Industry 4.0 for Manufacturing Success (ITC Case Study)

How do you prioritize technology investments at ITC Limited to ensure alignment with business objectives and maximize ROI, particularly in the manufacturing sector?

Let me take a step back before I answer your question about investments.

At ITC, our ITC Next strategy seeks to architect the next horizon of competitiveness, growth and profitability in the face of global uncertainties. It aims to transform ITC into a Future Tech, Consumer Centric, Climate Positive and Inclusive enterprise. The strategy has six foundational pillars one of them being Digital. For each business of ITC, digital is helping unlock value across our value chain. For e.g.: For our consumer facing businesses digital helps us drive Superior Insight, Agile Innovation, Hyper-personalization and Marketing ROI. At the same time for our manufacturing operational digital helps drive Energy optimisation, Quality Improvement, Yield Improvement, and Operational efficiency.

Going back to your question on investments, at ITC the use case helps define the technology and how the ROI is measured. For each digital project establishing a clear understanding of the end-outcome is critical. I can broadly classify the projects into three categories: Efficiency / Productivity improvement projects, Growth / Revenue enhancing projects, and projects that create a Societal impact.

In a manufacturing context we deploy multiple Industry 4.0 technologies to help drive the outcome I have mentioned earlier.

Could you elaborate on your strategies for breaking down silos within the organization to foster collaboration and innovation across different departments, especially in the context of digital transformation initiatives?

ITC’s diverse businesses like Food, Personal Care, Education and Stationary, Paperboards and Speciality paper, etc., each have multiple uses cases and technology needs. To aid innovation, collaboration, and agility, we at ITC have established multiple Centre of Excellence’s (CoEs) like Industry 4.0 CoE, Analytics CoE, SixthSense Command Centre. We leverage the Central IT team to help with cloud adoption, technology selection, and security solutions. We also have a Digital Council that is chaired by our Chairman Mr. Sanjiv Puri.

At the Paperboards and Speciality Paper Division, we follow the Total Productive Maintenance (TMP) methodology. Under this approach we have split the entire mill operations into Daily Management Team’s (DMT) who are responsible for their specific areas. As we scale digital adoption across the mills, we conduct regular training sessions at a DMT level and are also identifying and training Digital Champions in each DMT. The champions meet on a regular basis to discuss challenges, possible solutions and new technology developments.

Apart from this we follow best practices of conducting regular knowledge sharing sessions, annual meets, vendor & partner interactions, and participation in events. There is also a big focus on go-and-see visits and, startup collaborations to facilitate our learning.

In your experience, what are some common challenges faced by technology leaders in achieving seamless integration of digital solutions into traditional manufacturing processes, and how do you address these challenges at ITC Limited?

The manufacturing landscape in India is undergoing a rapid transformation with organizations realizing the benefits digital technologies can unlock. Large corporations to MSME’s are all experimenting and deploying technology to help drive efficiencies. D2C firms are levering technology to drive revenues and customer experience. In this frenzy of going digital some pitfalls are best avoided to realize the gains expected:

•  Business benefit led investments: 4 years back, when ITC PSPD embarked on our Industry 4.0 journey, the project was driven by the business teams under the guidance of a consulting partner. This ensured that from the start we had a business buy-in and use cases were identified bottoms-up. As the practice matured, we have manged to not only sustain, but also scale the impact Industry 4.0 has delivered. In hindside, our approach to clearly articulate the business benefit and have each digital project have a business and technology owner has been a big differentiator.

•  Re-design business processes: As we implemented digital projects, we soon learnt that for realization of benefits, the underlying business process will need to be modified to take into account the recommendation of the project. This could mean engineering changes, addition of sensors, implementation of golden batch’s to drive process adherence or even changing the KPI’s that are tracked across the various DMT’s. We have ever since intertwined the digital initiatives with the TMP maturity levels to institutionalize the use of digital levers across the manufacturing operations.

•  Scale beyond PoC: When exploring new technologies it is critical to experiment. As per Eric Rise, author of “The Lean Startup”, failing fast is equally important. As we adopt technology, we execute several proof of concepts (PoC), but at times without a clear vision on how these PoC’s can be scaled. This leads to low adoption and hence low impact. At ITC while designing a PoC, we have learnt to keep scale in mind from the word go. Additionally, we have adopted the approach that “Digital funds Digital”. This ensures that we are able to focus on digital projects that are value accretive.

• Change Management and Culture: I cannot emphasise enough on the importance of change management needed to help drive digital adoption at all levels. Many times great initiatives fail because of lack of buy-in at the shop floor or a lack of business leadership alignment or a lack of business sponsorship. At ITC, digital transformation is not a Digital or IT teams’ role, it is the business team that needs to be in the driving seat along with the digital team as the partner. When it comes to digital projects any change requires buy-in, and an appreciation and minimal understand of Industry 4.0 concepts across levels from shop floor to board room. Keeping this in mind, many interventions including trainings, reward and recognition, go & see events, newsletters, and townhalls are organized involving ITC managers and shop floor staff.

• Industry leading talent: Every digital transformation program depends on the people who are implementing it. A lack of focus on involving current and new talent with technology and business skills often becomes a limiting factor for initiatives. While we hire from the best engineering institutes, we have also developed a robust program that encourages team members at the shift supervisor, DMT lead level to learn digital skills and lead programs under the mentorship of the Industry 4.0 team. This model is helping us deliver a sustained impact.

Collaboration with external partners and vendors often plays a crucial role in driving technological innovation. Can you share insights into your approach to building and managing partnerships to accelerate digital transformation efforts within ITC Limited’s manufacturing operations?

ITC, with its diverse portfolio of businesses has different needs. This coupled with the ever-evolving business priority, finding an out of box solution is tricky. Hence, while we follow an approach of developing solutions in-house, we are also leveraging the vast partner, startup and academic eco-system to co-create solutions.

This eco-system come with the significant advantage of deep investments into R&D, building scalable technology solutions, and especially cross customer and cross-industry experiences. These aspects are critical for us to deploy solutions with agility.

How does ITC Limited leverage data analytics and artificial intelligence in its manufacturing processes to drive efficiency, optimize resource utilization, and enhance product quality?

Across ITC we have many examples, but let me for this conversation focus on our Paperboards and Speciality paper division.

While starting our digital transformation Journey we tried to implement couple of AI/ML based data analytics projects and during those projects implementation, we identified more than 40% of the project time was getting consumed for data collection and data stitching. Also, we found we are not having enough historical data to perform machine learning techniques as we are not storing the data generated by the sensors available within our processes.

To overcome this limitation, we identified the need for establishing a Data Historian which now holds data from the process sensors, quality parameters from SAP, data from MES, and other data sources. Post this, 100+ use cases have been implemented leveraging data analytics and artificial intelligence. These projects have created a 2.4% EBIDTA impact for the paperboard & speciality paper division over the past several years.

Various levers in manufacturing that got positively impacted from these projects include:

•  Variable cost reduction

•  Quality improvement

•  Throughput Improvement

•   Process optimization

•  Energy consumption reduction

•  Safety & Equipment Reliability

Cybersecurity Measures: As digitalization increases connectivity and data exchange, how does ITC Limited ensure robust cybersecurity measures are in place to protect sensitive information and manufacturing operations from cyber threats?

Industry 4.0 has brought in the need to integrate Industrial Control Systems (ICS) on the OT environment with IT environment for carrying out advanced analytics use cases across multiple areas in operations. This integration increases the surface of exposure and the risk of cyber-attacks on critical plant and ICS infrastructure.

It is therefore important for organizations to have an effective cybersecurity program by adopting a strategy known as “Defense-in-Depth”; layering security mechanisms such that the impact of a failure in any one area is minimized. This should be formalized by creating OT Security Policy & Procedures, Risk Registers, Guidelines and Checklists for users. Regular awareness sessions on cyber security should be conducted for OT and IT teams and the users.

To minimize risk exposure on account of IT – OT convergence, we have also implemented a comprehensive security solution. Security Enforcer (Firewall – OT Aware) implementation helps us to monitor and manage North-South traffic flow and CTD (Continuous Threat Detection) technology helps us to monitor and manage East-West traffic flow within the OT network.

Many technology solutions like network segmentation to restrict impact of an attack (if it happens) to a specific zone, Deep inspection, Intrusion Prevention Systems (IPS), Virtual Patching, help mitigate the risks on the OT environment.