Evolving HMI SCADA Business Models

Evolving HMI SCADA Business Models

The HMI SCADA software space continues to evolve into areas unthinkable only a few years ago. The competitive landscape is similarly evolving as some larger companies face corporate challenges and smaller players are finding new ways to compete.

Inductive Automation’s growing Enterprise Integrator program is a case in point. The company has built its distribution with integrators and has been adding partners. While I’ve been on the road, I’ve learned of two additions to this program. Grantek Systems Integration joins as a new member of the Enterprise Integrator Program. Inductive Automation defines Enterprise Integrators as those with a high level of Ignition certification, a global presence, the ability to take on enterprise-wide projects, and 250 or more engineers, among other requirements.

“Grantek has been working successfully with Inductive Automation for many years,” said Ian Tooke, chief innovation officer for Grantek. “The Ignition platform allows us to provide our clients with integrated solutions for MES, HMI, SCADA and the IIoT. Being an Enterprise Integrator will allow us to deliver even more value to our clients. The addition of an Ignition solution to our suite of enterprise-level offerings will bring great benefits to customers across the globe.”

Grantek has provided large-scale solutions in numerous industries, including food & beverage, energy, pharma/life sciences, and consumer packaged goods. The company focuses on smart manufacturing, automation, industrial networking, and industrial safety. Solutions include serialization, ERP integration and IIoT.

“We’re very pleased to designate Grantek as an Enterprise Integrator,” said Don Pearson, chief strategy officer for Inductive Automation. “Grantek has proven its expertise with our Ignition software platform on a variety of projects. The people at Grantek have done outstanding work, and we look forward to working with them on many more large projects in the future.”

A second integrator joining the program is ATS Applied Tech Systems.

“We are proud to be associated with Inductive Automation as a leading global partner,” said Rob Valent, managing director of ATS. “Being part of the Enterprise Integrator Program is a testimony to our strong engagement with Inductive Automation. ATS has delivered projects all over the world, and we’re leveraging Ignition to create scalable and flexible Industry 4.0 solutions for our customers. With this formal recognition from Inductive Automation, we look forward to a more powerful partnership delivering a smart digital transformation everywhere!”

ATS is one of the world’s premiere automation integrators and advises its customers independently on the best product portfolios for their technical and business needs. The company serves clients in a variety of industries, including aerospace & defense, automotive, electronics, food & beverage, life sciences, and metals & mining. The company has offices in the United States, United Kingdom, Germany, Australia, Canada, Mexico, and numerous other countries.

“We’re very pleased to designate ATS Applied Tech Systems as an Enterprise Integrator,” said Don Pearson, chief strategy officer for Inductive Automation. “ATS has shown over the years that it really understands its customers, and how to leverage the Ignition software platform to benefit those customers. ATS has done some terrific large projects, and we look forward to working with them on many more in the future.”

Internet of Things Update from Dell Technologies World

Internet of Things Update from Dell Technologies World

Last week it was Hannover Germany in pursuit of the elusive Internet of Things (IoT) where the weather had been in the 70s until I arrived. This week, still in pursuit of the elusive IoT, I’m in a chilly and wet Las Vegas at Dell Technologies World where I’ve talked IoT for some three years.

For two years, Michael Dell featured IoT in his keynote. Last year, he brought VP Andy Rhodes on stage for a highlight. Rhodes has since moved on to another group, the GM of IoT is also the CTO of VMware indirectly reporting to the President of OEM and Global Channel (and IoT). So on the one hand IoT has been elevated in the organization twice in a year. On the other hand, there seems to be less glitter.

Meanwhile this year, Dell brought up IoT in the context of data. Data being in the service of Digital Transformation. In fact, Dell said, “Dell Technologies is in a unique position to integrate innovation for Digital Transformation.” He noted that companies can use data to improve products and services which in turn attracts more customers which generates more data which is analyzed and so the process goes.

However since IoT generates data and date attracts attacks, security is an essential element of the system. Interestingly, I met with Zulfikar Ramzan who is CTO of RSA, the Dell security company who talked in terms of recognizing and managing risk. Making risk visible and using analytics are key strategies.

There were also two briefings with the Unstructured Data Group. So much of our industrial data is in historian databases. But the growth of Websites and IoT has generated unstructured data that must be stored, retrieved, analyzed, and used in order to support business

Trends for IoT within Dell Technologies? After conversations with CTO and GM Ray O’Farrell and my longtime contact Jason Shepherd, I’d say the big thing is that IoT has grown from being a small division—almost a skunk works sort of thing building a product and solution infrastructure to becoming part of the DNA across all Dell Technologies companies. Therefore the fruit of moving the locus of leadership higher in the organization and placed with people that can build alliances and partnerships. And these partnerships now include channel partners as well as solution partners. I’d call this growling maturity.

Global Mergers and Acquisitions Signify Industrial Changes

Global Mergers and Acquisitions Signify Industrial Changes

The industrial market—including both manufacturing / production companies and their suppliers—is experiencing continued consolidation through mergers and acquisitions as companies seek to grow and don’t see an organic alternative. This is true, not only in the US, but also globally according to data and analytics company GlobalData.

The Asia-Pacific (APAC) region’s share in the global mergers & acquisition (M&A) deals jumped to 31.6% in the fourth quarter (Q4) of 2017, a sharp rise from the 5% recorded in the previous quarter. According to GlobalData’s latest report, ‘Smart Money Investing in the Consumer Packaged Goods Industry in Q4 2017’, strong growth in APAC’s emerging economies offers a potential goldmine of opportunities to players in the CPG industry.

M&A deals in the region are primarily driven by the growing demand for healthy and convenient food and drinks amidst rising health consciousness and increasing income levels. Major players in the region are taking M&A route to expand their geographic presence as well as increase product portfolio to broaden their reach in potential new markets. For instance, ThaiBev acquired a 75% stake in Myanmar Distillery Company and Myanmar Supply Chain and Service, in an effort to expand its overseas reach to other Asian countries, while Zhejiang Huatong Meat Products acquired 100% stake in Xianju Guangxin Food to expand its portfolio.

The food sector accounted for 54% of M&A Deals in Q4 2017, followed by the beverages sector, which accounted for 31% during the same period, according GlobalData’s analysis on sector-wise investments.

The VC funding (VCF) activity took a dip in Q4 2017 compared to Q3 2017 in terms of value. North America recorded the highest share of 73%, while APAC recorded 15% of total value of the activity in Q4 2017. Investing in emerging technologies was the major factor driving VCF activity. For example, China-based Greybox Coffee managed to raise US$15mn through Series A Funding, capitalizing on the growing coffee culture in China, a predominantly tea drinking nation; while FYRE, a one-shot energy drink brand, managed to raise US$500,000 in seed funding.

Most of the PE investments registered in Q4 2017 were focused on companies planning to expand their product offerings, especially in the food industry, suggesting the ability of these companies to focus on creating products that meet evolving consumer preferences. For instance, Korea-based Sung Gyung Food secured funding from Standard Chartered Private Equity, allowing the investor to capitalize on the strong demand for seafood snacks in South Korea.

The Power of Mathematical Thinking Plus Skepticism

The Power of Mathematical Thinking Plus Skepticism

The power of mathematical thinking—or not thinking. The press release hit email inboxes this week. Researchers at XXX University (name hidden to protect the guilty) announce results of a study purporting to show that fear of the “risk of automation” causes health problems in workers.

Following are a number of percentages of this and that. Somewhere around the fourth paragraph if anyone read that far appeared the thought, “these findings correlate to health issues in general in each region.”

Huh?!

In other words, the null hypothesis was true, therefore the theory is worthless.

The “news” item also lacked:

  • Definition of “risk of automation”
  • Methodology of the survey
  • Surveyed population and percent responding

Just a little tip. When reading surveys and news, check out things carefully.

This release hit me at the wrong time. I am about halfway through “How to Not Be Wrong: The Power of Mathematical Thinking”, by Jordan Ellenberg. [https://www.amazon.com/How-Not-Be-Wrong-Mathematical-ebook/dp/B00G3L6JQ4/ref=sr\_1\_1?ie=UTF8&qid=1523023716&sr=8-1&keywords=how+to+not+be+wrong+the+power+of+mathematical+thinking]

Pick up that book. It just might save you from humiliation and embarrassment if you digest the teaching.

Purchasing Manager’s Index Still Looking Strong

Purchasing Manager’s Index Still Looking Strong

We have a new manufacturing sector economic activity report from the Institute for Supply Management—The Purchasing Manager’s Index—showing continued solid growth in the segment.

I also received an analysis from PwC’s Bobby Bono. His remarks are interesting including events in Washington that could change the rules of the game.

Long experience tells me that little that goes on in Washington significantly affects the economy. Presidents run for election on the economy, and are sometimes elected on it, but most of the time market forces and technology changes render their efforts dead on arrival. An exception, as Bono points out, could possibly be a trade war instigated by Trump. So far, all his tweets seem to be more geared toward getting people to the negotiating table (his forte, I guess), than in any unilateral action. Regardless, the underlying economy still looks strong. We can only hope.

In brief:

  • New Orders, Production, and Employment Growing
  • Supplier Deliveries Slowing at Slower Rate; Backlog Same
  • Raw Materials Inventories Growing; Customers’ Inventories Too Low
  • Prices Increasing at Faster Rate; Exports and Imports Growing

The report:

Economic activity in the manufacturing sector expanded in March, and the overall economy grew for the 107th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee:

The March PMI registered 59.3 percent, a decrease of 1.5 percentage points from the February reading of 60.8 percent. The New Orders Index registered 61.9 percent, a decrease of 2.3 percentage points from the February reading of 64.2 percent. The Production Index registered 61 percent, a 1 percentage point decrease compared to the February reading of 62 percent. The Employment Index registered 57.3 percent, a decrease of 2.4 percentage points from the February reading of 59.7 percent. The Supplier Deliveries Index registered 60.6 percent, a 0.5 percentage point decrease from the February reading of 61.1 percent. The Inventories Index registered 55.5 percent, a decrease of 1.2 percentage points from the February reading of 56.7 percent. The Prices Index registered 78.1 percent in March, a 3.9 percentage point increase from the February reading of 74.2 percent, indicating higher raw materials prices for the 25th consecutive month. Comments from the panel reflect continued expanding business strength. Demand remains robust, with the New Orders Index at 60 or above for the 11th straight month, and the Customers’ Inventories Index at its lowest level since July 2011. The Backlog of Orders Index continued a 14-month expansion with its highest reading since May 2004, when it registered 63 percent.

Consumption, described as production and employment, continues to expand, with indications that labor and skill shortages are affecting production output. Inputs, expressed as supplier deliveries, inventories and imports, were negatively impacted by weather conditions; Asian holidays; lead time extensions; steel and aluminum disruptions across many industries; supplier labor issues; and transportation difficulties due to driver and equipment shortages. Export orders remained strong, supported by a weaker U.S. currency. The Prices Index is at its highest level since April 2011, when it registered 82.6 percent. In March, price increases occurred across 17 of 18 industry sectors. Demand remains robust, but the nation’s employment resources and supply chains are still struggling to keep up.

Of the 18 manufacturing industries, 17 reported growth in March, in the following order: Fabricated Metal Products; Plastics & Rubber Products; Computer & Electronic Products; Paper Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Transportation Equipment; Petroleum & Coal Products; Wood Products; Machinery; Chemical Products; Textile Mills; Electrical Equipment, Appliances & Components; Furniture & Related Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Primary Metals. The only industry reporting a decrease during the period is Apparel, Leather & Allied Products.

Bobby Bono, PwC’s U.S. Industrial Manufacturing Leader, offers the following analysis.

The PMI manufacturing index decreased 1.5 points, but remains high at 59.3; prices reached their highest level in 7 years ahead of a potential trade war

The ISM Purchasing Manager’s Index (PMI) for manufacturing survey dropped 1.5 points to 59.3 for the month of March 2018.  While a significant drop from last month’s 60.8, last month was the highest the PMI reached in the last 14 years and March remains above the 90th percentile of PMI reports since 2000.

The continued positive economic environment has led to supply constraints and a buildup in the price index, which now stands at 78.1, its highest level in 7 years.   Price increases occurred across 17 of 18 industry sectors in March as New Orders also dropped 2.3 points.  While the full impact of tariffs and a potential trade war have not set in, some companies are beginning to see signs across select commodity prices and concern around overall global demand rise.

But with any change in rules, businesses need to learn what those rules are, how they will impact their business, and then how to adjust. Most manufacturers already build locally. There have been so many changes already in American regulations that they long ago realized it’s best for their business to build for American sales in North America, and to build for European sales in Europe to meet demand. It’s not 100% local but it’s heavily weighted. Manufacturers want to be close to their customers.

How businesses adapt to the new regulations will speak to their inherent strategy.  If they weren’t as flexible as they should have been, this may be a challenge. Commodity prices often move more than 10% in a year, so this tariff is not that different from that. It’s actually more predictable.

Industrial Internet of Things Integral Part of Industry of Things Conference

Industrial Internet of Things Integral Part of Industry of Things Conference

The Industry of Things World USA conference in San Diego in its third year is becoming a premier Internet of Things (IoT) event in the US. Organized by weConnect in Berlin, Germany, it attracts a few hundred attendees, excellent speakers, and me (of course). The organizers leverage worldwide contacts–organizing similar events in Berlin and Singapore. They also have similar events in other technology areas.

Topics cover a range of IT and OT subjects. I make sure to get to the OT people who are here. This is a quick recap of what I’ve seen so far.

Charlie Gifford spoke at a breakout session on ISA95. He updated us on the latest changes proposed to the standard. His other focus was to promote event-driven architecture. He suggested that we build a library of operations events such that when an event occurs information about the change with the updated data is broadcast to subscribers. This is a great bandwidth saving over continuous point-to-point connections. He is also concerned with how to interconnect the many existing databases within a plant or production location.

Jagannath Rao, SVP of IoT and MindSphere for Siemens, discussed the evolution of MindSphere and its latest incarnation. Key point–Siemens has committed to openness–providing for open APIs especially in its MindSphere platform and adoption of open technologies such as OPC UA.

MindSphere v 2 enabled people to go out and do Proof of Concept (PoC) projects. From these Siemens could determine what customers were interested in and what the problems were that they were trying to solve. This all fed back into the product development process leading to the recent release of v 3.

V3, now a product, builds on open technologies–open being the key word. The platform moved from SAP Leonardo to Amazon Web Services (AWS) providing a more robust cloud experience. AWS is a Infrastructure as a Service, while MindSphere is Platform as a Service containing open APIs and data models. The next step on the journey is for Siemens to build out an ecosystem of 3rd party applications.

When asked about TSN, Rao also brought up 5G, both of which point out the importance of the Edge for initial processing of IoT data. Siemens is preparing for this next step, for example its Sinumeric Edge contains much analytics power, then ability to communicate information not just vast streams of data.

OPC vice president of marketing Stefan Hoppe, during his breakout session, discussed the acceptance of OPC UA in industry and the power of the release of publish/subscribe with OPC UA. His strong discussion point was to emphasize that OPC UA is not a protocol. It is an information model. It uses protocols—AMQP, MQTT, DDS, JavaScript, whatever to communicate the information from one device to another (or many). Proponents of a protocol who suggest that a protocol is superior to OPC UA miss the point that it’s not a protocol but actually an information model.

One key potential misunderstanding…Hoppe’s presentation made OPC appear to be German-centric and tied to the German Industrie 4.0. We need to keep in mind that the OPC Foundation Board is only 33% German, and that OPC UA lends itself to the digitalization efforts of any of the countries developing standards. It has become the official communication technology for many standardization efforts including the Open Process Automation Forum. It is truly global.

Lin Nease, IoT technologist at Hewlett Packard Enterprise, chatted with me at a one-on-one meeting about the edge and the power of Xeon server technology in its edge devices as well as software-defined control. I think I’ll be seeing more from HPE as it builds out its IoT infrastructure.

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