Human Side of IoT: Local Startup Empowers Forgotten Shop Floor Workers!

Let’s not forget: human workers can and must still pay a role in the IoT!

Sure, the vast majority of IoT focus is on large-scale precision and automated manufacturing (Industrie 4.0 as it is known in Germany, or the Industrial Internet here). However, an ingenious local startup, Tulip, is bringing IoT tools to the workbench and shop floor, empowering individual industrial engineers to create no-code, low-code apps that can really revolutionize things in the factory.  Yes, many jobs will be replaced by IoT tech, but with Tulip, others will be “enabled” — workers will still be there to make decisions, and they’ll be empowered as never before.

Um, I’m thinking superhuman factory Transformers, LOL!

The Tulip IoT gateway allows anyone to add sensors, tools, cameras and even “pick to light bins” (never heard that bit of shop lingo, but they looked cool in video) to the work station, without writing a line of code, because of the company’s diverse drivers support factory floor devices. It claims to “fill the gap between rigid back-end manufacturing IT systems and the dynamic operations taking place on the shop floor.”

Rony Kubat, the young MIT grad who’s the company’s co-founder is on a mission “to revolutionize manufacturing software,” as he says, because people who actually have to play a hands-on roll in product design and production on  shop floor have been ignored in the IoT, and many processes such as training are still paper-based:

“Manufacturing software needs to evolve. Legacy applications neglect the human side of manufacturing and therefore suffer from low adoption. The use of custom, expensive-to-maintain, in-house solutions is rampant. The inability of existing solutions to address the needs of people on the shop floor is driving the proliferation of paper-based workflows and the use of word processing, spreadsheet and presentation applications as the mainstay of manufacturing operations. Tulip aims to change all this through our intuitive, people-centric platform. Our system makes it easy for manufacturers to connect hands-on work processes, machines and backend IT systems through flexible self-serve manufacturing apps”.

While automation in factory floors continues to grow, manufacturers often find their hands-on workforce left behind, using paper and legacy technology. Manufacturers are seeing an enormous need to empower their workforce with intuitive digital tools. Tulip is a solution to this problem. Front-line engineers create flexible shop-floor apps that connect workers, machines and existing IT systems. These apps guide shop-floor operations enabling real-time data collection and making that data useful to workers on factory floors. Tulip’s IoT gateway integrates the devices, sensors and machines on the shop floor, making it easy to monitor and interact with previously siloed data streams (you got me there: I HATE siloed data). The platform’s self-serve analytics engine lets manufacturers turn this data into actionable insights, supporting continuous process improvement.

The company has grown quickly, and has dozens of customers in fields as varied as medical devices, pharma, and aerospace. The results are dramatic and quite varied:

  • Quality: A Deloitte analysis of Tulip’s use at Jabil, a global contract manufacturer, documented 10+% production increases. It reduced quality issues in manual assembly by more than 10%. found production yield increased by more than 10 percent, and manual assembly quality issues were reduced by 60 percent in the initial four weeks of operation.
  • Training: Other customers reduced the amount of time to train new operators by  90 percent, in a highly complicated, customized and regulated biopharmaceutical training situation: “Previously, the only way to train new operators was to walk them repeatedly through all the steps with an experienced operator and a process engineer. Tulip quickly deployed its software along with IoT gateways for the machines and devices on the process, and managed to cut training time almost by half.”
  • Time to Market: They reduced a major athletic apparel maker’s time to market by 50% for hundreds of new product variations. That required constantly evaluating the impact of dozens of different quality drivers to isolate defects’ root causes — including both manual and automated platforms. Before Tulip, it could take weeks of analysis until a process was ready for production. According to the quality engineer on the project, “I used Tulip’s apps to communicate quality issues to upstream operators in real-time. This feedback loop enabled the operators to take immediate corrective action and prevent additional defects from occurring.”

Similar to my friends at Mendix, the no-code/low-code aspect of Tulip’s Manufacturing App Platform lets process engineers without programming backgrounds create shop floor apps through interactive step-by-step work instructions. “The apps give you access through our cloud to an abundance of information and real-time analytics that can help you measure and fine-tune your manufacturing operations,” Tulip Co-Founder Natan Linder says (the whiz-kid is also chairman of 3-D printer startup Formlabs). 

Linder looked at analytics apps that let users create apps through simple tools and thought why not provide the same kind of tools for training technicians on standard operating procedures or for building product or tracking quality defects? “This is a self-service tool that a process or quality engineer can use to build apps. They can create sophisticated workflows without writing code…. Our cloud authoring environment basically allows you to just drag and drop and connect all the different faucets and links to create a sophisticated app in minutes, and deploy it to the floor, without writing code,” he says. Tulip enables sharing appropriate real-time analytics with each team member no matter where they are and to set up personal alerts for the data that’s relevant to each.

IMHO, this is a perfect example of my IoT “Essential Truth” of “empowering every worker with real-time data.”  Rather than senior management parceling out (as they saw fit) the little amount of historical data that was available in the past, now workers can share (critical verb) that data instantly and combine it with the horse sense that can only be gained by those actually doing the work for years. Miracles will follow!

Writ large, the benefits of empowering shop floor workers are potentially huge.  According to the UK Telegraph, output can increase 8-9 %, while cutting costs 7-8%, cutting costs approximately 7-8 percent. The same research estimates that industrial companies “could see as much as a 300 basis point boost to their bottom line.”

Examples of the relevant shop-floor analytics include:

  • “Show real-time metrics from the shop floor
  • Report trends in your operations
  • Send customized alerts based on user defined triggers
  • Inform key stakeholders with relevant data”

IDC Analyst John Santagate neatly sums up the argument for empowering workers through the IoT thusly:

“With all of the talk and concern around the risk of losing the human element in manufacturing, due to the increasing use of robotics, it is refreshing to see a company focus on improving the work that is still done by human hands.  We typically hear the value proposition of deploying robots and automation of improvements to efficiency, quality, and consistency.  But what if you could achieve these improvements to your manufacturing process by simply applying analytics and technology to the human effort?  This is exactly what they are working on at Tulip.  

“Data analytics is typically thought about at the machine level. Manufacturers measure things such as throughput, efficiency, and quality by applying sensors to their manufacturing equipment, capturing the data signals, and conducting analytics.  The analytics provide an understanding of the health of the manufacturing process and enable them to make any necessary changes to improve the process.  Often, such efforts are top down driven.  Management drives these projects in order to improve the performance of the business.  An alternative approach is to enable the production floor to proactively identify improvement opportunities and take action, a bottom-up approach. For this self-service approach to succeed shop-floor engineers need a flexible platform such as Tulip’s, that allows them to replace paper-based processes with technology and build the applications that enable them to manage hands-on processes.  The real time analytics and visibility of hands-on manufacturing processes from Tulip’s platform puts the opportunity to identify improvement opportunities directly in the hands of people engaged in the work cells.

“Digital transformation in manufacturing is about leveraging advanced digital technology to improve how a company operates.  But, as the manufacturing industry focuses on digital transformation it must not forget the value of the human element.  Indeed, we don’t often think about digital transformation in relation to human effort, but this is exactly the sort of thinking that can deliver some of the early wins in digital transformation. “ 

Well said — and thanks to Tulip for filling a critical and often overlooked aspect of the IoT!

I’m reminded of my old friend Steve Clay-Young, who managed the BAC’s shop in Boston, and first alerted me to the “National Home- workshop Guild” which Popular Science started in the Depression and then played a critical part in the war effort. Craftsmen who belonged all got plans and turned out quality products on their home lathes.  I can definitely see a rebirth of the concept as the cost of 3-D printers from Kubat’s other startup, Formlabs drops, and we can have the kind of home (or at least locally-based production that Eric Drexler dreamed of in his great Engines of Creation (which threw in another transformational production technology, nanotech). 

I’m clearing space in my own workshop so I can begin production on IoT/nanotech/3-D printed products. Move over, GE.

Hippo: IoT-based paradigm shift from passive to active insurance companies

I’m a big advocate of incremental IoT strategies (check out my recent webinar with Mendix on this approach), for existing companies that want to test the waters first. However, I’m enough of a rabble-rouser to also applaud those who jump right in with paradigm-busting IoT (and big data) startups.

Enter, stage left, a nimble (LOL) new home insurance company: Hippo!

IMHO, Hippo’s important both in its own right and also as a harbinger of other startups that will exploit the IoT and big data to break with years of tradition in the insurance industry as a whole, no longer sitting passively to pay out claims when something bad happens, but seizing the initiative to reduce risk, which is what insurance started out to do.

After all, when a Mr. B. Franklin (I’ll tell you: plunk that guy down in 2017 and he’d create a start-up addressing an unmet need within a week!) and his fellow firefighters launched the Philadelphia Contributionship in 1752, one of the first things they did was to send out appraisers to determine the risk of a house burning and suggest ways to make it safer.

Left to right: Eyal Navon, CTO and cofounder; Assaf Wand, CEO cofounder of Hippo

In fact, there’s actually a term for this kind of web-based insurance, coined by McKinsey: insuretec” (practicing what he preached, one of Hippo’s founders had been at McKinsey, and what intrigued the founders about insurance as a target was that it’s a huge industry, hasn’t really innovate for years, and didn’t focus on the customer experience.).

I talked recently to two key staffers, Head of Product Aviad Pinkovezky and Head of Marketing, Growth and Product Innovation Jason White.  They outlined a radically new strategy “with focused attention on loss reduction”:

  • sell directly to consumers instead of using agents
  • cut out legacy coverage leftovers, such as fur coats, silverware & stock certificates in a home safe) and instead cover laptops, water leaks, etc.
  • Leverage data to inform customers about appliances they own that might be more likely to cause problems, and communicate with them on a continuous basis about steps such as cleaning gutters that could reduce problems.

According to Pinkovezky, the current companies “are reactive, responding to something that takes place. Consumer-to-company interaction is non-continuous, with almost nothing between paying premiums and filing a claim.  Hippo wants to build must more of a continuous relationship, providing value added,” such as an IoT-based water-leak detection device that new customers receive.

At the same time, White said that the company is still somewhat limited in what if can do to reduce risk because so much of it isn’t really from factors such as theft (data speaks: he said thefts actually constitute little of claims) but from one, measured by frequency and amount of damage (according to their analysis) that’s beyond their control: weather. As I pointed out, that’s probably going to constitute more of a risk in the foreseeable future due to global warming.

Hippo also plans a high-tech, high-touch strategy, that would couple technnology with a human aspect that’s needed in a stressful situation such as a house fire or flood. According to Forbes:

The company acknowledges that its customers rely on Hippo to protect their largest assets, and that insurance claims often derive from stressful experiences. In light of this, Hippo offers comprehensive, compassionate concierge services to help home owners find hotels when a home becomes unlivable, and to supervise repair contractors when damage occurs.”

While offering new services, the company has firm roots in the non-insuretech world, because its policies are owned and covered by Topa, which was founded more than 30 years ago.

Bottom line: if you’re casting about for an IoT-based startup opportunity, you’d do well to use the lens McKinsey applied to insurance: look for an industry that’s tradition-bound, and tends to react to change rather than initiate it (REMEMBER: a key element of the IoT paradigm shift is that, for the first time, we can piece “universal blindness” and really see inside things to gauge how they are working [or not] — the challenge is to capitalize on that new-found data). 

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!

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!

 

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!

 

 

 

2nd day liveblogging, Gartner ITxpo, Barcelona

Accelerating Digital Business Transformation With IoT Saptarshi Routh Angelo Marotta
(arrived late, mea culpa)

  • case study (didn’t mention name, but just moved headquarters to Boston. Hmmmmm).
  • you will be disrupted by IoT.
  • market fragmented now.

Toshiba: How is IoT Redefining Relationships Between Customers and Suppliers, Damien Jaume, president, Toshiba Client Solutions, Europe:

  • time of tremendous transformation
  • by end of ’17, will surpass PC, tabled & phone market combined
  • 30 billion connect  devices by 2020
  • health care IoT will be $117 billion by 2020
  • 38% of indiustry leaders disrupted by digitally-enabled competitors by 2018
  • certainty of customer-supplier relationship disruption will be greatest in manufacturing, but also every other market
    • farming: from product procurement to systems within systems. Smart, connected product will yield to integrated systems of systems.
  • not selling product, but how to feed into whole IoT ecosystem
  • security paramount on every level
  • risk to suppliers from new entrants w/ lean start-up costs.
  • transition from low engagement, low trust to high engagement, high trust.
  • Improving efficiencies
  • ELIMINATE MIDDLEMAN — NO LONGER RELEVANT
  • 4 critical success factors:
    • real-time performance pre-requisite
    • robustness — no downtime
    • scalability
    • security
  • case studies: energy & connected home, insurance & health & social care (Neil Bramley, business unit director for clients solutions
    • increase depth of engagement with customer. Tailored information
    • real-time performance is key, esp. in energy & health
    • 20 million smart homes underway in GB by 2020:
      • digitally empowering consumers
      • engaging consumers
      • Transforming relationships among all players
      • Transforming homes
      • Digital readiness
    • car insurance: real-time telematics.
      • real-time telematics data
      • fleet management: training to reduce accidents. Working  w/ Sompo Japan car insurance:
    • Birmingham NHS Trust for health (Ciaron Hoye, head of digital) :
      • move to health promotion paradigm
      • pro-actively treat patients
      • security first
      • asynchronous communications to “nudge” behavior.
      • avoiding hip fractures
      • changing relationship w/ the patient: making them stakeholders, involving in discussion, strategy
      • use game theory to change relationship

One-on-one w/ Christian Steenstrup, Gartner IoT analyst. ABSOLUTE VISIONARY — I’LL BE INTERVIEWING HIM AT LENGTH IN FUTURE:

  • industrial emphasis
  • applications more ROI driven, tangible benefits
  • case study: mining & heavy industry
    • mining in Australia, automating entire value train. Driverless. Driverless trains. Sensors. Caterpillar. Collateral benefits: 10% increase in productivity. Less payroll.  Lower maintenance. Less damage means less repairs.
    • he downplays AR in industrial setting: walking in industrial setting with lithium battery strapped to your head is dangerous.
    • big benefit: less capital expense when they build next mine. For example, building the town for the operators — so eliminate the town!
  • take existing processes & small improvements, but IoT-centric biz, eliminating people, might eliminate people. Such as a human-less warehouse. No more pumping huge amount of air underground. Huge reduction with new system.  Mine of future: smaller holes. Possibility  of under-sea mining.
  • mining has only had incremental change.
  • BHP mining’s railroad — Western Australia. No one else is involved. “Massive experiment.”
  • Sound sensing can be important in industrial maintenance.  All sorts of real-time info. 
  • Digital twins: must give complete info — 1 thing missing & it doesn’t work.
  • Future: 3rd party data brokers for equipment data.
  • Privacy rights of equipment.
  • “communism model” of info sharing — twist on Lenin.

 

Accelerating Digital Transformation with Microsoft Azure IoT Suite (Charlie Lagervik):

  • value networking approach
  • customer at center of everything: customer conversation
  • 4 imperatives:
    • engage customers
    • transform products
    • empower employees
    • optmize operations
  • their def. of IoT combines things/connectivity/data/analytics/action  Need feedback loop for change
  • they focus on B2B because of efficiency gains.
  • Problems: difficult to maintain security, time-consuming to launch, incompatible with current infrastructure, and hard to scale.
  • Azure built on cloud.
  • InternetofYourThings.com

 

Afternoon panel on “IoT of Moving Things” starts with all sorts of incredible factoids (“since Aug., Singapore residents have had access to self=driving taxis”/ “By 2030, owning a car will be an expensive self-indulgence and will no longer be legal.”

  • vehicles now have broader range of connectivity now
  • do we really want others to know where we are? — privacy again!
  • who owns the data?
  • what challenges do we need to overcome to turn data into information & valuable insight that will help network and city operators maximize efficiency & drive improvement across our transportation network?
  • think of evolution: now car will be software driven, then will become living room or office.
  • data is still just data, needs context & location gives context.
  • cities have to re-engineer streets to become intelligent streets.
  • must create trust among those who aren’t IT saavy.
  • do we need to invest in physical infrastructure, or will it all be digital?
  • case study: one car company w/ engine failures in 1 of 3 cars gave the consultants data to decide on what was the problem.

Live Blogging Gartner ITxpo Barcelona!

After a harrowing trip via Air France (#neveragain) I’m in lovely Barcelona, live-blogging Gartner ITxpo courtesy of Siemens — but they aren’t dictating my editorial judgment.

Keynoter is Peter Sondergaard, Sr. VP, Gartner Research:

  • start with high-scale traditional IT structures, but with new emphasis on cloud, etc. IT system now partially inside your org. and part outside.  We are half-way through transition to cloud: half of sales support now through cloud. More financial, HR & other functions. General trend toward cloud, but still some internal processes as necessary. Must clean up traditional inside processes.
    • “Ecosystems are the next evolution of Digital”
    • Must learn to measure your investments in customer experience.
    • Starting to explore VR & AR (personal shout out to PTC & clients such as Caterpillar!!)
    • must understand customer’s intent through advanced algorithms.  Create solutions to problems they don’t even know they have!
  • next domain of new platform: Things:
    • build strategies with two lenses: consumer preferences, AND the enterprise IoT lens.
    • leverage exponential growth in connected things
    • 27445 exabytes of data by 2020!
    • can’t just bolt on new systems on old ones: must rework existing systems to include devices — processes, workflow, much harder (i.e., my circular company paradigm).
  • intelligence: how your systems learn and decide independently
    • algorithms– algorithmic intelligence — drives decisions
    • now, AI, driven by machine learning. Machines learn from experience.
    • information is new code base
    • we will employ people to train things to learn from experience through neural networks
  • ecosystems
    • linear value supply chains transformed to ecosystems through electronic interchange.
    • others can build experiences, etc. that you haven’t thought out through APIs  — my “share data” Essential Truth. APIs implement business policies in the digital world.c
  • customers
    • customer driven

Where to start?

  • 70% of IoT implementation is through new organization within companies!

Now other Gartner analysts chime in:

  • insurance: engage your customers.
  • smart gov: must interact with those who implement. Must re-imaging public involvement sense/engage/interact
  • case study: Deakin University in Australia: digital platforms to enhance student experience.
  • case study: Trenitalia mass transit system switching to predictive maintenance! Huge cost savings. “Experience hands & beginners mind at work” — love that slogan!!!! “Listen to the train instead of scheduling maintenance”
  • blockchain: ecosystem, brilliant in simplicity. All can see transaction but no one can invade privacy. Use to solve many problems: data provenance, land registry, public infrastucture, AI.
  • Woo: use this to TRANSFORM THE WORLD!!!
  • ratz — I was preoccupied at time, they talked about a new mobility system for seniors — re my SmartAging paradigm!!
  • paradigm shift — partnering with competitors (much of what I wrote about in DataDynamite: share data, don’t hoard it!)  Think about Apple & Google driving car companies’ interfaces. “Do you join hands with digital giants or join hands with them?”).
  • ooh, love the digital assistant correcting his presentation. I can only dream of a future where there are millions added to grammar police!

 

 

Circular Company: Will Internet of Things Spark Management Revolution?

Could the IoT’s most profound impact be on management and corporate organization, not just cool devices?

I’ve written before about my still-being-refined vision of the IoT — because it (for the first time!) allows everyone who needs instant access to real-time data to do their jobs and make better decisions to share that data instantly —  as the impetus for a management revolution.

My thoughts were provoked by Heppelmann & Porter’s observation that:

“For companies grappling with the transition (to the IoT), organizational issues are now center stage — and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.”

If I’m right, the IoT could let us switch from the linear and hierarchical forms that made sense in an era of serious limits to intelligence about things and how they were working at thaFor companies grappling with the transition, organizational issues are now center stage—and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.t moment, to circular forms that instead eliminate information “silos” and instead give are circular, with IoT data as the hub. 

This article expands on that vision. I’ve tried mightily to get management journals to publish it. Several of the most prestigious have given it a serious look but ultimately passed on it. That may be because it’s crazy, but I believe it is feasible today, and can lead to higher profits, lower operating costs, empowering our entire workforces, and, oh yeah, saving the planet.

Audacious, but, IMHO, valid.  Please feel free to share this, to comment on it, and, if you think it has merit, build on it.

Thanks,

W. David Stephenson


The IoT Allows a Radical, Profitable Transformation to Circular Company Structure

 

by

W. David Stephenson

Precision assembly lines and thermostats you can adjust while away from home are obvious benefits of the Internet of Things (IoT), but it might also trigger a far more sweeping change: swapping outmoded hierarchical and linear organizational forms for new circular ones.

New org charts will be dramatically different because of an important aspect of the IoT overlooked in the understandable fascination with cool devices. The IoT’s most transformational aspect is that, for the first time,

everyone who needs real-time data to do their jobs better or
make better decisions can instantly 
share it.

That changes everything.

Linear and hierarchical organizational structures were coping mechanisms for the severe limits gathering and sharing data in the past. It made sense then for management, on a top-down basis, to determine which departments got which data, and when.

The Internet of Things changes all of that because of huge volumes of real-time data), plus modern communications tools so all who need the data can share it instantly. 

This will allow a radical change in corporate structure and functions from hierarchy: make it cyclical, with real-time IoT data as the hub around which the organization revolves and makes decisions.

Perhaps the closest existing model is W.L. Gore & Associates. The company has always been organized on a “lattice” model, with “no traditional organizational charts, no chains of command, nor predetermined channels of communication.”  Instead, they use cross-disciplinary teams including all functions, communicating directly with each other. Teams self-0rganize and most leaders emerge spontaneously.

As Deloitte’s Cathy Benko and Molly Anderson wrote, “Continuing to invest in the future using yesteryear’s industrial blueprint is futile. The lattice redefines workplace suppositions, providing a framework for organizing and advancing a company’s existing incremental efforts into a comprehensive, strategic response to the changing world of work.”  Add in the circular form’s real-time data hub, and the benefits are even greater, because everyone on these self-organizing teams works from the same data, at the same time.

You can begin to build such a cyclical company with several incremental IoT-based steps.

One of the most promising is making the product design process cyclical. Designers used to work in a vacuum: no one really knew how the products functioned in the field, so it was hard to target upgrades and improvements. Now, GE has found it can radically alter not only the upgrade process, but also the initial design as well:

“G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage and rapidly changing designs depending on how things are used by customers. ‘We’re getting these offerings done in three, six, nine months,’ (Vice-President of Global Software William Ruh said). ‘It used to take three years.’”

New IoT and data-analytics tools are coming on the market that could facilitate such a shift. GE’s new tool, “Digital Twins,” creates a wire-frame replica of a product in the field (or, for that matter, a human body!) back at the company. Coupled with real-time data on its status, it lets everyone who might need to analyze a product’s real-time status (product designers, maintenance staff, and marketers, for example) to do so simultaneously.

The second step toward a cyclical organization is breaking down information silos.

Since almost every department has some role in creation and sales of every product, doesn’t it make sense to bring them together around a common set of data, to explore how that data could trigger coordinated actions by several departments? 

Collaborative big-data analysis tools such as GE’s Predix, SAP’s HANA, and Tableau facilitate the kind of joint scrutiny and “what-if” discussions of real-time data that can make circular teamwork based on IoT-data sharing really achieve its full potential.

The benefits are even greater when you choose to really think in circular terms, sharing instant access to that real-time data not only companywide, but also with external partners, such as your supply chain and distribution network – and even customers – not just giving them some access later on a linear basis.  For example, SAP has created an IoT-enabled vending machine. If a customer opts in, s/he is greeted by name, and may be offered “your regular combination” based on past purchases, and/or a real-time discount. That alone would be neat from a marketing standpoint, but SAP also opened the resulting data to others, resulting in important logistics improvements. Real-time machine-to-machine (M2M) data about sales at the new vending machines automatically reroute resupply trucks to those machines currently experiencing the highest sales. 

With the IoT, sharing data can make your own product or service more valuable. With the Apple HomeKit, you can say “Siri, it’s time for bed,” and the Hue lights dim, Schlage lock closes, and Ecobee thermostat turns down. By sharing real-time IoT data, each of these companies’ devices become more valuable in combinations than they are by themselves.

Hierarchical and linear management is outmoded in the era of real-time data from smart devices. It is time to begin to replace it with a dynamic, circular model with IoT data as its hub.