Building the momentum to a sustainable future
While no industry had immunity against COVID-19, adopters of Industry 4.0 had a significant competitive edge during the crisis. Now, as we enter the “new” normal, all players in industry are relooking at how they can become more resilient and agile to prepare for what comes next. Following AVEVA World Digital, Craig Hayman, CEO of AVEVA, and Jean-Pascal Tricoire, CEO and Chairman of Schneider Electric, discuss what the future of digital industries looks like.
How has COVID-19 changed the business landscape? How can industries be agile in the aftermath of the pandemic?
Craig: For many of our customers, COVID-19 has been a force for change. Suddenly, when teams shifted to work remotely, analytics and smart processes take center stage, enabling resiliency, agility and in many cases helping businesses to continue operating. So many companies are accelerating their digital efforts, and we are excited to see the momentum that is building for our customers.
The industrial world is currently progressing through the transformation cycle that retail and finance experienced ten years ago. We’re working with leading companies in energy, manufacturing, infrastructure and pharmaceuticals to increase operational efficiency, unify their data and connect their teams to realize Industry 4.0. Companies like BP are using us to optimize value throughout their value chain, enabling them to accelerate decision making from weeks to hours, and optimizing profitability throughout their value chain.
The pandemic has accelerated our conversations because everyone is under pressure to cut OpEx and minimize CapEx and risk. Software can materially affect how companies can transform and streamline their operations, and our customers are open to working with us to lead them through this period of change.
How is digital transformation helping companies to evolve?
Jean-Pascal: Before COVID-19, every company had a digitization agenda, but the crisis placed everyone in a new situation with major transitions to navigate. As a result, our customers now have new priorities: for some they need to boost efficiency and cut costs, and others are looking for new capacities and resiliency. Digitization is the answer to both. We have just gone through a massive fast-forward in digitization and can expect it to accelerate further. Digital allows for remote everything, for greater agility, safer working conditions, supporting everything from physical distancing - to adhere to new health and safety policies - to unmanned operations. Digital strengthens resiliency through Asset Performance Management, predictive maintenance, analytics and artificial intelligence. Already, it allows companies to become more efficient and sustainable, addressing both the economic and environmental challenges we are facing. These are the trends massively accelerating digitization. The crisis has forced us to make decisions and accelerate. It has made us bolder and we see our customers building on this momentum.
What about Industry 4.0 and Sustainability – how do these trends play into the concept of digital transformation?
Craig: Industry 4.0 is about bringing digital information together to build a digital twin that allows you to optimize sustainable processes. If we take the energy sector, in the past few months jet fuel consumption dropped dramatically, however energy consumption overall remained relatively stable, and electricity demand grew. Electricity remains the most efficient way to distribute energy around the world. So, we have seen an acceleration of Industry 4.0 for energy distribution and energy supply chains, which is also accelerating the sustainability agenda.
In manufacturing, many companies’ supply chains could not flex at the same pace as the world was changing. We are seeing many companies pivoting to use local suppliers to meet specialist requirements.
As the lockdowns pass, companies are looking for a way to manage in the new normal. Here again, Industry 4.0 can help, because it frees up CapEx and OpEx to drive growth. “The future is already here, it’s just not evenly distributed” is a well-known phrase – but the same is true of Industry 4.0 – there are examples of leading companies, and for companies like AVEVA, our work is now to distribute that learning and success more evenly.
How do Schneider Electric and AVEVA support digital transformation for your customers?
Jean-Pascal: Every company can learn from one another. As Craig said before, you usually start digitizing because of a desire towards efficiency, resiliency, quality or traceability – but once you have the digital twin of your organization and the data, you can dig in and explore different aspects of digitization. Let’s consider resiliency and reliability – this means higher safety and better sustainability because you can track the resources you consume and empower your team. Once you’ve created your data lake, working with AVEVA and Schneider Electric, you can unlock a world of new functionalities and creative growth.
Craig: Let’s look at Schneider Electric’s smart factory in Batam, Indonesia, which is a World Economic Forum lighthouse. They we were able to decrease downtime by 44% by putting data into the hands of the team that’s operating the facility. If we look at ADNOC, they have generated $1 BN of saving by deploying and digitalizing their value chain and data with AVEVA. They used our software to unify their data, digitize their assets, and unlock the value on an ongoing basis.
Most companies have so much data already, on premises, in disparate systems, in the cloud – the trick is to snap AVEVA’s industrial software into that environment. Because we are source-agnostic, you don’t need to rip-and-replace. You can simply add our software and visualize your data, getting information to the experts who operate your systems. Then you can use artificial intelligence combined with real-time data using cloud, to optimize your performance.
How are companies preparing to manage data even beyond the pandemic? What is the digital impact to drive sustainability?
Jean-Pascal: Sustainability is a journey beginning by measuring where you are. Digitization is the natural first step for a fact-based approach. Then, you can develop an adapted strategy and execute it on the field, to improve your carbon footprint and boost circularity. It is not a one step process, it is very incremental, and you have to iterate at each stage. As you progress on your journey, you find new ways to drive sustainability, to streamline your processes and improve the sourcing and consumption of energy. At Schneider Electric, we are on our sixth consecutive plan of efficiency. Every time we start a new iteration, we find new ways to improve. Every three years we cut our carbon footprint by 10%.
In the coming months, I expect the focus on sustainability to increase – investors are pushing companies to manage their environmental and social impact to be even more aware. Companies will be audited on this – and that’s good!
Craig: We’ve just appointed Lisa Johnston as our Chief Sustainability Officer and we are building our strategy. We admire the work that Schneider Electric and Jean-Pascal have led on sustainability. They are a core member of the Paris Agreement and we are learning from their example.
Our software does a great deal already to support sustainability, reducing emissions, boosting energy efficiency and supporting traceability and product quality. One of our customers is Olam – we are working with them to install our MES software in their edible nut and cocoa operations. AVEVA has been mandated as the MES standard and we’re excited because this means we can improve efficiency in their manufacturing operations, drive circular and efficient operational practices, and improve quality and traceability throughout their cocoa supply chain. Data efficiency will enable them to operate more efficiently and will enable Olam to achieve world-class performance in the food and beverage sector.
What’s unique about the relationship between AVEVA and Schneider Electric?
Jean-Pascal: It’s a unique symbiosis. Our customers operate complex businesses, comprised of multiple systems in diverse locations with global value chains. They need to integrate that complexity and use AVEVA software to see their entire operations as clearly and simply as possible. AVEVA’s world-leading industrial software brings fully integrated analytics and cloud technology together with tools that are tailored to cutting-edge industrial processes. At the same time, our joint customers benefit from the scale and scope of Schneider Electric’s network of services.
Craig: We offer unique benefits through our partnership. For example, we recently launched an edge reference design which brings together Schneider Electric’s EcoStruxure and AVEVA’s software configured for IT to OT convergence in edge reference design. Just 30 days ago, we launched the AVEVA Unified Operations Center for data-centers, with AVEVA software fully integrated within it. For our customers, this opportunity to combine industrial capabilities focused on driving their sustainability with an independent software company that has the expertise and scale to deliver meaningful, sustainable transformation is a powerful combination. Together, we’re proud to be working with leading companies in manufacturing, energy, smart infrastructure and operations to help those industries shape a sustainable future.
AVEVA World Digital 2 is taking place on August 25 and 26. Register for free today at www.avevaworld.com
Craig Hayman is Chief Executive Officer of AVEVA, a position he’s held since February 2018. Previously, Mr. Hayman was Chief Operating Officer at PTC Inc., where he had responsibility for engineering, marketing, and sales. He also served as President of the Solutions Group. At PTC, he returned the digital engineering business to growth, revitalized the Partner Network, and successfully introduced a new generation of Industry 4.0-connected manufacturing applications. Prior to joining PTC, he was President of eBay’s enterprise business and served more than 15 years in senior leadership positions at IBM. Mr. Hayman holds a BSc in computer science and electronics from the University of London.