Financing Digitalization Project Aids Customer Adoption

Financing Digitalization Project Aids Customer Adoption

Siemens holds its Automation Summit this week in Boca Raton, FL, and it kicked off its media program with a round table discussion with the Financing group.

Siemens Financial Services exists as a sales support group to assist customers who perhaps require assistance financing a project. This could involve helping with cash flow or giving the customer some operational flexibility. This often helps smaller businesses as they adapt to the changing business and technology conditions they are facing today.

“Siemens is a one-stop shop.”

They brought back memories of my early sales training on solution sales when they mentioned that Siemens Industry is getting adjusted to solution sales (rather than product sales) and the Siemens sales teams are learning that financial can be a key component of a solution sale.

Siemens is not the only company in this space, by the way, adjusting to a new way of life beyond “selling boxes.”

ROI

Where can Return on Investment (ROI) be found in a digitalization project? Siemens suggests several ways:
• Increase manufacturing productivity
• Reduce energy consumption
• Reduce downtime
• Shorten setup and changeover times
• Improve quality
• Improve planning and forecasting—which leads to
• Reduced inventory
• Reduce waste

 

What are Industry 4.0 financiers offering that supports this new mindset?

Industry 4.0 Finance can:
• Embed financing options into the initial value proposition, opening a wider range of affordable digital transformation possibilities
• Flex financing periods to suit the pace at which each manufacturer will reduce costs or increase sales as a result of the company’s digital transformation
• Cover the total solution and total cost of ownership (hardware, software, services), allowing manufacturers to secure digital transformation at a guaranteed and sustainable monthly cost
• Employ machine data to ensure finance is based on usage or outcomes, aligning technology capabilities with their resulting commercial benefits
• Use cost-saving or money-making outcomes to fund enabling technology, making digital transformation
• cost neutral
• Build in technology upgrade options so manufacturers do not become trapped in technology obsolescence in a world of quicker innovation cycles
• Bridge the cash-flow gap between technology investment and the resulting benefits to make digital transformation more financially sustainable

Adding fincining assistance as part of a solution sale to help customers overcome a potential obstacle to implementing digitalization and reaping the benefits seems like good business sense.

MIMOSA and OPC Foundation Announce Joint Working Group

MIMOSA and OPC Foundation Announce Joint Working Group

Joint working groups to develop companion specifications has been a great method to advance interoperability. Here is an announcement of one where you can still get involved if you have expertise in one or the other. Note: I am chief marketing officer of MIMOSA and I also have done some work with OPC Foundation.

MIMOSA (an operations and maintenance information open system alliance) and the OPC Foundation have announced a joint working group to develop a companion specification for MIMOSA’s CCOM standard and OPC UA.

MIMOSA is a not-for-profit trade association dedicated to developing and encouraging the adoption of open information standards for Operations and Maintenance in manufacturing, fleet, and facility environments. MIMOSA’s open standards enable collaborative asset lifecycle management in both commercial and military applications.

MIMOSA CCOM (Common Collaborative Object Model) serves as an information model for the exchange of asset information. Its core mission is to facilitate standards-based interoperability between systems: providing an XML model to allow systems to electronically exchange data.

OPC Foundation is a not-for-profit association dedicated to providing the interoperability standard for the secure and reliable exchange of data in the industrial automation space and in other industries. The OPC UA (Unified Architecture) is platform independent and ensures the seamless flow of information among devices from multiple vendors.

The OPC UA standard is a series of specifications developed by industry vendors, end-users and software developers. These specifications define the interface between Clients and Servers, as well as Servers and Servers, including secure access to real-time data, monitoring of alarms and events, access to historical data and other applications. The standard includes the ability to securely transport any information model between the systems. It is a key standard for Industry 4.0.

The joint MIMOSA and OPC Foundation CCOM OPC UA Working Group will develop an OPC UA Information Model for CCOM. The information model specified by CCOM will be defined in a UA companion specification using OPC UA constructs for the purpose of exposing CCOM information to OPC UA applications, with an initial focus on existing Use Cases relating to information exchange to and from the control system. This will combine existing strengths of each organization for some near-term wins, where OPC UA is used to bring information from the factory floor and where MIMOSA plays its traditional role in Asset Management.

The working group will deliver the following:
• OPC UA Information Model for CCOM (Standard OPC UA companion specification, Nodeset file and prototype implementation)
• A write up for the OPC Wiki describing the Companion specification
• Trade show demonstration and information material

Anyone who would like to contribute to this industry specification please contact Alan Johnston [email protected].

Podcast Interview Beyond the Hype of Digital Transformation

Podcast Interview Beyond the Hype of Digital Transformation

This time I have a guest in this podcast conversation about digital transformation. Saadi Kermani, global business development at Schneider Electric Wonderware, joins me for a rare encore performance discussing information management beyond the hype of cloud, digital transformation, and Industry 4.0 in episode 164 of my long-running podcast series. He appeared previously in episode 136 in October 2013.

 

Financing Digitalization Project Aids Customer Adoption

Festo Manufacturing and Distribution in the US

The Festo International Press Conference has taken me on manufacturing and technology tours to Germany and Hungary in the past. This year’s event was a short drive down Interstate 75 to Cincinnati, Ohio. Here a large international press contingent toured its new $70 M state-of-the-art distribution and manufacturing center.

assembly-2The facility features a highly automated order picking system unique to the manufacturing industry in North America and only comparable to the highly sophisticated warehouse systems of the strongest retail brands. With these new premises Festo is now able to triple its capacities: This allows for more flexibility, improved services and offers plenty of space for future growth.

Excellent growth prospects

The center is designed to allow for the speed and flexibility needed to accommodate Festo’s future growth in the NAFTA market (US, Canada and Mexico). The RSC will also support the expected growth in Mexico, which is becoming a recognized hub for the automotive industry. The new center has Foreign Trade Zone status, which makes it faster and more efficient to support customers in the US, Canada and Mexico from a central US location.

logistics-2With a storage capacity of 65,000 bins, the highly automated warehouse system – implemented by Witron, the leading designer and supplier of fully automated warehouse and logistics systems – features seven high-performance picking stations and the capability to pick and pack 1,000 items per hour. “As regional and US sales continue to grow, this Regional Service Center will provide a strong product supply backbone for the North American market with best in class supply chain performance“, said Yannick Schilly, Head of Product Supply NAFTA

yannick-schillyand RSC Mason.

Festo Value Production (Lean)

The facility features an implementation of the Festo Value Production system (FVP). This system is based on closely involving employees in defining standards and continuously improving processes and technical solutions. Great emphasis is placed on consistent communication as well as the visualization of objectives and results. It is thus possible to produce globally over 30,000 products with countless variants and deliver tailor-made solutions to customers all over the world within a matter of days.

The Regional Service Center features both an assembly area and the warehousing/picking area. When assembly is completed, the finished product is transported to the Regional Service Center (RSC) for shipment. All components in a system are grouped by barcode, packaged for shipping, and then shipped out to schedule.

“Our customers in North America expect top quality ‘made by Festo’, with guaranteed supplies and next-day delivery at prices in keeping with local market conditions. At the same time, energy efficiency, environmental protection and occupational safety are becoming increasingly important. The Regional Service Center in Mason/Ohio will secure our regional supplies to the North American market for the years ahead,” concludes Dr. Dirk Erik Loebermann, Chief Operation Officer and Member of the Festo Management Board.

Training and Apprenticeship Program

didactic-4Festo has established a separate group, Festo Didactic, which provides training and apprenticeship programs both for Festo products and systems as well as for automation in general. In Mason, Didactic has partnered with Sinclair Community College and five companies in the Cincinnati tri-state area (Art Metal Group, Clippard Instruments, Festo Inc., MQ Automation, Nestlé) to create a two-year Mechatronics Apprenticeship Program to help employers develop the skills that are missing in the workforce today by combining theoretical education, hands-on training, and on the job training. The apprenticeship is designed to help individuals learn advanced manufacturing skills as well as earn an associate’s degree in mechatronics.

The first cohort of the program includes 11 apprentices who are training for careers as maintenance technicians, automation specialists, service technicians, and manufacturing technicians. The program uses the German apprenticeship model of dual education, where apprentices learn in a classroom and maintain a steady job.

Every week each apprentice spends one day at Sinclair Community College for classes, one day using state-of-the-art equipment at the new Festo Learning Center in Mason, and three days working at their respective employers. The apprentices are able to take what they learn in class, practice it at the Festo Learning Center, and then use that new knowledge and skill in a real-life work environment. “In terms of educational modality, the apprenticeship model couldn’t be a better fit for manufacturing,” says Vice President for Regional Centers at Sinclair Community College Scott Markland.

The Festo Learning Center is a unique part of the program. The Center is designed to meet international standards for production facilities and labs. It provides the apprentices a training facility where they can work with instructors on high-end Festo workstations that simulate a work environment and corresponds to their classroom curriculum.

Industry 4.0

For manufacturing companies in high-wage countries, Industry 4.0 provides an opportunity for remaining competitive on a global scale. “We are talking here about the transformation of industrial manufacture into a fully networked, flexible production system. To remain competitive, we must take the initiative with our characteristic spirit of inventiveness and give shape to this new development”, says Prof. Peter Post, Head of Corporate Research and Technology of Festo AG & Co. KG.

This transformation in the world of production is founded on digitalization, a crucial element in the merging of the virtual and real worlds. Prof. Post sees great potential here: “Digital refinement will give rise to increasingly intelligent products. In future, the individual elements of an overall system will be able to communicate with each other and autonomously control and regulate themselves. They are the core of industrial digitalization and support the production process through enhanced functionality – from classic aspects such as productivity and quality on to increasing individualization.”

dr-michael-hoffmeisterTo optimally leverage these new capabilities of intelligent products, cooperation needs to be established with many systems and business processes. “Together with our partners in Industry 4.0, we’re currently defining the new language of Industry 4.0. The German ‘Plattform Industrie 4.0’ with its widespread members from office and shop floor, as well as from standardizations and associations, works on joint reference models and international standards. This will allow for engineering the digital work stream in a kind of plug&play manner! The intelligent devices will describe themselves and will autonomously find the right collaboration partners”, details Dr. Michael Hoffmeister, representing the portfolio management software of Festo AG & Co. KG. “In the future, digitizing these virtual added values of a component will be as important as manufacturing the physical part”, he says.

Being one of the main drivers of standardization within Industry 4.0, Dr. Hoffmeister points out, how important worldwide collaboration is: “We’re working technically closely together with our colleagues from the Industrial Internet Consortium. Our business scopes are complementing each other and our architectures are mapping together”.

Festo Customers in the Region

We toured two customer plants in the area. HAHN Automation and Storopack.

HAHN Automation is one of the leading manufacturers of special machinery for automated production. Its main customers are the automotive industry and its suppliers. “We have a firm focus on customer proximity, since that is the only way we can ensure our quality standards and guarantee intensive project support,” says John Baines.

This strategy has borne fruit, as shown by the successful cooperation with customers located within three hours’ drive of Cincinnati. The nationwide list of customers reads like a who’s who of the industry: from BMW to BorgWarner, Brose, Continental or Mitsubishi, HAHN Automation’s customers include most of the industry’s global players. Another practical point is the closeness of its own facilities to Cincinnati Airport, which is just ten minutes away. This also explains why the company is developing and supplying its site in Mexico from its US factory.

Modular cell concept

HAHN Automation’s main concept is the MasterCell. A MasterCell can either be used as an automatic single workstation with manual component placement or combined into technologically sophisticated automation systems. The modular system design is based on the principle of fast and cost-effective expansion in line with demand as production quantities increase. In the MasterCell modern robots as well as leading-edge assembly and testing technology are used, making it suitable for challenging assembly and testing processes.

The benefits for customers include the standardized cell structure, ease of handling and operation, ergonomic design, high quality, high availability, short delivery times, great economic efficiency, flexible degrees of automation and high levels of customizability.

Festo automation components play an important role in the MasterCell concept: from the modular automation platform CPX/MPA to pneumatic drives from the standard product range and pneumatic grippers, HAHN Automation uses key products from the automation specialist. These are used in almost all assembly cells.

Packaging Material

Packaging material is a typical throwaway product. Packages arrive, are opened, the goods are removed, and the filler material is thrown away. “Hardly anyone – apart from Storopack – thinks about how important it is to select the right protective packaging products in the right quantity and quality for a particular application,” explains Daniel Wachter, President of Storopack for North America in Cincinnati, Ohio. Incorrect or inadequate filler material can damage goods in transit, while excessive or incorrectly inserted protective packaging material can significantly reduce productivity at packing stations in distribution centers.

blown-film-lineStoropack produces – among other things – its AIRplus film rolls to supply to distributors and customers throughout the world. During the primary process, plastic granulate is formed into basic plastic film at blown film lines. This is then wound onto rolls by winding machines. These machines are equipped with standard cylinders DSBC which allow the rollers of the winding machines to be correctly aligned, depending on the load.

On configuration lines in the secondary process, the film is configured to the required dimensions and perforations and packed as finished AIRplus rolls. Stamping tools are used to seal and perforate the infinite plastic film to form air cushions of specific widths and lengths. These lines are also equipped with pneumatic cylinders DSBC, as well as rotary cylinders DSNU-PPS, compact cylinders ADN and short-stroke cylinders ADVC, controlled in each case by individual valves CPE 14.

Financing Digitalization Project Aids Customer Adoption

Industry 4.0 Survey: Building the Digital Enterprise

Are we getting beyond the speculation and hype of ideas such as Industry 4.0 and digital manufacturing? This latest survey and study by PwC (www.pwc.com/industry40) reveals that executives anticipate benefits from investments within two years.

pwc-industry-40-survey-2016

PwC says its 2016 Global Industry 4.0 Survey is the biggest worldwide survey of its kind, with over 2,000 participants from nine major industrial sectors and 26 countries. It goes to the heart of company thinking on the progress of Industry 4.0. The study explores the benefits of digitising the horizontal and vertical value chain, as well as building your digital product & service portfolio.

Industry 4.0 at a glance

“We include a detailed description and definition of Industry 4.0 in the main global report on the survey.” Digitisation and integration of vertical and horizontal value chains, digitisation of product and service offerings, and the development of new digital business models and customer access platforms are driving Industry 4.0 adoption.

Digital Enterprise From the Study

Behind the scenes of the world’s leading industrial products companies, a profound digital transformation is now underway. Companies are digitising essential functions within their internal vertical value chain, as well as with their horizontal partners along the supply chain. In addition, they are enhancing their product portfolio with digital functionalities and introducing innovative, data-based services.

  • Industrial manufacturing companies plan to invest 5% of annual revenue in digital operations solutions over the next five years. And they are setting themselves ambitious targets for the level of digitisation and integration that can be achieved.
  • Many companies are already producing machines to deliver on the vision of the connected factory, using the power of the internet to link machines, sensors, computers, and humans in order to enable new levels of information monitoring, collection, processing, and analysis. This is adding to the products and services that companies can offer their customers, helping them work in collaborative ways in the design of future machines and their digital environment to boost performance.
  • A number of technologies, including robotics, cobotics, 3D printing and nanotechnology, have direct relevance for many industrial manufacturing applications while other technologies, such as augmented reality, can enable manufacturers give customers realtime information and training at the point of use.

Some of these developments are maturing now. Others remain for the future. The rate of adoption of Industry 4.0 technologies by industrial manufacturing companies is accelerating fast.

The digitisation, integration and automation opportunities offered enable companies to collaborate both internally and across their value chains in ways that can provide a step change in productivity as well as design and build quality. And they are opportunities that are increasingly important as companies seek to stay relevant as the era of digitally connected smart infrastructure develops.

Analysis

The point that fascinates me is the speed of adoption. It was only three years ago when I was introduced to the “hype” of Industry 4.0. Then followed speculation and hype. Typical technology curve, I think.

However, most of the technology existed. It just took the foresight and will to begin and the intelligence of implementation. Ways to increase sales and reduce costs both contribute to profitability. Maybe the strategies and technologies behind Industry 4.0 and Internet of Things and digital manufacturing actually will help us cross the next manufacturing divide.

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