Building a Resilient Global Supply Chain through IT-OT Convergence
Sami Koskinen, Director of Digital Transformation, Beamex
In today’s global economy, supply chain resilience has become more critical than ever before. As companies strive to create more efficient, transparent, and sustainable supply chains, the convergence of Information Technology (IT) and Operational Technology (OT) is playing an increasingly vital role.
IT-OT convergence allows businesses to bridge the gap between the physical operations on the factory floor and the digital data in the enterprise systems. As an engineer and as someone deeply involved in process industries, I’ve seen firsthand how IT-OT convergence can transform business outcomes, but also how it presents its own set of challenges.
At its core, IT-OT convergence connects the data-rich, real-time operational systems on the factory floor (OT) with the broader, enterprise-wide systems (IT) that manage everything from logistics to procurement. This connection enables organisations to make better decisions, improve efficiency, and ultimately enhance the resilience of their supply chains. It is the latter that I want to address in this blog.
In 2021, when a 400-metre-long, 20,000-tonne ship got stuck in the Suez Canal, it caused massive disruptions to the global supply chain. After all, the canal offers the shortest maritime route between Asia and Europe, handling about 12-15% of global trade. Ships had to go around the canal adding many days to their expected travel times. The incident exposed key vulnerabilities in the global supply chain forcing companies and organisations to explore ways to predict such events and strengthen systems.
Using IT and OT for a better supply chain
One of the enduring focus areas has been IT-OT convergence. OT systems hold a wealth of data on machine performance, production rates, and quality metrics, but traditionally, this data has been siloed. With convergence done right, it can provide visibility across the entire supply chain, allowing stakeholders greater control over how it is run.
The ability to predict the future, or at least be more aware of upcoming risks is a standout feature of IT-OT convergence. Take the chemicals sector for example. Companies in this space face high risks if their supply chains are disrupted due to the highly volatile nature of their products. Safety is a top priority and IT-OT convergence helps companies maintain that safety by providing real-time data on equipment conditions, enabling them to detect potential safety hazards before they escalate. It also helps companies better track the supply and demand for various raw materials, allowing them to make more robust arrangements to secure their sourcing and transport. My colleague Jan Henrik-Svensson wrote a very interesting blog on the rise of predictive technologies and I encourage you to read it.
Another way in which IT-OT convergence can help is by creating a more transparent supply chain. Consumer awareness and demand for ethically and sustainably sourced products has never been higher. Many companies are working on displaying as much information about their supply chain as possible. By getting IT and OT to talk to one another, companies can create a fool-proof, trackable and traceable roadmap right to the source. The best example of this is in the food and beverage industry which has been working on certifiable and verifiable farm-to-fork models. IT-OT convergence helps companies trace the origin of their products and their journey through the agricultural consumption process right up to when they land on the consumers’ plates.
Increased traceability and trackability also ensure that stakeholders in the supply chain can maintain compliance with global and regional regulations. This is most evident in the pharmaceutical industry. Here, patient safety is paramount, and the risk of compromising this safety can mean losing your license to operate. Stringent global and local regulations require pharmaceutical companies to maintain full traceability and documentation for their production processes. The improved transparency coupled with predictive tools allows companies to keep ahead of evolving regulations while ensuring that they are fully compliant. This in turn keeps the supply chain agile and running smoothly.
Is convergence easier said than done?
The benefits of IT-OT convergence are clear. However, implementing it along the global supply chain is an ambitious task. One of the biggest hurdles is the issue of security. Traditionally, OT systems have been isolated from the outside world, making them relatively safe from cyber threats. However, as we integrate these systems with IT networks, the risk of cyberattacks increases. This is especially true for the global supply chain. Cybersecurity firm Cyble claims to have “found 90 cybercriminal claims of successful supply chain attacks in a six-month period that encompassed February 2024 to mid-August 2024.” The majority of these attacks targeted IT and technology companies followed by manufacturing and healthcare. For IT-OT convergence to take off, robust cybersecurity measures are needed to ensure the safety of their operations.
Another challenge is legacy systems and processes. The global supply chain consists of hundreds of industries, each consisting of several thousand companies spread across the world. Building entirely new facilities for IT-OT convergence or retrofitting brownfield systems to integrate with modern IT systems can be a costly and time-consuming process. Additionally, IT-OT convergence requires a new level of collaboration between teams that have traditionally operated in silos. IT professionals and OT engineers must work together to ensure that the systems are properly integrated and that the data is used effectively. This requires ongoing training and education to ensure that all employees understand the value of IT-OT convergence and how to use it to improve their work. It may seem a tall order, but one that needs to be done to secure the supply chain and harness the full impact of the latest technological disruptions.
The future is convergence
Convergence across the supply chain may turn out to be inevitable. Legacy systems may fade away as skilled workers retire. Companies will have no choice but to use IT to capture their “silent knowledge”. The next generation of talent will bring in new systems and processes, guided by their experiences in other industries. The disruption promised by AI and more intelligent sensors means companies have to invest in IT-OT convergence now or risk being obsolete. According to the Boston Consulting Group, “value pools worth around $60 billion will be up for grabs,” as IT and OT converge.
Siemens’s electric motor factory in Bad Neustadt is one example of how it can be done. The factory produces made-to-order multi-axis electrical motors at the rate of 500,000+ configurable variants for customers per year. To keep up with demand and increase modular automation, they have invested in IT-OT convergence, connecting the factory’s sensors, machines and controllers to data lakes which are then processed by AI and other IT systems. The resulting improvements in energy use and production rates mean Siemens is scaling up IT-OT convergence efforts.
From my perspective, calibration has a key role to play in IT-OT convergence by ensuring that stakeholders are working with validated measurements. Proper calibration ensures that the OT is producing accurate results. IT systems can ensure that calibration records are fully traceable and accessible. This seamless integration ensures that equipment is always performing at its peak, reducing the risk of errors being affecting the whole value chain.
At Beamex, we are committed to leading this change, working closely with our partners to ensure that IT-OT convergence not only improves operational efficiency but also enhances the quality and safety of the products and services we deliver. Do you have ideas on how we can use IT-OT convergence to strengthen the global supply chain? Let me know in the comments below.
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