SAP Executives Bullish on Internet of Things

SAP Executives Bullish on Internet of Things

If this blog is going to discuss the connected manufacturing enterprise, we’re going to continue to focus on the Internet of Things (IoT). Companies are lining up at present to provide thought leadership and products/services to support IoT.

To be sure, the Industrial Internet of Things is similar, yet different than the popularized IoT from the consumer world. It is also much more robust, since we’ve been at this for years.

Michael Lynch and Richard Howells of SAP chatted with me recently to bring me up to speed with what’s happening with that company and IoT.

SAP is not a point solution company, rather it endeavors to bring all the solutions into an integrated whole. Therefore, it is quite interested in fitting automated connectivity into its portfolio of solutions.

Background

SAP supplied some background information as a prelude to the conversation.

Supply Chain Management – While only 10 percent of industrial operations are currently using the connected enterprise, looking ahead to 2015, the next phase will be about making the cloud truly functional for your business to help streamline processes. Factories and plants that are ‘connected’ are more productive and smarter than their non-connected counterparts – those that don’t take advantage of this connectivity will start to lag behind.

Manufacturing/Automotive – Automotive companies are already starting to use IoT-enabled technology to predict faults, quickly respond to maintenance conditions and take proactive action. Through IoT there is end-to-end visibility across manufacturing operations. Companies are integrating factory-floor operations with core business processes to optimize production with real-time updates from machine data and gain predictive analytics to automate parts and consumable ordering to maximize revenue.

Conversation

Here are some notes from our conversation.

We seem to be at the top of the “hype cycle.” We have been doing this for a long time considering technologies such as RFID and tracking software and the like. But what has changed are the cost of all the chips and the development of big data platforms. There are now chips in everything.

Information from the data gathered is now incorporated into the business process so that managers can make most decisions based on real-time information. Management of the business process itself will help managers run their business better.

Edge devices connected to each other can make decisions faster—say for collision avoidance systems.

Business networks will become more important—physical networks will feed into business networks.

We’re in early stages of this industrial Internet of Things. The first phase is connecting things. SAP can really participate in the second phase where companies ask how they can change and optimize the way they do business—where OT/IT converge. The third phase, the most exciting one, takes it to the next level. With more information displayed well, you can see things you never thought about. Pirelli realized that by managing tire inflation it can offer service in fuel optimization. Customers can do things they couldn’t do before.

At the manufacturing level with products such as MII and EMI, SAP is connecting asset management systems for machine health, as well as looking for deeper machine knowledge.

Connecting to business is critical. Imagine a truck with sensors, it may have 50-100 sensors, but they aren’t coordinated. But if connected and with geolocation, I can see traffic jams and do rerouting. I can see a problem with a truck and schedule maintenance. Connected logistic capability enables managers to manage large depots and hubs. Add geolocation, you can track the specific truck. You can deliver predictive maintenance and service by sending a repair person before customer even knows there’s a problem. This improves customer service. With new visibility into manufacturing, companies are capturing data and using it for reduce downtime, predictive maintenance, building analytics and enabling business solutions.

Business value

Needless to say, SAP is bullish on the IoT given the foreseeable added business value to suppliers and customers.

 

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.

2015 Automation, Business, Manufacturing Prognostications

2015 Automation, Business, Manufacturing Prognostications

Jim Pinto w beardLet the debates begin! Jim Pinto has published his 2015 prognostications in the latest JimPintoBlog.

Check out his entire list and enter your thoughts on his blog. I’ll highlight some of his thoughts and add some of my own.

 

Automation Industry Trends

New inflection points will change the leadership lineup.

GM—I do not expect big changes in the automation leadership lineup. Mitsubishi, Rockwell Automation and Siemens are dominant in their home areas and fighting it out in China and India. Siemens has a bit of an edge having been international for a longer period of time. But as automation commoditizes, perhaps some new entrants will grab some share. If Bedrock Automation can market well, watch out for it. On the process side, Invensys is gone, absorbed by Schneider Electric. So the process automation business becomes even more of a minor part of the overall businesses, like ABB, Emerson Process Management, and Yokogawa. The only interesting situation in that market area is Honeywell Process Solutions. But I don’t really expect any change there.

I think 3D printing (additive manufacturing) is a game changer and one of the most important things from last week’s CES. It’s not strictly automation, though.

From Jim:

  • Internet of Things (IoT): The Industrial Internet will transform the next decade. Intelligent sensors and networks will take measurement and control to the next level, dramatically improving productivity and efficiencies in production. Growth in 2015 will be bottom-up, not top-down.
  • Smaller, Cheaper Sensors: Everyone is looking for or working on smaller, cheaper sensors for widespread use in IoT. Expect fast growth for sensors this year.
  • Cloud Computing: Cloud computing technology reduces capital expenditures and IT labor costs by transferring responsibility to cloud computing providers, allowing secure and fast access for data-driven decisions. The significant gains in efficiency, cost and capability will generate continuing rapid growth in 2015.
  • 3D Printing in Manufacturing: Today, do-it-yourself manufacturing is possible without tooling, large assembly lines or multiple supply chains. 3D printing is reshaping product development and manufacturing.
  • Mobile Devices in Automation: The use of WiFi-connected tablets, smartphones and mobile devices is spreading quickly. Handheld devices reduce costs, improve operating efficiency, boost productivity and increases throughput. More and more employers are allowing BYOD (bring your own device).
  • Robotics: Millions of small and medium-sized businesses that will benefit from cheaper robots that can economically produce a wide variety of products in small numbers. The next generation of robots will be cheaper and easier to set up, and will work with people rather than replace them.
  • Control Systems Security: In spite of apprehensions over consumer security breach events, industrial cyber security has mostly been ignored due to lack of understanding of solution costs. Many companies struggle to justify what is seen as added cost to secure their operation. Major security breaches will change this attitude.

Business Technology Trends

Gartner’s top trends for 2015 (3) cover three themes: the merging of the real and virtual worlds, the advent of intelligence everywhere, and the technology impact of the digital business shift. There is a high potential for disruption to the business with the need for a major investment, or the risk of being late to adopt.

Here are the top Gartner trends:

  • Computing Everywhere: As mobile devices continue to proliferate, there will be increased emphasis on the needs of the mobile users. Increasingly, the overall environment will need to adapt to the requirements of the mobile user
  • 3D Printing: Worldwide shipments of 3D printers are expected to grow 98 percent in 2015, followed by a doubling of unit shipments in 2016, reaching a tipping point over the next three years.
  • Advanced, Pervasive and Invisible Analytics: The volume of data generated by embedded systems generates vast pools of structured and unstructured data inside and outside the enterprise. Organizations need to deliver exactly the right information to the right person, at the right time, so analytics will become deeply, but invisibly embedded everywhere.
  • Smart Machines: Advanced algorithms will allow systems to understand their environment, learn for themselves, and act autonomously.
  • Cloud Computing: The convergence of cloud and mobile computing will continue to promote the growth of centrally coordinated applications that can be delivered to any device. Applications will evolve to support simultaneous use of multiple devices.
  • Risk-Based Security and Self-Protection: All roads to the digital future lead through security. Organizations will increasingly recognize that it is not possible to provide a 100 percent secured environment. They will apply more-sophisticated risk assessment and mitigation tools. Every app needs to be self-aware and self-protecting.

GM—My take is that the biggest thing in this area is analytics combined with improved visualizations and dashboards that take advantage of smartphones and tablets. Cloud is here. IoT is here. Security will forever be an important part of business.

2015 Consumer Electronics Show

  • Wearable Devices: The time is right for wearable devices.
  • Practical green tech.
  • Sustainability and transportation: Tesla Model X all-electric SUV with the doors that open like a Delorean. Electric-assisted bike technology; electric scooter with swappable batteries and dashboard analytics.
  • Kid-Tech: Apps to help teach children science, math, and tech. Fun little robots that teach kids computer programming concepts. Drawing, design, and color patterns to help kids learn about robotics and computer programming.

GM—as I’ve already written, autonomous vehicles could be a game changer and 3D printing was huge. The outlier is drones. Who knows where that might go?

Future Prognostications 2015-2025

Here are ten prognostications for the next decade, picked from the World Future Society (7) forecasts, plus other readings and discussions with Futurists.

  • – Education: A major shift to on-line education and certification is already happening, and will continue steadily.
  • – Jobs: Advances in artificial intelligence will eliminate human workers.
  • – Robot Work Force
  • – Middle Class Impasse: delaying retirement, income stagnating
  • – Driverless cars
  • – Speak to Computers.
  • – Robotic Augmentation (exoskeletons)
  • – Health & Well-being: sensors everywhere
  • – Brain scanning will replace juries
  • -Energy: Futurist Ray Kurzweil notes that solar power has been doubling every two years for the past 30 years while costs have been dropping. He says solar energy is only six doublings (less than 14 years) away from meeting 100% percent of energy needs.

GM-There are going to be some disruptions and huge benefits from a number of these. Autonomous vehicles and health advances are fantastic. I wish education would change more quickly that it does. Even those who wish to disrupt education mainly only have the political agenda of “teachers’ unions” and driving down salaries. (Why is it a political agenda to drive down salaries. Shouldn’t we be trying to improve everyone’s lot in life?)

I’m not a fan of Kurzweil. 100% is not realistic—maybe residential, but not everything. Don’t think there’s enough volts there!

I think we are going to need those labor-saving, productivity-enhancing advancements because we’re actually facing a labor shortage in 10 years. Time to start thinking farther ahead.

Humans have a way of adapting to thrive. I am optimistic about the future!

Yes, Jim, I’m with you there!

SAP Executives Bullish on Internet of Things

Managing Manufacturing Workforce Shortage

Last month I wrote a piece of news and analysis regarding a survey by ThomasNet. The survey of 500 manufacturing leaders of small to medium businesses reported the good news of increased business and improving outlook. But, respondents complained about a couple of manufacturing workforce issues—lack of people with appropriate engineering and technical skills and work ethic (or lack thereof) from people of the “millennial” generation.

My first reaction is that I hate those generation generalizations. I’m technically a boomer, but I don’t think I identify with a majority boomer traits. In fact, I’ve discovered that I fit many traits of millennials. And I know others in my situation.

On the other hand, marketers have found those generalizations useful for consumer marketing campaigns. There must be some truth in the mix somewhere.

Regarding millennials, I also referred to a piece I wrote following a session at last year’s Emerson Global Users Exchange. One thing that shocked me at that meeting was the strong opinion among some “boomer” engineers who discounted an entire generation of engineers for being intellectually shallow by relying on Google too much and for being spoiled.

Probing deeper into the issues

In order to dive a little deeper into the survey, I had a follow up interview with Linda Rigano, ThomasNet Executive Director of Media Relations. She took me through a little history. For nearly 100 years, the 30+ volume green Thomas Register occupied a shelf in the bookcase of nearly every procurement person and engineer in a manufacturing company in the country. Its pages contained specifics of companies supplying almost anything you could need or want.

ThomasNet took the register online in 1998. “It’s the first online directory,” said Rigano. “It’s a major site with every manufacturer and distributor in North America. We are premier product source and discovery site with 68,000 product categories. We focus on helping procurement specialists and engineers even to the extent of downloading CAD drawings.”

ThomasNet also houses an internal ad agency. The company’s focus is small to medium sized manufacturers considering that to aggregate to about 80% of the total market.

For the survey, researchers talked to owners and/or managers of 500 companies—evenly split between product manufacturers and custom manufacturers.

As I reported from the press release, most see an improved economy, business growth, added investments, and the need for more employees. And there is the rub. The number one problem each talked about was finding qualified job candidates, especially in these areas:

  • Manufacturing and production management
  • Engineers
  • Skilled trade
  • Production workers

Worse, there is a “perfect storm” brewing with positive growth, need for workers, and 1/3 saying they plan to retire within 10 years with no succession plan in place.

Some are proactive

What I wanted to know was are there any of these owners/managers doing anything about the labor shortage? Do they recruit, train, apprentice? I’m not interested in yet another hand-wringing article much as we’ve seen for 10 years.

ThomasNet does not have statistics on this, but they did collect stories (which I hope to share in the future as examples for everyone else). There are some bright lights—some true leaders doing something about the problem.

There is a company in Phoenix that makes precision built-to-order components. The general manager was having a hard time getting the people he needed, yet he was bidding a contract that would require adding 12 people to his 85-person staff. So, he partnered with a local motorcycle school to find mechanics. He’s looked at some creative ways of recruiting from outside his immediate area and bringing them to Phoenix.

Another manager who has a location in southern US advertised on Craig’s List in the north about coming south where it is warmer. (That would work this week when I’m writing this, highs are low teens Fahrenheit with lows below zero!)

A Wisconsin manufacturer has been intentionally recruiting millennials. The manager had to sell his partners on the concept because of their perceptions of young people. He has gone to technical colleges and engineering schools. He gives seminars on manufacturing and technology. One key recruiting tool is tours of the plant.

Tackle the problem

There are ways to tackle the workforce problem.

  • First, remove the glasses that cause you to look narrowly at the problem.
  • Go out yourself to colleges and trade schools and meet people.
  • Give seminars on manufacturing
  • Take young people on guided tours of your plants to show them the realities of the joys of making things

Take a chance—be proactive and go out and get them.

 

SAP Executives Bullish on Internet of Things

Doing A Great Work

For I am doing a great work, and I cannot come down.

There was a man who lived about 2,500 years ago. His story contains intrigue, vision, persuasiveness, leadership and project management. It is a great story to set our minds on as we look at planning our new year—setting a direction for what we will be and what we will do.

In the Christian Bible the story is found in the Old Testament, which are also Jewish writings. The man was called Nehemiah. No matter what your religion or non-religion, I highly recommend reading this. We can learn the meaning of leadership from him.

The quotation comes from a response by Nehemiah to some adversaries who wanted him to leave the work and come down from the mountain to meet with them in the plains to “negotiate.”

What is your great work?

At the end of 2012/beginning of 2013 I pondered this question along with th wisdom of Dr. Henry Cloud in his book “Necessary Endings.” The same thing last year. In both cases I took a look at what was happening and decided I needed to make some changes.

There are many more opportunities today than there were when I was starting out. Opportunities can lead to inaction and inertia from the pain of deciding from among too many options. But as humans, we need movement to grow.

What will our opportunity be in 2015? What is the “One Thing” or “Great Work” that you are pursuing? What is so important that you cannot and will not be diverted?

As for me

As  for me, last year I got diverted from my goals and it caused much grief. This year, look for a new look and a new focus as I double down on this site and my strategic marketing and product development consulting business.

As for you

Decide on that and have a great and profitable 2015.

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