Learn To Ride The Technology Wave

A technology wave of change is moving through the machine tool industry as manufacturers face increased competition, pricing pressures, profit erosion and recruiting challenges. Manufacturing leaders analyzing options for competitive differentiation, incremental revenue growth, profitability and customer retention should consider their software prowess as essential to riding that wave. Many manufacturers may not fully understand how their business may be driven or limited by the software they ship with their machine tools. The scope of their digital ecosystem — or how outdated, disconnected and underutilized their software may be — matters.

This Software Savvy column will explore: how software can add competitive differentiation, revenue and profitability to machine products; how software packaging, pricing and distribution strategies increase EBITDA, and how information technology (IT) and operational technology (OT) can either negatively or positively impact factory operations and Factory of the Future initiatives.

One way to begin prioritizing your software initiatives is to separate software portfolios into internal and external categories.

The internal category includes: traditional IT components such as local area and wide area networking and associated user and cloud-based infrastructure systems; business operation systems for sales, marketing, supply chain management, accounting and more, and OT components such as factory floor systems that may incorporate manufacturing execution systems, the industrial internet of things, controls/automation, as well as maintenance, reliability and safety.

The external category includes customer-facing software systems, such as human-to-machine interface (HMI) applications, online and offline machine programming systems, specialty or proprietary software components for specialized (or competitively differentiated) machine operations, technical support systems, and, in some cases, supplier management systems. This external category — organizationally speaking — should also include the employees, software development toolkits, programming platforms, any cloud-based third-party access, OEM software components, and any IT systems that derive revenue from these external categories.

Look for the signs

There are many articles, whitepapers, books, academic courses, corporate training classes and hundreds of consulting businesses specializing in solving the problem of technology modernization. But each manufacturer is different — the size of your business uniquely contributes to the problem/ solution paradigm of modernization.

For internal software portfolios, here are some obvious signs it’s time to modernize:

• performance issues (slow software or systems)
• difficulty with software upgrades,
• pervasive systems integration issues,
• recurring security threats or breaches to business systems,
• limited or eliminated vendor support for older software versions,
• a constant need for multiple workaround solutions,
• ISO or other industry standard compliance infractions,
• increasing maintenance and reliability costs or safety compliance fines,
• outdated systems that can no longer integrate with new technology additions,
• the inability to recruit technology-savvy employees,
• high turnover in IT or OT leadership, engineering and support functions,
• and, generally speaking, employee complaints.

External software portfolios that require modernization often have unique problems, which can be divided into two categories: software and technology problems that hinder production (factory floor issues) and end-user software that ships with your machines.

The warning signs from the factory floor generally involve: