"Why do we digitize anything? To understand where we are, to respond quickly to market changes - eventually to earn more. But if people earn by underpayment of taxes, they do not need transparency and orderliness of business processes, quite the contrary".

There is a gulf between a digital factory, enterprise organization in the twenty-first century - and the automated manufacturing of the twentieth century, say participants of the St. Petersburg fourth industrial revolution. Automation in many cases consisted in buying expensive equipment and connecting ERP-, MRP-systems without changing the essence of the processes. "Inefficient manual processes are often transferred to the information field without optimization, that does not give any advantage to business. The transition to digital factories discloses the possibility of a profound transformation of the business ", - says Director of the Department of IT and OM at BIOCAD company (biotechnology production) Eugeniy Pochkaev.

Unpreparedness for radical changes is an important reason why the Russian industry has been slow to transition to digital technologies. In St. Petersburg, the very few companies carry out this transition. The results that they get, count in favour of alternativeness of "the digits".

Smarty and the prophetess

"Standard automation systems collect raw data, which by itself do not bring any value to business, do not carry any knowledge. A digital factory allows to go to the business intelligence - formation of knowledge on the basis of information collected", Eugeniy Pochkaev articulates the main, in his view, feature of a new type of enterprise.

"Now we can translate the model of the production "into digits", to analyze its various parameters. For example, location of equipment, storage size, internal logistics, transportation methods, etc. The model will allow us to find the optimal combination of parameters to minimize production losses, both time and financial ones”, he continues. “In the same way the optimal equipment utilization schedules are selected, its maintenance cycles. As a result, we eliminate "mudas", which are not visible in the "manual" analysis". As Pochkaev Eugene stressed, "these are simplest examples illustrating the initial stage of operation of digital factories; on the same principles it solves at BIOCAD next more complex tasks".

The experts tell us: if a typical automation allows to gather information about the past - for example, seasonal drops in supply - the digital factory, "pondering" the resulting statistics will give their owners the exact schedule of failures for the next season. Smart systems are also able to show the value of the price of the company's products, that will be winning against the background of the future prices of competitors.

Total surveillance

"Even if a factory has automatic machines with digital software, it does not indicate the presence of a digital factory”  CEO of the St. Petersburg factory TPV CIS (assembles TVs under international brands) Blazej Bernard Reiss describes the specifics of digital manufacturing.  “It is possible to digitize both semi-automatic and manual operations, which are plenty in our company. On the contrary, the work of machines, not connected in a single system, is not a digital production. "

As Blazej Bernard Reiss points out, «fundamentally digital enterprise - scheduling and traceability, i.e. the tracking of each product at all stages of the life cycle." "You follow the product as early as the stage when it is some scattered components at your warehouse, and further you can see details put on the line, how they are collected, where and when the finished product is sent”,  he explains.  “If desired, you can see the product till its very death".

Thereat digitization of components and equipment is relatively uncomplicated; the most difficult is to digitize human actions, adds Blazej Bernard Reiss. A human should be fit into the system or the system should be expanded for him to fit into it. It is also necessary to provide the so-called idiot proof - protection from the idiots, that is, from the unusual (sometimes committed with the best intentions in an effort to make a creative contribution to the process) human actions that create problems in digital systems. "Our big advantage over the other players in the assembly industry that we have been able to harmoniously combine people with digital technologies",  representative of the TPV remarks. Thus, standardization of the personnel and the reduction of losses due to the "human factor" is an important side effect of digitization.

One can lose count

The ability to receive detailed analytics of production processes, monitor them online, immediately see the flaws - technical and managerial - improves performance of industrial companies in all directions, - says President - General Designer of "Lenpoligrafmash" holding (manufacturer of printing equipment and software, mainly for the defense industry) Kirill Soloveitchik. "I am ready to show you the reporting and analytics that the system sends me every morning directly to the smartphone - it's impressive!”, he said.  “I can see in real time, by which worker, on which machine, and which operation for the product is made. And this is active-adaptive system: it gets information about the processes and adjusts them".

The case is the electronic system of production planning and scheduling of "Lenpoligrafmash" own design, which the company supplies the market with and applies itself. According to Kirill Soloveitchik, this is a complex hardware and software system that integrates many subsystems and equipment - machining centers with features of forward and reverse communication, barcode scanners, electronic devices such as smartphones, with which the information is sent to QC inspectors, etc. "The use of such systems provides growth of production quality, transparency and quality of the production facility management, planning quality, the ability to increase the utilization of people and equipment, to principally reduce unproductive losses. But how to correctly assess the effectiveness of the implementation of complex industrial IT system in money - this is a question to answer which doctoral dissertations are executed”, said Kirill Soloveitchik. “It can be said, for example: all the companies included in the global top 500, do it - among them there is no one that does not use digital production management technology. Or another criterion - I increase revenue, sometimes evolutionary, sometimes revolutionary, without increasing the number of employees and the number of pieces of equipment". The fact that the "digit" increases labor productivity is undoubted.

Blazej Bernard Reiss operates quantitative evaluations, talking about the situation in different parts of the company before and after the "digits". "I spent six months on digitization of the components warehouse, even temporarily transferred my office there”, he says.  “It periodically turned out that the warehouse was full, and there is nothing to make products of: the necessary components were not on the places where they were supposed to be, and it was not possible to find them. We first identified all the causes of failures, then we developed an algorithm for components movement and consolidated it with a corresponding software solution." "Now each type of detail is assigned to a numeric code corresponding to a specific cell in a warehouse, and the system simply does not allow the details to some other places”,  he sums up.  “As a result, if before the line idle time the due to lack of parts was 3 hours per week, now is 3 minutes per month. The cost of parts that are not in their cells, estimated, on the report of our auditors, 700 rubles, while the cost of warehouse is 19 million dollars, that is, the share of warehousing errors is now negligible". "But this is not possible to achieve without digital technology”, emphasizes Blazej Bernard Reiss. “That is, it is possible to achieve, doubling the number of employees at the warehouse, but we do not aspire to this at all".

Another case from TPV practice: as a result of the digitization of finished product testing line the number of employees at the site was reduced from 13 people to zero - the line tests assembled TVs independently and stops when it detects a problem. This gave the company the opportunity to reduce the total time of a product unit output and improve overall production efficiency by 5 times.

According to Evgeniy Pochkaev, in different work areas of the company the introduction of "digits" solves completely different problems, which in some cases is reduced to the point of optimization, and in others - to the formation of the technological breakthrough. One of the most significant transformations produced in business processes of BIOCAD by digital technology, was the optimization of molecules in a virtual environment. "By connecting IT with biology, chemistry, mathematics, we model complex molecules and can predict how they will act in a patient's body. A standard process of optimization  goes through repeatable experiments in the "wet" labs and requires a huge investment of time and money", says Evgeniy Pochkaev and emphasized: digital optimization reduces the time spent on individual processes hundreds times. "Generally speaking, any effect can be assessed only in the long term, we are still in the process of transition to a digital factory”, he added. “What we are sure of is that we can significantly reduce time to market of new products, which in the future will allow us to to create unique products first in the world. Of course, this will impact their cost, making biological products more available".

One of the representatives of the pharmaceutical industry noted that companies transitioning to digital design and production of drugs, can save costs thousand times. Since we are talking about the transformation of the mode of production comparable to that of manual labor replacement with mechanisms, such evaluation does not look absolutely fabulous.

Scary demands, strong guarantees

Actually, the advantages of "digits" cannot be reduced for the economic efficiency of an enterprise - it forms a new era of production capacity, and therefore a new model of relations "supplier - manufacturer - consumer". "A key characteristic of the production in the XXI century is the mass production of individual products”, said director of "Consist Business Group" consulting Vyacheslav Solopov. - As digital technologies allow reconfigure hardware "on the fly", it is possible to produce products with different properties in a single party". "A customer once ordered a non-standard product in a large factory in China (a non-standard capacity battery with non-standard dimensions of the case)”, he illustrates his thesis. “And as it is a modern enterprise, which applies digital technology, the price difference compared to the serial products amounted to only $17 when the product is priced at about $300, and the manufacturing period was three days. I cannot imagine how much would cost the execution of such order at the largest Russian enterprises, and how long it would have lasted".

"Digital add-on in conjunction with the industrial robotics and additive technology allows to quickly reconfigure production to new products”, - explains the deputy director of the research group "Designing the Future "Natalia Andreeva. - Roughly, we can say that it is a digital factory that eliminates the effect of scale and theoretically makes cost-effective the production of not only small series, but fully customized products."

Understanding the level of new technological capabilities, customers increase the demands to the producers - this is reflected in the individualization of products (make it "to suit me"), and the increase in the number of parameters, compliance with which the supplier should provide. "For us, the transition to digital technology  is not a question of economic efficiency, expressed in the reduction of costs, increase productivity, and so on”,  says Director General of the SPA for plastics processing named after "Komsomolskaya Pravda" (manufacturer of polymer products) Sergey Tsybukov. “For us, it is a matter of life or death". "We are forced to take up technical products with specified properties, that is, to guarantee the customer a large number of complex parameters”, he explains. “A human cannot achieve this manually".

"If you come to the presentation of our digital area, you'll see an innovative product called "deflector"- of the industrialist gives an example. – “This is a normal deflector for a Russian railways traffic light. But in fact it is a work of art." "Customer requirements are so terrible, and our guarantees are so strong that the manufacture can be performed only by virtuosos”, he continues. “In taking such a product to the assembly line, a digital product is needed that controls the entire chain of design and production, otherwise a small, barely discernible technical error will bring our efforts to naught in five years". As explained by Sergei Tsybukov, for the time being production of products with desired properties is required by few Russian major customers. But thereat the whole world slowly moves to new business models.

"Sophisticated clients tend to go to the service model of the product life cycle. The supplier shall be responsible not for one part, but in the consortium of suppliers - entirely for the product for 20-25 years. If the product did not sustain the operation during of this period, you will have to change it. Without digital technology, you cannot prove that this was the situation of irregular operation, and not a production defect, and also you cannot quickly repair damage without it", the industrialist said.

So far, his company opens first digital production facility, where complex designs and materials are modeled. "But our long-term goal is to do everything in "digits": from modeling and design to the machines cost calculation and management",  says Sergey Tsybukov.

Money matters, but not only them

St. Petersburg industrial companies implement important elements of digital factories, but the digital enterprise of the complete cycle is not yet built anywhere - the assessment of all the "RBC Petersburg" interlocutors reduce to this.  However, even the cases when significant elements of digital production are implemented, in St. Petersburg, as well as throughout Russia, are little, said Vyacheslav Solopov. "The industry is, unfortunately, not a leader in the transition to "digits", he said. “The leaders, perhaps, are trade and services, because there are shorter cycles and higher margins. For a manufacturing enterprise, investment in the creation of a digital factory will amount to millions of dollars, and the payback is not as fast. "

The need for large investments is indeed, an important, but probably not the main barrier. "It's a matter of the state of a Russian businessmen soul”, said Blazej Bernard Reiss.  “Let us say, today not everyone agrees that the financial statements and management of the enterprise must be integrated. But digitizing individual actions - for example, the purchase of one or two digital machines not integrated in the control system - is an unproductive way." "Why do we digitize anything?” the top manager of TPV speculates. “To understand where we are, to respond quickly to market changes - eventually to earn more. But if people earn by underpayment of taxes, they do not need transparency and orderliness of business processes, quite the contrary." "Civilized, whitewash Russian business comes to the digitization of manufacturing processes right now; it has enough money and competence for this",  he concluded.

"In one degree or another, many of our partners in the Russian pharmaceutical industry are moving towards automation”, Eugenit Pochkaev shares his observations. - But, unfortunately, in many Russian companies, and not only in the pharmaceutics, approach to automation for automation is prevailing. The introduction of automated control system is deemed successful, where people meet deadlines and budget. It surprises me: they spend a few million dollars, and the whole effect is that the project is finally finished."

But in the end all - in pharmaceutics and the other industries - digital factories will be created, Eugeniy Pochkaev is confident. "Industrial companies either will move to digital production, or be displaced from the market by high-tech players”, he explains. “Conservatism will remain only in a unique hand-made-manufacturing (which forms its fundamental value), and for the rest the transition to digital technology has no alternative."

Although St. Petersburg industry plunged into the ocean of digital manufacturing only ankle-deep, the experience of the first companies going down this path - such as BIOCAD – is interesting enough to study and replicate in other Russian regions, says Vyacheslav Solopov.

Back to news