How Will Digitization Effectively Transform Agriculture?

“If you eat, you’re in agriculture.”

That old adage is more true today than ever before. It’s expected that by 2050 our world population will approach 10 billion. That’s double what it was only thirty years ago in 1987. Increased land, water, and resource use for the growing population competes directly with farming needs to feed that population. It’s fortunate that digitization is helping to connect agricultural concerns around the world. But what will the future of farming look like?

How will digitalization effectively transform agriculture?

Though robotic farming may seem far-fetched, it’s here today. Much like yesteryear’s use of satellites for precision agriculture, the additional data provided through the Internet of Things (IoT) allows us to grow more food with fewer resources on less land. With analytics, a farmer in Kenya uses a drone to release beneficial insects in a problem patch. A Kansas wheat farmer helps keep the water table pure by only fertilizing areas in need. Yields are boosted without waste through very specific irrigation management. Total corn production savings can reach 4.5% with yield mapping, 2.4% with GPS soil mapping and 2.7% with guidance systems. Here are some recent innovations we’ve helped bring to life.

What does palm oil’s future look like?

Planting a palm oil plantation requires strong long-term planning. But what does the future hold for this important crop? As palm oil’s popularity has grown, so have the industries it services. Biofuels, cosmetics, and other industries are all impacted by palm oil production in addition to its traditional uses in food. Fortunately, there’s a strong push to improve sustainability in the palm oil industry.

Most palm oil production in the past has been based on overall yields. But tomorrow’s plantation can determine production by every plant. IoT technology allows tracking the exact growing conditions of the palm tree. This means its exact needs are met to maximize yield and minimize waste. But how does this happen?

Aerial photos play a vital role in this process. Drones, planes, and satellites provide imagery to help producers make smart decisions in oil palm plantation management. Sensors provide climate, soil condition, and other data. This collection of data and strong analytics options let the producer manage stressed areas while boosting production in other parts of the plantation.

This process is being moved forward through collaboration across multiple sectors. Research, genetics, machinery, inputs, and the farmer all work hand-in-hand to provide more palm oil with less waste and a more sustainable environmental impact.

The future is sweet with sugarcane production

Though it’s still one of the world’s top sweeteners, sugarcane has also branched out recently into the biofuel and electrical production sectors. A single ton of sugarcane produces 120 kilograms of sugar, 85 liters of ethanol and 25 kilowatt-hours of electricity. But the tropical origins of the plant means it’s always been planted in developing countries with plenty of land and labor. That made it a cheap crop to grow.

Today’s population growth is limiting sugarcane production. This means more care must be taken in crop techniques and inputs to provide maximum results on minimal land. To complicate matters even further, the land it is raised on is often very different. This requires different approaches to achieve these results.

Different climates require the use of different techniques and methods. Ratoon planting allows the crop to be grown from the prior year’s plant stubble. But the number of years can vary greatly. Production-leading Brazil replants new cane every 5 or 6 years. As second-highest producer, India’s climate demands planting new cane every two or three years.

Hand harvesting uses manpower and a sharp hand-tool while providing 500 kg per hour, with rising labor rates making this practice less profitable than in the past. Mechanizing the process allows manual labor to be focused in different area as a single harvester will handle 100 tons of sugarcane per hour. Except for on steep slopes, mechanical harvesting provides a more ecologically sound approach. Satellite-based tractor navigation uses permanent wheel tracks to maximize production while minimizing wasted time and fuel.

Combining sustainable farming practices with economical technological advancement allows us to grow as a people and as a planet. Smarter crop rotation, precision pesticide and fertilizer application, yield mapping and weed sensors are only a few of the advancements farmers will see in the years to come. IoT technology is expected to see a 20% annual compounded growth from 2015 to 2020. New agricultural business models are expected to see a 15%–25% growth in revenue above the industry average.

Farms that add IoT capabilities, Big Data analytics, and similar connected agriculture tools are making strong strides. Imagine yields 10%–20% higher than in the past. They’re also seeing an average increase in profits of 18%. Some farms have seen profit increases of up to 76%.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Internet of Things – Digitalist Magazine

Don’t Confuse Digital With Digitization

Jeanne Ross is principal research scientist for MIT’s Center for Information Systems Research.

Digitization involves standardizing business processes and is associated with cost cutting and operational excellence. In essence, it imposes discipline on business processes that, over the years, were executed by individual heroes in a variety of creative (but not always optimal) ways. SAP, PeopleSoft, and other integrated software packages that burst onto the scene in the 1990s helped lead the way into more digitizing, but it remains a painful process.

Today, companies are confronting something new and different: digital. Digital, of course, is an adjective. It refers to a host of powerful, accessible, and potentially game-changing technologies like social, mobile, cloud, analytics, internet of things, cognitive computing, and biometrics. It also refers to the transformation that companies must undergo to take advantage of the opportunities these technologies create. A digital transformation involves rethinking the company’s value proposition, not just its operations. A digital company innovates to deliver enhanced products, services, and customer engagement. Digital is exciting, thrilling — and a bit unnerving!

The problem is this: We have found that many business leaders are thinking of digital as advanced digitization, such as enhancing the customer experience with mobile technologies or implementing internet of things capabilities to improve operations. But “becoming digital” is a totally different exercise from digitizing. Companies today must become digital to compete in a world in which both end consumers and business customers expect products and services to meet their needs on demand across channels. In most industries, digital is already a business imperative. Digitization is an important enabler of digital, but all the digitization in the world won’t, on its own, make a business a digital company. I would argue, in fact, that failing to distinguish increased digitization (even radically increased digitization) from a digital transformation could be a fatal mistake.

Digitization Is an Operational Necessity

The benefits of digitization are significant: efficiency, operational excellence, predictability. For all the pain that it entails, digitization is an essential undertaking in companies. Without digitization, companies cannot scale; they cannot absorb the complexity of expanded product portfolios; they cannot personalize services. Disciplined, standardized business processes, where appropriate, ensure the accuracy and security of core transactions and back-office processes. They make data accessible and reliable.

Most companies have grossly underestimated the challenge of digitization. Shedding habits — imposing discipline — has proved to be harder than business leaders imagined. In many cases, leaders have committed to digitization initiatives thinking they are funding new and better technology. Many didn’t recognize that digitization requires a commitment to fundamental changes in how people work. Consequently, most digitization efforts cost more — and generate fewer benefits — than anticipated.

Despite more than 20 years of business digitization history, MIT Center for Information Systems Research (CISR) has found that only 28% of established companies have successfully digitized. This is a problem, because companies must be digitized if they hope to become digital. Without digitization, management’s attention will be consumed with fixing whatever is going wrong today in a company’s operations. There will be no time for innovation. Leaders won’t have the resources to invest in a digital transformation or the operational excellence to support their digital value proposition.

Digital Is a Customer-Centric Value Proposition

To become digital, leaders must articulate a visionary digital value proposition. This value proposition must reassess how digital technologies and information can enhance an organization’s existing assets and capabilities to create new customer value. Being digital is not just introducing mobile apps for customers. It is taking advantage of the opportunity to redefine a business — and possibly even an industry.

Big, old companies have started to define visionary digital value propositions. Schneider Electric SE has moved beyond selling electrical products to providing energy management solutions. Kaiser Permanente views itself not as a health care provider but as a patient-provider collaboration. BMW is not just an automobile manufacturer; it’s a provider of individual mobility. Philips has sold off multiple businesses, including its foundational lighting business, to focus on “improving lives through health care innovation.”

These are bold strokes. They are risky. But the alternative is to try to succeed in a digital economy with a pre-digital value proposition. That could be the riskiest alternative of all.

To become digital and pursue a digital vision, companies must define their digital offerings. They must embrace information-enriched customer solutions delivered as a seamless, personalized customer experience. Digital offerings are the specific solutions that deliver on a company’s digital value proposition. The benefits of a successful digital transformation include growth in revenues and margins, undying customer loyalty, and the ability to attract top talent (and thus continue to grow).

Successful companies in the digital economy will be digital (to provide customer value) and digitized (to provide for scale and efficiency). Although companies still struggle to digitize, what it means and how to do it are now well established. It’s just hard to do well. How to be digital, in contrast, is less well established. Defining a value proposition that will attract customers who are actually willing to pay for a given solution is more art than science.

Five Guiding Principles for a Digital Transformation

If you want to get started on a digital transformation, I suggest you embrace five guiding principles:

  1. Don’t hand off responsibility for your digital transformation to your IT unit. This is a business transformation. If you think IT can make it happen, the game is over!
  2. Do engage IT leaders in defining your vision and mapping your initiatives. Your embedded culture and structures will be your two biggest obstacles to your digital transformation, but your legacy IT systems are more likely a liability than an asset. IT leaders can help establish what’s possible.
  3. Bring in professional help. If you wouldn’t add a room to your house without consulting an architect, make sure you understand that in trying to coordinate the business components, roles, structures, processes, and systems that will enable you to deliver digital offerings, you need professional business architects. Stop thinking of architecture as an IT issue and engage in developing your business architecture.
  4. Be persistent and patient. Understand that you will need to invest time and money in your digital initiatives just like venture capital companies invest in innovative businesses. The cost savings from digitization were easy to track. The new revenues from digital initiatives probably won’t flow in quickly. Track some intermediate metrics like reuse and time to market.
  5. Prepare to co-create with customers. Unless you have Apple cofounder Steve Jobs’ gift for anticipating what customers want, you’ll need to engage them in the process of defining your offerings. Otherwise, you may never see those new revenues you’re counting on.

It will take time to settle on a pattern of digital offerings that bring value to your customers and your business. It will take even longer to identify, build, and reuse business components so that new solutions can be easily configured. And for many companies, there is still much work to be done to ensure that they are sufficiently digitized to support a digital transformation.

In short, your digital transformation will be a long journey. It’s important to get started.


MIT Sloan Management Review

Business Process Digitization In Life Sciences

Life science companies are facing several challenges that are forcing them to innovate.

A survey published in Harvard Business Review (March 2016) found that internal dysfunction and creeping complexity is the main barrier to consistent profitable growth. The survey polled 377 business leaders, most of whom represented companies with revenues of $ 5 billion and above.

Over time, companies accumulate disparate, inconsistent, and siloed processes. Some of these come from different processes and technologies introduced through acquisitions. Some linger from when the company was smaller. And some result from organizational resistance to change.

Resolving internal dysfunction and standardizing processes benefits the company in many ways:

  • Combats stalled profitability and growth
  • Leads to faster support and lower costs in technology and processes
  • Enables faster integration in M&A and reduces costs and time to integrate so business leaders can realize synergies more quickly
  • Provides better control over processes and makes it easier to determine the root cause of problems

Realizing these potential benefits, one leader in a niche biologics manufacturing space is undertaking a global process digitization initiative. The organization is standardizing processes, adopting leading practices, and building metrics and analytics around processes and sub-processes. The company’s goal is to support aggressive future growth plans. In that sense, it is re-imagining processes as a top-line enabler.

Digitization of processes helps companies re-imagine their business functions and gain deeper insights to improve the bottom line, move products faster and with greater precision, and understand patient or customer behavior at a deeper level.

The following are some trends seen by life science companies that are re-imagining their business processes.

Lines of business

Procurement

A progressive medical device company is looking to 3D-print smaller parts for its products.

A pharmaceutical company leverages 3D printing to print temporary spare parts so equipment can function without interruption until replacement parts arrive.

R&D

A Covance study (which appeared in biopharmadive.com in June 2017) reported that 10% of sites fail to enroll even a single patient in oncology clinical trials. In sites where patients were enrolled, the rate was slow: In one case, out of 116 sites, only 42 were active in patient enrollment. The study states that even in those active sites, it took 15 months to enroll just 77 patients. Pharmaceutical companies are leveraging analytics to improve their processes to improve patient engagement and increase enrollment rates.

Better patient engagement, faster enrollment, and positive customer experiences can help pharmaceutical companies get through their clinical trials more efficiently. For successful trials, this can mean getting approvals more quickly, which in turn can get products to the market earlier. The bottom line is faster revenue realization, but more importantly, much-needed therapies can get to patients sooner.

Manufacturing

Technology enables companies to finish products closer to the customer. This enables manufacturers to plan and move products better and to react more quickly to changes in the market.

To achieve this, some companies have chosen to separate their packaging operations from manufacturing. Still other companies are deploying cutting-edge planning systems to improve their planning processes.

Another pharmaceutical manufacturer has piloted process robots for some critical routine processes, such as palletization.

Distribution

Pharmaceutical companies, especially biologics, must transport their products carefully. Historically, cold chain shipments require a mandatory “temperature” release stating that products have not been subject to temperatures outside a prescribed range. This ensures that product properties are not altered so the therapy stays potent and effective.

Digitization allows companies to monitor other parameters that could potentially affect products, such as light, pressure, humidity, geographic location, length of time spent at various nodes en route, altitude, shock, etc. Integrated with an event management system and mobile alerts, anomalies or incursions can then be reported in real time, allowing quick action to save the shipment.

Other lines of business

Lines of business such as HR are also digitizing their business processes. Tasks such as resume matching and reading social media signals to gain insight on whether key employees could leave the company, etc. are increasingly being digitized. Digitization in HR also helps executives match roles with employees’ skill sets, experience, personality, and passions to put the best people in the right roles.

Leading practices, standardized processes

Based on observation of process dysfunction at various companies, some consulting companies have drawn up a taxonomy of best practices or standard processes. They have taken these leading practices and configured templates by industry, which companies can leverage as a starting point to accelerate ERP implementation. This approach not only saves considerable time and costs, but it also helps lower the volume of customization.

Another benefit is the quantification of process-related metrics at each logical step—for example, the number of erroneous orders or quality release failures with reason codes helps to periodically monitor the business.

Continuous process improvement

Digital transformation is introducing new process-related roles, such as process owner, process lead, sub-process lead, and even chief process officer. These roles reflect the importance of managing and governing processes for continued operational excellence.

Not only are these specialists responsible for continuous monitoring of their processes based on metrics and key performance indicators, but they are also entrusted with continuous improvement.

Another approach to process improvement is to use robots for operational functions. Such automation of processes with machine learning is known as RPA—robotics process automation, where a process robot learns the process and gets better at executing it. The business analyst can focus on data and metrics and glean business insights rather than battle with the operations tactics.

Re-imagining processes is an easy and cost-effective way to affect change, especially if companies start small and scale up their process improvement and automation as needed. The concept mooted by Dr. Michael Hammer in his book, Faster, Better, Cheaper, is now being taken to a whole new level.

I invite you to share your thoughts on this topic.

For more on advanced technology in life sciences, see The Internet of Things In Life Sciences.


Internet of Things – Digitalist Magazine

How Digitization Is Disrupting Construction: Strategies Forward

From 3D printing to prefabrication and assembly, the digitization and industrialization of construction is already underway. Knowledge and technology developed by the other industrialized industries is enabling construction to leapfrog to the latest, proven methods at breakneck speed.

Today’s construction industry is at an inflection point. Digitization is changing everything, including barriers to entry. In the new digital world, new business models are emerging, disrupting the industry and requiring new processes for the way we work and deliver services.

Digital technologies changing the construction industry: 3D printing & IoT

From supply chain to workforce planning, digital technologies are bringing greater efficiency and scalability to the construction industry. Robotics and 3D printing, for example, require 30% to 60% less building materials and can be completed 50% to 80% faster. The market for portable and modular buildings is growing as digital technology powers faster completion rates. Portakabin, a UK-based construction company building, uses 3D building information modeling (BIM) and a factory-like setting to construct portable and modular buildings 50% faster than conventional buildings. This allows Portakabin to obtain a higher level of precision, delivering construction on time and within budget.

The Internet of Things (IoT) is powering new efficiencies and smarter asset utilization. For example, CCC, a large Middle Eastern contractor, faced weak demand in 2008. The company had two choices: become more efficient or go out of business. Today, CCC uses IoT to monitor and improve the utilization of its assets, saving approximately $ 15 million per year.

Digitization of construction: does your business have the right strategy?

Construction companies that shift to digital stand to realize significant gains over the competition. These are the five key areas being most impacted by digitization and industry transformation:

1. Expertise and knowledge

As a new generation enters the workforce and more experienced craftsmen retire, there is an urgent need to make up for the resulting experience gap. Capturing and utilizing best practices can no longer be just a goal; it must be a reality. Otherwise, accidents, rework, and delays will become more commonplace – jeopardizing safety, efficiency, and productivity.

Technology-savvy millennials expect digital rather than paper-based processes. For example, consider the knowledge and experience that helps determine the amount of consumables or small tools required for a job. This knowledge will need to be translated into a format, such as tablets, that can be easily accessed at the job site.

2. Construction sites

Many activities traditionally performed piecemeal onsite will be consolidated and moved to efficient factory-like settings with safety and equipment availability greatly improved. The use of modern, lean techniques, including a major role for robotics, will improve quality, greatly reduce waste, and improve costs and schedules

Prefabricated “Lego-like” components will be produced with great precision and transferred to the job site. Here, 3D models and wearable technology will direct “skilled-enough” labor to quickly and accurately assemble the components.

Sensors gathering up-to-date information will transform the construction site, improving safety, monitoring progress, and reducing unnecessary downtime by anticipating and correcting potential problems, like a lack of materials or equipment issues.

The project status will be continuously transmitted back to headquarters to ensure contractors are paid faster and that their pay is based on progress.

3. Project collaboration

Owners, contractors, architects, and other members of the construction team will work on contracts designed to improve information sharing. They will be compensated based on the project’s success, rather than individual accomplishments. For example, project-as-the-tenant collaboration systems will be available to everyone on the project. This includes up-to-date structured (2D/3D renderings, job cost, etc.) and unstructured (documents, procedures, manuals, etc.) information.

With project collaboration, case studies show that change orders can be virtually eliminated. RFIs will document decisions already reached in the field. Under this new digital model, trust and respect are commonplace, driving the shared stakeholder collaboration that is paramount for greater success.

4. Skilled labor network

Labor unions are evolving. A digitally networked workforce may replace some aspects of their role. Skilled craftsmen and staffing firms will post online for available jobs with large contractors. Contractors, in turn, will be able to compare the costs, track record, skill set, availability, etc. of every person before the hire, similar to Angie’s List in the consumer marketplace. Pre-negotiated contracts based on volume and certified suppliers will save contractors time and money. An Uber-like availability and simplicity will be accompanied by reliable feedback.

Unions, in turn, will implement new training programs to help members better understand these new technologies and enhance skill level.

5. Commissioning and operations

The handover of critical information from the construction phase to the operational phase will occur seamlessly and without having to re-enter the information into asset systems.

BIM data is linked to the ERP and project management information, providing visual components throughout the process that will help minimize errors and costly rework.

Information captured in the design phase will have a common thread that will be used to populate the information in the asset management systems.

Equipment installed in the construction will have information on warranty and maintenance stored in an open network that operators will be able to access well after the construction phase is completed.

Next steps: moving towards full digitization

The digitization of expertise and knowledge, intercompany collaboration, commissioning and operations, and the construction site as a whole demands new business models and construction methods. Companies must be prepared to embrace these changes or risk being out-performed and out-innovated by the competition.

For more insight on the new digital age, see Building a Sustainable World, How to survive and thrive in a digital construction economy.


Internet of Things – Digitalist Magazine