance, and innovation are necessary to ensure a deployment evolves to continuously meet the internal and external demands facing manufacturers.
Steering committees with cross-functional representatives or dedicated centres of excellence-type organisations are best suited to take on the task of understanding the challenges likely to arise, looking for operational efficiencies between groups, and evaluating standards and technology options in concert with any systems and solutions already in place. Some companies have even created entirely new management positions, such as chief digital officer. Regardless of the details, it is important to treat the initiative as its own entity and not simply an offshoot of an existing cost centre.
Establish clear strategic goals. Once management support and team leadership are in place, clearly defining the strategic goals driving the initiative is an essential step. This is a good time to brainstorm all possible opportunities, thinking outside the four walls of the business to consider how the IIoT initiative might integrate with others in the supply chain. Starting from raw material acquisition to post-sale customer relationships, examine supply chain implications, partners, or any other element that intersects any point along the chain.
Develop a data management plan. Planning for data management needs up front is a must. One of the benefits of IIoT is that it provides the ability to set policies, partitions, and different views of data. Companies can establish data sharing controls to dictate which information becomes public, without compromising the privacy of sensitive material.
Enlist stakeholder participation. As these elements come together, bringing in stakeholders from across the company will become necessary. Representatives from departments such as legal, marketing, and support and repair organisations can help guide privacy policies and enhance insight into the company’s new strategies and potential business models.
Ongoing IT-OT collaboration is key to success with IIoT as part of a digital transformation or Industry 4.0 initiative. With organisational and leadership unity, IIoT technology has nearly limitless opportunity to improve business outcomes and expand the potential for new revenue streams far into the future.
There is much ado about connectivity, digitisation, and data within the manufacturing industry. Tim J. Shinbara, Jr., vice president, technology at The Association For Manufacturing Technology weighs in on potential hurdles businesses can face and the role IIoT plays in navigating them.
Many countries have set national initiatives and strategies particularly focused on the advanced manufacturing sectors to realise productivity gains based on a new generation of data-driven processes from equipment monitoring to predictive maintenance to increased device and system interoperability. The world of the Industrial Internet of Things, or IIoT, has begotten a new breed of innovation, or at least it is positioned to do so.
Generally, I am bullish on this concept but skeptical as to how many disparate industries and companies will set strategies focused on a business solution and not solely on a technology play. Technologies are enablers. They are the bridges for our business chasms. But left on their own, they can distract from providing actual value to the market with potential negative consequences due to neglect of a real business challenge being solved.
It is important to recognise the potential technologies and their enabling attributes and perhaps by use of case studies, better understand the pros/cons of adoption and implementation. So, while it is the very technical attributes that I am drawn to as I pursue the latest technology trends within the manufacturing technology space, I am cautious to throw the spotlight on a laundry list of the latest-and-greatest or the top “x” number of technologies to make your business better. Instead, it may be more beneficial to understand what are common business challenges I have encountered and what types of IIoT attributes may help reduce, mitigate or otherwise solve such challenges.
When discussing a business challenge approach, it is helpful to also have an IIoT perspective of the technology solution space. For the purposes of this article it may be useful to reference a graphic that depicts five general categories by which data in the IIoT may move from collection to utilisation. Each of the five categories may have market participants monetising solutions only in that category but regardless, it is of extreme importance that requirements for any end-to-end solution for customers include seamless and reliable data portability as threading the data from collection to utilisation is neither trivial nor unnecessary.
Business Challenge #1—Unknown Costs
Presumably, the most fundamental business tenant is to sell your product for more than it costs to make it. Where the manufacturing industry has been historically challenged is clearly and accurately understanding the actual production cost to produce. There are, generally, known overhead rates, labour rates, and raw material costs. However, generally accepted accounting principles or, more relevantly, governmental tax policies skew how equipment costs are managed. Such costs tend to be normalised and spread evenly over an assumed useful life rather than discretely investigated and more accurately documented.
Technology characteristics that enable a timelier collection, connection, and storage of manufacturing equipment data are of extreme importance and are also key in further down-stream analytics and utilisation. There are further considerations regarding the technology solution space for this business challenge. That you collect data is one thing. That you use the data, and how, is an entirely different subject.
Common key performance indicators (KPIs) applied to production equipment and devices are things such as: overall equipment effectiveness, utilisation, downtime, etc. These are the typical infographics analogous to your car’s dashboard, whereby KPIs can be leveraged to guide operational parameters, provide leading indicators for performance or maintenance, and assist in production triage.
Additionally, if the data collected and used to constitute KPIs are also applied to cost parametrics, then the ability to increase visibility into the as-is production data is capable of nearing reality on manufacturing costs. Understanding elements of the production reality such as: date-time stamp of production, power usage, tool life, non-value-added processes (e.g. tool changeout, setup, etc.) equates to a truer representation of cost elements such as cost per kW/hour and effective tool usage.
Business Challenge #2—Misinformation Exchange
Perhaps one of the highest goals destined for IIoT to attain is that of connecting data and information to and from machines, factories, and companies. Depending upon your region or industry this may be classified as a “factory of the future,” “smart manufacturing,” or maybe “digital manufacturing.” What is inferred is that quantifiable, actionable data will drive those things that are today unclear, ambiguous, and voluminous. What is not discussed at length is how that data will gain context, be shared, or be secured.
Those few areas should be prioritised. This is also an area that needs harmonisation and adoption of standards. For data to be useful, it needs to have meaning. In the case of manufacturing , this, in part, is provided by open standards such as MTConnect (a semantic data dictionary that structures and defines manufacturing technology data). There are several types of semantic dictionaries available for the manufacturing space covering different areas such as packaging (e.g. PackML), manufacturing technology (e.g. MTConnect), and buildings and control networks (e.g. BACnet).
So, if you manage a factory—or parts of a factory—you may need to consider one or more of these three and potentially others. Again, focus is not on scouting technologies but rather on solving a business challenge: collect, understand, and prepare accurate information.
The exchange aspect of this challenge may be internally between manufacturing devices that need to interoperate, between operational systems and manufacturing planning/scheduling systems, or even further connected to enterprise planning and supplier management systems. The exchange itself needs both an infrastructure (e.g. wired, wireless routing) and coordination (e.g. communication protocols) to move information to the appropriate end-user.
There are even more standards to consider in this space such as: MQTT, a publish-subscribe (i.e. pub-sub) lightweight messaging protocol; AMQP, a point-to-point, pub-sub protocol to assist reliability and security during routing; and B2MML, creates commonality for data definitions to link enterprise resource planning systems to industrial control and manufacturing execution systems.
Information exchange is quickly extending outside just manufacturing technology devices and even past the walls of factories. Information sharing is becoming a negotiated item within intellectual property, warranties, and other service-related contracts. A scalable attribute for any solution should leverage open standards, both security tools and practices, and the multi-modal infrastructure that reflects more of telecommunication infrastructure rather than solely a factory’s local area network. Today’s technologies are quickly enabling virtual connections to ensure a more holistic informational view.
Business Challenge #3—Capacity Imbalance
Seemingly, manufacturers will subjectively state their production capacity levels. Often the level is based upon a scheduler’s estimation per job and how many of those jobs are currently in-production (i.e. initiated the production process) or in queue. This approach may not be unrealistic, but it is, however, at-risk of being inaccurate. For the manufacturers I have encountered where machine visibility has been implemented, a range of actual productivity has reported somewhere between 20—40 percent. In every case, the actual productivity (i.e. capacity utilisation) has been surprisingly low to that manufacturer.
Often there are machines dedicated only to certain parts due to features that require specific machining capabilities whether by spatial volume or part complexity. In other cases, there are machines occupied with parts but not necessarily machining parts; accumulating idle time. By having a combination of data analytics and actionable information, a production manager or scheduler may attain production parity by minimising idle time and maximising utilisation.
This overall optimisation initiative becomes a factory optimisation business goal instead of a big data research and development project as many similar projects are touted to be. Again, that data science is applied to a capacity imbalance challenge is not a bad thing, it is just not the main thing.
By understanding and identifying such parity challenges, there are now market solutions that are brokering open capacity with needed demand. Many times, the idle time within small and medium enterprises is too quickly dismissed as the cost for new orders or new customers may be too high or is perceived as too high which effectively results in the status quo. In this case, it is not that a machine could be improved to cut more chips by improving uptime, but rather increasing orders in the scheduling queue; orders that they otherwise would not have been able know about or win.
Subsequently, as suppliers are becoming more closely linked to their customer’s solutions, there are many more instances of true partnerships. And as more information to support such partnerships is exchanged, what is required is a more dynamic, responsive platform that can transact and secure that information. Some have described the structuring, storing, and transferring of digital information in this scenario as creating a “digital thread.” The thread is what provides a continuous value-add option for all stakeholders from design to production to service and maintenance. What is now becoming of burgeoning benefit is the inclusion of collected as-is data into simulation models for the factory.
The literal digital factory may be of the upmost importance in near-term production planning as it would provide an affordable means by which to try new processes, sequencing, and foresee unintended consequences of otherwise isolated positive improvements.
The IIoT has certainly brought new market entrants, new potential partners, and new business models to the traditional manufacturing ecosystem. This could be an opportunity to retool our shops, our technologies, or our customer. Hopefully, it at least motivates us to retool our strategies and ensure we are focusing on the main thing, our businesses!
The world wants to fly, and consumers worldwide are increasingly travelling more and enjoying low air fares offered by carriers. As we move into 2018, the dynamic aerospace sector continues to expand to cater to the global rapid growth in the travel sector. By Farah Nazurah
What is driving the demand for air travel? Higher living standards, a burgeoning middle class in emerging markets, cheaper air fares as well as tourism and travel growth are propelling the market, with year-on-year travel growth rates for the past five years averaging 6.2 percent, according to aircraft manufacturer Boeing’s market outlook on the global aircraft demand from 2017 to 2036.
International tourist arrivals grew 3.9 percent worldwide in 2016, which was faster than overall global gross domestic product (GDP) growth, according to the World Tourism Organisation. In 2016, the strongest regional growth was recorded in Asia Pacific.
Asia Awakens To Travel
The outlook for air travel demand is expected to remain strong with consumers spending more on travel and tourism, according to aircraf t manufacturer Bombardier’s market forecast for 2017 to 2036. In terms of growth rate, South Asia and Greater China are projected to be the fastest growing markets, with a compound annual growth rate (CAGR) of 5.7 percent and 4.6 percent respectively.
The economic and income growth in large emerging economies such as China and India are major drivers to the global GDP growth and air travel demand. China has fuelled the world traffic growth over the past few years and its passenger growth has increased at an average rate of more than 10 percent annually, according to Boeing.
India’s newly-emerged high-growth economy is contributing to more than 20 percent of passenger traffic growth per year in its domestic market, and is projected to become the third largest commercial aviation market by the early 2020s.
The fast-growing middle class in both countries are ready to spend more on air travel, and the middle class in both countries has risen from 80 million in 2000 to 135 million in 2016, which is an increase of nearly 70 percent.
Fast Expanding MRO Market
As air travel grows, consequently the need for aircraft maintenance, repair and overhaul (MRO) expands as well. MRO providers play an essential role in sustaining the world’s airline fleets, and assuring aircraft safety and airworthiness.
The global aircraft MRO market reached US$66 billion in 2016, and is projected to rise at a CAGR of 6.17 percent from 2018 to 2023, according to market intelligence agency Research and Markets. The ever-expanding global aircraft fleet size and market for low-cost carriers, alongside the stronger demand for technological upgrades of existing fleet, are expected to propel the global MRO market in the next five years.
The number of aircraft in service is increasing, driven by a higher penetration of commercial carriers in the world’s emerging economies and orders for new aircraft thus, steering the aircraft MRO market in an upward momentum.
Asia Pacific is witnessing a significant rise in daily air traffic, owing to the growing number of MRO facility establishments in the region. China, India, Japan, and South Korea are a few of the leading countries in the region’s commercial aviation market, and the region’s MRO market is forecast to amount to US$30.48 billion by the end of 2022, according to market research firm Research and Markets. This creates ample opportunity for MRO providers to expand in the region.
Singapore’s Substantial Role In MRO
What exact role does Singapore play in the aircraft MRO sector? The country’s aerospace industry has stringent safety and quality standards, which sees it recognised as a reliable one-stop solutions provider for aircraft maintenance and repair needs.
This includes nose-to-tail capabilities such as engine overhaul, structural and avionics systems repair, airframe maintenance, as well as aircraft modifications and conversion.
“With more than 130 aerospace companies, Singapore has the largest and most diverse concentration of aerospace companies in Asia,” informed Tan Kong Hwee, executive director of transport engineering, Singapore Economic Development Board. The country has developed a robust aerospace industry that includes manufacturing, engineering, research and development, MRO, and other aerospace-related services.
Employing over 20,000 staff, the sector has an annual output of more than US$6 billion. The nation currently holds 25 percent of Asia’s MRO market and approximately 10 percent of the global share. The reason airliners tend to choose the country for their MRO needs is because they can have all their work done in a “one-stop shop,” instead of having to get their aircraft serviced in several different locations.
Cost is an especially important factor in the aerospace industry; although MRO costs are higher in Singapore, the aircraft can be serviced faster. For example, an aircraft serviced in Singapore for 30 days as compared to 50 days elsewhere translates to cost savings for airliners, as the aircraft can generate profits for those 20 extra days of uptime.
Support Spurring Innovation
The Singapore government’s commitment to maintain a free market also enables businesses to easily operate in the country. According to the World Bank’s Doing Business 2017 report, Singapore is ranked as the world’s second-easiest country in which to do business after New Zealand.
Moreover, the country’s skilled workforce, political stability, established logistics, infrastructure and protection of intellectual property facilitates the ease for aerospace providers to set up business there.
“Government support is also crucial to the efficiency of the logistics and supply chain activities which support the MRO sector,” said Louis Leong, vice president, Asia, Hawker Pacific Asia. He also stated that the Singapore government is also heavily supporting the development of local talent in the aerospace industry through partnerships with education institutions.
Besides MRO, aerospace-related research and development activities in Singapore have grown significantly over the past few years. The nation will have to advance further in this field to maintain its edge in the industry, and continue developing Industrial Internet of Things (IIoT) technologies such as aircraft health monitoring where sensors monitor temperature, position and pressure; predictive maintenance; and the use of drones, robots and virtual reality in MRO.
An example of a joint venture leveraging on IIoT is Rolls Royce, a provider of aerospace power systems. The manufacturer partnered with Singapore Aero Engine Services Private Limited as well as the Agency for Science, Technology and Research in Singapore in September last year. The partnership saw an investment of US$45 million, which will operate a joint lab for five years to develop advanced manufacturing technologies for the aerospace industry.
“Singapore has also seen a steady increase in aerospace manufacturing activities, with some of the most complex engine and avionics parts produced in Singapore,” stated Mr Tan.
Planning, part tracking, and visit packaging of scheduled routine maintenance are important in the MRO environment. Image Source: Rolls Royce
Thailand’s Emerging Aerospace Industry
Thailand is seeking greater market share in Southeast Asia’s aerospace sector, and aims to duplicate the success of its automotive industry, which is the 12th largest in the world. To develop itself into a full-service aerospace hub, the country is leveraging on its strategic location, low labour costs, and expanding network of free trade agreements.
Air passenger traffic has been growing in Thailand, due to the upward trend in country’s tourism industry. The airports managed by Airports of Thailand (AOT) handled 121.7 million passengers in 2016, an increase from 109.8 million passengers in 2015, according to the leading operator at AOT. There were a total of 790,194 aircraft movements (take-offs and landings) in 2016 as compared to 727,750 in 2015.
In the next 20 years, it is expected that 42 percent of the 32,146 global aircraft deliveries will be in Asia Pacific, according to market intelligence agency Frost & Sullivan. This results from the exponential growth of passenger traffic that will increase from 60 million unique passengers in 2017 to 180 million unique passengers by the end of 2037. In Thailand, the amount of total aircraft is projected to almost triple from 314 aircraft in 2017 to 811 aircraft by 2037.
The Thai government is sparing no effort to achieve their goal to be an MRO hub. To accelerate investment, the nation has implemented the “Super- Cluster” program that allows companies to be eligible for eight-year corporate tax exemptions and an additional five-year reduction of 50 percent, provided they are in the designated cluster areas. The country also has aviation schools that offer courses for engineers, technicians and mechanics.
Thailand’s transport ministry has also commenced a development plan that started in 2017 and will last until 2031, with the plan divided into three phases. The first phase between 2017 and 2021 will see Thai Airways building a new MRO centre; the second phase will focus on the continued expansion of the centre until 2026; and the third phase will target the expansion of the nation’s aviation design and manufacturing capabilities. Moreover, the Thai government has also initiated a US$5.7 billion plan to transform its U-Tapao airport into an MRO centre.
The airport is located 140 km southeast of the nation’s capital city, Bangkok, and will start operations by 2026. The country currently has six MRO providers servicing the aerospace industry, but industry experts said it would take at least a decade to put the necessary infrastructure in place before the country can be on the same footing as Singapore’s MRO sector.
These government-led initiatives could create a US$30.8 million industry as well as 7,500 jobs, according to officials from the Thai government. Additionally, it could reduce the cost of the annual maintenance for local airlines by US$20 million over 30 years.
MRO providers play an essential role in sustaining the world’s airline fleets, and assuring aircraft safety and airworthiness. Image source: Rolls Royce
Big Data: Advancing Aerospace MRO
As more highly connected next-generation aircraft enter the world’s fleets in the next 20 years, MRO providers and original equipment manufacturers are adopting strategies to collect the right information from the vast amount of data gathered through IIoT technologies. The aerospace MRO sector operates on thin profit margins, and MRO providers are under continuous pressure to be as efficient as possible—big data enables providers to improve operational efficiency and minimise downtime.
“As an SME, we must also start to take advantage of Industry 4.0 technologies to improve our utilisation and productivity,” stated Soh Chee Siong, chief executive officer of JEP Precision Engineering—a manufacturer of Inconel and titanium products for the aerospace industry— at the launch of their smart factory in Singapore in November 2017.
“More so in Singapore’s context, where the labour market is tight and operating cost is increasing, we must transform the company using this technology, and create a more data-driven environment so that decisions can be made efficiently and effectively,” added Mr Soh.
All About The Data
Numerous opportunities are available in the MRO sector that leverage on big data to enable services such as predictive analytics, improved monitoring of usage patterns, or tracking and anaylsing the health of equipment in real-time. Centralising information is also essential—a central database needs to store all the vital data and link them back to the source files to ensure that all updates are automatically delivered to staff.
Planning, part tracking, and visit packaging of scheduled routine maintenance are important in the MRO environment. Thus, MRO providers need to ensure the integration of a content authoring/publishing system into an MRO data management tool which will provide significant added value. With the capability of authoring routine and non-routine job cards directly from the data collection environment, maintenance activities can be efficiently created based on established maintenance schedules and then be tracked according to the company’s needs.
In today’s advancing digital era, it is essential to create value with the information gathered through IIoT technologies, especially so for emerging economies that want to garner momentum in the aerospace MRO sector.
China’s Premier Urges Manufacturers: The country’s Premier Li Keqiang aims to transform China’s manufacturing industry into one that drives on the Industrial Internet of Things from the current low-cost competitive edge that the sector has.
Asia Pacific: The number of manufacturers in Asia Pacific supporting Smart Factories a fully connected factory would nearly triple by 2022, according to a study commissioned by Zebra Technologies—a manufacturer of marking, tracking and computer printing technologies.