Business Opportunities from Industrial Internet of Things

Business Opportunities from Industrial Internet of Things

timSowellTim Sowell, Schneider Electric (Wonderware) vp and fellow, has been writing a weekly blog that I report on for a while now. His Operations Management Systems Evolution blog is always thoughtful and informative.

Recently, I have discovered another Schneider Electric blog, this one by someone whom I do not know (I think)–Gregory Conary.

Each take a look at the Industrial Internet of Things in these posts.

Conary’s recent post discussed the “business opportunities we are seeing emerge from this megatrend.”

He cites information compiled by LNS Research, in its eBook Smart Connected Operations: Capturing the Business Value of the Industrial IoT. 47 per cent of respondents to its Manufacturing Operations Management (MOM) online survey indicated that they did not expect to invest in IoT technologies in the “foreseeable future”. A further 19 per cent indicated that they did not expect to invest in IoT technologies in the next 12 months.

Conary states, “Frankly I’m not surprised. IIoT seems to bring with it the hype of something that will take a long time to adopt. In some cases I think this can be true. And while we are unclear on what time frame is meant by the term ‘foreseeable future’ referenced above, I believe there are business opportunities that can be capitalized on now and in the medium term. IIoT is more prevalent than we imagine. There are examples and business practices that we often don’t even recognize as being enabled by IIoT – things like increasing industrial performance and augmenting operators are two of the opportunities which can make a difference to your business now.”

Increased industrial performance

“Using data to improve industrial performance by connecting things to each other – this is happening now. How is it happening? Through wireless technologies, low cost sensors and using advanced analytics. In practice, this is a decision support system for complex manufacturing operations.”

I agree with Conary. We’ve had the foundation and platform for the Industrial Internet of Things for a long time. It just continues becoming more robust. As better data analytics algorithms are developed and better ways to communicate and display information are devised, then usefulness to manufacturing operators, maintenance technicians, engineers, and managers will increase dramatically.

Tim Sowell riffed off an article in Wired. “As the Internet of Things (IoT) continues its run as one of the most popular technology buzzwords of the year, the discussion has turned from what it is, to how to drive value from it, to the tactical: how to make it work.

We need to improve the speed and accuracy of big data analysis in order for IoT to live up to its promise. If we don’t, the consequences could be disastrous and could range from the annoying – like home appliances that don’t work together as advertised – to the life-threatening – pacemakers malfunctioning or hundred car pileups.”

Sowell adds this analysis, “This follows on from my discussion 2 weeks ago around the need to avoid just gathering data, vs gaining the proportional amount of knowledge and wisdom, which brings in a term you hear a lot ‘machine learning’.”

From Wired, “The realization of IoT depends on being able to gain the insights hidden in the vast and growing seas of data available. Since current approaches don’t scale to IoT volumes, the future realization of IoT’s promise is dependent on machine learning to find the patterns, correlations and anomalies that have the potential of enabling improvements in almost every facet of our daily lives.”

Sowell concludes, “In the industrial world this more applicable than nearly all industries, and in many cases we are already applying “machine levels” at different levels. A key part in the shift from ‘Information’ to ‘knowledge’ is having the tools to drill into historians based on events and to discover learnings and patterns. Once validated and discovered these are turned into ‘self-monitoring’ conditions to understand the current state of the device, and predict / recognize conditions well before they happen. Providing the ‘insight’ to make awareness and decisions where the machines/ devices are telling you where the opportunities are. But a key part of machine learning is that this knowledge in not a once off step, it is a continuous evolution leveraging the gathering history data and developing increased amounts of knowledge.”

Final thought

Both Conary and Sowell point directly to the new reality and to new challenges. We can now gather much more data than we can make sense of. As soon as we have those tools, we will provide better tools to operations and maintenance to improve plant performance.

Catching Up With ABB Automation and Power World

Catching Up With ABB Automation and Power World

Ulrich Spiesshofer, ABB CEO

Ulrich Spiesshofer, ABB CEO

I was not able to attend ABB’s Automation and Power World this year. Too many places to go at the same time.

However, someone I trust, Mehul Shah of LNS Research, was there and wrote his observations on the LNS blog.

Mehul focuses on software and linked it to the Internet of Things. “The conference also featured a prime focus on the Internet of Things (IoT), as a panel was presented on stage, containing key event sponsor Microsoft, ABB, and an ABB customer. The trio provided insight and examples into how the IoT trend is impacting the industry.”
Highlighting ABB’s solution in the IoT space, Spiesshofer discussed the following key areas of focus
• Robotics
• Intelligent devices
• Control systems
• Advanced communication infrastructure
• Enterprise software
• Analytics solutions

“A notable fact that was highlighted at conference was that—to my surprise—more than 50% of what ABB’s currently offers is software related. ABB had made a few major acquisition over the last decade to build its software offering. The most impactful was the acquisition of Ventyx for $1 billion in 2010. This gave ABB a major boost in asset, operations, energy, and workforce management solutions in some of the asset intensive industries. ABB has also made some other acquisitions such as Insert Key Solutions and Mincom to build its Enterprise Asset Management software offerings. It seems clear the company understands the importance of its software business to remain competitive, and has also developed a separate Enterprise Software group that houses some of these acquisitions.”

Interesting that the investments were in software applications. Several years ago a CEO told me that software was important to his company—and that there was software in most of the company’s hardware products. That was correct—but my point was software business, not technology. ABB seems to have kept emphasis on software business even while Spiesshofer has been divesting some of the acquisitions made under previous CEO Joe Hogan.

Shah’s Takeaways

• It was impressive to see the effort that ABB has invested to bring its acquisitions under one brand.
• ABB has taken a first step in building a technology roadmap by bringing some of the software offerings together as part of the Enterprise Software group. LNS sees this as a big step in the right direction strategically, and should prove of great benefit to current ABB customers as well as prospects.
• However, ABB currently has important software products that remain outside of its Enterprise Software group and it remains to be seen if these solutions will receive the required attention, especially when considering the breadth of ABB’s portfolio. Two examples of this are the company’s Manufacturing Execution System (MES) offering, and the aforementioned Decathlon for Data Centers.
• ABB has a full-fledged MES offering with some good customers currently leveraging this MES across discrete, process, and batch industries.
• ABB might have some ground to cover in MES compared to some of its closest competitors in this space. Companies like GE, Siemens, Schneider Electric and Rockwell Automation have been heavily focused on the software business with many announcing reorganizations to increase resources allocated to software over the past several years and.
• Another area we would like to hear from ABB is around their offerings in IoT. While there were number of products that were categorized as IoT solution, ABB will need a holistic offering and vision around how their industrial clients can leverage these solutions to drive value.
• To answer the question, yes—ABB can compete effectively in the software business. But there is still some grounds to cover. ABB has had a lot of critical parts of the software business for quite a while and has been slower than many of its competitors in pulling it all together.

Gary’s Take

I agree with Mehul for the most part. I knew ABB had an MES offering, and I’ve interviewed Marc Leroux many times over the years. But it always seemed a little under the covers. The same with the Ventyx acquisition. It was easy to forget about it as it didn’t seem to get the promotion it deserved.

ABB is such a diverse conglomerate that sometimes it’s hard to know what it focuses on. I always followed the automation—primarily process automation. Several years ago, I think at Hannover but maybe SPS in Nuremberg, ABB executives explained the factory automation offering and the added emphasis the company was placing on it. But there are so many things and so few promotional dollars.

Also a few years ago, ABB decided to add its Power users to its Automation user group conference—hence Automation and Power World. However, the first two of those featured much more power and much less automation. It looks as if the company is striking a balance at the conference. But the Power division is still a laggard in performance.

ABB is a strong company, but it has much work to do in order to reach peak performance.

11 Tips for Stimulating Enterprise Software Adoption

11 Tips for Stimulating Enterprise Software Adoption

LNS Research Manufacturing Operations Management researchMike Roberts at LNS Research has posted a blog 11 Tips for Stimulating Enterprise Software Adoption. Many, if not all, of these tips have been written about before. This is a useful compilation of them in one place. Reading between the lines, I wonder if he’s talking about putting in one of those huge, monolithic software solutions that, in reality, have a spotty record of installation and adoption. Even so, these are more important than ever.

I’ll summarize a few here. Head over to the blog to catch them all along with their

  1. Ensure Executive Sponsorship and Buy-In for the Project

Executive sponsorship is key to getting budget approval for an enterprise software investment, but the role of leadership has to extend beyond that. One aspect that may facilitate executive buy-in and use is evaluating solutions with robust executive dashboards and reporting capabilities early on.

  1. Include Users in the Solution Selection Process Upfront

It’s important to not alienate the professionals who will actually use the solution from the processes of developing user requirements, selection, and coming up with a deployment plan.

  1. Put Together a Deployment Team to Support the Project over Its Lifecycle

Because every company has a unique set of IT resources and user requirements, it’s feasible to forecast on-the-fly adjustments will be required during the deployment to create a better user experience or to troubleshoot a system issue.

 

  1. Execute a Pilot Deployment before Transitioning Enterprise-Wide

It’s common for companies to initiate a deployment with a single module or two to attain early user feedback and get the process down.

  1. Identify & Empower “System Champions” to Support and Drive Adoption

Just like there are early adopters on the technology adoption lifecycle for consumer products, the same can be said in the business world.

  1. Invest in Change Management that Ensures Long-Term Adoption

Although leadership should anticipate some resistance, they should also have a plan for overcoming it.

Improve Manufacturing Operations With EMI Applications

Improve Manufacturing Operations With EMI Applications

Mark DavidsonOne of my prognostications from my last post on 2015 prognostications riffing off Jim Pinto’s post, dealt with analytics. I think this will not only be big, it will be essential to making you and your manufacturing enterprise competitive.

Mark Davidson of LNS Research, just wrote about the subject, Enterprise Manufacturing Intelligence (EMI) software, on the LNS blog site.

He asks, “1) What are the business results that manufacturing/production companies are achieving utilizing these software capabilities? And 2) What should you and your company be doing in regard to the opportunities presented by these technologies?”

He correctly addresses the core capability—operational and business performance dashboards that provide timely information to different users and roles.

Are people using these now? “61% of companies in the LNS Research Manufacturing Operations Management (MOM) survey of over 550 professionals indicated that their companies either currently have EMI dashboards or are planning to install them in the next year.”

Here’s why this is important. “The joint LNS Research and MESA ‘Metrics That Matter’ survey uncovered a significant difference in average annual improvements in the costs of producing a unit of goods. Current users of EMI software recorded 24.1% average annual improvements in Total Cost per Unit Excluding Materials versus the 13.1% overall improvement of all respondents.” And, “Companies that have implemented EMI software solutions are experiencing 7.2% higher OEE performance than those who have not. The average OEE for those who have EMI solutions in place was 74, versus 69 for those who do not.”

Make sure your stars are aligned

And, his last thought, “It is imperative that you not only focus on these supporting new technologies, it’s important to also align your organization’s key resources: people and processes, along with your technology strategy.”

Check out Mark’s complete article. Then check out potential partners for implementing EMI applications. Let me know how you’re doing.