Keeping Digital Disruption in Check

July 27, 2023
Digital transformation may be inevitable for manufacturing, but the journey to that destination needn’t be chaotic one.

In the second part of Machine Design Senior Content Director Bob Vavra’s conversation with Steve Dertien, executive vice president and chief technical officer at PTC, they touch discuss how manufacturers can best get digital transformation efforts off on the right foot.

Once again, this interview has been edited for clarity.

Machine Design: As you go in to customers at various stages of their familiarity with a company like PTC, what’s the starting point for the conversation? We’re looking for low-hanging fruit, obviously, but where do the conversations begin, and how do you begin to demonstrate the value of using data and technology effectively?

Steve Dertien: I think a little bit depends like where in their engineering process they are, if they’re just doing CAD data management in a very crude PLM—crude meaning, let’s just say they’re doing it in Excel or Google Sheets. The very first step might be to say, “How do we actually get that in order so that we can truly collaborate both internally and with our supply chain seamlessly?

So that’s an interesting triangle of workflow that we go through with customers to say, “How do we drive that advantage?” And then from there, you really look at the bottlenecks and say, “Okay, what is inhibiting our success here? Is it productivity in the factory?”

Every company, despite what they do competitively, is in a different business process landscape. They might be swapping out technologies, they might be doing mergers and divestitures. And a lot of that is what sort of process harmonization is what benefits them the most. But behind it all are three or four or five key strategic themes that really can kind of drive an outcome.

We focus our customers to focus a lot on engineering and manufacturing, obviously. You can focus just as much attention on what it takes to service a product as well. If you imagine some of these products have serviceable life cycles of 10, 20, 30, even 50 years, there’s a lot more value to be had in satisfying the customer with the service of that product over its lifecycle than maybe even in the initial sale of it. There’s a tremendous amount of focus on service optimization as well while reducing your inventory costs while trying to support that.

WATCH: Digital Transformation: Managing the Disruption

MD: As we said at the outset, digital transformation is this big term, and there’s a lot of big technology behind it, but I think one of the things that gets overlooked is some of the things we like to talk to our audience about all the time. These are really scalable solutions; these are not big solutions only for big companies.

SD: I’d say in our portfolio we have everything that kind of works for small organizations that are hyper-agile all the way up to the most large, complex companies on earth. But in the end, I don’t really have conversations about large companies and small companies because that technically doesn’t have a lot to do with what they engineer or what they manufacture.

I have just as many customers that that work on really sophisticated designs across a very small team with a diverse supply chain. And they want the solution that actually scales to deal with that complexity—or their complexity might be a wide portfolio of relatively simple products like electrical connectors, or something like that.

The dimensionality of how we can serve is actually pretty important, because there’s not exactly a one-size-fits all. In my occupation, I really don’t engage with customers that do the same thing, even if they’re in the exact same industry. It’s actually kind of a remarkable yet rewarding part of the opportunity.

MD: And you learn something every time.

SD: Yeah, exactly. My day is never consistent because it’s always, always filled with something new. So, it’s pretty amazing.

MD: I had a discussion with Dave Duncan—your VP of sustainability—recently, and one of the things we talked about was this idea that 80% of a product’s environmental impact is influenced by decisions made in the design phase. It seems like that that’s one place where, in digital transformation, more companies should be looking to start rather than necessarily at the operational phase.

SD: I’d say the interesting proposition is you have a lot of your carbon footprint is locked into designs that you already have. So, the real interesting question for some companies is, “Where do I get started?” The good news is you don’t have to start at one spot. You could execute a, let’s say, an operational strategy to reduce waste-to-landfill. That doesn’t take a lot of effort. You could kind of get rid of the zip ties and the plastic packaging and things like that. But the moment you say, I want my supplier to make it in a different material, you’re at the top of the pyramid again, working with engineering because they’re going to revalidate that material any testingproduct testing and so forth.

How do we unlock that data so that you can effectively make sound decisions across the spectrum? That’s kind of where everything’s going on the engineering side, for sure. And then if you want to make really profound changes, the only people that can do that is engineering. That’s not to say the manufacturing folks can’t do some process stuff that’s amazing. But up to the point that you’re changing the form fit functionality and the design of the product, right? You’re kind of limited in that capacity.

MD: It’s getting those groups together talking, understanding one another’s perspectives and then creating something that’s fabulous design, that’s manufacturable, that is sustainable throughout the entire circular supply chain of that product, (then) reuse of the materials that that really unlocks some really exciting possibilities.

SD: We have obviously we have recycling in electronics and certain products in aluminums and metals and in general. But when you when you really look at like wiring harnesses and industrial machinery and medical machinery and you really say, “How can you decompose as much of that as possible back into reusable?”

It’s interesting. You know, it’s going to be a while in as we start to learn and figure that out. But I think that whole circular nature will be a big part of it. The good news, I don’t think anybody has to wait for a waterfall to happen literally. It doesn’t matter what organization you are in; there’s a lever you could pull to make good in the world, and you certainly want to shine a light on that so people know where to get started.

MD: The last thing I want to talk about is something I’ve observed both in the U.S. and Europe over the last 18 months in particular, and that is this idea of digital transformation really being driven from the industry out. They’re basically saying [to governments], “We’re going to do this. If you’ve got problems with sustainability, if you’ve got problems with the way that we’re managing the supply chain, you can legislate it or you can just get out of our way and let us go do the things that we’re doing.”

But the manufacturing business is driving so much change simply because it’s good business to do it.

SD: I think it’s good business. I think it’s a lot of it, especially if you’re really focused on kind of the economic or the financial return, it’s somewhat easy to measure now. There’s a lot of emotion in certain areas, like a lot of engineering improvement is kind of tough to measure over the life cycle of what happens in engineering because it’s a lot of complexity management with a lot of people, you know.

But that aside, those returns can be targeted and you can understand it and I think companies are really wising up to what that benefit truly is to their operations, whatever it might be, right? The product portfolio comes to light by virtue of the investments that are happening in the strategies there.

I think the other thing that’s ultimately happened, too, is some of the traditional conservatism in industrial manufacturing has gone by way of having a few more people aggressively think about what the opportunity is.

And I say that because whether it’s your marketing department, your HR department…go right on down the list, the finance team, they’ve all taken digital opportunities. They’ve all had a jump start to truly try and transform what they’re doing operationally. The problem is, is that the majority of the spend isn’t in those departments. It’s in the operations teams, in the engineering team.

And I think they’re latching on now to that. And you know what? They normally are conservative because you don’t want to rock the boat too hard as far as delivering a quality product. Everybody knows they need to do something to kind of get in, keep their competitive advantage.

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