by Gary Mintchell | Jan 24, 2020 | Data Management, Manufacturing IT
Digitization is on everyone’s lips these days. If you have not taken steps to implement and improve digital data flow, you are probably already behind. I receive information regularly from PwC and here is a new report on how digitization is reshaping the manufacturing industry. The report takes a look at 8 companies and showcase how they improved their efficiency, productivity and customer experience by ensuring they have the right capabilities central to their operating model and by matching them with strong skill sets in analytics and IT.
Pressure from the consumer, new regulations and advances in information technology are all reasons that are pushing manufacturing organizations to digitize so they can avoid falling behind the new breed of market-leading ‘digital champions.’ The report identifies 4 significant changes CEOs must implement to maximize the benefits of digitization.
1. Drive organizational changes that address new digital capabilities and digitalized processes – e.g., product and process design and engineering, end-to-end procurement, supply chain/distribution and after-sales – right from the top, because these are so new and different
2. Hire more software and Internet of Things (IoT) engineers and data scientists, while training the wider workforce in digital skills
3. Learn from software businesses, which have the ability to develop use cases rapidly and turn them into software products
4. Extend digitalization beyond IT to include significant operational technologies (OT) such as track and trace solutions and digital twinning
From the report, “Already, digitally ‘smart’ manufacturers are gaining a competitive advantage by exploiting emerging technologies and trends such as digital twinning, predictive maintenance, track and trace, and modular design. These companies have dramatically improved their efficiency, productivity, and customer experience by ensuring these capabilities are central to their operating models and by matching them with strong skill sets in analytics and IT. “
During 2018 and early 2019, PwC conducted in-depth digitisation case studies of eight industrial and manufacturing organisations in Germany, the US, India, Japan and the Middle East. Drawing on discussions and interviews with CEOs and division heads, we explored the key triggers for change these companies faced, assessed how digital solutions are being implemented and how digitisation is affecting key aspects of their operating models. We also compared our eight organisations with other publicly cited digitisation case studies, and leveraged PwC’s 2018 study Digital Champions: How industry leaders build integrated operations ecosystems to deliver end-to-end customer solutions and other ongoing PwC research.
This paper is the result of ongoing collaboration between PwC and the Global Manufacturing and Industrialisation Summit (GMIS). GMIS provides a forum for industry leaders to interact with governments, technologists and academia in order to navigate the challenges and opportunities brought about by the digital technologies of the Fourth Industrial Revolution. PwC has been a knowledge partner with GMIS since 2016.
The eight case studies in this report make clear how far the role of digital technology goes beyond traditional IT systems. It also encompasses OT and data and analytics technologies. Full integration and linkage among these different technologies, and the ecosystems they are part of, are essential to a successful digital transformation. Yet success is impossible without a digitally smart workforce that is familiar with Industry 4.0 skills and tools.
These challenges are the subject of the second part of the report Digital Champions: How industry leaders build integrated operations ecosystems to deliver end-to-end customer solutions, which will be published in January 2020.
The report will elaborate further on the emerging theory of digital manufacturing and operations, in which successful, digitised industrial organisations will increasingly have to act like software companies in response to four key factors:
- The connected customer seeks a batch size of one, necessitating greater customisation of products and delivery time, improved customer experience, use of online channels and outcome-based business models.
- Digital operations require both engineering and software abilities to enable extensive data analysis and IoT-based integration, as well as digitisation of products and services.
- Organisations need augmented automation, in which machines become part of the organisation via closely connected machine–worker tasks and integrated IT and OT.
- Future employees will be ‘system-savvy craftspeople’ with the skills to use sensors in order to collect and analyse accurate data, as well as design and manage connected processes.
About the authors
Anil Khurana is PwC’s global industrial, manufacturing and automotive industry leader. He is a principal with PwC US.
Reinhard Geissbauer is a partner with PwC Germany based in Munich. He is the global lead for PwC’s Digital Operations Impact Center.
Steve Pillsbury is a principal with PwC US and the US lead for PwC’s Digital Operations Impact Center.
by Gary Mintchell | Jan 23, 2020 | Commentary, Manufacturing IT, News
In brief: During its brief history as a collection of Hitachi Ltd. data properties, Hitachi Vantara continues to grow and remake itself. It has now added Hitachi Consulting and Intelligent Data Cataloging company Waterline Data. The new company combines IT Infrastructure, Data Management and Analytics.
The first news is the combination of Hitachi Vantara with Hitachi Consulting as one company to create a new digital infrastructure and solutions company.
The new Hitachi Vantara aims to become the world’s preferred digital innovation partner by unlocking the “good” in data that benefits customers, raises the quality of people’s lives and builds a sustainable society. Hitachi Vantara will specifically bring a competitive edge to the digital domains that matter most – the data center, data operations, and enterprise digital transformation.
The new Hitachi Vantara combines the best consulting-led digital solutions and vertical industry expertise of Hitachi Consulting with Hitachi Vantara’s IT domain expertise. Going forward, the integrated company will help customers develop practical, scalable digital strategies and solutions that transform operational processes, improve customer experiences and create new business models to drive innovation and growth.
For example, the new company will offer a holistic manufacturing industry practice as one of several vertical industry practices. The manufacturing practice will integrate consulting methodologies for addressing quality, customization, sustainability and new business models with data-driven solutions such as Lumada Manufacturing Insights from Hitachi Vantara, which integrates silos of manufacturing data and applies AI and machine learning to evaluate and enhance overall equipment effectiveness (OEE).
“A barrage of data and technology is disrupting enterprises and industries the world over,” said Toshiaki Tokunaga, chief executive officer and chairman of the board, Hitachi Vantara. “Through the integration of Hitachi Consulting, the new Hitachi Vantara will be uniquely equipped with the capabilities our customers need to guide them on their digital journeys. We’re going to be the company that helps customers navigate from what’s now to what’s next.”
The Hitachi Vantara portfolio is built upon a foundation of world-class edge-to-core-to-cloud infrastructure offerings, including the recently introduced Hitachi Virtual Storage Platform (VSP) 5000 series, the world’s fastest data storage array. The portfolio further features AI and analytics solutions, cloud services for application modernization, systems integration and change management services for SaaS-based ERP implementations and migrations, and Lumada-based digital industrial solutions. Hitachi Vantara’s offerings are all backed by world-class business consulting, deep experience in improving organization effectiveness, co-development capabilities and global delivery services.
With its expanded capabilities, the new Hitachi Vantara will play a key role in advancing Hitachi’s 2021 Mid-term Management Plan, which aims to make the company a global leader through “Social Innovation Business.” The Social Innovation Business strategy centers on combining Hitachi’s industrial and IT expertise and products to create new value and resolve social issues.
Hitachi Vantara will help advance the plan by expanding revenues from digital business, by digitally transforming Hitachi’s industrial businesses, by fueling international growth, and by delivering social, environmental and economic value which helps customers contribute to the attainment of United Nations’ Sustainable Development Goals.
As announced in September 2019, Toshiaki Tokunaga, a 30-year Hitachi veteran who has successfully transformed several Hitachi businesses, will serve in the dual role of chief executive officer and chairman of the board of Hitachi Vantara.
The company’s two business units, Digital Infrastructure and Digital Solutions, will be led by Presidents Brian Householder and Brad Surak, respectively. Hitachi Vantara today also announced details of other appointments to its executive leadership team.
Hitachi Vantara Will Integrate Advanced Data Cataloging Technology Into Lumada Data Services Portfolio
In further news, Hitachi Vantara announced acquisition of the business of Waterline Data, which is headquartered in Mountain View, CA. It provides intelligent data cataloging solutions for DataOps that help customers more easily gain actionable insights from large datasets and comply with data regulations such as GDPR.
Waterline Data delivers catalog technology enabled by machine learning (ML) that automates metadata discovery to solve modern data challenges for analytics and governance across edge-to-core-to-cloud environments. Waterline Data’s technology has been adopted by customers in the financial services, healthcare and pharmaceuticals industries to support analytics and data science projects, pinpoint compliance-sensitive data and improve data governance. It can be applied on-premises or in the cloud to large volumes of data in Hadoop, SQL, Amazon Web Services (AWS), Microsoft Azure and Google Cloud environments.
Waterline Data’s patented “fingerprinting” technology is the cornerstone of its solutions, removing one of the biggest obstacles to data lake success. Fingerprinting uses AI- and rule-based systems to automate the discovery, classification and analysis of distributed and diverse data assets to accurately and efficiently tag large volumes of data based on common characteristics.
Integrating Waterline Data technology with Hitachi Vantara’s Lumada Data Services portfolio will provide a common metadata framework to help customers break down data silos distributed across the cloud, the data center, and the machines and devices at the edges of their networks. By applying DataOps methodologies to the unified datasets, customers can more rapidly gain insights and drive innovation.
“Our research illustrates that almost half of enterprise data practitioners are spending more than 50% of their time simply trying to find and prepare data for analysis. Data catalog products have emerged in recent years as strategic imperatives for enterprises seeking to address this challenge while also improving data governance,” said Matt Aslett, research vice president, 451 Research. “This acquisition is logical and strategic: Waterline Data’s capabilities are a complementary fit for Hitachi Vantara and its Lumada Data Services portfolio. Adding Waterline Data furthers the company’s ability to address growing demand for products and services that deliver more agile and automated approaches to data management via DataOps: helping enterprise consumers of data ultimately leverage information in a fluid, yet governed way.”
“Hitachi Vantara provides customers with the digital building blocks, DataOps approaches and industry solutions they need to transform their organizations through data-driven insights,” said Brad Surak, president, Digital Solutions, Hitachi Vantara. “Waterline Data technologies complement Hitachi Vantara’s DataOps expertise and will become key offerings in the Lumada Data Services portfolio, bringing our customers greater visibility, tighter quality control, improved compliance and better management of their data.”
Financial terms of the transaction were not disclosed. The acquisition of Waterline Data is subject to customary closing conditions and it is expected to close in the fourth quarter of Hitachi’s fiscal year 2019 (ending March 31, 2020).
Upon completion of the acquisition, Hitachi Vantara will make Waterline Data technologies available as standalone solutions as well as integrated components of the Lumada Data Services portfolio.
by Gary Mintchell | Feb 12, 2018 | News
A tale of the business state of two industrial technology supplier companies–GE and ABB.
This is a great article tracing the heritage and woes of GE. While the company is still strong in all the basic industrial categories, it’s moves deeper in to financial and entertainment industries have cost it dearly. Not to mention decades of financial sleight-of-hand. When I was at Minds + Machines last fall, I wondered if this might be the last. The new CEO hinted at changes in GE Digital at the conference. Shortly afterwards, the shoe dropped. GE Digital was to be essentially gutted. No more grandiose plans for a huge software platform that would be the solution of everything digital. Smaller applications and partnerships were to be the new direction. There will be some GE people at ARC this week, I’ll see what else I can learn.
Meanwhile, ABB released its full year 2017 financial results. It has been in the midst of restructuring since Ulrich Spiesshofer assumed the reins in 2013 succeeding GE alum Joe Hogan. ABB touts its progress in this report.
Ulrich Spiesshofer, ABB CEO
“In the transition year 2017, we shaped a streamlined and strengthened ABB. Now, our digital-first portfolio for customers in utilities, industry and transport and infrastructure is based on two clear value propositions: bringing electricity from any power plant to any plug, and automating industries from natural resources to finished products,” said Spiesshofer. “The annual results include the dampening effect of our massive transformation. With our targeted actions to shift our center of gravity, we have improved competitiveness, addressed higher-growth segments and de-risked ABB. We delivered four consecutive quarters of increasing base-order growth. The momentum we have built in 2017 positions us for profitable growth as the global markets are improving. Today’s proposal to increase the dividend for the 9th consecutive year demonstrates our confidence in the future.”
Full-year 2017 Group Results
ABB delivered a steady financial performance in 2017 despite market headwinds and its ongoing transformation. Total orders were steady (steady in US dollars). Base-order growth (base orders are classified as orders below $15 million) showed increasing momentum each quarter, and for the full year increased 5 percent (6 percent in US dollars), mitigating the effect of lower large orders. The large order share of total orders in 2017 was 8.5 percent, versus 13.5 percent in 2016, in part as a consequence of ABB’s business model shift. Total service orders grew 8 percent (8 percent in US dollars) to 20 percent of total group orders.
The order backlog at the end of December 2017 was $22,414 million, 4 percent lower (2 percent in US dollars) compared with the prior year. The book-to-bill ratio2 was 0.97x for 2017, compared with 0.99x in 2016.
Revenues improved 1 percent (1 percent in US dollars) to $34,312 million, with positive contributions from Electrification Products and Robotics and Motion more than offsetting the declines in Industrial Automation and Power Grids. Total services revenues grew 3 percent (3 percent in US dollars) and now stand at 18 percent of total group revenues.
ABB executed on its Next Level strategy throughout 2017. The company launched ABB Ability, its digital solutions offering, and continued to invest in digital, sales, branding and research & development. It delivered strong cost savings in White Collar Productivity and supply chain/operational excellence and completed or announced a number of important transactions. It continued to de-risk its portfolio by divesting non-core businesses, and taking actions to implement its EPC (Engineering, Procurement and Construction) business model change. These activities impacted full year results. The company’s operational EBITA declined 2 percent (1 percent in US dollars) to $4,130 million, inclusive of approximately $140 million of charges related to the EPC businesses. The reported operational EBITA margin was 12.1 percent, 30 basis points lower due to charges related to the EPC businesses and would have been steady without these charges.
Net income in 2017 rose 17 percent compared with the previous year to $2,213 million, reflecting primarily lower transformation-related restructuring and restructuring-related expenses and net gains recorded on the business divestments in the year. Basic earnings per share grew 17 percent to $1.04. Operational EPS2 was $1.25, 1 percent lower in constant currency4
Cash flow from operating activities was steady compared with 2016 at $3,799 million for the full year. ABB continued to benefit from improvements in net working capital which generated approximately $600 million of cash during 2017. Net working capital as a percentage of revenue was reduced to 11.3 percent, a 10 basis point improvement year on year. Capital expenditures for the group were $949 million during 2017. Free cash flow of $2,926 million was 5 percent lower than 2016 and the company’s cash return on invested capital (CROI) was 12.4 percent2, mainly impacted by the acquisition of B&R.
by Gary Mintchell | Mar 17, 2017 | Automation, Data Management, News, Organizations, Process Control, Technology
ABB CEO Ulrich Spiesshofer
ABB held its customer conference in Houston this week and showcased many new products and unveiled its digital enterprise platform ABB Ability.
ABB Ability is the name given to its portfolio of digital solutions. I was trying to place it into a competitive landscape when one speaker showed a slide positioning ABB Ability with GE Predix, Siemens Mindsphere, and Schneider Electric’s Ecostruxure. CEO Ulrich Spiesshofer likened it to putting all the Lego blocks of ABB’s digital offerings together.
ABB Chief Digital Officer Guido Jauret
ABB Ability is a platform, database, and analytics that allows such things as helping customers in utilities, industry, transport and infrastructure develop new processes and advance existing ones by providing insights and optimizing planning and controls for real-time operations. The results can then be fed into control systems to improve key metrics such as factory uptime, speed and yield.
“As a pioneering technology leader in digital solutions, with an installed base of more than 70 million connected devices and 70,000 control systems, ABB is uniquely positioned to support its customers’ digital transformation,” said Spiesshofer. “With ABB Ability, we are combining ABB’s entire portfolio of digital solutions and services. We are creating additional customer value by bringing together ABB’s domain expertise, advanced connectivity and the latest digital technologies. With this, our customers can achieve unprecedented improvements in operational performance and productivity.”
Digital offerings provided by ABB Ability include performance management solutions for asset-intensive industries; control systems for process industries; remote monitoring services for robots, motors and machinery; and control solutions for buildings, electric-vehicle charging networks and offshore platforms. Some of the more specialized offerings address energy management for data centers and navigation optimization for maritime shipping fleets, among many others.
Customers who are already using the portfolio of digital solutions that are now part of ABB Ability include some of the world’s leading utilities, manufacturers and service providers, among them Shell Oil, CenterPoint Energy, Con Edison, BASF, Royal Caribbean, Cargill, Volvo, BMW and many others.
“Building our solutions on the Azure platform means we can take advantage of all of its capabilities and add value with our domain-specific offering,” said ABB Chief Digital Officer Guido Jouret. “In effect, we are turning ABB’s decades of industrial domain expertise into software offerings that our customers can access through the world’s largest and most advanced digital platform. From being a hidden digital champion, we are becoming the partner of choice for customers embarking on a digital transformation. They can now know more, do more, do better, together. We can help them assess, automate, optimize and collaborate.”
This product was the coolest thing at the show for me. It is ABB’s take on the trend toward smaller I/O devices with configurable racks. Admittedly not having first-mover advantage, ABB was able to build on existing competitive offerings and release an updated take on the technology.
ABB Ability System 800xA Select I/O, a new addition to System 800xA, is a redundant, Ethernet-based, single-channel I/O system. It supports ABB’s next-generation project execution model, Intelligent Projects, which offers a range of efficiency improvements for automation projects. With Select I/O, customers can undertake major projects on a faster schedule with fewer cost overruns. It uses standardized cabinets that allow installers to digitally marshal signals instead of using labor-intensive marshalling panels. Loop checks can be done before the rest of the system is delivered, minimizing the impact of late changes and allowing for project tasks to be executed in parallel.
ABB Ability Asset Health Center – Among the first ABB Ability solutions to be launched on Azure is ABB’s next-generation asset performance management solution, Asset Health Center 3.0. Available since January 2017, it uses predictive and prescriptive analytics and customized models to identify and prioritize emerging maintenance needs based on probability of failure and asset criticality.
ABB Ability Collaborative Operations – This powerful solution, now being brought to scale across industries, helps customers collaborate more effectively. It allows experts to work together across organization boundaries, using the same data and analytics platforms. It focuses on such outcomes as improving productivity, reducing equipment failures, lowering the cost of asset maintenance and transforming overall business performance. This is done while maximizing security and protecting data, people and assets at every level of integration. The solution has been delivering sustainable, long-term results to early adopters.
ABB Ability Digital Substation – ABB’s digital substation provides customers in the utility sector with unmatched control and efficiency. The digital substation incorporates fiber optic current sensors and disconnecting circuit breakers to reduce maintenance requirements and the need for miles of conventional cabling. ABB Ability takes these advances several steps further by combining the latest electrical gear with digital sensors and cloud computing. The result is that grid operators can make decisions based on comprehensive, up-to-the-moment information, while predictive algorithms can improve maintenance practices and asset management.
ABB Ability Smart Sensor – This smart sensor solution, unveiled last year, connects low-voltage electric motors to the Industrial Internet, allowing them to be monitored continuously. The solution, which can be easily affixed to a motor, transmits data on vibration, temperature, loads and power consumption to the cloud. Alerts are generated as soon as any of the parameters deviates from the norm, allowing the operator to take preventive action before the motor malfunctions. Early indications are that the smart sensor solution leads to a reduction in downtime of motors by up to 70 percent and extends their lifespan by up to 30 percent. Acting on the data to optimize the motor’s performance reduces energy consumption by as much as 10 percent.
by Gary Mintchell | Feb 23, 2017 | Internet of Things, Manufacturing IT
The afternoon stream I moderated at the Industry of Things World conference focused on connected vehicles—Construction Equipment, Trucks, Airplanes. I also interviewed a farm equipment manufacturer about some perhaps surprising uses of data-driven decision making in agriculture.
But first, a thought from another keynote address:
From a NASA study—If you want to employ a creative genius, you’ll have 98% success employing a 3-5 year old; if you hire an adult, you probability of success drops to 2%.
Data-Driven Agriculture
I caught up with Alexander Purdy of John Deere between sessions. He’s not an engineer or IT manager like many of the attendees and speakers (he had a later keynote). He on the business end. How can John Deere grab a competitive advantage and serve customers through connected data? After a career as a consultant, he loves actually doing things.
His group deals in guidance systems and digital solutions. Guidance systems essentially link a GPS to large farm equipment. Not only does this ensure the rows of corn are nice and straight, the digital decision making increases coverage and yield.
Deere’s digital solutions include online JDLink, JDonline, and an ops center. A farmer can sit in her office and plot out planting regimes setting up everything before going into the field. There is even a way to collaborate on methods and local information.
Let’s take seeding for example. Sensors connected back to the system can feedback soil conditions. This helps the planter decide for each seed in a cornfield the optimum x, y, and z (yes, they measure depth of planted seed). The idea is to get each plant to grow at about the same rate.
Connected Construction Equipment
Kjell Jespersen, Caterpillar, spoke on huge construction equipment. Customers have been using the large amount of data generated by construction equipment mainly for improving maintenance. However, they crave better productivity data to manage their business. Developing the systems for gathering and analyzing all the data will become crucial as a competitive advantage—or failure to do so could force a company to exit the business.
Connected Trucking
Turning to the long-haul trucking business, companies are turning to truck suppliers such as Volvo and Mack Trucks to provide connected vehicle technology to provide data for improved customer support. According to Evandro Silva, Manager Connected Vehicle Services, Volvo Group Trucks North America, a telematics solution was used to develop a connected service that enables quick diagnosis of issues, proactive scheduling for repairs, and confirmation that needed parts are in stock and ready to install—all while the truck is still on the job.
Airplane Digital Twin
Robert Rencher, Senior Systems Engineer and Associate Technical Fellow, The Boeing Company, took the discussion to a new level—literally. From equipment that stays firmly on the ground, Rencher discussed the role of a “digital twin” throughout the lifecycle of an aircraft. A digital twin is defined within a system representing the characteristics of the object and the virtual environment in which the digital representation of objects and their physical equivalent, vice versa, are represented digitally and co-exist such that the object’s past, current, and future capabilities and can be assessed and evaluated in real-time. As an object progresses through each phase of its lifecycle, various systems interface with the digital twin.
Next Year
Look for information about next year’s conference and all the other conferences. Next year will be about the same time of year in San Diego. Details are still being worked out. Check out twitter conversations at #IoTClan
