Today, most companies, whatever their type (industry, retail, telecommunications, etc.) are starting to derive real value from data acquisition and advanced data processing platforms, IT platforms, the Internet of Things (IoT) and the Industrial Internet of Things (IIoT). Many of these companies are still opting for resource-intensive, in-house manufacturing initiatives. While well-intentioned, these initiatives can have detrimental medium- and long-term effects on the company's cost, time and personnel.
The digital transformation is becoming a table that bets on the change of process to compete effectively in today's market. However, this transformational change has led some companies to choose to go the digital route entirely internally.
The dark side of do-it-yourself
Many companies, no matter how many resources they have, resort to a strategy of developing their own solutions for monitoring, collecting, analysing and representing data, as they feel that they are best suited to their needs since they are conceived and implemented for that purpose.
On the other hand, company shareholders need to see their money go into projects that result in quick, short-term gains, a measurable return on investment and scalable use cases that sustain long-term growth and benefit the bottom line. In many cases, deployments of homegrown monitoring solutions have grown into massive cost centers with no clear reward or future benefits in sight.
Despite the advantages that having an in-house or ad-hoc monitoring tool may seem to have in the short term, there are three main disadvantages to consider for do-it-yourself solutions, from a broader business perspective.
While the initial price of purchasing a platform or monitoring solution may seem excessive for some companies, the alternative of developing it in-house and adapting it to the required functionality is much more expensive. For example, the total cost of ownership of a do-it-yourself project can be almost 4 times higher in a factory environment when compared to the adoption of a third party IIoT platform.
The maintenance costs of a proprietary solution can skyrocket due to the continuous investments required in terms of security, scalability or development of new functionality. The blockage of this ongoing expense can quickly reach millions, resulting in negative recurring annual expenses and results. A monitoring platform provider with knowledge and know-how about agile software development processes is better suited to rapidly deploy innovative applications on the roadmap, than an industrial company.
"Time is money" for any organization. Executives have it always in mind, whether it's deploying resources to develop a new system internally or creating a product to improve customer experiences. Specifically, developing a software solution entirely in-house is a time intensive and therefore costly effort. This time-consuming process is exponentially prolonged for non-digital native companies that may be experts in industrial machinery engineering, but less so in agile software development and programming.
To develop an own monitoring solution can take up to 2.5 years if we consider the time it takes to get advice, design the platform, its development and its production. It is estimated that partnering with a software vendor that offers a monitoring platform takes half that time, and even faster than that in many cases
Expressions such as "experience is a degree" or "Let the cobbler stick to his last" are common and known to all of us but in many cases, we do not apply them.
In the case of monitoring, each organization has the necessary knowledge to decide what is important to measure and know and what is not within their processes, but when it comes to getting down to business, it is advisable to have the experience of a third party with expertise in the sector, since after all, it is what they live from and where they spend most of their time.
In the end, lack of experience impacts negatively on the previous points, TCO and time and, of course, directly on the company's bottom line.
With the constant pressure of a continuously growing and renewing market, the reduction in time to adopt monitoring solutions is doubled when industrial adopters of third-party monitoring solutions outperform the market. Industrial companies that do not have such solutions in production are rapidly becoming the minority; the American IDC (International Data Corporation) predicts that by the end of 2020, 75% of manufacturers will have integrated some type of monitoring solution into their operations, be it IT, IoT, IIoT or BI.
With proprietary initiatives, there are many unknowns that can lead to implementation delays and return on investment (ROI). With the current speed of change and innovation in the market, that ultimately means falling behind the competitors.
The growing popularity of Lean principles stems from the fact that they really focus on improving every aspect of a work process, save costs and help increase the competitiveness of companies, involving all levels of a company's hierarchy.
Within the field of monitoring, both processes and systems must be optimized to eliminate waste and generate added value in each of the different departments of the company. We can list the following main points in a lean monitoring process:
Identify where the greatest value lies in the exploitation of data. Any other activity or process that does not add value to the final product or service is considered a waste.
Value Stream Mapping. This stage tells us where value is being generated and in what proportion the different parts of the process produce value or not.
Creating a continuous workflow. After you have mastered your value stream, you must ensure that the workflow of each process remains smooth. Bottlenecks and interruptions or stops of processes and systems can occur at any time. However, by monitoring and visualizing your workflow in real time, you can easily detect and remove obstacles that may arise.
Create a Pull System. Having a stable workflow is a guarantee that work tasks are performed much faster and with less effort. In a pull system, the work is removed only if there is a demand for it. This allows you to optimize resource capacity and deliver products/services only if there is a real need.
Continuous Improvement. After going through all the steps above, you have built your Lean monitoring system. However, do not forget to pay attention to this last step, probably the most important one.
There are some important advantages that companies can benefit from thanks to lean monitoring.
Focus. By applying Lean, you can reduce waste activities. Therefore, your workforce will be focused on value-adding activities.
Improved productivity and efficiency. When employees focus on delivering value, they will be more productive and efficient because they will not be distracted by unclear tasks.
Smarter processes. By establishing a pull system, you can deliver work only if there is real demand.
Better use of resources. When your production is based on actual demand, you will be able to use only as many resources as necessary.
As a result, your company (and your team) will be much more flexible and able to respond to customer requirements much faster. In the end, the principles of Lean management will allow you to create a stable production system with a greater chance of improving overall performance.
Believing in this is key, after that we take care of the rest, 😉