Integration for all: why SMEs shouldn’t fear digital transformation

Schneider Electric is a Business Reporter client.

The most advanced capabilities in the digital era shouldn’t be the preserve of big companies – many of today’s cutting-edge approaches can be just as powerful for SMEs

Recent events, both global and local, are prompting manufacturers of all sizes to assess operations and become more flexible and resilient. Whether in response to supply chain disruptions, looming Net Zero targets, or simply remaining competitive in straitened financial times, industrial enterprises are taking digital steps to future-proof.

But while the benefits of digital transformation offer huge advantages to any organisation, embracing transformation is easier for some companies than others. It requires investment in systems, technology and culture, and for small businesses that need to see a return on investment on a smaller budget, there can often be a hesitancy to digitalise.

For Schneider Electric, it’s part of our mission to improve sustainability across every industrial operation. It doesn’t matter to us if a business has one facility or 10, is brand-new or using legacy assets, produces one specialist product or manufacturers a portfolio of options. We know that improvements are vital to the ongoing health of industry in the UK, and businesses of any size can become more productive, efficient and sustainable through digital transformation. And those undergoing the process are also benefitting from improved business agility and resilience – vital in times of uncertainty.

For SMEs it can be difficult to find examples of companies like themselves that have undertaken digital transformation. This is chiefly because most examples are of large corporations undertaking big projects, using expensive software that aligns numerous processes and functions, often across many sites.

It can also be hard for smaller companies to recognise how such transformation may apply to them – or, indeed, how they could afford such expensive changes to their systems.

Stepping into Schneider Electric’s own plant at Le Vaudreuil in France is a great example of this. From a single unified control centre, the facility keeps track of power usage, controls a vast array of processes and follows the real-time performance of all assets. Dashboards display operational data from every corner of the 14,000-square-metre shop floor, giving onsite operators instant updates and alerts to keep production as efficient as possible. Le Vaudreuil also hosts an army of driverless vehicles and collaborative robots that are part of the site’s production setup.

It would be easy for industrial SME leaders to see Le Vaudreuil’s capabilities as out of reach, or not applicable to their smaller-scale operations, but this couldn’t be further from the truth. This lighthouse facility should be seen as a guide for businesses looking to overcome challenges while deploying technology at a rate that suits them, and which can, more importantly, deliver value.

Since the start of the Le Vaudreuil transformation to a smart factory in 2018, the site has reduced both energy use and carbon emissions by 25 per cent and material waste by 17 per cent. For such a large facility, these figures equate to huge savings in cost and energy consumption – and the same can be applied to SMEs even if transformation happens at a slower, more manageable rate. Importantly, for industrial organisations of any size, the savings associated with such efficiencies go straight to the bottom line and are too large to be delayed.

SMEs that fall behind on industrial transformation may be trading small initial savings for future competitiveness. Transformation is a one-way journey and if a company doesn’t take even small incremental steps, it will quickly be unable to meet evolving customer demand.

The fact of the matter is, you don’t need multiple facilities or a brand-new greenfield site covering multiple processes to reap the benefits of digitalisation. Digitised single sites can still see a host of improvements with the exchange of data between IT systems and operational technology (OT) on the shop floor. Just scratching the surface, businesses can access orders and inventories from suppliers, improving planning and pre-empting supply chain issues before they affect business. This, coupled with the immediate efficiency improvements and reduction of energy use, means that industrial transformation should be a top priority for any SME.

Sites operating with data silos centred on different processes, machines or lines can easily break down those barriers and create a connected facility that gives operators the contextualised information they need, when they need it. Any facility, even those with a combination of new and legacy assets working on multiple operating systems, can consolidate those systems using inexpensive IIoT smart sensors to start building the contextualised data dashboards that can drive many of the immediate benefits of integration.

While every business will have its own goals in terms of profit and efficiency, the universal requirement to reduce global emissions impacts everyone. Industrial energy consumption represents almost 40 per cent of current global consumption and is still dominated by fossil fuels.

This figure alone should be seen as call to action for industrial businesses large and small to play their part. Even the tiniest percentage improvement of overall equipment efficiency for an SME will have a massive impact if mirrored across every similar-sized business worldwide. With governments around the world setting new emissions targets, it’s clear the legislative environment for industrial organisations will require reductions in carbon use, improvements in efficiency and evidence of decarbonisation – and as the old maxim goes, you can’t measure what you can’t see. Without digitalisation, it simply won’t be possible for many companies to show they are meeting the forthcoming demands of decarbonisation.

Industrial transformation is fundamental to the success and, more bluntly, the survival of all industrial organisations, whether large or small. By opening up a plethora of improvements that will reduce cost, waste and energy consumption, the benefits of digitalisation are improved operations and a more profitable, agile and resilient business. Companies that want to remain competitive must take meaningful steps now to not be left behind. And beyond the individual goals of each business, industry also has a collective responsibility to reduce its impact on climate change, and in industrial digital transformation it has a capable tool to make a huge difference.

Schneider’s purpose is to empower everyone to make the most of our energy and resources, bridging progress and sustainability for all. We call this Life Is On.

Our mission is to be your digital partner for sustainability and efficiency.

We drive digital transformation by integrating world-leading process and energy technologies, end-point-to-cloud connecting products, controls, software and services, across the entire lifecycle, enabling integrated company management for homes, buildings, data centres, infrastructure and industries.

We are the most local of global companies. We are advocates of open standards and partnership ecosystems that are passionate about our shared meaningful purpose and inclusive and empowered values.

By Kristin Baker, Vice President Industrial & Process Automation, UK & Ireland – Schneider Electric

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