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Will Black Swan Events Become a Catalyst for IT and OT Integration?

May 19, 2020
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A black swan event describes an unexpected event that has an extreme impact. Though there is debate about whether the COVID-19 pandemic was predictable, the breadth of its impact took the world by surprise. COVID-19 swiftly changed the lifestyles and working models we were familiar with. By the end of March, the number of remote workers in Europe and the US was in the millions, and in China, the hundreds of millions. More and more schools have transitioned to virtual classrooms and distance learning. Online shopping sales are soaring, and the online gaming industry is also seeing a significant increase in players. For the manufacturing industry, going “online” has become a key strategy heavily discussed among C-suite executives in the past few weeks. In the long run, the current situation may accelerate, or even necessitate the following waves of digital transformation of industrial automation, which is rapidly accelerating IT/OT convergence.

1. Digital Supply Chains: Speeding up decision-making and enabling advance preparations

In the era of globalization, a single out-of-stock component can halt an entire production line. Many businesses were notably impacted during the pandemic, highlighting the need to build a digital supply chain. Through big data collection, digital supply chain systems can provide early detection of issues caused by possible raw material shortage/overestimation. Although the global supply chain was suddenly disrupted, businesses with digital supply chain systems were able to swiftly evaluate potential risks and react accordingly to minimize losses.

2. Digital Production Lines: Providing high flexibility and the capability to switch end-product manufacturing immediately

To address the shortage of medical supplies needed for COVID-19 epidemic prevention, many companies adjusted their production lines to manufacture personal protective equipment (PPE) and other critical supplies.

  • The perfume and cosmetic production lines at LVMH are now producing medical detergent and disinfectant.
  • The automotive assembly line at Ford and GM are now used to make face masks and ventilators.
  • Dyson designed new ventilator equipment by leveraging its existing technology and production of air purifiers.
  • Electronics contract manufacturer Foxconn set up new face mask production lines.

Before, building the capability to quickly switch production lines to produce different products was mainly adopted by manufacturers who offered high variety and low volumes for their production. It was viewed as an indication of strong management skills and labor dispatching flexibility. However, in the future, this will become a requirement to swiftly react to market changes or black swan events like COVID-19, and may even be the key to a business’s survival. Digital production lines can monitor different production stages to promptly adjust raw material usage and labor deployment.

3. Remote Monitoring: Shattering the myth that operators and equipment must be in the same place

Until recent years, operations in industrial control systems were still mainly done offline. Workers had to physically be in factories to operate control systems (e.g., SCADA). After COVID-19 hit, “work from home” arrangements became a necessity to continue operations safely, and made remote monitoring an essential tool. Network administrators scrambled to see whether remote monitoring was possible for each system and how to upgrade their systems to enable it quickly. These temporary measures will become long-term needs.

4. Remote Maintenance: A new service model that operations managers need to embrace

Most clients have maintenance contracts with their automation equipment suppliers to ensure they can get immediate support when their equipment malfunctions. Although remote maintenance can troubleshoot issues faster, operations managers still prefer to wait for a maintenance engineer to look into problems on-site. Often when the maintenance engineer arrives on-site, they find that the issue could be fixed by simply adjusting settings or upgrading software, all of which could be done off-site. “With the arrival of this black swan event, it not only brought widespread transition in hardware and software usage, but more importantly, businesses were able to experience the convenience of remote maintenance and get accustomed to new service models,” said Vic Lin, IIoT Solution Business Development Manager at Moxa.

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