Transforming Performance to Join Best-in-Class Manufacturers

Written By: Nicholas Leeder
  • 10/19/2021
  • Read Time : 3 min

At PTC, we work with manufacturers of all stripes. Regardless of what they produce, where they make it, and how they make it—process or discrete—they share a common goal: improved performance. Achieving higher levels of performance has been a shared goal to drive improved financial returns and competitive advantage since the first industrial revolution saw the mechanization of production machinery powered by water and steam.

The Performance Gap is Real

This pursuit of performance (often quantified with metrics like Overall Equipment Effectiveness or OEE) has driven the evolution of manufacturing through a series of revolutions up to today with the Fourth Industrial Revolution. From SCADA and lean manufacturing to industrial connectivity and the Industrial IoT, companies are harnessing technology to claim best-in-class status. And while those top performers see their factories running at 85% OEE, most companies are only running at 40-60%. While that’s great news for those at the top, it means there are significant opportunities for the rest. Given the slate of current global challenges affecting all industries, competitive advantage and the security of peak performance takes on a newfound importance.

A Lighthouse to Lead the Way Forward

The performance chasm between the best and the rest is sobering. But there is some good news for those companies who are serious about improving their own competitive standings. Specifically, the best practices of these top-performing companies are not a well-kept secret. In fact, the World Economic Forum’s “lighthouse” program serves to highlight and share these best practices out to all. This program, which includes many of PTC’s customers, features companies that are disclosing their Industry 4.0 technology and practices—offering critical lessons and examples for others to follow. To understand the commonalities across super-performing factories, we can start with how they approach their digital strategy.

The Need for the Digital to Transform Physical

For years, the pursuit of digital transformation has been focused purely on technology capabilities, features, and functions. While these are certainly important factors, they also exclude a massive consideration. For digital transformation to be successful, you must foreground the importance of operational and financial impact. More specifically, digital innovations must transform physical factories in a way that results in meaningful economic impact.

Furthermore, the speed and scale of these impacts must also be considered. It sounds simple, but the basic criteria for evaluating a technology’s ability to make improvements across an enterprise in the shortest time possible has eluded companies for decades. Manufacturers should lead with the physical changes and results that make the biggest impact—and then use those outcomes to find the digital solutions that can best produce them. While we prize digital transformation, what we are really looking for is business and physical transformation that is enabled through technology. These are lofty sentiments, but you’re probably asking yourself, “what precisely are these best-in-class companies doing to transform their physical business?”

Transformation Begins with Connectivity

Across the board, best-in-class manufacturers start with establishing connectivity. This has historically been a challenge. Each factory floor hosts an eclectic array of equipment, and each factory—even across a single organization—can be unique and distinct. Consequently, successful enterprise-scale solutions rely upon a standardizing connectivity layer. This approach accelerates connectivity—even for plants and factories that boast legacy workhorse machines that predate modern connectivity. It also mitigates the need to invest in swapping expensive, and otherwise perfectly suitable equipment. Regardless of the business problems manufacturers are solving for, the technological pursuit of digital transformation begins with connectivity.

Understanding Performance in Real Time

A connected factory can generate enormous volumes of data—but not all data has equal value. This is where the business-first approach to technology enters the picture. By focusing on the inefficiencies, including bottlenecks, unplanned time losses, and scrap that impede peak productivity, you can direct your Industry 4.0 digital solutions.

Monitoring production performance is not a new concept, and even among companies with relatively low OEE, most are looking for interruptions and bottlenecks. What leaders are doing differently is leveraging new digital capabilities to monitor and respond to bottlenecks in real time. Historical, point-in-time performance read outs are fine and good, but if you’re examining these problems after the fact then you’re not actually improving performance.

Understanding—and Addressing—Your Performance Problems

Being able to know why operational efficiency is being impacted—while its being impacted—is a huge advantage. Condition-based monitoring helps best-in-class companies understand the root cause behind the problems that affect asset availability or quality. And with analytics and machine learning, they can pivot from real-time visibility in the present, to predicting status and downtime issues in the future. Manufacturing leaders are innovating with predictive and even prescriptive maintenance—allowing them to advance from immediately addressing operational challenges to preventing them in the first place. This represents a massive competitive advantage, and a sea-change in how manufacturers look at operational excellence.

People are at the Heart of Your Change

Much of this blog has been devoted to the steps and technologies that can be employed to improve your operating performance. We should not forget that behind every machine and decisions to take actions there is a person. These people have deep process knowledge of your manufacturing environment.

To ignite your transformation, place your frontline workers at the heart of the change. Upskill and enable them on the new technologies to remove the fear of the unknown and harness the opportunities to improve performance. Use capabilities such as augmented reality to capture experienced workers process knowledge and use these technologies to engage with the next generation of workers, addressing the growing workforce and skills gaps. Above all, make sure that the knowledge and information is placed as close to the work as possible to make decisions. We’ve seen with our customers how this approach is the catalyst to drive your transformations forward, at speed and at scale.

Learn More About Best-in-Class Performance, from the Best in Class

There are a lot of challenges that keep most manufacturers from reaching those 85% OEE benchmarks. There are also many ways to go about addressing those performance gaps—some more proven than others. I’ve only scratched the surface in this blog.

If you’d like to learn more about how the best of the best are making serious inroads in the pursuit of superior OEE metrics, join me at Manufacturing Live on Thursday, Oct. 28. The virtual event begins at 10 a.m. EST and will cover a range of topics. I’ll be speaking specifically about how digital transforms physical assets and hosting one of several sessions—where I’ll be joined by Yogesh Zope, Chief Digital Officer at Bharat Forge, and Tessa Myers, VP & GM of Production Operations Management, Software and Control at Rockwell Automation. With key insights about the realities of digital transformation and continuous improvement, Yogesh and Tessa will make this session a must-watch event. Register now by clicking the image below:


  • Connected Devices
  • Industrial Internet of Things
  • Augmented Reality
  • Digital Transformation

About the Author

Nicholas Leeder

Nicholas Leeder serves as Vice President, Head of Digital Transformation Group, at PTC. He has a passion for helping companies capitalize on digital transformation and Industry 4.0 and realize measurable results and business value. As one of the leading thought leaders and advisers in Europe around the digital changes in engineering and operations, he shares his practical business and technology experience developed from over 20 years of assisting companies gain the maximum value from these transformations.