**Sudhakar Varshney** Global VP, Manufacturing and Operations, Hach Company
Sudhakar Varshney | Global VP, Manufacturing & Operations, Hach
Sudhakar is in charge of end-to-end supply chain management and operations of 25 manufacturing and distribution locations globally for Hach. Identifying opportunities for operational excellence almost comes instinctively to Sudhakar. He has evaluated and implemented a host of technologies and knows the nuances of approaching a digital transformation initiative.
Sudhakar believes that digitalization must be adopted in a natural progression – by plucking the low hanging fruit before you move higher. In this interview, Sudhakar highlights the trends and opportunities for the Water Industry and the scope for technology adoption in the industry. He also explains how the sector is coping up with challenges posed by COVID 19 and shares his views on the role technology providers can play in helping the industry adopt technology at a faster pace.
Water Industry Trends & Challenges
Water industry is seeing quite an uptick in action when it comes to aligning with and adopting the technological trends. These trends can be loosely mapped to two categories – those driven by the consumer, and those imperative for service providers for staying relevant and profitable. The consumer driven trends are:
From the service-provider’s point of view the three major trends that I have noticed are:
When we talk about challenges, I think cost and sustainability are the perennial challenges for almost all the industries and water industry is no different. Municipalities have been stretched quite a bit during COVID-19 because they had to serve the customers despite non-payment owing to the moratorium. And, in these times, digitalization has played a very important role for them and has enabled them to manage their cost effectively by optimizing their processes through effective monitoring of the operational parameters.
The Scope for Digital Maturity and RoI
As compared to other industries, the water industry lags when it comes to the adoption of digital technologies. When you think from water industry’s customer base standpoint, there is a diverse eco-system of data sources, operating patterns, and equipment variance. Each machine has its own unique data stream operation logic and most of these machines are not even IoT enabled. It is thus almost impossible for conventional IT infrastructure and analytics applications to synthesize anything actionable from the current eco-system. It is necessary to identify and prioritize the use cases which have the potential to deliver most value to the customers and are cost-efficient at the same time.
There exists huge potential for technologies such as data management, compliance management, remote diagnostics, and digital twins and their respective applications in this industry. One of the technologies that we are investing in is machine learning and AI for quality inspections on high volume manufacturing. Automation and robotics are also playing a big role specifically on high-precision workflows that are needed to minimize variability and human variation. There is another technology which does not get talked about much and that is Augmented Reality, especially in the area of maintenance of complex equipment. There is a world of difference in troubleshooting an equipment with the aid of a VR glass where step-by-step instructions are visually projected and explained to you as compared to reading a user manual and following it. However, though there is a huge scope for adoption of these technologies in the industry, I believe the biggest challenge in their adoption is training people on these technologies and getting them to overcome their inertia in working with new technologies. It is imperative that training methodologies must also change to align with industry 4.0 and follow a smart performance- based learning approach. The learning management systems need to become smart as well. You can automate all you want, you can digitalize all you want, but unless you have consensus and involvement of the people who would work with those technologies, your digitalization initiative won’t be a success.
ROI is not a limiting factor or a consideration for adoption of digitalization. It was a consideration a few years ago when organizations were unable to map the tangible benefits of the digitalization initiatives to their investments. The approach or methodology of measuring RoI for Industry 4.0 initiatives is similar to how you would do it when you buy a physical asset. For a physical asset, you look for a payback time of 4-5 years. This same approach works for digitalization investments too except that the benefits must be looked upon more from a macro perspective. For example, if an organization is using RFID technology just for inventory management in a small area, it won’t show up the RoI in the grand scheme of things. But if the organization looks at it from a working capital standpoint, across the whole organization and focuses on how small bits come together, that's where it adds value. I strongly believe the RoI model needs to be approached from this viewpoint else it might create an impression of the organization sinking-in money without getting actual returns.
Another way to look at drawing out tangible RoI is prioritization.
Organizations must look at solving the biggest problem and also creating the biggest value – opportunities that will provide the biggest impact for the money spent. I have seen cases where organizations try to boil the ocean and fail at it. What is required is a little bit of a ground effort. The best approach is to identify the top 10 most important assets in the company that contribute 35 - 40% of the sales which are already capacity constrained. Then implement real time op-tracking and diagnostics on those, to get the value out of your investments. Once you learn from this and create a platform, then replicating on the other 90 assets is simple. Once you do it for the top processes and assets, you are already drawing the value from your investments and then taking those learnings and best practices to your other platforms becomes easier.
Countering Black Swans
With COVID 19, there's a de-densification at our customer plants as well, and more and more people are working remotely. So, I think there is a predominantly high focus on solutions for remote management in areas such as compliance reporting, data collection & consolidation, parameter adjustments at the plant for the nitrification, or addition of chlorine, etc. The second focus-area is operational and equipment health visibility. Given that we operate in critical infrastructure business, we need the visibility to foresee and prevent shortage of water in the middle of a pandemic. So, digitalization of the end-to-end supply chain and developing the ability to provide that visibility to our customers on where their orders are, and how promptly we can fulfil the orders has surfaced as very big opportunities for us. I cannot emphasize enough on how important this has become for sales in current times. Business continuity planning, providing updates on the status of the orders, addressing the issues in every part of the supply chain has become critical, because some of our customers don't even store consumables for more than two or three days. They are relying on us to provide them the demand visibility.
At Hach, as soon as we realized the scale of the pandemic and as more and more countries shut down, we created a centralized control center. I call it a crisis management center to monitor data. This data played a very, very big role, in ensuring the connectivity with our supply chain. We do not have end-to-end connectivity, but we were able to effectively utilize data pieces to mitigate any major supply chain or business continuity disruptions. Our team did a really good job ensuring operational continuity. I can't even tell you how many hours I along with my team spent in the crisis management center. And I can tell you, if we didn't even have those small elements of digitalization, it would have been a really challenging environment, we would have created for our customers. A lot of people don't talk about supply chain risk, but this pandemic has forced everyone to do a supply chain risk and impact analysis and business continuity planning. This was necessary to be ready with remediation strategies planned for high risk business functions. In the not so recent past, business continuity planning was a one-time event, which was done once every two years, but the current situation has forced us to make it a daily activity. I believe that in large multi-national organizations, you will see dedicated teams focused on this a 100 percent.
I believe, the industry is bound to invest in a host of technologies with the experience of facing this pandemic. A lot of technologies have demonstrated a potential to play a key role in ensuring business sustainability and continuity if faced with a similar challenge or in case if the current situations persists for a longer period. At the base of all these technologies is data analytics and IoT. If you're collecting data remotely, you need equipment to communicate. So IoT is an absolutely necessity. Big Data, Data Analytics becomes very, very important as well. And I think automation becomes quite important too, because, if you are looking at de-densification of off sites and places, automation is the only way-forward.
Best Practices and Choice of Service Providers
Adoption of Industry 4.0 is no more an option but a necessity and a necessity that needs to be fulfilled at a rapid pace to ensure business sustainability. I think offshore IoT service providers can be leveraged for this rapid set-up of technology infrastructure. These development partners provide the advantage of cost arbitrage and their experience, exposure and expertise across multiple industry verticals and a wide variety of customers is a huge asset to avoid the pitfalls of Industry 4.0 implementation. The role of technology partners also has evolved over the years and goes beyond mere implementation and execution. It is a wholesome role now with development partners being involved from the design and strategy perspectives as well. Outcome and risk-sharing has become equally important for service providers when it comes to long-term engagement and this shows in various business models such as outcome-based business models being provided over the T&M models.
Business Rapid Fire
Evolution or revolution? Water Industry is a very diverse and fragmented industry and hence it becomes a challenge to revolutionize the industry. So, I think it's more of an evolution than revolution.
Strategy or execution? Strategy is very, very important. I think, sometimes execution can be broken in tasks and activities and can be managed, but how to strategize this change is very important. And, how to strategize this change with your service providers is even more important because it involves identifying service providers who can bring a very different perspective. So, I think strategy assumes higher importance than execution.
Biggest takeaway from the new normal For me, it is the importance of digitalization. It assumes critical importance in everything we do. From our kids learning on zoom to a maintenance technician out in the field, who's now moving towards remote diagnostics. I think doing things with the aid of digitalization is the new normal. And I don't think it's going away anytime soon. Even in my organization, people who have gone remote, have started to enjoy it and believe in its value. If we improve and enhance our processes further and provide tools and technology for remote management and operations, I think there is a huge potential for this operational model.
One trend of the new normal that will continue in the future Business Continuity Planning and supply chain mapping & de-risking will assume greater significance and importance and will continue as a focus areas beyond the new normal.
2021 will be the year of Transition Planning.
