Tim Sowell, Schneider Electric Fellow and Vice President, is always thinking two or three steps ahead of the rest of us. His weekly blog is on my must-read list. This week he tackles the future role of systems integrators—assuming that manufacturing software becomes much more configurable out of the box (therefore requiring much less custom code).
“In a number of discussions this week and last year it was clear that in the next 5 to 10 years the role and way traditional System Integrators work in the Industry Supervisory/ Operational/ Information space, will transform significantly. Especially those serving the smaller to medium industrial market, customers will demand accelerated solutions with a different model of project management, e.g., no RFP, no long project cycle, expect pre canned domain knowledge. They will want setup fast, and results with understandable costs. Similar to Sales Force.com where your CRM system can be set up in days, is the model that early adopters are testing in 2014, and I expect to grow in 2015.”
I tweeted this out Sunday and wound up in an interesting Twitter conversation with Andy Robinson (@archestranaut). A couple of other people chimed in. More on that below.
No offense meant to the sales function, but manufacturing operations software is of necessity much more complex. Sowell implies that there is some beta or alpha testing going on, but it will be interesting to see how that develops. One of the biggest challenges is for the customer to rationalize and understand its operations such that a configurable solution will be feasible.
Sowell continues:
“So what is changing is that users are now wanting:
Solutions faster, minimal project removal of the project RFP process
Less involvement
Expect domain experience built in
Minimal impact on internal resources
Minimal risk
“Good enough” will do if it improves and minimal impact or up front cost
Minimal up front cost.
“So the new generation of System Integrator in the industrial world will be a “solution provider”. Providing a service of domain solutions hosted and built on an digital industrial platform from vendors such as Schneider-Electric. They will engage the customer in 3 to 5 year service contracts, but projects will be in weeks not months, years, RFPs will go away to selecting modules and completing configuration questionnaires.”
This begins another crucial thought process for systems integrators. I remember the height of the open systems movement from the late 90s through the early 2000s. SIs wondered if open systems would put them out of business. No more custom coding proprietary systems.
I suggested that open systems would require even more work from SIs, because someone would have to tie the parts together. In many ways, I don’t think open systems were as revolutionary as we thought they would be. However, the thought process did yield a number of standard interconnect technologies.
Now onward to operations management software. My next post after this one, as fate would have it, concerns just such a configurable system as Sowell envisions. In that case, much of the work can be done without systems integrators. The process is designed for small-to-medium-sized businesses presently, but it will be interesting to see how far the concept can be stretched.
Here is a glimpse of the twitter conversation I had with Andy Robinson:
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.
One 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.
Sometimes I think I must be Tim Sowell’s, vp and fellow at Schneider Electric (software), personal press agent. I tweet his blog and refer to his writing often. He is the best thinker on manufacturing operations systems whose writing I can find. By the way, if any of you know other thinkers I should follow, please add to the comments.
In his latest post, he tackles a subject near to my heart–simplicity. People just keep trying to add complexity on top of complexity without regard for constructing the systems such that they may be understood.
Sowell posted this blog entry recently. In it he pointed to an excellent article that we all need to digest and incorporate into our lives. It deals with striving for simplicity in the face of increasing complexity.
Reflecting upon 2014, Sowell notes, “In the last half of 2014 we saw a significant increase in companies engaging with us on ‘Operational System, Operational Environment in 2020 – 25’. These were not inquires; these were real engagements where companies were reflecting on their systems relative to the new operational landscape we are all facing over the next 10 years. I suspect that 2015 will continue this trend and different programs been taken by companies to guide investments, and technological adoptions to provide them with a foundation to address ‘operational transformation’. Addressing the increasing complexity of systems, without increasing operational process complexity is fundamental.”
Sowell continues, “One of challenges we all face is the new operational landscape with changing products, a flat world of competition and changing workforce, we have a tendency to think and create complexity is increasing value. This article by Neil Smith allows a good ‘step back’ of the need stay focused on simplicity and this must apply to operational processes and systems, if we are going to be able to absorb change and compete.”
Are you interested in improving your manufacturing operations? Looking for a manufacturing strategy? Here is a video essay (with a companion podcast downloadable on iTunes) where I compare two dominant manufacturing strategies of today.
Tim Sowell, Schneider Electric Fellow and Vice President, is always thinking two or three steps ahead of the rest of us. His weekly blog is on my must-read list. This week he tackles the future role of systems integrators—assuming that manufacturing software becomes much more configurable out of the box (therefore requiring much less custom code).
