The Digital Shift: How Remote Trends are Revolutionizing the Industry

Transcription:

Sean Riley:

I'm your host, Sean Riley. Many end users saw the benefits remote services can provide to their operations during the COVID-19 pandemic and have continued to request remote assistance from their suppliers. George Blunt, a consulting analyst from Interact Analysis joins the podcast to discuss PMMI's latest white paper titled 2024 Trends in Remote Services and Monitoring. Blunt describes how end users are choosing which remote services to use and which they're investing in for the future. What barriers are preventing end users from adopting some remote services over others and how remote services can address skills gaps in the workforce. Let's have a listen. So with all the fancy introductions out of the way, welcome to the podcast, George.

George Blunt:

Hi Sean. It's great to be here. Thanks for inviting me on.

Sean Riley:

Oh, the pleasure is all ours. So could you give us kind of an introduction to remote services and the types of remote services that we're going to be covering in this report?

George Blunt:

Sure. So remote services is quite a broad term and it basically encompasses any service or tool that is used by CPGs to support their operations remotely. And this can either be internally or it can involve services done through a connection with an equipment supplier. And so of course this will often require giving the OEMs remote access into the plant where they can interact with the machinery for things such as troubleshooting. But this can also involve many other different methods as well, things like video streaming or even something as complex as augmented reality. So looking at the types of remote services that we're covering in the report, firstly we're looking at virtual FATs or virtual factory acceptance tests. And this involves live-streaming video from the equipment supplies facility directly to the CPGs. And then through this video stream they can assess the machinery, check that it meets their specifications, but without actually having to visit the OEM facility.

We also look at remote support. This is used when the CPGs internal maintenance team can't fix a problem and so they need that additional help and support. There's also remote training, which is quite self-explanatory. This basically just involves any kind of training through remote methods where the instructor is not in the same room with the staff. We also look at remote commissioning where the supplier can access the machinery and check that everything's running smoothly. This often involves video streaming as well. And the final two things that we're going to look at are remote monitoring, which is used to track a machine's performance and status. This is done using quite complex sensors which can track lots of different things like vibration. And then from the data collected through the monitoring, we can do predictive maintenance. This is also covered and basically involves predicting when a component or machine is going to fail. This is done looking at a bunch of different metrics like vibration. And then this also allows CPG technicians to fix any issues before there's a big problem, which could potentially mean a stoppage and machine downtime.

Sean Riley:

So that's a whole litany. That's a lot of different remote services that you guys are covering. And I know that our industry was kind of hesitant to embrace remote services. Covid kind of took away some of that hesitancy, but I guess which of these remote services are CPGs currently using the most?

George Blunt:

Yeah, definitely. So as you said, although some of these tools have been around for quite some time now, it was during the Covid pandemic where CPGs were almost forced to start using them as an option due to restrictions. Why would you send an OEM technician to fix a simple mechanical issue or some code when you can simply just do it remotely? And so during this period when they started using these more often, they started to see the other benefits that remote services brings. Things like getting support instantly as opposed to having to wait a couple of days for the technician to travel. And actually from our survey we found that over 50% of CPGs have increased their investment since the pandemic. This wasn't just a trend over the pandemic, it has continued up to today. So moving on to the specific types and which remote services are most used.

From our survey, we found that remote support is currently seen as the most beneficial. Around 55% stated that they're currently using it and then when you look at those who aren't, a further 37%. And so when you look at those who don't use remote support, there's a further 37% who say they plan to use it by 2027. So it's definitely a very popular service. As you know, the quicker a problem can be fixed, the less machine downtime the better. And with the skill gaps worsening in the industry, I think it's only going to become more prevalent as more and more problems won't be able to be fixed by the internal team. And so they'll need that extra support.

And so for the OEMs providing a high level remote support is definitely going to become important. As for the other services, remote monitoring and predictive maintenance are also seen as highly valuable. And from our survey around half of the CPGs said that they're looking to implement these services by 2026. So there's definitely a big opportunity there. And it does seem that OEMs have recognized this opportunity. We found that almost two thirds of them are planning to begin offering predictive maintenance within the next three years. However, not all of the remote services I've mentioned are as widely used and popular. Virtual FATs, for example, only used by about a quarter of CPGs and remote current missioning by only 5%. So really small and it seems that they're not looking to use them in the future either, with only 13% planning to use them in the next three years.

And from conversations with the CPGs, it seems that these services are only really seen as beneficial in very specific situations with simpler machines like conveyors or for repeat purchases when they already have some experience with the machine. And they say this is because it's really easy to miss problems due to the lack of scrutiny when it's done remotely. And so they really think that some staff needs to be there in person so they can climb over the machine to get a really good proper assessment.

Sean Riley:

You touched on a bunch of different sort of things that are leading the way in driving CPGs, but what are some of the main things that you guys figured out in the report that's driving CPGs to invest in these remote services?

George Blunt:

Sure. Yeah. So we found there were kind of three main categories of most importance to their investment. These are one, reducing machine downtime, two, optimizing machine and operation performance, and three, increasing the speed of support. And all three of these had around 90% of CPGs saying that they were important factors to their investment. And so when you look at these three factors, it makes it obvious why remote support, monitoring, and predictive maintenance have the most potential. The combination of monitoring and predictive maintenance will massively reduce the frequency of stoppages. And one statistic that really shows this is 92% of the CPGs we surveyed find that reduced machinery downtime is an important factor when looking to invest in predictive maintenance. So yeah, definitely a real investment [inaudible 00:07:02]. The other factor that I mentioned was increasing speed of support. And so obviously the use of remote support provides the CPGs the means to solve the issues really quickly when these do arise and they don't have to wait that long period of time for any OEM staff to travel.

So for this survey, we actually asked these questions not just to the CPGs but also to the OEMs. And this has given us some quite interesting insight into the difference between what OEMs perceive as the major drivers compared to what the actual reality is for CPGs. And there were three kind of main factors that were significantly overestimated by the OEMs and these were limiting the impact of worker shortages, less cost and time spent on travel, and also limiting the impact of skills gaps in the workforce. And the largest difference between these points was 19%, quite a large difference. And what we thinks quite interesting about this is that these three factors are arguably affecting OEMs just as much as CPGs. And so these results may actually be reflecting the key benefits that providing remote services to the customers actually brings to the OEMs own operations.

Sean Riley:

Interesting. Very interesting. I know we talked about the hesitancy of people to adopt, which goes back a long ways. Are there other barriers that are keeping people from adopting remote services?

George Blunt:

Yeah, sure. So we did also investigate this in the survey and we found that the main barrier was cost of service and 60% of the CPGs stated that cost was a barrier. The other significant ones were having unlimited IT skills with their staff to maintain the networks. Cybersecurity risk was another barrier, and so was also having lots of different remote service interfaces for different machines across the plant. And these all had over 40%. The same as a barrier. So firstly, looking at cost, what's interesting is the additional cost of remote services as you know, considerably small when you compare with the CapEx of actually purchasing the packaging machinery. And so having cost of service being such a common barrier may have something to do with the cost of retrofitting the existing machinery. So you know that older machines are capable of connecting to the local network and enabling that remote access.

Now, although it is currently possible to retrofit and update the OT systems, this can often take a long time due to the technical complications and runs the risk of machine downtime. There's also the issue of incompatibility with the older machines. Some CPGs are using machines which can be up to 40 years old and they're just not built with that kind of capability. And this problem also extends into remote monitoring, which require complex sensors and quite modern OT systems. And interestingly, it seems that some CPGs are actually unaware that OEMs can help them with this. So even though 70% of OEMs state that they offer remote support for both new and existing, there are 43% of CPGs that are using remote support only for their new machinery. So this is definitely something that OEMs could potentially educate their customers on.

Another concern that always comes up in these conversations is cybersecurity. And obviously this is understandable when you often see the news stories, another CPGs IT system is under attack and cause massive disruptions. And the types of attacks that tend to worry CPGs are things like malware, supply chain attacks and also data theft and tampering. But something that we found really interesting out of this survey is that it seems that these cybersecurity concerns are decreasing. So we looked at data from a previous PMI report, which was looking at trends in remote access back in 2020, and in that survey they found that 100% of CPGs found cybersecurity to be a barrier to investment, whereas in our survey looking at today, that has drastically dropped to 43%. So quite a big decrease there.

Sean Riley:

Absolutely.

George Blunt:

And we think the reason behind this is a combination of CPGs being better educated on the risks, of allowing this remote access, but we also think that due to CPGs strengthening their security as well, using more secure methods of remote access. And if you look at these remote methods in more detail, the current most common method is using a direct VPN. Around 70% of respondents use this method. But when you looked at 2026, it seems the use of methods like converged networks and externally managed secure networks are going to increase. And the real benefit that these other methods give CPGs is basically the ability you can provide segmented access to your plant, access to individual machines as opposed to the whole network.

Sean Riley:

You've touched on it a little bit previously with some of the other questions, and it's also something that I've been thinking about as we've been talking because it's the biggest issue in our industry is that there's a skills gap. So you kind of touched on it, but could you expand a little bit on how remote services are helping with the skills gap in the industry?

George Blunt:

Yeah, definitely. So as you say, the skill gaps in the industry is massive right now. And this is leading to CPGs relying a lot more on their OEMs for not just complex things but really simple mechanical problems that previously would've just been handled in-house by their own team. And obviously neither the CPGs or the OEMs actually want to waste their time and money on sending their technicians for minor issues. And so yeah, this is definitely a significant driving force behind the rising use of remote support. And this was supported in our survey as well with around 80% of CPGs saying that limiting the impact of skills gaps is an important factor when investing. So CPGs are definitely looking at remote support as part of the solution to this issue. Remote training is another service that can help this as well. From our survey, around 90% of CPGs think that remote training is effective at mitigating the skills gaps in their operations.

We also looked at different types of remote training and it seems that the most cost-effective form is instructor-led online sessions according to the CPGs, but there are others as well. And from our conversations, they seem to think that having the instructors in person with machinery is the most effective form. The staff more focused, they can ask questions, get really hands-on with the training. Now augmented reality I think is a technology which really has the potential to bridge this gap between remote and in-person. Augmented reality is like an interactive experience where the staff can wear a headset or goggles and then this basically enhances their real world surroundings. And so they can be given onscreen like spatial markers, instructions, or even videos while being trained on the machinery. And currently 70% of CPGs see this as an efficient method of remote training. When we were speaking with CPGs, but when we were speaking with CPGs, they said there seems to be some resistance from the older generation of maintenance staff.

Sean Riley:

Yeah, I could see that.

George Blunt:

Yeah. There seems to be like a slight generational divide, but obviously as this technology becomes more prominent, potentially some of these staff members retire, then augmented reality is expected to become a more common option across all remote services.

Sean Riley:

Very cool. So taking all of these remote services in mind, what did you guys with your report come out with in terms of what we think we're going to see in the future of remote services?

George Blunt:

As I've said, the use of remote services is still on that upwards trajectory at the moment, and we've seen no evidence of it's slowing down. And this is especially true for services like remote support because as the capability of the OEMs to troubleshoot and diagnose these issues remotely improves, more and more of these problems will be able to be resolved without any need to travel. And currently the majority of software-based issues are already being addressed via remote access, whereas the mechanical issues are often too complex and it really requires an OEM technician to be there in person to really figure out what's going on.

And although these visits are expected to decrease, it seems there's always going to be a need for in-person support for quite a few of these failures just because they're too complex to do remotely. When it comes to FATs and commissioning, these are expected to continue to remain mostly in person, but virtual FATs occasionally being used for repeat purchases or for simple machinery as I mentioned. However, one use of virtual FATs, which I think has particular value is for those who are purchasing machinery from vendors outside of the US. The cost and time of travel is much higher when going overseas.

And so the benefits of being able to do this remotely massively increase. And again, augmented reality has potential use here and could make CPGs more comfortable with performing the FATs and commissioning remotely. Moving on to training, it seems that CPGs in the near future think that in-person training will remain as the primary form, but with instructor-led and self-paced remote sessions being a sort of additional training to consolidate the learning. And augmented reality is probably going to remain niche for now, but as a next generation of technicians enter the workforce, it's expected to become more popular. We see all remote services in this report have got potential and it's definitely going to be interesting seeing to what extent remote services kind of replaces the in-person stuff.

Sean Riley:

Yeah, absolutely. And you would think with especially the younger generation that's more comfortable with things like Zoom and virtual meetings and stuff like that where they don't have to be in person, that this stuff would be more willing to be adopted. As you kind of touched on, the older generation isn't so keen to use it.

George Blunt:

Yeah, definitely.

Sean Riley:

With all this that you've told us, which has been fantastic, where can people find more information on the report itself so that they can get the full Monte on this one?

George Blunt:

The report will come available on the PMMI websites shortly, where PMMI members can download it. I'm also going to be doing a webinar in February where we'll be going in more depth in the results and you'll be able to see the data represented visually in graphs and also be able to ask questions at the end. And then I'm also going to be doing the presentation at PACK EXPO East in the middle of March. So yeah, there's lots of opportunities to find out more about this topic.

Sean Riley:

Awesome. Thank you so much, George, for taking time out of your day to come on the podcast with us.

George Blunt:

Thank you very much for having me. Thank you.

Sean Riley:

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