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Think beyond the cloud – How platform players can prepare for the next phase of the IoT

Many companies are already combining advanced automation, cloud computing and IoT services, among others, to transform their operations. In terms of the maturity of industrial ecosystems, however, Marianne Hannula, Head of Service Product Management and R&D at ABB, believes that there is still the need to establish business models that fully support the technology. She talks about what needs to be done to usher in the era of global supply chain ecosystems and how to take full advantage of its build up phase.

“I first came across machine-to-machine communication more than 15 years ago when I was working with mobile internet applications; a lot has happened since then,” shares Hannula. “All this technological advancement has built momentum for the evolution in industrial ecosystems. These now refer to ecosystems that manage and control the performance of multiple pieces of equipment that form the supply chain, not just order-type data transfers.”

The different players in the field have been somewhat focused on their own operations and that has, in certain cases, slowed the development of new ecosystems. According to Hannula, ecosystems that offer a win-win situation for both parties are needed. “In the case of IoT, this should mean win-win-win-win for multiple parties, not just two.”

Data ownership as a matter of agreement

Hannula sees positive signs in that the time has come when these groups – not just the few early adopters and startups – are beginning to be more open to collaboration and data sharing. “That openness is needed to enable global supply chain ecosystems to develop, where data from multiple sources are combined for the improved performance of the supply chain and for the benefit of end users.”

As data ownership is more complex in an IoT context, the topic has given rise to various opinions. Hannula sees it as a question of what has been agreed upon. “Basically all players should own their data. Sometimes access to this data might be the sellable item. The question arises when the data facilitates new knowledge as it is analyzed and/or combined with other data,” she continues. “Who then owns this knowledge? Who should be held accountable for the consequences when it is used and something adverse occurs? I view this as a matter of agreement, but the responsibility has to be clearly defined between the stakeholders.”

‘Don’t wait for tomorrow’

With regard to IT and OT convergence, Hannula advises companies to not wait for tomorrow. “Use your existing IT structures and find the connectivity means to combine the data available from multiple devices and systems to enable better business decisions now. With that you will learn and find out where the biggest benefits for your business are.”

In addition to the ability to perform predictive maintenance, Hannula believes that the other clear-cut benefits of the Industrial Internet involve the optimization of performance and quality as well as reliability.

“With real-time data turned into knowledge and insights, we are able to detect topics where the process productivity can be improved and become more efficient. Just saving a second or two in some repetitive process can translate to considerable additional revenues,” she explains. “If that happens in one part of the supply chain, the benefits that can be available at the supply chain level can be even greater. Another example could be automatically combining data from various sources and using that to fine-tune equipment performance. This could lead to savings and better quality.”

“When one talks of the IoT, you often only hear the word cloud. But you also have to consider how these clouds can start talking to each other. Then apart from these clouds, there are storms, sunshine and stars.”

Advice for platform players

Hannula believes that there will be a major build up phase for IoT ecosystems during the next five years. “More and more industrial companies will get involved, there will be more and more cloud solutions, and connections between different cloud platforms will become available. The technological knowledge collected over the years and currently stored in documents – or even only in the heads of experts – will turn into a more automated format, making it scalable and useful to business.”

To take full advantage of these changes, she says that companies should focus on three things. “First is that the future starts today. Start using what is available now and learn from it. The next thing to remember is that IoT is not a game of solitaire: Experiment and collaborate with other players. The third and last is don’t wait to be disrupted. Be open to the idea of adopting new business models and remember the human aspect of all this. Instead of considering something as a threat, embrace it as an opportunity and be curious from a technical perspective.”

Above all, Hannula recommends that platform players widen their general outlook. “When one talks of the IoT, you often only hear the word cloud. But you also have to consider how these clouds can start talking to each other. Then apart from these clouds, there are storms, sunshine and stars,” she concludes. “The cloud is a simplification of a technical aspect, but to gain the full benefit of IoT a broader view is needed.”

Marianne Hannula works as Head of Service Product Management and R&D (Portfolio Management, Development, IoT) at ABB.

Image credit: kerenby / Shutterstock.com

Interview w/ Marianne Hannula

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Integrating IT, OT and security: convergence to collaboration

“OT and IT are working towards the same goal, uptime,” writes Daniel McGinn of Schneider Electric.  “Whether that means the comfort of building occupants and business continuity or the specific needs of safety and security.” In part one of a two-part blog entry, McGinn highlights the integration of IT and OT, and what that means for security. Companies developing IoT solutions must consider the implications these new systems, applications or even platforms have in terms of security.

“Keeping buildings operational, IT running and security systems up, depends on the availability of the network and server platforms they are running on, and these systems are only as available as the power supporting them. Because these systems are increasingly connected and open, the departments themselves must come together as well,” notes McGinn. “This is where safety and security now begins for any structure that requires active monitoring and access control.”

Read more about the risks and management challenges of IT environments at: http://blog.schneider-electric.com/datacenter/power-and-cooling/2017/01/04/integrating-it-ot-security/

Image credit: Scanrail1 / Shutterstock.com

Via Schneider Electric Blog

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Trends and themes from the Industry of Things World USA Survey Report 2017

Findings from the Industry of Things World USA Survey Report 2017 reveal that compared to Europe, the US is very advanced on the software side and IoT platforms, analytics tools, as well as AI approaches. Maria Relaki, Group Production Director at we.CONECT Global Leaders, the organizer of the Industry of Things World conference series, talks about the key results that shed light on the current state of the American IoT market.

A clear majority of the cross-industry IoT and Smart Manufacturing managers that participated in an online survey by Industry of Things World – conducted from August to October 2016 – considers Smart Manufacturing as the main driver and contributor for US manufacturing competitiveness.

“One interesting fact from this year is that 71% of the respondents actually have industrial IoT or Smart Manufacturing systems in their organization, compared with 41% who rated the importance of IoT project implementations in their companies as very important last year,” states Maria Relaki, Group Production Director at we.CONECT Global Leaders.

Relaki adds that another key finding is that access to necessary infrastructure is rated as the biggest challenge to implementing IoT within companies (53%), followed very closely by cost (46%). “The positive news is that in 2016 the biggest challenge was ‘uncertain ROI/ lack of business case’ – so here it seems we have had some significant progress. The business case is now a given and it’s a matter of making it happen,” she says.

The survey also reveals that Smart Manufacturing systems are not applied only on a machine (32%) or plant level (43%), but they are being more and more integrated across all levels (36%) within a business.

Challenges and opportunities

By far the biggest opportunity that IoT offers has been recognized as the increased efficiency (68%) that comes with smart manufacturing systems. “As the second biggest opportunity, respondents listed the competitive advantage that IoT can offer as well as, very interestingly, that it can increase product quality,” continues Relaki.

Access to necessary infrastructure is rated as the biggest challenge to implementing IoT within companies.

According to survey participants, some of the biggest challenges they face involve the lack of standards and interoperability, and costs associated with the integration of new systems. They also cited security breaches – that IoT needs a new security approach rather than the traditional one, for instance – and management buy-in as other factors that affect the implementation of industrial IoT technologies in their organizations.

Trending topics

Relaki believes that the industrial IoT landscape is going through a transition. Shifting industry boundaries are changing competition, and businesses need to be aware of that. “Traditional competitors need to look beyond their universe and keep an eye on how IoT technologies can enable other businesses to eat away parts of their market share.”

The interoperability of connected devices in the world of IoT is still a big issue, one that is subject to discussion. “How far away are we from a universal standardization? Discussing the implementation of open source and open standards might be a way to move into a direction with fast results,” offers Relaki.

While robotics is a theme that is becoming more and more relevant, she says that the human factor in all of this must not be forgotten. “The Internet of Things involves new ways of thinking about how humanity and technology can cooperate differently when ‘things’ get smarter. Augmented reality and virtual reality in manufacturing simulation, as well as M2M and Artificial Intelligence for improved productivity, will be discussed throughout the conference.”

Industry of Things World USA 2017

Organized by we.CONECT Global Leaders Industry of Things World USA is an international knowledge exchange platform where over 500 high level Industrial Internet of Things executives will meet. Scheduled to take place in San Diego, California from February 20 to 21, 2017, this year’s two-day program aims to encourage and inspire participants to rethink their technology and business strategy for scalable, secure and efficient IoT, from cloud, robotics and automation to standards, interoperability and security.

“We will have the pleasure of hearing from Alex Tapscott, a blockchain expert, on the impact of Blockchain on the Industrial Internet and how this will change the way we do business. Jeff Burnstein, President of the Robotic Industries Association, will discuss how robots in a smart factory can use self-optimization, self-configuration and artificial intelligence to complete complex tasks in order to deliver vastly superior cost efficiencies and better quality for goods or services,” shares Relaki.

At the same time, the event will attempt to demystify the complexity of getting started with integrating robotics into an IIoT network. “Small and medium sized companies in particular may be overwhelmed by jargon, fears about cost and the difficulty of knowing how to apply these technologies, so these talks will hopefully be of use to them in understanding how to explore robotics and IIoT further.”

To find out more about the agenda and speakers of Industry of Things World USA 2017, visit http://industryofthingsworldusa.com/en/.

Download the full survey report:

http://industryofthingsworldusa.com/cms/media/uploads/events/3755/dokumente/formular/Industry_of_Things_World_USA_2017-Survey_Report.pdf

Maria Relaki works as Group Production Director at we.CONECT Global Leaders and is responsible for the Industry of Things World global event series.

Image credit: we.CONECT Global Leaders

by Industrial Internet Now

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IoT spending 2017-2020: Internet of Things industry drivers and investments

According to i-Scoop, manufacturing, transportation and utilities are the industries “poised to invest the most in IoT until 2020”. Though currently we are seeing a lot of investments in Consumer Internet of Things (CIoT), it is expected that by 2020 these investments will decrease. The article highlights aspects of the IDC Worldwide Semiannual Internet of Things Spending Guide.

“In the leading IoT industry, manufacturing, operations by far represent the main spending use case ($102.5 billion in 2016 on the mentioned total of $178 billion), outperforming other manufacturing IoT use cases such as production asset management and maintenance and field service. The only exception is the EMEA region, where freight monitoring (transportation) is the main use case, followed by manufacturing operations,” according to the IDC report.

Read more on IIoT investments and patterns per industry and cross-industry at: http://www.i-scoop.eu/iot-spending-2020/

Image credit: Hamik / Shutterstock.com

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Mass customization in manufacturing – enabling customer-centric value creation

Traditionally, manufacturing has been defined by supply chains geared towards maintaining production costs as low as possible, with ultimate emphasis placed on output and distribution. These supply chains have largely been both enabled and limited by the hardware systems at their core. As companies are beginning to introduce data-driven, software enabled supply chains, manufacturing will increase in efficiency and mass customization will follow suit. In terms of distribution, platforms and apps are becoming the preferred medium and should be grabbing the attention of material handling industry as well.

Frank Piller, Professor of Management and Scholar of Mass Customization & Open Innovation, shares his thoughts on the intersection of the Industrial Internet and mass customization.

“Manufacturing will really begin to drive business models,” says Piller, who has been leading the Technology and Innovation Management Group at RWTH Aachen University for a decade. Rather than regarding the Industrial Internet solely as an enabler of new business models, Piller sees the technological developments made possible by IIN and IIoT as “drivers of business models.” According to Piller, mass customization plays a pivotal role making this paradigm shift that manufacturing industries are already experiencing, more customer-centric.

“I see the question of manufacturing and the Industrial Internet being defined by two stems of debate; enabling operational excellence on a larger scale on one hand, and using Industrial Internet technologies to drive new business models on the other.” What mass customization makes possible via these two defining principals, is for manufacturing, supply chains and the business model inherent to them, to become more customer oriented. “The ultimate goal of mass customization is for manufacturers not only to become customer-centric, but more so customer-driven, to exploit the heterogeneity of customer demand,” says Piller.

According to Piller, manufacturers will often see the high variety of demand as a challenge, a cost driver and ultimately as a hindrance to maintaining a truly customer-centric manufacturing process. However, what mass customization does, notes Piller, is turns this assumption on its head.

“We should instead see high variety of demand as a profit driver, and do so by allowing for the input of each individual customer at the beginning of the value and supply chains. This doesn’t entail reinventing engineering to order process or craft customization, but doing this with an industrial efficiency that the latest Industrial Internet technologies make possible.”

For material handling, the integration of automated and semi-automated robots into production lines is a big driver for coping with higher degrees of variety, says Piller, who also sees mass customization as something already being utilized in material handling equipment. “A lot of material handling equipment is already engineered to order, meaning it’s highly modular and therefore can fit into existing plant layouts, as well as be integrated into planning and production. Deploying this in larger volumes is the next step.”

“A lot of material handling equipment is already engineered to order, meaning it’s highly modular and therefore can fit into existing plant layouts, as well as be integrated into planning and production. Deploying this in larger volumes is the next step.”

From prediction to action

Closely linked to the paradigm shift taking place in manufacturing are the opportunities that predictive analytics opens up. Piller sees these opportunities as something material handling companies should be taking advantage of and implementing in their systems. “As the basic premise of predictive analytics is that we must guess less, and know more, an implication for a material handling company could be making better forecasts of the incoming flow of material.”

A consumer goods company will traditionally do some market research or extrapolations of the first few weeks of sales, in order to see how sales will develop for the rest of the season. “Now they can get access to much more unstructured data from social media conversations or purchasing behavior in key stores, and thus better predict the operational planning necessary to meet the demand,” says Piller.

However, as with most new data related developments, predictive maintenance and analytics don’t come without potential pitfalls. Piller appropriately sums up the paradox surrounding predive analytics and maintenance, by stating, “the better we are with predictions, the worse we become in executing.

“Imagine a huge plant that has many material handling systems across the globe, and let’s say they are all assessed using predictive maintenance. The plant manager will then know ‘ok, in a weeks’ time, 20 out of my 1000 pieces of equipment will breakdown, and I only have 2 repair teams. How do I allocate them?’ Therefore, action as opposed to prediction is the ultimate goal.”

First an app, then a platform

Another significant development that will only increase the capacity of the Industrial Internet to create new customer-driven business models, is the emergence of the platform economy. However, according to Piller, traditional industries should not be looking to immediately develop a platform as the likes of Amazon and Uber have. For instance, the transportation and material handling industries would benefit by starting off with an app.

“Of course, managers think that ‘we will become a platform,’ but this requires a big mental shift in companies, a shift towards openness. However, I think that traditional industries should first acknowledge the possibilities an app introduces to their business. In a connected world, an app can be a piece of equipment and shouldn’t be limited to the notion of a smart-phone app,” Piller notes.

Becoming a platform-based industry certainly doesn’t happen overnight. What Uber or Amazon managed to do on a consumer level, would be extremely difficult to successfully execute in the industrial world, simply because of the level of openness it requires. For Piller, more companies need to recognize the benefits of an app.

“Established B2B companies are very conservative when it comes to putting their data in a platform, so even if a platform is created by an established player, filling it with meaningful data is a question on its own. Therefore, in terms of market entry, being an app on a platform has a lot of advantages. My advice would be to learn how to become the preferred app, like the Angry Birds of material handling.”

Experimenting for future solutions

Piller is confident that companies experimenting even with more left-field utilizations of the Industrial Internet will ultimately drive innovation, and do so in a customer oriented way.

“Take the Amazon Dash Button, a solution which costs the consumer $4.99. At that price point, even a small established company can start experimenting by asking, for example, ‘what could we do, if we managed to increase the connectivity between equipment that allows you to monitor actions and actives?’”

According to Piller, the issue some managers and CIOs face is making sense of the huge pile of possible things to do – and sometimes they end up doing nothing.“Therefore, I think it’s always better to start experimenting and testing assumptions in order to get real feedback, instead of making huge PowerPoints,” he concludes.

Frank T. Piller works as Professor of Technology & Innovation Management at the Business School of RWTH Aachen University, Germany

Image credit: chombosan / Shutterstock.com

Interview w/ Frank Piller

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