Today, we are in the middle of the most amazing technological change that our businesses, our industries, and our world, have ever witnessed.
Coupled with this transformation, comes the health, safety and economic implications resulting from the global pandemic. We spoke with Çağlayan Arkan, Microsoft’s vice president of manufacturing, to find out how the industry is responding.
Covid-19 has affected all industries. What are the biggest changes you are witnessing in manufacturing?
As the pandemic unfolded, we immediately saw massive disruption in terms of demand, supply and the workforce. For supply chains, an important aspect of this was an over-reliance on one source or one country as well as supply chains that were too lean. In addition, manufacturers were facing serious challenges around business continuity. They could not see their inventory or their suppliers. Without having their workforce on the shop floor or having the ability to connect to their assets or suppliers, manufacturers struggled to operate. We believe some of the biggest changes coming out of this crisis will include a certain, if not significant, level of regionalisation and localisation of supply chains. We also anticipate manufacturers will build capabilities around remote operations in order to deal with the next crisis. Reskilling of the workforce, closing the skills gap, and ensuring health and safety around the new standards that the pandemic imposed on us all will be top-of-mind considerations going forward. Finally, but importantly, we know sustainability will become a much bigger focus.
If this global pandemic has taught us anything, it has taught us that no business is 100 per cent resilient, but that businesses that are fortified with some form of digital capability, having built at least reasonable levels of ‘systems of intelligence’, are more resilient than others. Technology is at the centre of how companies will survive these situations and how they will thrive in the future moving forward. We have seen more digital transformation happen out of necessity during the first two months of the crisis than we have seen in the last two years alone. In short, we say the keys to successful response and recovery are for manufacturers to operate remotely everywhere, simulate everything and automate anywhere.
But this transformation is not just about technology. By thinking first about how we can help people achieve more, we can uncover the true role of technology. It is just a tool, a way of helping people do amazing things, solve bigger problems, create more rewarding experiences and generate more value. That is the era we are in today. I see tremendous opportunity for leaders, for enterprises, for our economies, and for everyone.
With so many opportunities available, how do you think Microsoft’s partner ecosystem has evolved? And how are partners positioned to help manufacturers?
With hundreds of thousands of partners, our ecosystem is stronger than ever. Together, we are powering breakthrough innovations for customers around the world. Our partners are embedding Microsoft technologies into their own solutions and delivering more differentiated, long-term value for customers. They are delivering consistent, repeatable, high-fidelity managed services on the Microsoft Azure cloud. They are going all-in on artificial intelligence (AI), helping make it accessible to and valuable for everyone. They are building solutions using repeatable intellectual property and code on Microsoft platforms to ensure the quality and capabilities our customers have come to expect. Every major industrial internet of things (IIoT) provider has joined forces with Microsoft to integrate and offer their manufacturing services and solutions on top of our global platform. And, because every company today is driving their own tech intensity, we are also now partnering with our customers to not just help them adopt the latest tools and technologies, but to empower them to build their own unique digital capabilities and drive innovation in their industries.
How are manufacturers pioneering the use of Microsoft technology and meeting the challenges of a rapidly changing landscape?
We have worked with many thousands of manufacturers on their digital transformations over the years. What we have learned is that those that are most successful understand that this process is a journey – one that supports people to create the organisational value through a clear vision, strategy, culture, and unique potential and capabilities. They then turn to technology to enable new business models, transform to a data-driven culture, and reinvent their entire value chain. The integrated capabilities spanning the Microsoft cloud create – what we believe – is an unmatched platform for this kind of global scale transformation.
For example, Airbus is driving innovation and accelerating production with Azure mixed reality and HoloLens. The company has reduced design validation time by 80 per cent and accelerated complex tasks during assembly by 30 per cent.
Meanwhile, Unilever is empowering its 155,000 employees globally to do their best work by using Microsoft 365, building custom apps that harness real-time insights from data with PowerApps and Power BI, and leveraging Azure IoT’s digital twin technology to digitise its supply chain network.
Using Microsoft Office 365 and Windows 10, GE Aviation’s Digital Group is digitally enabling its 300,000-person workforce to collaborate more effectively and make decisions faster. And Ecolab is doing the important work of addressing the world’s water challenge with Microsoft cloud technologies to help customers get closer to net-zero water usage. These are just a few of the very inspiring stories of innovation that our customers are driving with Microsoft technologies.
Sustainability has become a key driver in manufacturing and its importance will grow as populations increase and resources dwindle. Where is Microsoft focusing its attention?
Earlier this year, we announced an ambitious goal and a new plan to reduce and ultimately remove Microsoft’s carbon footprint. We believe that Microsoft’s most important contribution to sustainability and carbon reduction will come not from our work alone, but by helping our customers around the world through our learnings and with the power of data science, AI, and digital technology. For many of our customers, sustainability is already a core part of their business, while others are just beginning their work to mitigate their carbon impact. Regardless of where organisations are on their journey, we are committed to supporting them. For example, we are helping customers better understand the carbon impact of their cloud workloads with tools like the Microsoft Sustainability Calculator that analyses estimated emissions from Azure services through a Power BI dashboard. We also launched a 24/7 matching solution with Vattenfall – a first-of-its-kind approach that gives customers the ability to choose the green energy they want and ensure their consumption matches that goal using Azure IoT.
We are also committed to pursuing new partnerships to address carbon reduction. This will include co-innovating with customers and partners to develop low-carbon solutions, as we have done with L&T Technology Services, ABB, and Johnson Controls on sustainable smart building solutions capable of reducing energy consumption by 40 per cent. We are also driving cross-industry collaborations and coalitions to develop new standards and tools. An essential function of the adoption of new technology is to improve operational efficiency by empowering the workforce.
How is Microsoft helping manufacturers attract, retain and empower their staff with these new technology skills?
When we look at workforce empowerment, we must first face the growing skills gap and talent shortage in the industry today. Reskilling employees is more important than ever because now we have added concerns about employee safety and remote work, not to mention business continuity.
Manufacturers must find ways to attract the next generation of employees while retaining the experience of their seasoned colleagues. At the same time, people need to be equipped with the digital skills essential for today’s new world of work. To do this, we turn to advanced capabilities like automation, AI, cognitive services and mixed reality. These technologies will serve to enhance a new hybrid workforce of human and machine intelligence, while allowing manufacturers to revolutionise their factories, build modern and inclusive workplaces, and optimise efficiencies for better customer experiences.
For example, mixed reality capabilities including HoloLens and Dynamics 365 Guides enable inexperienced workers to learn more quickly by simulating real-world experiences. This kind of immersive on-the-job training has meant that staff can be educated much faster, they can retain information much longer, and they can execute complex jobs more safely. For our aging workers, we can keep them in the workforce longer by making their expertise available virtually wherever it is needed with the affordability and efficiency of autonomous systems and collaborative robots.
We are helping manufacturers reskill and empower their existing workforce with tools like Microsoft 365 to accelerate an intelligent workplace and Dynamics 365 Remote Assist to enable workers to fix equipment faster with the help of remote experts, decreasing factory floor downtime. Lastly, new industry training such as Microsoft’s AI Business School helps companies learn how to strategically apply AI to transform their business and their culture.
With so much change, can you give us some predictions for the year ahead?
The world around us is already changing at a meteoric pace – and we are only at the beginning of what is possible. When I look ahead, I see five key areas that will continue to disrupt and mature the industry:
1. We will continue to see AI drive the biggest opportunities and impact as more organisations promote adoption from proof-of-concepts to full-scale applications. AI is key to accelerating our crisis recovery, from empowering the new workplace, to moving supply chains closer to home, to enabling safer factories, to bringing autonomy and intelligence to industrial control systems to achieve ‘remote everything’.
2. As 5G technology becomes more ubiquitous, it will make a tremendous impact on industrial automation, providing new levels of connectivity, real-time communication, automation and factory uptime on a scale not seen before.
3. Digital twins will continue to evolve rapidly, and we will see more and more dimensions of twins emerge, allowing us to – quite literally – predict the future.
4. From capabilities such as product authentication, to complete track-and-trace across the supply chain, to real-time negotiation and auditing, to the prevention of IP theft, blockchain will continue to revolutionise the way we think about exchanging value, data and assets across industries.
5. Sustainable manufacturing will continue to be a growing priority as manufacturers design for economically-sound processes throughout the end-to-end value chain, working to eliminate waste and engineer better outcomes for their businesses and more value for their customers.
We will be there every step of the way, navigating these changes and sharing our learnings with our customers, our partners, our communities and our industries. Together, we will continue to break new ground in the manufacturing, co-creating landmark innovations and customer experiences as we navigate the road to recovery. Together, we will manufacture a better future. And I am privileged to be a part of it.
This article was originally published in the Autumn 2020 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.
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