At present, the digital wave is sweeping across thousands of industries, and the equipment manufacturing industry, as the core of the industry, is facing internal challenges of its own transformation and upgrading, as well as external demands from end users. In the latest survey conducted by Omdia Consulting on global OEM companies commissioned by Schneider Electric, up to 99% of respondents believe that digital transformation will have a profound impact on various stages of the machine's lifecycle, including design and engineering, commissioning and operation, maintenance and service, with 62% of respondents emphasizing the significance of this impact. It is worth mentioning that 80% of OEM respondents are currently trying or have already deployed digital technologies in some facilities or business functions. By introducing digital services such as remote access and status monitoring, they not only enhance their competitiveness and flexibility, but also continue to create added value for end users.
It can be seen that in the increasingly competitive global market, actively embracing digital transformation, utilizing innovative technologies to optimize operational efficiency and sustainability, and exploring new business models have become a common consensus among OEM enterprises.
Digital transformation brings opportunities and challenges to OEM enterprises
The positive attitude of OEM enterprises towards digital transformation stems from the new development opportunities contained in this trend. On the one hand, with the deepening of global Industry 4.0, the equipment manufacturing industry, as an important indicator of a country's comprehensive competitiveness, has received high attention and support for its digital transformation from various countries. Recently, China's "Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Trade in" also emphasizes digital transformation and intelligent upgrading as important directions to promote equipment renewal and transformation in key industries. This not only points out the application direction of digital technology for the equipment manufacturing industry, but also stimulates the market demand potential in the equipment and equipment field, creating business growth space for OEM enterprises.
On the other hand, research shows that improving overall performance is the primary driving factor for OEM companies to carry out digital transformation. Digital technology can not only significantly improve overall equipment efficiency and capacity utilization, but also extend the benefits from a single machine to the entire production line and even the entire enterprise level. In addition, data, as a key production factor in the digital age, is becoming a catalyst for OEM enterprises' digital transformation by activating the benefits brought by data. Up to 70% of OEM enterprise respondents believe that improvements in data flow and visibility of machines and operations are the core benefits of implementing digital solutions. This enables enterprises to enhance data analysis, transform key data into insights, and make more effective and informed decisions to support further development and optimization of products and services.
Moreover, actively carrying out digital transformation by enterprises will also promote sustainable industrial development. Especially towards the "dual carbon" goal, OEM enterprises rely on digital solutions to improve the efficiency of automated machines and industrial processes, optimize environmental sustainability measures, including reducing greenhouse gas emissions and energy consumption, increasing the procurement and use of renewable energy, and increasing the recycling and reuse of materials and products.
However, it is not easy for OEM companies to ride the wave of digitalization. In Omdia's research, many OEM companies stated that they still face many obstacles during the transformation process. For example, when enterprises need to integrate digital transformation capabilities into current technology platforms, engineering and integration of IT and OT environments are considered one of the three most important challenges by nearly half of the surveyed enterprises, especially for small and medium-sized OEM enterprises, where this challenge is more prominent; The other two major challenges are deployment costs and partner selection. In this context, the readiness of the Machine Industry Internet of Things (IIoT) has become a key capability to support OEM enterprises in addressing digital transformation challenges.
Stimulating the innovative value of digital technology requires collaboration within and outside the enterprise
According to statistics, two-thirds of digital transformation projects end in failure or fail to achieve established business goals. This indicates that the process of implementing digital transformation strategies for enterprises is highly complex, requiring the selection of suitable and experienced suppliers with professional knowledge, such as machine integrators, technology and automation partners.
Research has shown that system integration capabilities, network security support services, and the ability to collaborate with IT and OT departments are the most important considerations for OEM companies when selecting suppliers. In addition, at different stages of digital transformation, partners need to have the ability to meet customized needs to support OEM enterprises in the transformation of different steps and business models in the digital process. This includes the transition from the basic product level, to the introduction of intermediate level services such as remote diagnosis and time-based maintenance, and to the advanced stage of the complete transformation of business models towards service-oriented.
In addition to selecting suitable suppliers, enterprises also need to reshape their organizational structure and collaboration mechanisms to promote digital transformation from the inside out. Research has found that the IT department of enterprises has the most prominent influence in defining digital transformation standards for the lifecycle of machines. From a broader perspective, as digital transformation expands both inside and outside the factory, the impact and decision-making are not only related to the machine lifecycle. At this point, OEM companies must take a holistic perspective and make decisions based on a complete supply chain to adapt to a broader strategy from production to service. Therefore, enterprises should establish cross functional departmental collaboration and teams, integrating IT OT, Multiple forces such as engineering, finance, and human resources are needed to better support our own digital construction.
In addition, OEM enterprises increasingly hope to accelerate their transformation from the traditional "selling machines/equipment" business to the "selling services" business of sustainable revenue creation through digital transformation, and edge computing and cloud based digital solutions can just meet this demand. Research shows that real-time data access, predictive maintenance, and remote monitoring are the three major cloud services supported by digital solutions. These services can not only help OEM enterprises optimize workflows and improve the performance of the entire production line, thereby better responding to constantly changing market demands, but also bring more opportunities to establish connections with end users and achieve new business growth.
At the same time, OEM companies generally believe that adopting innovative technologies will have a significant impact on different stages of the machine lifecycle. For example, in the design and engineering stages, by deploying digital tools, enterprises can design and model complex structures and systems faster and more accurately. Digital simulation and analysis can also help businesses better understand the behavior of machine solutions and identify potential hazards before problems occur. During the debugging phase, digital tools can help businesses save time and costs, reduce risks, and encourage the development of parallel engineering. In the process of transitioning from traditional models to service-oriented models, open platforms, as a disruptive technology, can further help OEM enterprises improve efficiency, shorten debugging time, achieve more flexible machine development and production, and create more value for end users.
The successful experience of pioneers provides a demonstration reference for OEM transformation and upgrading
Based on the actual needs of OEM enterprises, Schneider Electric has developed the EcoStruxure open automation platform based on the IEC 61499 standard, which can achieve decoupling of software and hardware, promote the deep integration of IT and OT, and help enterprises further unleash innovation vitality and productivity. At present, more and more OEM companies are accelerating their digital transformation and business model upgrading with the help of Schneider Electric's EcoStruxure solution for machine control, providing practical demonstrations and useful references for many enterprises.
For example, a packaging and palletizing equipment supplier in the food and beverage industry has achieved a new level of integration and operation by adopting Schneider Electric's EcoStruxure machine platform, as well as software and hardware products including robot and intelligent conveyor solutions, and digital twin software. Specifically, with the help of digital twin models with simulation capabilities, the enterprise can conduct machine testing without the need to create prototypes. Through virtual debugging, it has achieved up to 40% cost savings and reduced replacement time by 50%.
For example, a well-known centrifuge manufacturer utilized Schneider Electric's comprehensive solution that includes EcoStruxure open automation platform, Modicon M580 high-end automation edge controller, Altivar frequency converter, and Harmony iPC. With the flexibility and scalability brought by creating standardized modules, it not only shortened the time to market of the equipment, but also saved 50% of debugging costs, paving the way for future open, modular, and asset centric automation processes.
In the project of replacing the dehydration system of a local mining company in Indonesia, a leading supplier of a certain pump and pump system, relying on digital services and AVEVA industrial software in Schneider Electric's EcoStruxure machine solution, jointly designed and built a complete dehydration system. This system not only helped mining companies reduce energy consumption by 20%, downtime by 25%, and labor costs by 40%, but also prompted the supplier to develop a new business model to provide remote services to end users.
Nowadays, digital transformation brings unprecedented opportunities and challenges to OEM enterprises. It not only provides OEM enterprises with a more open technological environment and collaborative methods, but also unlocks a new space for business model innovation, allowing data and insights to play a greater role in the value chain that runs through the upstream and downstream of the industry. Looking ahead to the future, Schneider Electric looks forward to working with more OEM companies to jointly depict a more efficient and open industrial landscape, empowering the high-quality and sustainable development of China's manufacturing industry