Digital Transformation and Smart

Manufacturing in Food & Beverages

Industry
Janice Abel

1
 Agenda
Introduction
• Drivers, Challenges, Trends and Benefits

Data & Use Cases

• Digital Transformation in Food & Beverages
• User Survey Results
• Use Case
• Where are you?
Panel Session
• Q&A

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About ARC: Global Advisors to Industry
• Leading analyst team focused on manufacturing ecosystem
• 31 years of thought leadership and market analysis
• 1,500 clients - include end users, suppliers, and financial
• Global advisory, consulting, supplier selection, services, Industry insights in 19 industrial
verticals
• Market research, conferences, forums, white papers, newsletters, blogs, and other
publications

Delivering value
and influence to
emerging vendors

www.arcweb.com

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Digital Transformation
Digital Transformation is the transformation of business, industrial products, operations,
value chains, and services that are enabled through the augmentation of people and
knowledge through the expanded use of digital technologies.

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Digital Transformation Challenges

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Many Food & Beverage Industry Challenges

Changing Food quality New worker Integrated new Reducing costs –

consumer concerns generation and technologies remaining
preferences • Unsafe retiring worker • From raw competitive
• More handling, generation materials to • Omni-
sustainable food-borne • Mentoring, supply chain channels
• Product illnesses training, new • Secure & • More
innovation, • Recalls & technologies customizable competition
differentiation outbreaks of • Retirees digital
illnesses knowledge infrastructure
• Regulations

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 Which kind are you?

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 Can Technology Align Culture?

People/Culture
Buy-in
Collaboration
Business
Perceived Benefits & Visibility
Executive buy-in
Technology Financials
Data/Information Challenges
Integration Challenges
IT/OT Challenges
Processes/Things
Real-time complex processes
New equipment/sensors
New ways of doing things

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 Can Technology Align Culture?
Alignment of Technology, Culture, Business and Processes

Requires Working Together!

People/Culture
Buy-in
Collaboration
Business
Perceived Benefits & Visibility
Executive buy-in
Financials
Technology
Data/Information Challenges
Integration Challenges
IT/OT Challenges Processes/Things
Real-time complex processes
New equipment/sensors
New ways of doing things

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 Operational
Mindset
Technology Process control
Purpose built integrity & zero
downtime,
for industrial safety, quality &
automation operational
efficiency
IT/ OT Challenges
Cybersecurity
Different Mindsets….Different Issues

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Challenges
IT/OT Priorities/Cultures Can Differ
We need to run Here comes
the patch test security
to see how it updates?
affects the
process?

Option1 Option 2
Option 3
Separate Train/Embed IT Option 4
Put Engineering Put OT resource
Manufacturing Skills in
resource under in engineering
IT from OT; Wall Automation/
IT Services
of Mistrust Engineering
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 Cultural Challenges
”IT is on their own. Manufacturing may
have IT experts, but they are manufacturing
people. Manufacturing IT people and IT
people don’t see eye to eye.”

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 New technologies are both disrupters &
catalysts for industry change.

What are you doing for the digital

transformation?
• Digital culture readiness
 Without a digital culture it’s not a digital transformation
 Nearly 78% of companies that focus on culture sustain
performance.
 By ignoring culture, you risk transformation failure
 Better financial performance
 Worker & process enablement is important
• Job losses - should be addressed

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 Technologies and Business Practices
Enables the Digital Transformation of industry
Disruptive Technologies

Cloud Big Data Social

Robotics

Mobile Edge
IIoT Extended Reality
Predictive
Analytics /Machine Digital Twins/
Learning/ AI Simulation

• Connected Supply Chain

• Connected Enterprise
• Connected Operations
• Connected Products
Aging systems, business • Connected Services
models and work processes • Connected Workers
developed for last century • Empowered
• Synchronized, Collaborative & Autonomous
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More Challenges - Technology

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IT/OT Technology Challenges
IT/OT Convergence will enable Intelligence (and even more data)

IT/OT
Convergence is the
integration of
information
systems with
operational
technology
systems, people &
things used to
monitor the
process, events,
trends, devices.

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Digital Transformation Challenges
Data Challenges

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What are some of the Technologies for the Digital
Transformation?

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What are you doing for the Digital Transformation? (survey)
• Executive team and • Data visibility & • ML, AI – some roll • Replacing legacy
support for accessibility outs(E.G. shortening systems
digitization initiatives • Contextualizing and batch times, filling • Cloud and edge
• IT/OT teams combining data lines, custody • MES
• Using technology to • Connecting/integrating transfers, etc.)
• Historian
enable collaboration data • Predictive analytics
• Eliminating data silos
Cultural Data Advanced New
Evolution management analytics platforms

• Moving data to the cloud, • Replacing repetitive • AR/VR – mostly discrete, • Enhancing
edge, etc. tasks, material maintenance cybersecurity
• Moving historical, movement, filling • CAMERAS/Video technologies and
reports, regulatory lines EVERYWHERE computer access
documentation to cloud
• Structured and • Other
unstructured
Robots,
Data lakes,
chatbots, Visualization Security
Cloud, Edge AGVs, etc.

About the value!

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What are you doing for the Digital Transformation?

New IoT sensors Digital twin & Track and

Mobile everything
• New audio sensors simulation trace/blockchain

About solving the problem and getting value!

Additive Integrated technologies SERVICES/Ecosystems of

New processes partnerships/services
manufacturing • End-to End

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Lots of Data in Manufacturing Data Lakes

Raw Data in One Place

Lots of New Digital Devices, Data and

Cloud, Edge, On-premise Data Platforms for DT

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New Platforms for the Digital Transformation
• A multi-layer technology that enables the
secure provisioning, management, and
automation of connected devices within
the Internet of Things e.g. remote devices,
sensors, data, and applications.
• IoT platforms is a cloud platform that
collects, configures, manages and
maintains data and devices with different
layers (including cloud), protocols and
network topologies.

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All types of Analytics
What’s essential?

Data preparation –
ingestion,
platform, etc.

Model and
Value Algorithms –
based on use

Security Scalability

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 What are you doing for Digital Transformation?
Machine Learning and Artificial Intelligence Example

AI – models and applies or imitates

• Chatbots - Google assistant, home, mini ,
AWS Alexa, Dot, Apple’s Siri, Microsoft
intelligence of human minds Cortana rely on DeepMind – AI
• Moving personal profiles or apps from one
platform to another?
• 8 million people use voice recognition today

ML is a subset of AI!
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AI Example
How many bagels?
• AI Example
 Facial recognition

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How many bagels?
• 8 dogs
• 8 bagels
• Machines are faster
• The algorithm could distinguish
the dogs but different breeds
are more difficult.
• Tools & Algorithms are getting
better and easier to deploy

About Solving
Problems!

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Digital Transformation
Transformation Brings Value

People Process Things Data New

• Connecting people • Changing processes • Sensors, machinery, • Connecting and Technologies
for collaboration • Delivering process robots and other leveraging data
• Getting everyone on intelligence to assets are connected • More autonomous – • Analytics & AI
the same team whomever, • IIoT auto connect • Robotics, Cobots,
wherever, and • Connected plant, etc.
whenever it is enterprise
needed • Extended
• New data platforms realities
– edge & Cloud

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What are you doing for the Digital Transformation?
Use Cases…

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 Deschutes Brewery
• PI system analytics to predict Diacetl rest
• Make better tasting beer
• Reduced production time by up to 72 hours
for each batch
• Maximized capacity and postponed $8M in
capital upgrades
• BENEFITS
 Real-time data resulted in better brewing
 4% decrease in total fermentation time

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Where are you in your Digital Transformation Journey?

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Food & Beverages Industries Capabilities for Digital Transformation

53% Concerned
about their ability
to achieve
business goals for
DT.

Source: RSM \

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Digital Transformation in the Food & Beverages

81% taking steps

to develop DT
strategy.
Source: RSM

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Manufacturing and Data Maturity Model for the Digital Transformation
3. SMART MANUFACTURING
Data is recognized as a key asset. Few data
silos. Data alignment. Resources are committed 5. FARM TO FORK
to extracting value from data using advanced End-to-end complete
analytics. Synchronizing. Robotics, etc. Analytics integration from raw
Multiple plants. Cultural Alignment. materials to supply chain
across plants and enterprise.
2. CONNECTING SILOS/ANALYTICS Autonomous, syncronized,
Connecting silos across plants, collaboration.
standards, practices, new sensors, 4. FACTORY OF FUTURE
new technologies.
Integrated/automated/
1. COLLECTING DATA autonomous plants across
Basic data, many silos, some the enterprise.
reporting, spreadsheets...

The digital transformation will require new processes, new technologies,

new platforms, easier integration, new ways to synchronize & store
data sources, new analytics, new jobs, new training, culture changes,
new ways of collaborating & manufacturing for business value.
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What are you doing for the Digital Transformation?
…ARC Data in Food & Beverages

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 Batch Management Software & Services
2018
Revenue by Industry

Batch Metals

Management 21%
Pulp & Paper

Software & Household &

Personal Care

Services Revenue Other Industries

Food & Beverage

Chemical

Pharmaceutical &
Food & Beverages is 3rd largest ©Copyright ARC Advisory Group 2018
Biotech

industry in BMS Market!

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 MES/MOM 2017
Revenue by Industry

Water & Wastewater

Metals

Other Industries

MES/MOM by 13% Pulp & Paper

Mining

Software & Service Refining

Revenue Oil & Gas

Electric Power Generation

MOM vs MES (Manufacturing Operation Management / Manufacturing Execution System)
Food & Beverage

Pharmaceutical & Biotech

Food & Beverages is 3rd largest Chemical

industry in MES/MOM market ©Copyright ARC Advisory Group 2018

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 Data Platform/Historian Revenue
2017
Aerospace & Defense
Revenue by Industry
Cement & Glass

Textiles

Water & Wastewater

Automotive

Data Platform 7%
Metals

Pulp & Paper

Software & 7%
Mining

Other Industries

Services Food & Beverage

Pharmaceutical &
Biotech
Oil & Gas

Refining

Chemical

Electric Power

Food & Beverages is the 5th Generation

©Copyright ARC Advisory Group 2018

largest industry in Data Platform

Market! VISION, EXPERIENCE, ANSWERS FOR INDUSTRY, INFRASTRUCTURE & CITIES © ARC Advisory Group • 37
 Data Platform/Data
Historian Software
by Revenue Data Platform/Historian Software Revenue by
Supplier 2017
• OSIsoft is the leading data platform
OSIsoft
• 45% of the data platform software
revenue
Supplier A

• Integrate and work with other suppliers

Supplier B

Supplier C

Supplier D

Supplier E

Supplier F

Supplier G

Supplier H

Supplier I

Supplier J
©Copyright ARC Advisory Group 2018

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Future: Digital Transformation
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Future of Industrial Revolution – What’s next?

Industrie
Industrie 5.0
Robots, chatbots, sensors
Industrie 4.0 physical, biological &
chemical =
Industrie 3.0 Cyber-physical autonomous/synchronized/
connected end-to-end –
systems/networking
from farm to fork;
Industrie 2.0 Electronics & IT
Systems, optimize humans.
Mass automation
1.0 Mechanization, production &
Steam & water electricity
power

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The Future

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How do you Get Started?
SCALE & TRANSFORM & CONTINUE
Scale up and roll out across plants, enterprise;
continue process; cybersecurity is still important

TRANSPARENT/PROMOTE
Make your successes transparent; move from
those that don’t work but expect some failures

PILOT TECHNOLOGY/CHALLENGES
Look for challenges/evaluate for
success/measurable – KPIs

IDENTIFY & EVALUATE

CHALLENGES/BUSINESS CASE/ACTION
Evaluate challenges/Executive Buy-In/Funding

START WITH A VISION/TEAM/STRATEGY

Executive support helps align culture, training, etc.

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Digital Transformation is Transforming Business

Embrace the digital Empower people and

transformation transform your process!

All about the data and value!

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