I am writing a series of articles focused addressing the challenges faced in digital transformation within the manufacturing and go into multiple topics addressing some of the questions we have about rolling out a successful digital journey.

The topics will range questioning the integration of legacy systems with new operational technologies, outlining the importance of human elements, strategies for expansion, cybersecurity threats, return on investment, among others. The objective of these articles is to provide insights on the different aspects of digital transformation in the manufacturing industry.

Digital Transformation challenges in the manufacturing industry

I am writing a series of articles that aim to address the challenges faced in digital transformation within the manufacturing industry. These articles will cover a range of topics, providing insights and answering questions about successfully implementing a digital journey.

Objective

The objective of these articles is to provide valuable insights into the different aspects of digital transformation in the manufacturing industry.

Stay tuned for the upcoming articles in this series, where we will delve
into the challenges faced by manufacturers when integrating legacy systems with new operational technologies. We will explore the potential roadblocks and offer strategies to overcome them, ensuring a smooth transition towards digital transformation.

Integration of legacy systems with new operational technologies.

This article delves into the technical and strategic challenges manufacturers encounter when their legacy systems fail to keep pace, hindering the acceleration of digital transformation through the integration or implementation of new digital solutions. It is crucial for manufacturing companies, even when prepared to deploy new digital systems, to be cognizant of methods that streamline this integration seamlessly without disrupting ongoing operations.

Technical and strategic challenges in manufacturing

Manufacturers often face technical and strategic challenges when their legacy systems fail to keep up with the pace of digital transformation. A manufacturing plant is engineered to operate for a couple of decades, not just a couple of years.

The challenge lies in the fact that manufacturing equipment is installed at the start-up of the plant, with the initial focus being on efficiency, quality, and performance. However, as time goes on, the plant runs at its optimum, and people become accustomed to its quirks, which means they may not be at the forefront of productivity.

This is where the customer comes in. Customer requirements change over time, and competitors install new production lines and manufacturing technology, making them more agile and productive than older facilities. Manufacturing companies need to follow a strategy that allows them to balance new customer expectations, the state-of-the-art facilities of their competition, and the need to remain competitive themselves.

One element to consider is having a strategy in place to extract the maximum value from legacy systems while also investing in better technology. This will help prevent technical debt from becoming a strain on innovation and digital transformation.

Once new technologies are identified, it is crucial for manufacturing companies to be aware of methods that streamline the integration of these technologies without disrupting ongoing operations, even when they are prepared to deploy new digital systems.

Define legacy systems

The critical roles of these legacy systems cannot be understated, as they support essential business functions and contain valuable historical data. However, their limitations, such as incompatibility with new software, high maintenance costs, and security vulnerabilities, increasingly hinder operational efficiency and innovation.

Considering the future impact

When evaluating legacy systems, it is crucial to understand their impact on future goals and aspirations. It is important to consider where you want to be in the next 3, 5, or 10 years. While you may be fine in the short term, it is essential to understand that with each passing year, your technical debt grows in comparison to others. This can hinder innovation and slow down development. Additionally, high technical debt increases the risk of system failures and security vulnerabilities. Managing and reducing technical debt is vital for companies to maintain competitiveness and agility over time.

In the manufacturing sector, there are various types of legacy systems that need to be considered for successful digital transformation. These include:

Hardware

Hardware legacy systems consist of outdated hardware components, such as automation systems like PLCs or DCSs, communication hardware, and proprietary hardware. Maintaining these systems requires specialized knowledge, maintenance specialization, and partnerships.

Software

Software legacy systems are characterized by outdated software applications and codebases. They were developed using deprecated programming languages or rely on software libraries or operating systems that are no longer supported.

Infrastructure

Infrastructure legacy systems encompass outdated network architectures, communication protocols, and data storage methods. Upgrading these systems often poses challenges due to the associated cost and complexity.

Orchestration of your systems

To achieve the full value of digital transformation, it is important to orchestrate all of these legacy systems together. Focusing solely on software, or hardware, or infrastructure will not lead to successful digital transformation. For example, if you replace a software application but the hardware does not have the facilities to be connected, or the existing infrastructure could crumble under the new software, the end result may still be the status quo, or the ROI may be significantly lower than calculated. A lot of elements to think about, below a couple of challenges.

Common challenges of legacy systems

Legacy systems in manufacturing come with a host of challenges that can complicate people, processes, operations and strategic initiatives:

• Incompatibility with new software: One of the most significant issues with legacy systems is their lack of compatibility with newer software solutions. For instance, you may have an old Programmable Logic Controller (PLC) that has limited communication capabilities, or its CPU may not meet the specifications required to execute new requirements. This incompatibility can result in integration challenges, making it difficult to share data across systems. Consequently, operational inefficiencies and data silos can arise.
• Risks: As technology ages, it becomes more challenging and expensive to maintain. Parts for older machines are harder to find, and the expertise required to service them becomes more specialised and costly. However, it is also important to consider the implications of not having replacement parts or the necessary skills, namely the business risk. The likelihood of the business risk will increase as time passes and your financial consequences.
• Security vulnerabilities: Older systems often do not support the latest security protocols and may not be compatible with modern cybersecurity software. This makes them vulnerable to cyber-attacks, which can jeopardize sensitive data and disrupt manufacturing operations.

The legacy systems in manufacturing poses a risk, not only to the operational efficiency of a manufacturing plant but also to its ability to compete in a rapidly evolving industry landscape. For years, manufacturing companies have focused on keeping their systems current. Perhaps you have an obsolescence plan in place or an investment plan to acquire new machines. However, this raises the question of how we can go beyond keeping the manufacturing park current and instead create a transformation culture of people, systems and processes.

Navigating legacy system challenges

The challenges posed by legacy systems require a strategic approach that balances the need for modernization with the realities of operational continuity. Manufacturers can explore several strategies, such as incremental system upgrades or a complete system overhaul if financially and practically feasible. Additionally, it is important to consider the opportunities for digital transformation within the manufacturing operation. While some elements may be classified as legacy, there could be opportunities in operation that are maybe not fully digitized. Therefore, it is necessary to both reduce the risk of legacy systems and embrace transformative changes.

Importance of integrating new digital technologies

The integration of new digital technologies into manufacturing processes presents a transformative opportunity to overcome the limitations imposed by legacy systems. These technologies, such as the Internet of Things (IoT), operational platforms, sophisticated production systems, robots, artificial intelligence (AI), big data analytics, and cloud computing, offer numerous benefits that can significantly transform manufacturing operations.

When considering the adoption of new digital technologies, it is crucial to align them with your aspirations. For example, you may aim to develop a digital twin to simulate your operations or supply chain. By doing so, you can gain a comprehensive understanding of every element in your value chain.

The advantages of embracing new technology include:

• Increased efficiency: deploy digital technologies to automate and optimize manufacturing processes, reducing manual intervention and minimizing errors. This leads to higher productivity and lower operational costs.
• Enhanced scalability: modern digital solutions are designed to scale with the business, supporting growth and adaptation to changing market demands without the need for extensive system overhauls.
• Improved data analytics: The ability to collect, analyze, and act on vast amounts of data in real-time allows manufacturers to make informed decisions, predict market trends, and respond to customer needs more effectively.
• Better customer experiences: Digital technologies enable manufacturers to offer customized products and services, improve delivery times, and enhance overall customer satisfaction.

In conclusion, the series of articles addressing the challenges of digital transformation in the manufacturing industry aims to provide valuable insights into various aspects of this process. The integration of legacy systems with new operational technologies poses technical and strategic challenges for manufacturers. Balancing customer expectations, competition, and the need to remain competitive is crucial. Legacy systems play a critical role but can hinder operational efficiency and innovation due to limitations and technical debt. It is important for manufacturing companies to consider the future impact of these systems and manage technical debt to maintain competitiveness and agility. Successful digital transformation requires the orchestration of hardware, software, and infrastructure legacy systems. By addressing these challenges, manufacturers can navigate the complexities and embrace the benefits of digital transformation in the manufacturing industry.