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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

2 Comments

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  • Federico Neme 02.09.2017 02:19

    Gusto a join.

  • Federico Neme 02.09.2017 02:18

    Gusto.

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Making the shift from smart factories to living services

The Industrial Internet of Things (IIoT) is transforming the way manufacturers approach matters such as resource allocation, production processes and the workforce. In time, companies will gain even more benefits from the highly automated, end-to-end production integration of intelligent products and services made possible by the IIoT. Edy Liongosari, chief research scientist and managing director at Accenture Labs, talks about critical trends and uncovers advantages that have yet to be widely discussed.  

Operational safety and efficiency are two of the most clear-cut advantages the IIoT brings from the outset. Edy Liongosari believes those are the obvious ones because the return on investment of such initiatives is much simpler to calculate and measure. “When we talk about new products and services, however, the business cases are typically built with a lot of assumptions. Therefore, the confidence on those business cases is lower. But that’s exactly where the big opportunities are.”

Liongosari says that safety and efficiency are just part of the first of four waves of IIoT adoption. The next wave – which he believes has greater transformational impact – consists of the creation of smart products and smart services. “It’s vital to consider how you are going to be able to use the physical products that you have and to think about the product as a way – as a channel if you will – to sell and deliver what we call living services,” he shares.

Living services are contextually aware digital services designed to anticipate and respond to customer needs in real-time through the channel that you have. Liongosari mentions one example that emerged from the IOT Solutions World Congress in 2016: Bigbelly is a connected trash bin that knows exactly when to compact waste and when to unload it. He also cites Claas, the German agricultural machinery manufacturer that has partnered with the free field mapping service 365FarmNet. Together the two use their respective fields of expertise to bring about precision farming, in turn driving the future of agriculture.

A universal standard

In a manufacturing setting, thanks to the convergence of Operational Technology and Information Technology, manufacturing equipment is increasingly connected with larger enterprise systems – from manufacturing execution systems, production management, logistics and enterprise resource planning systems – to allow manufacturers to plan, monitor and adjust their production in real-time.

Liongosari, however, is of the opinion that a universal standard to allow equipment from multiple vendors to communicate and collaborate will not become the norm, at least not in the short term. “It’s primarily because of the diversity of the use cases, environmental conditions, and laws and regulations that fall under the IIoT. For example, the diversity of IIoT infrastructure requirements such as energy consumption, computing and bandwidth availability, mobility and security makes it very hard to have just one sole industry standard,” he explains. However, there are plenty of efforts to make specific IIoT standards to interoperate – to the extent it can be reasonably done – through a variety of testbeds.

“You can see the borders between various industries slowly disappearing because a lot of newcomers are coming to your game very, very quickly. The possibility is really big.”

Critical trends

According to Liongosari, there are four key trends impacting the IIoT. The first deals with automation and artificial intelligence (AI). Our ability to automate or augment work processes using machine intelligence can now be done at the unprecedented scale and precision through the use of AI techniques.

In an automotive manufacturing plant, for example, cameras can be used to learn and detect refined defects in a product. Rather than wait for a batch run to be completed before defects are found, those can be detected in real-time. “Sometimes you don’t realize the presence of small defects until much later on, resulting in a significant loss of work,” he explains, adding that in many cases, existing surveillance cameras can be repurposed for defect prevention in quality assurance by embedding some intelligence in them. “This is what we call the next generation of automation.”

The second key trend is about human and machine interaction. “The industrial workforce itself is changing significantly,” he says. A human workforce is augmented with wearable computing capabilities to significantly increase their efficiency as well as agility, allowing them to take on new tasks at the speed like never before. In addition, collaborative robots – or cobots – that have been used for hospitality and concierge services, are now being expanded to perform simple and repetitive tasks on the factory floor, such as those in Amazon’s warehouses.

The third comprises platforms and ecosystems. “One critical element of smart products is their ability to sense, configure, and respond based on the needs of the customers,” states Liongosari. “It’s not just selling your products and services but the ability to turn the product itself into a platform – just like in Android or iOS – to allow others to build upon it and use it to build a set of rich and interconnected living services provided by a lush ecosystem of business partners.”

The last key trend is cybersecurity, which is rising in importance due to vulnerabilities to attacks, espionage and data breaches brought about by increased connectivity and data sharing. Liongosari brings up the denial of service attack by a Mirai-based botnet that affected IoT devices in September 2016 as a reminder of the importance of cybersecurity in this highly interconnected world.

“In addition to security, privacy and data ethics are increasingly critical especially given the vast amount of customers’ and employees’ data that companies now have access to. In some cases, the concept of data ownership in an organization is being seriously questioned as ownership implies that the organization can do whatever it wants with the data,” says Liongosari.

The use of such data is highly dependent on many factors beyond data privacy laws and regulations. For example, organizations need to factor in the original intention of data when it was provided or captured, ethical interpretation of the analyzed data, and how the results are being used and shared ethically. “How are you going to interpret data uniformly across different countries, laws, interpretations and usages? The meaning of data ownership may change or the term may completely disappear.”

Seizing the opportunity

In order for manufacturers to chart a path of growth through the IIoT, Liongosari offers sound advice. “You can start small in a sense that you can focus on operational efficiency – that there is a specific return on investment that you drive toward. But at the same time, you need to think big because the opportunity is a considerable one,” he says.

“You can see the borders between various industries slowly disappearing because a lot of newcomers are coming to your game very, very quickly. The possibility is really big.” To seize the opportunities of the Industrial Internet of Things, Liongosari sums it up with this mantra: “Start small, think big, and iterate fast.”

Edy Liongosari works as chief research scientist and managing director at Accenture Labs

Image credit: Zapp2Photo / Shutterstock.com

Interview w/ Edy Liongosari

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A wider view gives more accurate results

Taking a step back and analyzing processes from a larger perspective might take you to surprising places, such as a dinner table in a Chinese household, says Petri Asikainen, Director, Product Development at Konecranes. According to Asikainen, to get the most out of your production processes, having a wide view of the process in hand is crucial. By seeing the processes as a whole, monitoring them as widely as is possible and by adjusting the production facilities’ metrics accordingly, noticeable boosts can be gained in the total output.

Industrial monitoring is going through big changes. From the variety of ways in which equipment in an industrial setting can be monitored, to the new possibilities in remote monitoring and -operation, operators in facilities have gained new ways to operate efficiently. A great example of this can be found in the context of waste processing.

“We were asked to optimize the operating activities in a certain waste management facility. We noticed that once we installed a Remote Operating Station for the crane operators in the power plant’s main operating room, suddenly the old local operating room over the waste bunker wasn’t the number one choice for working anymore,” Asikainen says.

Having all the personnel operate the plant from one location allows for better communication between the operators in charge of different parts of the facility. It also offers noticeable savings for companies, as there’s no need to build additional local operating rooms just to be physically present for the operation of the cranes anymore.

Monitoring everything there is to be monitored

In many industrial operations, the crane is in the center of the production process. This unique position allows for the possibility to gain deep insight of the production process.

“The entire material flow in the facility might be dependent on the crane, and this gives us plenty of opportunities to create different types of insights for customer’s needs. One example, found in the context of the paper industry, is that we can better identify where reject appears. This is valuable information for the manufacturer, and if it can help to improve the material efficiency of the manufacturers process by half a percent – it might already cover the cost of the crane data gathering capability and analysis work with extremely short pay-back time,” Asikainen explains.

The cranes’ movement patterns can also be tracked in the production facilities, so that the biggest bottle necks can be found. This tracking also helps map the actual material flow. If a load is moved from one place to another several times back and forth, the whole process slows down.

“Existing manufacturing facilities continuously face the need to respond to the global race for lowering costs and improving efficiency. A thorough analysis of the material flow can help improve production. Through it, we can find out what kind of crane setup would suit the client’s process, a result which is based on the actual measured data. When one is considering rebuilding an existing facility, this kind of efficiency analysis is a good tool to define the profitable targets to invest in.”

As to why Asikainen ended up practically monitoring how a household dines, he uses it as an example of how processes can be optimized in various, wider ways.

“We discovered that the loaders used in the waste facilities in China were continuously moving heavier loads compared to their European counterparts. One reason for this was that the households use a large amount of oil in cooking. The residue ends up in the trash and then to the waste processing facilities. This has an effect on the raw material, making it finer and increasing its energy density,” Asikainen explains.

This has a direct effect on how the whole process is set up and the crane is optimized. When the operators have a better view on the type of waste coming in to the facility, the effect that the differences in waste have on the energy output can be taken into account better.

Benefits of monitoring

When asked about the benefits the increased monitoring brings for companies, Asikainen brings up the similarities between lift trucks and cars. Both have similar concerns, such as tire leaks. For both, leaks can be monitored and fixed faster through monitoring. Early reaction to low tire pressure decreases extensive wearing and improves safety.

The operability of cranes develops in similar trends as cars – functionalities which 15 years ago could have been sold only to extreme needs, are now common even in the most value-focused cranes.

“Snag prevention is an example of this. It automatically stops crane movement if a hook, a sling or a load accidentally gets caught on something. Having real-time information on both the environment in which the crane is operating as well as the loads that they are moving, has made it possible to halt the crane if something gets caught in the way”, Asikainen says.

Hook centering is also an effective technology to improve efficiency and safety. If you lift a load and the hook isn’t centered, the load starts to swing as it’s lifted off the ground. The hook centering positions the crane above the hook, eliminating a possible human error. The hook is where it is supposed to be before lifting the load.

Maintenance by demand

Another way in which the increased monitoring can be utilized by companies is by making maintenance more effective. When you have sensors measuring thousands of points of data, you can efficiently both prevent halts as well as optimize maintenances routes.

“With the increased amount of information, technicians can focus their attention to issues needing extra care. The crew can also receive info on which manuals, tools and parts they must have with them beforehand,” Asikainen says.

All in all, maximizing the improvement through monitoring is dependent on two things – both the gathered data and the insights. Through having both, companies can achieve a more holistic view of their process, one which is based more on the actualities of the operating environment, and not just on subjective, professional guesses. This makes the whole manufacturing process more reliable and transparent.

Petri Asikainen works as Director, Product Development at Konecranes.

Interview w/ Petri Asikainen

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