Holy Clayton Christensen! Is Local Motors prototype for future of manufacturing?

In the latter stages of writing The Future Is Smart, I came across Local Motors, an amazing company that is not only an IoT innovator but also might pr0vide a model to revolutionize American manufacturing in general.

I’d read an article years ago about the company when it was locally-based, but since it was focused entirely on off-road & fast cars at the time (both of which leave me cold) I didn’t follow up.

Now it’s diversifying into a cute small urban shuttle device, the Olli, which is being produced at Local Motion’s Knoxville microfactory, taps IBM’s Watson, and which they label “the world’s first self-driving cognitive vehicle.” Very cool.

co-creation

The first of Local Motor’s revolutionary aspects is its design process, which it labels “co-creation” (AKA crowdsourcing — in fact founder/visionary John B. (Jay) Rogers, Jr. says he was inspired by the Jeff Howe book of the same name). It uses a SaaS platform, where the company posts design challenges, and then community members (some experts, some just enthusiasts) offer their ideas. Eventually, the community votes on which designs to actually produce:

“An active process where brands and their customers work together with solvers, designers, and engineers to accelerate product and technology development. We call this group our Community and proudly work to empower genius ideas and brilliant solutions from Community members across the globe.”

The participatory aspect even extends to the shop floor: buyers can opt to personally take part in the final assembly process (and designs are also easily customized after the sale as well).

The company has also provided consulting services on co-creation for organizations ranging from the US Army to Airbus. 

This is not unlike my “share data, don’t hoard it” IoT Essential Truth, which is also at the heart of my Circular Company vision: when you involve and empower a wide range of people, you can unleash creativity that even the most talented person can’t.

direct digital manufacturing

The second Local Motors innovation is use of creative technologies, especially 3D printing, in manufacturing, what they call “direct digital manufacturing (DDM).”  The process mimics what Siemens does at its “Factory of the Future,”  where complete digitalization gives them quality, precision, and the opportunity for mass customization:

“DDM creates significant unfair advantages: the ability to produce parts directly from a CAD file; elimination of investments in tooling; reduction in time lag between design and production and, best of all, elimination of penalties for redesigns — unlocking mass customization that was previously unobtainable.”

According to Chief Strategy Officer Justin Fishkin, the economies possible with the DDH approach means the Rally Fighter model was profitable after only the 60th one was built.

microfactories

I’ve written before about Ford’s River Rouge plant, the ne plus ultra of the first Industrial Age: iron ore went in one end of the 1 x 1.6 mile factory and Model Ts came out the other.

By contrast, Local Motors is building several supermarket-sized “microfactories” around the globe at a cost 1/100th of that for conventional car plants, which “..will also act as points of sale, or what Fishkin calls ‘experiential dealerships.’”

 


The jury’s still out on Local Motors (Rogers, for example, has come in for some scathing tell-all comments by former employees), but even if it isn’t a roaring success, it will have a lasting legacy for challenging such long-held assumptions about the entire design/build process. and for exploiting the full benefits of digitization.  It’s the essence of Christensen’s disruptive innovation.

We’ll be watching

 

Great Podcast Discussion of #IoT Strategy With Old Friend Jason Daniels

Right after I submitted my final manuscript for The Future is Smart I had a chance to spend an hour with old friend Jason Daniels (we collaborated on a series of “21st Century Homeland Security Tips You Won’t Hear From Officials” videos back when I was a homeland security theorist) on his “Studio @ 50 Oliver” podcast.

We covered just about every topic I hit in the book, with a heavy emphasis on the attitude shifts (“IoT Essential Truths” needed to really capitalize on the IoT and the bleeding-edge concept I introduce at the end of the book, the “Circular Corporation,” with departments and individuals (even including your supply chain, distribution network and customers, if you choose) in a continuous, circular management style revolving around a shared real-time IoT hub.  Hope you’ll enjoy it!

IoT: LiveBlogging PTC’s LiveWorx

Got here a little late for CEO Jim Heppelman’s keynote, so here goes!

  • Vuforia: digital twin gives you everything needed for merging digital “decorations” on the physical object
  • Unique perspective: AR takes digital back to the physical. Can understand & make better decisions.
  • Virtual reality would allow much of the same. Add in 3-D printing, etc.
  • “IoT is PLM.” Says PTC might be only company prepared to do both.
  • Says their logo captures the merger of digital and physical.
  • Case studies: they partnered with Bosch’s Rexroth division. Cytropac built-in IoT connectivity–  used Creo. Full life-cycle management. Can identify patterns of usage, etc. Using PTC’s analytics capacity, machine learning analysis. Want to improve cooling efficiency (it was high at first). Model-based digital twin to monitor product in field, then design an upgrade. How can they increase cooling efficiency 30%??  Came up with new design to optimize water channel that they will build in using 3-D printing. Cool (literally!). 43% increase in cooling efficiency. The design change results in new recommendation engine that helps in sales. Replaced operating manual with 3-D that anyone can understand. (BTW: very cool stagecraft: Heppelmann walks around stage interviewing the Rexroth design team at their workstations).
  • Ooh: getting citizen developers involved!!!  Speeds process, flexibility. App shows how products are actually operating in the field. Lets sales be much more proactive in field. Reinventing CRM.  May no longer need a physical showroom — just put on the AR headset.
  • Connectivity between all assets. The digital twin is identical, not fraternal. Brings AR into factory. They can merge new manufacturing equipment with legacy ones that didn’t have connectivity.  ABB has cloud-based retrofit sensors. Thingworx can connect almost anything, makes Industry 4.0 possible. Amazing demo of a simulated 3-D disassembly and replacement.
  • Hmmm — closing graphic of his preso is a constantly rotating circular one. Anticipating my “circular company” talk on Wednesday????

Closing the Loop With Enterprise Change Management. Lewis Lawrence of Weatherford, services to petroleum industry:

  • former engineer. In charge of Weatherford’s Windchill installation (they also use Creo).
  • hard hit by the drop in gas prices
  • constant state of flux
  • 15 years of constant evolution
  • their mantra: design anywhere, build anywhere.
  • enterprise change — not just engineering.
  • hmmm: according to his graphics, their whole change process is linear. IMHO, that’s obsolete in era of constant change: must evolve to cyclical. Ponderous process…
  • collect data: anything can be added, if it’s latest

The IoT Can Even Help You Breathe Better: GCE Group’s Zen-O portable oxygen concentrator for people with respiratory problems (not actually launched yet):

  • InVMA has built IoT application using ThingWorx to let patients, docs and service providers carefully monitor data
  • GCE made radical change from their traditional business in gas control devices. Zen-O is in the consumer markets. They were very interested in connected products — especially since their key competitor launched one!
  • Goals: predictive maintenance, improved patient care, asset management, development insight.
  • Design process very collaborative, with many partners.

The Digital Value Chain: GE’s Manufacturing Journey. Robert Ibe, global IT Engineering Leader at GE Industrial Solutions:

  • supports Brilliant Factory program.
  • they design and manufacture electrical distribution equipment, 30 factories worldwide.
  • “wing-to-wing” integrated process
  • had a highly complex, obsolete legacy
  • started in 2014: they were still running really old CAD technology. 14 CAD repositories that didn’t talk to each other. 15 year old PLM software. No confidence in any of data they had.
  • They began change with PLM — that’s where the digital thread begins.  PLM is foundation for their transformation.
  • PLM misunderstood: use it to map out cohesive, cross-functional, model-based strategy. Highlight relevance of “design anywhere — manufacture anywhere.” Make PLM master of your domain. Make it critical to commercial & manufacturing. Advertise benefits & value.
  • Whole strategy based on CAD. Windchill heart of the process.
  • Rate of implementation faster than business can keep up with!
  • Process: implementation approach:
    • design systems integration
    • model-based design
    • digital thread
    • manufacturing productivity.
  • common enterprise PLM framework
  • within Windchill, can see entire “digital bill of documents.”
  • focused on becoming critical for supply chain.
  • total shift from their paper-based legacy.
  • integrated regulatory compliance with every step of design.

It’s Not Your Grandmother’s IoT: Blockchain and IoT Morph Into An Emerging Technology Powerhouse:

  • Example of claims for fair-traded coffee that I’ve used in past

Finding Business Value in IoT panel:

  • Bayer — been in IoT (injection devices for medicine) for 7 years.  Reduced a lot of parts inventory.
  • Remote control of vending machines replaces paper & pencil
  • Your team needs to evangelize for biz benefits of IoT
  • New Opportunities:
    • vision and language
    • interacting with physical world
    • problem solving.
  • Didn’t know!  Skype can do real-time translation.
  • Google Deep Mind team worked internally, cut energy costs at its server farms. 15% energy reduction.
  • Digital progress makes economic pie bigger, BUT  most people aren’t benefitting economicallly. Some may be worse off. “Great decoupling” — mushrooming economic gap. One reason is that tech affects different groups differently.
  • “Entirely possible to create inclusive prosperity” through tech!

 

WEDNESDAY

Delivering Smart City Solutions and an Open Citywide Platform to Accelerate Economic Growth and Promote New Solution Innovation, Scott McCarley, PTC:

  • $40 trillion potential benefits from smart cities
  • 1st example & starting point for many cities, is smart lightpoles. Major savings plus value added. Real benefit is building on that, with systems of systems (water, traffic, energy, etc.) — the systems don’t operate in isolation.
  • Future buildings may have built-in batteries to add to power supply. Water reclamation, etc.
  • Cities are focused on KPIs across all target markets.
  • Cornerstone systems for a city: power & grid, water/wastewater, building management, city services & infrastructure.
  • Leveraging ThingWorx to address these needs:
    • deploy out-of-box IoT solutions from a ThingWorx Solution Provider: All examples, include Aquamatix, DEPsys (grid), Sensus, All Traffic, Smoove (bike sharing).
    • leverage ThingWorx to rapidly develop new IoT solutions.
      connect to any device, rapidly develop applications, visually model systems, quickly develop new apps. Augmented reality will play a role!
    • create role-based dashboards:
      one for your own operations, another for city.
    • bring the platform to create a citywide platform.
      Sum of connected physical assets, communication networks, and smart city solutions.

Digital Supply Networks: The Smart Factory. Steven Shepley, Deloitte:

  • 3 types of systems: 1) foundational visualization solutions:  KPIs, etc. 2) advanced analytical solutions 3) cyber-physical solutions.
  • Priority smart factory solutions:
    • advanced planning (risk-adjusted MRP), dynamic sequencing, cross network.
    • value chain integration: signal-based customer/supplies integration, dynamic distribution routing/tracking, digital twin.
    • asset efficiency: predictive maintenance, real-time asset tracking intelligence, energy management
    • labor productivity: robotic and cognitive automation, augmented reality-driven efficiency, real-time safety monitoring
    • exponential tech: 3-D printing, drones, flexible robots.
  • How to be successful: think big, start small, scale fast
  • Act differently: multi-disciplinary teams,
  • sensors getting simpler, easier to connect & retrofit. National Connectors particularly good.

Global Smart Home, Smart Enterprise, and Smart Cities IoT Use Cases. Ken Herron, Unified InBox, Pte.

  • new focus on customer
  • H2M: human to machine communication is THE key to IoT success. Respect their interests.
  • Austin TX: “robot whisperer” — industrial robot company. Their robots aging out, getting out of tune, etc. Predictive analytics anticipates problems.
  • Stuttgart: connected cow — if one cow is getting sick, may spread to entire herd. Intervene.
  • Kuala Lumpur: building bot — things such as paper towel dispensers communicating with management.
  • London: Concierge chatbot — shopper browsing can chat with assistant on combining outfits.
  • Dubai: smart camera. Help find your car in mega-shopping center: read license plates, message the camera, it gives you map to the car.
  • Singapore: Shout — for natural disasters. Walks the person making the alert through process, confirms choices.
  • Stuttgart: Feinstaubalarm — occasional very bad airborne dust at certain times. Tells people with lung problems options, such as taking mass transit.
  • Singapore: Smart appliances — I always thought smart fridge was stupid, but in-fridge camera that lets you shoot a “shelfie” does make sense
  • Fulda Germany: smart clothing for military & police: full record of personal health at the moment. Neat!
  • Noida India — smart sneakers can automatically post your run results (see connection to my SmartAging concept)

Business Impact of IoT, Eric Schaeffer, Accenture:

  • Michelin delivery trucks totally reinvented, major fuel savings, other benefits.
  • manufacturing being deconstructed
  • smart, connected products are causing it
  • industrial companies must begin transformation today

Thingworx: Platform for Management Revolution. W. David Stephenson, Stephenson Strategies:

Here are key points from my presentation about how the IoT can allow radical transformation from linear & hierarchical companies to IoT-centric “circular companies” (my entire presentation can be found here):

  • The IoT can be the platform for dramatic management change that was impossible in the past.
  • Making this change requires an extraordinary shift in management thinking: from hierarchy to collaboration.
  • The results will be worth the effort: not only more efficiency & precision, but also new creativity, revenue streams, & customer loyalty. 
  • In short, it will allow total transformation!

Kickstarting America’s Digital Transformation. Aneesh Chopra & Nicholas Thompson!

  • on day one, Our President (not the buffoon) told Chopra he wanted default to be switch from closed to open government & data.
  • National Wireless Initiative: became law 1 yr. after it was introduced.  Nationwide interoperable, secure wireless system.
  • Obama wanted to harness power of Internet to grow the economy. Talked to CIO of P & G, who was focused on opening up the company to get ideas from outside.
  • Thompson big on open data, but he thinks a lot more now is closed, we’re going wrong way.
  • Interesting example of getting down cost of solar to $1 per installed watt!!
  • Thompson: growing feeling that technology isn’t serving us economically. Chopra: need to democratize the benefits.
  • Chopra talking about opening up Labor Dept. data to lead to creative job opportunities for underserved.

 

 

 

 

ThingWorx Analytics Video: microcosm of why IoT is so transformative!

I’ll speak at PTC’s LiveWorx lollapalooza later this month (ooh: act quickly and I can get you a $300 registration discount: use code EDUCATE300) on my IoT-based Circular Company meme, so I’ve been devouring everything I can about ThingWorx to prepare.

Came across a nifty 6:09 vid about one component of ThingWorx, its Analytics feature. It seems to me this video sez it all about both how you can both launch an incremental IoT strategy (a recent focus of mine, given my webinar with Mendix) that will begin to pay immediate benefits and can serve as the basis for more ambitious transformation later, especially because you’ll already have the analytical tools such as ThingWorx Analytics already installed.

What caught my eye was that Flowserve, the pump giant involved in this case, could retrofit existing pumps with retrofit sensors from National Instruments — crucial for two reasons:

  • you may have major investments in existing, durable machinery: hard to justify scrapping it just to take advantage of the IoT
  • relatively few high-end, high-cost machinery and devices have been redesigned from the ground up to incorporate IoT monitoring and operations.

Note the screen grab: each of these sensors takes 30,000 readings per second. How’s that for real-time data?  PTC refers to this as part of the “volume, velocity and variety challenge of data” with the IoT.

As a microcosm of the IoT’s benefits, this example shows how easy it is to use those massive amounts of data and how they can be used to improve understanding and performance.

There are three major components:

  • ThingWatcher:
    This is the most critical component, because it sifts through the incredible amount of data from the edge, learns what constitutes normal performance for that sensor (creating “pop-up learning flags”), and then monitors it future performance for anomalies and, as the sample video shows, delivers real-time alerts to users (without requiring human monitoring) so they can make adjustments and/or order repairs.  Finds anomalies from edge devices in real-time. Automatically observes and learns the normal state pattern for every device or sensor. It then monitors each for anomalies and delivers re- al-time alerts to end users.
  • ThingPredictor:
    For the all-important new function of predictive maintenance, two different types of ThingPredictor indicators pop up when if anomalies are detected, predicting how long it may be until failure, allowing plenty of time for less-costly, anticipatory repairs. Because the specific deviation is identified in advance, repair crews will have the needed part with them when needed, rather than having to make an additional trip back to pick up parts.

    If you ask for a standard predictive scoring you don’t specify which performance features to include and get a simple predictive score. However, you can specify several key features to evaluate and get a more detailed (and probably more helpful) answer. For example,  “if you indicate an important feature count of three, the causal scoring output will include the three most influential features for each record and the percentage weights of each feature’s influence on the score.”

  • ThingOptimizer:
    Finally, you can use “ThingOptimizer” to do some what-if calculations to decide which possible “levers,” as ThingWorx calls the key variables, could change the projections to either maximize a positive factor or minimize the negatives. “Prescriptive scoring results include both an original score (the score before any lever attributes are changed) and an optimized score (the score after optimal values are applied to the lever attributes). In addition, for each attribute identified in your data as a lever, original and optimal values are included in the prescriptive scoring results.” It sort of reminds me how the introduction of VisiCalc allowed users, for the first time, to play around with variables to see which would have the best results.
Best of all, as the video illustrates, ThingWorx Analytics would facilitate the kind of “Circular Company” I’ll address in my speech, because the exact same real-time data could simultaneously be used by operating personnel to fine tune operations and catch a problem in time for predictive maintenance, and by senior management to get an instant overview of how operations are going at all the installations. Same data, many uses.
Bottom line: a robust IoT platform could be the key to an incremental strategy to begin by improving daily operations and reducing maintenance problems, and also be the underpinning for more radical transformation as your IoT strategy becomes more advanced!  See you at LiveWorx!

Creating Your Incremental IoT Strategy Webinar Tomorrow!

Posted on 1st May 2017 in circular company, data, design

creating your IoT strategy webinar

Hope you’ll join me and Mendix  (which, BTW,  Gartner just tabbed as a platform as service [Paas] “Magic Quadrant” leader for its low-code tools for rapid app development!), for a 10 AM (EDT) webinar Tuesday the 2nd on creating incremental IoT strategies (register here).

In a way, this is an update of the e-book I wrote for SAP several years ago, Mastering the Internet of Things Revolution, in which I also outlined an incremental strategy for testing the IoT waters and then building on those early experiments for more comprehensive change.

That’s important if your company doesn’t have the resources for a total IoT makeover, or if you’re a little in doubt about how the IoT would benefit you.

While I do give a teaser for my IoT-data based “Circular Company” paradigm shift, the webinar is otherwise focused on how incremental IoT projects allow you to build unprecedented (and previously impossible, due to our inability to “see” what was happening inside of things) precision in every aspect of your operations:

Along the way I’ll show how the Mendix platform can play a role, — consistent with the democratizing data meme I’ve pushed since my Data Dynamite book — of empowering everyone, not just programmers, to quickly create enterprise low-code apps to capitalize on the incredible data the IoT yields.

Please join us.

 

Surprising Benefits of Combining IoT and Blockchain (they go beyond economic ones!)

One final effort to work this blockchain obsession out of my system so I can get on to some exciting other IoT news!

I couldn’t resist summarizing for you the key points in”Blockchain: the solution for transparency in product supply chains,” a white paper from Project Provenance Ltd., a London-based collective  (“Our common goal is to deliver meaningful change to commerce through open and accessible information about products and supply chains.”).

If you’ve followed any of the controversies over products such as “blood diamonds” or fish caught by Asian slaves & sold by US supermarkets, you know supply chains are not only an economic issue but also sometimes a vital social (and sometimes environmental) one. As the white paper warns:

“The choices we make in the marketplace determine which business practices thrive. From a diamond in a mine to a tree in a forest, it is the deepest darkest ends of supply chains that damage so much of the planet and its livelihood.”

Yikes!

Now blockchain can make doing the right thing easier and more profitable:

“Provenance enables every physical product to come with a digital ‘passport’ that proves authenticity (Is this product what it claims to be?) and origin (Where does this product come from?), creating an auditable record of the journey behind all physical products. The potential benefits for businesses, as well as for society and the environment, are hard to overstate: preventing the selling of fake goods, as well as the problem of ‘double spending’ of certifications present in current systems. The Decentralized Application (Dapp) proposed in this paper is still in development and we welcome businesses and standards organizations to join our consortium and collaborate on this new approach to understanding our material world.”

I also love Provenance’s work with blockchain because it demonstrates one of my IoT “Essential Truths,” namely, that we must share data rather than hoard it.  The exact same real-time data that can help streamline the supply chain to get fish to our stores quicker and with less waste can also mean that the people catching it are treated fairly. How cool is that?  Or, as Benjamin Herzberg, Program Lead, Private Sector Engagement for Good Governance at the World Bank Institute puts it in the quote that begins the paper, Now, in the hyper-connected and ever-evolving world, transparency is the new power.

While I won’t summarize the entire paper, I do recommend that you so, especially if blockchain is still new to you, because it gives a very detailed explanation of each blockchain component.

Instead, let’s jump in with the economic benefits of a blockchain and IoT-enabled supply chain, since most companies won’t consider it, no matter what the social benefits, if it doesn’t help the bottom line. The list is long, and impressive:

  • “Interoperable: A modular, interoperable platform that eliminates the possibility of double spending
  • Auditable: An auditable record that can be inspected and used by companies, standards organizations, regulators, and customers alike
  • Cost-efficient:  A solution to drastically reduce costs by eliminating the need for ‘handling companies’ to be audited
  • Real-time and agile:  A fast and highly accessible sign-up means quick deployment
  • Public: The openness of the platform enables innovation and could achieve bottom-up transparency in supply chains instead of burdensome top-down audits
  • Guaranteed continuity:  The elimination of any central operator ensures inclusiveness and longevity” (my emphasis)

Applying it to a specific need, such as documenting that a food that claims to be organic really is, blockchain is much more efficient and economical than cumbersome current systems, which usually rely on some third party monitoring and observing the process.  As I’ve mentioned before, the exquisite paradox of blockchain-based systems is that they are secure and trustworthy specifically because no one individual or program controls them: it’s done through a distributed system where all the players may, in fact, distrust each other:

“The blockchain removes the need for a trusted central organization that operates and maintains this system. Using blockchains as a shared and secure platform, we are able to see not only the final state (which mimics the real world in assigning the materials for a given product under the ownership of the final customer), but crucially, we are able to overcome the weaknesses of current systems by allowing one to securely audit all transactions that brought this state of being into effect; i.e., to inspect the uninterrupted chain of custody from the raw materials to the end sale.

“The blockchain also gives us an unprecedented level of certainty over the fidelity of the information. We can be sure that all transfers of ownership were explicitly authorized by their relevant controllers without having to trust the behavior or competence of an incumbent processor. Interested parties may also audit the production and manufacturing avatars and verify that their “on-chain” persona accurately reflects reality.”

The white paper concludes by also citing an additional benefit that I’ve mentioned before: facilitating the switch to an environmentally-sound “circular economy,” which requires not only tracking the creation of things, but also their usage, trying to keep them out of landfills. “The system proposed in this paper would not only allow the creation (including all materials, grades, processes etc) and lifecycle (use, maintenance etc) to be logged on the blockchain, but this would also make it easy to access this information when products are returned to be assessed and remanufactured into a new item.”

Please do read the whole report, and think how the economic benefits of applying blockchain-enabled IoT practices to your supply chain can also warm your heart.

 

More Blockchain Synergies With IoT: Supply Chain Optimization

The more I learn about blockchain’s possible uses — this time for supply chains — the more convinced I am that it is absolutely essential to full development of the IoT’s potential.

I recently raved about blockchain’s potential to perhaps solve the IoT’s growing security and privacy challenges. Since then, I’ve discovered that it can also further streamline and optimize the supply chain, another step toward the precision that I think is such a hallmark of the IoT.

As I’ve written before, the ability to instantly share (something we could never do before) real-time data about your assembly line’s status, inventories, etc. with your supply chain can lead to unprecdented integration of the supply chain and factory, much of it on a M2M basis without any human intervention. It seems to me that the blockchain can be the perfect mechanism to bring about this synchronization.

A brief reminder that, paradoxically, it’s because blockchain entries (blocks) are shared, and distributed (vs. centralized) that it’s secure without using a trusted intermediary such as a bank, because no one participant can change an entry after it’s posted.

Complementing the IBM video I included in my last post on the subject, here’s one that I think succinctly summarizes blockchain’s benefits:

A recent LoadDelivered article detailed a number of the benefits from building your supply chain around blockchain. They paralleling the ones I mentioned in my prior post regarding its security benefits, of using blockchain to organize your supply chain (with some great links for more details):

  • “Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes (Talking Logistics)
  • Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents
  • Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade (Provenance)
  • Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.
  • Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.”

That kind of information, derived from real-time IoT sensor data, should be irresistible to companies compared to the relative inefficiency of today’s supply chain.

The article goes on to list a variety of benefits:

  • “Enhanced Transparency. Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators (Talking Logistics).
  • Greater Scalability. Virtually any number of participants, accessing from any number of touchpoints, is possible (Forbes).
  • Better Security. A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes (Spend Matters).
  • Increased Innovation. Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.”

Note that it the advantages aren’t all hard numbers, but also allowing marketing innovations, similar to the way the IoT allows companies to begin marketing their products as services because of real-time data from the products in the field. In the case of applying it to the supply chain (food products, for example), manufacturers could get a marketing advantage because they could offer objective, tamper-proof documentation of the product’s organic or non-GMO origins. Who would have thought that technology whose primary goal is increasing operating efficiency could have these other, creative benefits as well?

Applying  blockchain to the supply chain is getting serious attention, including a pilot program in the Port of Rotterdam, Europe’s largest.  IBM, Intel, Cisco and Accenture are among the blue-chip members of Hyperledger, a new open source Linux Foundation collaboration to further develop blockchain. Again, it’s the open source, decentralized aspect of blockchain that makes it so effective.

Logistics expert Adrian Gonzalez is perhaps the most bullish on blockchain’s potential to revolutionize supply chains:

“the peer-to-peer, decentralized architecture of blockchain has the potential to trigger a new wave of innovation in how supply chain applications are developed, deployed, and used….(becoming) the new operating system for Supply Chain Operating Networks

It’s also another reminder of the paradoxical wisdom of one of my IoT “Essential Truths,” that we must learn to ask “who else could share this information” rather than hoarding it as in the past. It is the very fact that blockchain data is shared that means it can’t be tampered with by a single actor.

What particularly intrigues me about widespread use of blockchain at the heart of companies’ operations and fueled by real-time data from IoT sensors and other devices is that it would ensure that privacy and security, which I otherwise fear would always be an afterthought, would instead be inextricably linked with achieving efficiency gains. That would make companies eager to embrace the blockchain, assuring their attention to privacy and security as part of the deal. That would be a definite win-win.

Blockchain must definitely be on your radar in 2017.

 

Lo and behold, right after I posted this, news that WalMart, the logistics savants, are testing blockchain for supply chain management!

 

IoT Intangibles: Increased Customer Loyalty

There are so many direct, quantifiable benefits of the IoT, such as increased quality (that 99.9988% quality rate at Siemens’s Amberg plant!) and precision, that we may forget there are also potential intangible benefits.

Most important of those is customer loyalty, brought about by dramatic shifts both in product designs and how they are marketed.

Much of this results from the IoT lifting the veil of Collective Blindness to which I’ve referred before: in particular, our prior inability to document how products were actually used once they left the loading dock. As I’ve speculated, that probably meant that manufacturers got deceptive information about how customers actually used products and their degree of satisfaction. The difficulty of getting feedback logically meant that those who most liked and most hated a product were over-represented: those who kinda liked it weren’t sufficiently motivated to take the extra steps to be heard.

Now, by contrast, product designers, marketers, and maintenance staffs can share (that critical verb from my Circular Company vision!) real-time data about how a product is actually operating in the field, often from a “digital twin” they can access right at their desks.

Why’s that important?

It can give them easy insights (especially if those different departments do access and discuss the data at the same time, each offering its own unique perspectives, on issues that will build customer loyalty:

  • what new features can we add that will keep them happy?
  • can we offer upgrades such as new operating software (such as the Tesla software that was automatically installed in every single car and avoided a recall) that will provide better customer experiences and keep the product fresh?
  • what possible maintenance problems can we spot in their earliest stages, so we can put “predictive maintenance” services into play at minimal cost and bother to the customer?

I got interested in this issue of product design and customer loyalty while consulting for IBM in the 9o’s, when it introduced the IBM PS 2E (for Energy & Environmental), a CES best-of-show winner in part because of its snap-together modular design. While today’s thin-profile-at-all-costs PC and laptop designs have made user-friendly upgrades a distant memory, one of the things that appealed to me about this design was the realization that if you could keep users satisfied that they were on top of  new developments by incremental substitution of new modules, they’d be more loyal and less likely to explore other providers.

In the same vein, as GE has found, the rapid feedback can dramatically speed upgrades and new features. That’s important for loyalty: if you maintain a continuing interaction with the customer and anticipate their demands for new features, they’ll have less reason to go on the open market and evaluate all of your competitors’ products when they do want to move up.

 

Equally important for customer loyalty is the new marketing options that the continuous flow of real-time operating data offer you. For a growing number of companies, that means they’re no longer selling products, but leasing them, with the price based on actual customer usage: if it ain’t bein’ used, it ain’t costing them anything and it ain’t bringing you any revenue!

Examples include:

  • jet turbines which, because of the real-time data flow, can be marketed on the basis of thrust generated: if it’s sitting on the ground, the leasee doesn’t pay.  The same real-time data flow allows the manufacturer to schedule predictive maintenance at the earliest sign of a problem, reducing both its cost and the impact on the customer.
  • Siemens’s Mobility Services, which add in features such as 3-D manufactured spare parts that speed maintenance and reduced costs, keeping the trains running.
  • Philips’s lighting services, which are billed on the basis of use, not sold.
  • SAP’s prototype smart vending machine, which (if you opt in) may offer you a special discount based on your past purchasing habits.

At its most extreme is Caterpillar’s Reman process, where the company takes back and remanufactures old products, giving them a new life — and creating new revenues — when competitors’ products are in the landfill.

Loyalty can also be a benefit of IoT strategies for manufacturers’ own operations as well. Remember that the technological obstacles to instant sharing of real-time data have been eliminted for the supply chain as well. If you choose to share it, your resupply programs can also be automatically triggered on a M2M basis, giving an inherent advantage to the domestic supplier who can get the needed part there in a few hours, versua the low-cost supplier abroad who may take weeks to reach your loading dock.

It may be harder to quantify than quality improvements or streamlined production through the IoT, but that doesn’t mean that dependable revenue streams from loyal customers aren’t an important potential benefit as well.

Blockchain might be answer to IoT security woes

Could blockchain be the answer to IoT security woes?

I hope so, because I’d like to get away from my recent fixation on IoT security breaches and their consequences,  especially the Mirai botnet attack that brought a large of the Internet to its knees this Fall and the even scarier (because it involved Philips, a company that takes security seriously) white-hat hackers attack on Hue bulbs.  As I’ve written, unless IoT security is improved, the public and corporations will lose faith in it and the IoT will never develop to its full potential.

Now, there’s growing discussion that blockchain (which makes bitcoin possible), might offer a good IoT security platform.

Ironically — for something dealing with security — blockchain’s value in IoT may be because the data is shared and no one person owns it or can alter it unilaterally (BTW, this is one more example of my IoT “Essential Truth” that with the IoT data should be shared, rather than hoarded as in the past.

If you’re not familiar with blockchain, here’s an IBM video, using an example from the highly security-conscious diamond industry, that gives a nice summary of how it works and why:

The key aspects of blockchain is that it:

  • is transparent
  • can trace all aspects of actions or transactions (critical for complex sequences of actions in an IoT process)
  • is distributed: there’s a shared form of record keeping, that everyone in the process can access.
  • requires permission — everyone has permission for every step
  • is secure: no one person — even a system administrator — can alter it without group approval.

Of these, perhaps the most important aspect for IoT security is that no one person can change the blockchain unilaterally, adding something (think malware) without the action being permanently recorded and without every participant’s permission.  To add a new transaction to the blockchain, all the members must validate it by applying an algorithm to confirm its validity.

The blockchain can also increase efficiency by reducing the need for intermediaries, and it’s a much better way to handle the massive flood of data that will be generated by the IoT.

The Chain of Things think tank and consortium is taking the lead on exploring blockchain’s application to the IoT. The group describes itself as “technologists at the nexus of IoT hardware manufacturing and alternative blockchain applications.” They’ve run several blockchain hackathons, and are working on open standards for IoT blockchains.

Contrast blockchain with the current prevailing IoT security paradigm.  As Datafloq points out, it’s based on the old client-server approach, which really doesn’t work with the IoT’s complexity and variety of connections: “Connection between devices will have to exclusively go through the internet, even if they happen to be a few feet apart.”  It doesn’t make sense to try to funnel the massive amounts of data that will result from widespread deployment of billions of IoT devices and sensor through a centralized model when a decentralized, peer-to-peer alternative would be more economical and efficient.

Datafloq concludes:

“Blockchain technology is the missing link to settle scalability, privacy, and reliability concerns in the Internet of Things. Blockchain technologies could perhaps be the silver bullet needed by the IoT industry. Blockchain technology can be used in tracking billions of connected devices, enable the processing of transactions and coordination between devices; allow for significant savings to IoT industry manufacturers. This decentralized approach would eliminate single points of failure, creating a more resilient ecosystem for devices to run on. The cryptographic algorithms used by blockchains, would make consumer data more private.”

I love it: paradoxically, sharing data makes it more secure!  Until something better comes along and/or the nature of IoT strategy challenges changes, it seems to me this should be the basis for secure IoT data transmission!

 

 

 

Siemens’s MindSphere: from automation to digitalization

Perhaps the most important component of a successful IoT transformation is building it on a robust platform, because that alone can let your company go beyond random IoT experiments to achieve an integrated IoT strategy that can add new components systematically and create synergistic benefits by combining the various aspects of the program.

A good starting point for discussion of such platforms is a description of the eight key platform components as detailed by IoT Analytics:

  1. “Connectivity & normalization: brings different protocols and different data formats into one ‘software’  interface ensuring accurate data streaming and interaction with all devices.
  2. Device management: ensures the connected ‘things’ are working properly, seamlessly running patches and updates for software and applications running on the device or edge gateways.
  3. Database: scalable storage of device data brings the requirements for hybrid cloud-based databases to a new level in terms of data volume, variety, velocity and veracity.
  4. Processing & action management: brings data to life with rule-based event-action-triggers enabling execution of ‘smart’ actions based on specific sensor data.
  5. Analytics: performs a range of complex analysis from basic data clustering and deep machine learning to predictive analytics extracting the most value out of the IoT data-stream.
  6. Visualization: enables humans to see patterns and observe trends from visualization dashboards where data is vividly portrayed through line-, stacked-, or pie charts, 2D- or even 3D-models.
  7. Additional tools: allow IoT developers prototype, test and market the IoT use case creating platform ecosystem apps for visualizing, managing and controlling connected devices.
  8. External interfaces: integrate with 3rd-party systems and the rest of the wider IT-ecosystem via built-in application programming interfaces (API), software development kits (SDK), and gateways.”

Despite (or because of, the complexity,) I think this is a decent description, because a robust IoT platf0rm really must encompass so many functions. The eight points give a basis for deciding whether what a company hawks as an IoT platform really deserves that title or really constitutes only part of the necessary whole (Aside: it’s also a great illustration of my Essential Truth that, instead of hoarding data as in the past, we must begin to ask “who else can use this data?” either inside the company or, potentially, outside, then use technology such as an IoT platform to integrate all those data uses productively.).

During my recent Barcelona trip (disclaimer: Siemens paid my way and arranged special access to some of its key decision makers, but made no attempt to limit my editorial judgment) I interviewed the company’s Chief Strategy Officer, Dr. Horst J. Kayser, who made it clear (as I mentioned in my earlier post about Siemens) that one of the advantages the company has over pure-play software firms is that it can apply its software offerings internally first and tweak them there, because of its 169-year heritage as a manufacturer, and “sits on a vast program of automation.”

Siemens’s IoT platform, MindSphere  is a collaboration with SAP, using the latter’s vast HANA cloud.  It ties together all components of Siemens’s IoT offerings, including data analytics, connectivity capabilities, developers’ tools, applications and services. MindSphere focuses on monitoring manufacturing assets’ real-time status, to evaluate and use customers’ data, producing insights that can cut production costs, improve performance, and even switch to predictive maintenance. Its Mind Connect Nano collects data from the assets and transferring it to MindSphere.

The “digital twin” is integrated throughout the MindSphere platform. Kayser says that “there’s a digital twin of the entire process, from conception through the manufacturing and maintenance, and it feeds the data back into the model.” In fact,  one dramatic example of the concept in action is the new Maserati Ghibli, created in 16 months instead of 30 — almost 50% less time than for prior models.  Using the Teamcenter PLM software, the team was able to virtually develop and extensively test the car before anything was created physically.

IMHO, Mindsphere and components such as Teamware might really be the key to actualizing my dream of the circular company, in this case with the IoT-based real-time digital twin at the heart of the enterprise — as Kayser said, “everything is done through one consistent data set.)” I hope to explore my concept, and the benefits I think it can produce, more with the Siemens strategists in the future!  I tried the idea out on several of them in Barcelona, and no one laughed, so we’ll see…

As with the company’s rail digitization services that I mentioned in my earlier post, there’s an in-house guinea pig for MindSphere as well: the company’s “Factory of the Future” in Amberg. The plant manufactures Simatic controllers, the key to the company’s automation products and services, to which digitalization is now being added as part of the company’s Industrie 4.0 IoT plan for manufacturing (paralleling GE’s “Industrial Internet.”). As you may be aware, Siemens’s efforts in this area are a subset of a formal German government/industry initiative — I  doubt seriously we’ll see this in the U.S. under Trump.

The results of digitalization at Amberg are astonishing by any measure, especially the ultimate accomplishment: a  99.9988 percent rate (no typo!!), which is even more incredible when you realize this is not mass production with long, uniform production runs: the plant manufactures more than 1,000 varieties of the controllers, with a total volume of 12 million Simatic products each year, or about one per second.  Here are some of the other benefits of what they call an emphasis on optimizing the entire value chain:

  • shorter delivery time: 24 hours from order.
  • time to market reduced by up to 50%.
  • cost savings of up to 25%

Of course there are several other robust IoT platforms, including GE’s Predix and PTC’s Thingworx, but my analysis shows that Mindsphere meets IoT Analytics’ criteria, and, combined with the company’s long background in manufacturing and automation, should make it a real player in the industrial internet. Bravo!

http://www.stephensonstrategies.com/">Stephenson blogs on Internet of Things Internet of Things strategy, breakthroughs and management