by Gary Mintchell | May 31, 2019 | Automation, Commentary, News, Technology
The popular saying holds that the future is here just unevenly distributed. According to a survey released by PWC and The Manufacturing Institute, that thought is certainly true about the Fourth Industrial Revolution (which PwC labels 4IR but many others label Industry 4.0). This research confirms my observations that many manufacturers have projects at a variety of stages, while many others have adopted a wait-and-see attitude.
The report notes that fourth industrial revolution has been met with both enthusiasm and fence-sitting. While sentiments and experiences have been mixed, most business leaders are now approaching 4IR with a sense of measured optimism. Indeed, larger systemic changes are underway, including building pervasive digital operations that connect assets, developing connected products and managing new, real-time digital ties to customers via those products.
While manufacturers recognize the potential value of advanced technologies and digital innovation—particularly robotics, the Industrial Internet of Things (IIoT), cloud computing, advanced analytics, 3D printing, and virtual and augmented reality—they are still deliberating how and where to invest and balancing the hype with their own level of preparedness. Meanwhile, they’re also well aware of the significant changes 4IR will bring to a new manufacturing workforce—that is, one that is increasingly symbiotic and increasingly beneficial for many workers and manufacturers alike.
This narrative is reflected in a new survey of US-based manufacturers carried out by PwC and The Manufacturing Institute, the workforce and thought leadership arm of the National Association of Manufacturers. We see a definitive—and, indeed, inevitable—shift to 4IR as companies seek to integrate new technologies into their operations, supply chain, and product portfolio. At the same time, they acknowledge that scaling, justifying 4IR investments, and dealing with uncertainty surrounding use cases and applications usher in a new set of challenges.
Some key survey findings include:
• While the sector as a whole is making assertive forays into 4IR, many manufacturers still inhabit the awareness and pilot phases. Nearly half of manufacturers surveyed reported that they are in the early stages of a smart factory transition (awareness, experimental, and early adoption phases).
• Manufacturers do expect the transition to accelerate in the coming years—73% are planning to increase their investment in smart factory technology over the next year.
• While we see a number of fence-sitters, the bulk of manufacturers are indeed prioritizing 4IR, the digital ecosystem, and emerging technologies. 31% report that adopting an IoT strategy in their operations is “extremely critical” while 40% report that it’s “moderately critical.”
• About 70% of manufacturers say the biggest impacts of robotics on the workforce in the next five years will be an increased need for talent to manage in a more automated, flexible production environment and the opening of new jobs to engineer robotics and their operating systems.
…While adopters have identified clear signs of success. Though most manufacturers are still climbing the 4IR adoption curve—albeit at different speeds—those that have made progress are reporting a modicum of performance boosts measured by productivity gains, reduced labor costs, new revenue streams from IoT-connected products and services, as well as improved workforce retention and worker safety. Those that have effectively defined their use cases with a focus on outcomes rather than technology are seeing early wins, and are looking for ways to generate even more value.
The Takeaway
Manufacturers are seeking to balance 4IR hype and reality. And most acknowledge that sitting back and waiting for the inevitable may not be an option.
The road may be longer than the hype would have companies believe, but preparing for and embracing change is a muscle many of today’s manufacturers are ready to flex. Those that can build on their ad hoc pilots and prioritize investments and strategies with their long-term desired business outcomes will be better positioned to create lasting value for their organization.
by Gary Mintchell | May 30, 2019 | Manufacturing IT, News, Security
Cyber Security got a shout-out during the Siemens Spotlight on Innovation forum in Orlando last week. Leo Simonovich, VP and Global Head, Industrial Cyber and Digital Security at Siemens Gas and Power, and Mike Wiacek, co-founder & CSO of Chronicle (an Alphabet company) took the stage discussing their newly signed cyber security agreement.
Key phrase—“customers can own their environment”. Perhaps the most interesting conversation I had during the networking event was with a Chronicle tech person who gave me a deep dive into the product. This is security unlike everything else I investigate in the OT realm. This isn’t a network monitoring app. Nor is it a device that acts as a firewall for industrial control devices. It builds a huge database and adds analytics (which is “in our DNA”). The solution has two parts—visibility and context. It bridges IT and OT worlds with the intent to “democratize security for the success of the digital economy”; that is, make it accessible to customers, simple, affordable, easy-to-use.
Through a unified approach that will leverage Chronicle’s Backstory platform and Siemens’ strength in industrial cyber security, the combined offering gives energy customers unparalleled visibility across information technology (IT) and operational technology (OT) to provide operational insights and confidentially act on threats.
The energy industry has historically been unable to centrally apply analytics to process data streams, cost-effectively store and secure data, and identify malicious threats within OT systems. Research conducted by Siemens and Ponemon Institute found that while 60 percent of energy companies want to leverage analytics, only 20 percent are utilizing any analytics to do security monitoring in the OT environment. Small and medium enterprises are particularly vulnerable to security breaches as they frequently do not have the internal expertise to manage and address increasingly sophisticated attacks.
“The innovative partnership between Siemens and Chronicle demonstrates a new frontier in applying the power of security analytics to critical infrastructure that is increasingly dependent on digital technology,” said Simonovich. “Cyber-attacks targeting energy companies have reached unprecedented speeds, and our cutting-edge managed service unlocks the analytics ecosystem offers a new level of protection from potential operational, business and safety losses.”
“Energy infrastructure is an obvious example of cyber-attacks affecting the physical world and directly impacting people’s lives,” said Ansh Patnaik, Chief Product Officer, Chronicle. “Backstory’s security telemetry processing capabilities, combined with Siemens’ deep expertise, gives customers new options for protecting their operations.”
The partnership between Siemens and Chronicle will help energy companies securely and cost-effectively leverage the cloud to store and categorize data, while applying analytics, artificial intelligence, and machine learning to OT systems that can identify patterns, anomalies, and cyber threats. Chronicle’s Backstory, a global security telemetry platform for investigation and threat hunting, will be the backbone of Siemens managed service for industrial cyber monitoring, including in both hybrid and cloud environments. This combined solution enables security across the industry’s operating environment – from energy exploration and extraction to power generation and delivery.
by Gary Mintchell | May 29, 2019 | Commentary, News, Workforce
I saw this note in today’s Espresso from The Economist, “France’s finance minister pledged to save jobs under threat at General Electric’s plant in the country’s north-east. The American industrial conglomerate, which made a loss of $23bn last year, had said it would cut around 1,000 jobs. Earlier this year GE paid France a €50m ($56m) fine for failing to create jobs after it took over Alstom’s energy business.”
Meanwhile in the US, officials are taking a second look at the results of Foxconn’s supposed multi-billion dollar investments. Politicians made great PR hay in 2017 with the announcement of a large investment in Wisconsin. Two years down the road, maybe the investment may not be so large and the employment a few thousand shy.
Governments can preach and give breaks and whatever, but market forces and bad management mean much more than governments for success. Take Alstom, for example. Perhaps there is French pride involved, but GE discovered that that particular acquisition was not all that it hoped for. One of a string of GE missteps. The French government can fine all it wants, but job creation depends upon good management and proper economic tailwinds.
I recently reported on the “success” of re-shoring manufacturing jobs, as the Reshoring Initiative would have it. Most likely it’s a result of financial analysts taking a closer look at supposed savings from only low wages discovering that other costs, such as logistics, insurance, loss of intellectual property, longer lead times, inability to quickly respond to changing markets all combined to make manufacturing offshore unappealing.
Most of the ills of manufacturing society I read about have a common root cause—less than competent management. I don’t see any quick fixes for that! And it won’t come from government fines generated by disappointment at lack of political gain.
by Gary Mintchell | Dec 15, 2018 | Commentary, News
Remember the TV ads where the recent college graduate gets a job with GE? He then must explain to his parents that it is not an old-line dirty industrial company but a hip software company.
Send those ads to the never, never land of wherever bits go when they are deleted from servers.
GE has been trying to divest GE Digital for about a year. Evidently there were no takers. It just announced spinning off Digital into a new “IoT Software Company.” Or, if you want the GE spin on the action, “GE Advances Digital Leadership with Launch of $1.2 Billion Industrial IoT Software Company.”
I attended just one GE Digital Minds+Machines conference. It was 2017, and after listening to the new CEO (who is now a former CEO) asked “could this be the last Minds+Machines?” Appears I was right.
Bullet points from the press release:
- New GE-owned, independently run entity will be established to expand company’s leadership in IIoT market and better serve industrial customers
- GE selling majority stake in ServiceMax
The company will start with $1.2 billion in annual software revenue and an existing global industrial customer base. The company is intended to be a GE wholly-owned, independently run business with a new brand and identity, its own equity structure, and its own Board of Directors. The proposed new organization aims to bring together GE Digital’s IIoT solutions including the Predix platform, Asset Performance Management, Historian, Automation (HMI/SCADA), Manufacturing Execution Systems, Operations Performance Management, and the GE Power Digital and Grid Software Solutions businesses.
Additionally, GE announced an agreement to sell a majority stake in ServiceMax, a leading provider of field service management software, to Silver Lake, a leading private equity firm focused on technology investments. With these actions, GE will sharpen the focus of its IIoT portfolio to position the new business for future growth. The transaction is expected to close in Q1 2019, subject to customary closing conditions and regulatory approvals.
“As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise,” said GE Chairman and CEO H. Lawrence Culp, Jr. “As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers and generate new value for shareholders.”
GE’s new IIoT business would provide software for these asset intensive industries with a focus on the power, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods and mining industries.
GE Digital CEO, Bill Ruh, has decided to depart GE to pursue other opportunities. The company intends to conduct an internal and external search to identify the CEO for this new independent company. Further details on GE’s new IIoT software company will be announced in Q1 2019. This plan is subject to customary regulatory approvals, including information and consultation with employee representatives where required.
by Gary Mintchell | Oct 31, 2018 | Education, Podcast
I have unleashed another podcast–180 Asking Why.
Asking why? Continuous learning. Helping educate our children. Ideas for solving new problems and developing new business.
Not in the podcast, but in the realm of learning, change agents, asking why, I have been reading Beth Comstock’s book, Imagine It Forward: Courage, Creativity, and the Power of Change reflecting on her experiences at GE and NBC. Must read for all of you who are change agents.
