Day 2, Live Blogging from SAP’s IoT2016 Internet of Things Event

I’m up first this morning, & hope to lift attendees’ vision of what can be achieved with the Internet of Things: sure, cool devices and greater efficiency are great, but there’s so much more: how about total transformation of businesses and the economy, to make them more creative, precise, and even environmentally sustainable?

I’ve just revised my 4 IoT Essential Truths, the heart of my presentation, bumping make privacy and security the highest priority from number 4 to number 1 because of the factors I cited last week. I’ll draw on my background in crisis management to explain to the engineers in attendance, who I’ve found have a problem with accepting fear because it isn’t fact-based, how losing public trust could kill the IoT Golden Goose.

I’ll go on to explain the three other Essential Truths:

  • Share Data (instead of hoarding it, as in the past)
  • Close the Loop (feed that data back so there are no loose ends, and devices become self-regulating
  • Rethink Products so they will contain sensors to feed back data about the products’ real-time status, and/or can now be marketed not as products that are simply sold, but services that both provide additional benefits to customers while also creating new revenue streams for the manufacturer.

I’ll stress that these aren’t just truisms, but really difficult paradigm shifts to accomplish. They’re worth it, however, because making these changes a reality will allow us to leave behind old hierarchical and linear organizational structures that made sense in an age of limited and hard-t0-share data. Instead, we can follow the lead of W.L. Gore and its cyclical “lattice management,” in which — for the first time — everyone can get the real-time data they need to do their jobs better and make better decisions. Equally important, everyone can share this data in real time, breaking down information silos and encouraging collaboration, both within a company and with its supply chain and distribution network — and even with customers.

Amen.


Back with Michael Lynch of SAP!

  • we can change the world and enhance our understanding greater than ever.
  • can help us solve global warming.
  • great case study on heavy truck predictive maintenance in GoldCorp Canadian gold mines.
  • IoT maturity curve:
  • Critical question: who are you in a connected future?  Can lead to re-imaginging your corporate role.
  • UnderArmour is now embedding monitors into clothing.
  • Tennant makes cleaning equipment. Big problem with lost machines, now can find them quickly.
  • Asset Intelligence Network — Facebook for heavy equipment — SAP will launch soon.
  • example of a tractor company that’s moving to a “solutions-based enterprise.” What is the smallest increment of what you do that you could charge customer. Like the turbine companies charging for thrust.

SAP strategy:

  • “Our solution strategy is to grow by IoT-enabling core industry, and providing next generation solutions for millions of human users, while expanding our platform market by adding devices.”
  • they have an amazing next-gen. digital platform. More data flow through there than Alibaba & Amazon!
  • CenterPoint Energy — correlating all sorts of data such as smart meter & weather. Better forecasting.
  • Doing a new home-based diabetes monitoring system with Roche.
  • Doing a lot of predictive maintenance.
  • Connected mining.
  • Building blocks:
    • Connect (SAP IoT Starter Kit)
    • Transform
    • Re-imagine

Ending the day with my presentation on first steps for companies to take in beginning an IoT strategy, with special emphasis on applying analytical tools such as HANA to your current operations, and building “precision operations” by giving everyone who needs it real-time data to improve their job performance and decision-making. Much of the presentation will focus on GE, with its “Brilliant Factories” initiative!

Live Blogging from SAP’s HANA IoT event

Hmm. Never been to Vegas before: seems designed to bring out the New England Puritan in me. I’ll pass on opulence, thank you very much…

 SAP HANA/ IoT Conference

SAP HANA/ IoT Conference

Up front, very interested in a handout from Deloitte, “Beyond Linear,” which really is in line with speech I’ll give here tomorrow on the IoT “Essential Truths,” in which one of my four key points will be that we need to abandon the old, linear flow of data for a continuous cyclical one.  According to Deloitte’s Jag Bandia,

“Among users with a complete, 360-degree view of relevant data for each specific process can help avoid missed opportunities. The ‘all data’ approach means relevant data can and should come from anywhere — any application, any system, any process — not just the traditional channels associated with the process.”

Bravo!

First speaker: SAP Global Customers Operations CTO Ifran Khan:

  • “digital disruption”: catalyst for change & imperative to go digital.
  • digression about running going digital (I put in my 30 minutes this morning!!!), creating a totally new way of exercising (fits beautifully with “Smart Aging“!)
  • new macro tech trends are enabling digitalizations: hyper-connectivity, super computing, cloud computing, smart world, and cybersecurity (horrifying stat about how many USB sticks were left in dry cleaning!)
  • those who don’t go digital will go under…. (like John Chambers’ warning about IoT).
  • new opportunities in wide range of industries
  • need new digital architectures — “driving locality of data, integrated as deep as possible into the engine.
  • HOLY COW! He starts talking about a circular, digitally-centered concept, with a buckyball visual.  Yikes: great minds think alike.
  • sez HANA allows a single platform for all digital enterprise computing.
  • running things in real-time, with no latency — music to my ears!

Jayne Landry, SAP:

  • too few in enterprise have real-time access to analytics — oh yeah!
  • “analytics for everyone”
  • “own the outcome”
  • “be the one to know”
  • SAP Cloud for Analytics — “all analytics capabilities in one product.” real-time, embedded, consumer-grade user experience, cloud-based. Looking forward to seeing this one!
  • “Digital Boardroom” — instant insight. Same info available to board also available to shopfloor — oh yeah — democratizing data!

Very funny bit by Ty Miller on using SAP Cloud for Analytics to analyze Area 51 data. Woo Woo!

Ifran Khan again:

  • how to bring it to the masses? Because it’s expensive and difficult to maintain on the premises, extend and build in cloud! Add new “micro services” to SAP HANA cloud platform: SAP Application Integration, Tax Service, Procurement, Customer Engagement, Predictive, and, ta da, IoT.
  • video of Hamburg Port Authority. Absolutely love that and what they’re doing with construction sites!

Jan Jackman, IBM:

  • customers want speed. Cloud is essential. IBM & HANA are partners in cloud…

This guy is sooo neat: Michael Lynch, IoT Extended Supply Chain for SAP (and former opera student!):

  • “Connecting information, people, and things is greatest resource ever to drive insightful action.”
  • “big deal is the big data processing potential is real & chips are cheaper, so you can build actual business solutions”
  • STILL gmbh (forklifts) great example!
  • phase 1: connect w/ billions of internet-enabled things to gain new insights
  • phase II: transform the way you make decisions and take action
  • phase III: re-imagine your customer’s experience.
  • they do design thinking workshops — would luv one of those!
  • great paradigm shift: Hagleitner commercial bathroom supplies
  • Kaeser compressors: re-imaging customer service
  • working with several German car companies on enabling connected driving
  • once again, the  Hamburg Port Authority!!

SAP’s strategy:

  • offers IoT apps. platforms, and facilitates extensions of IoT solutions
  • work closely with Siemens: he’s talked with them about turbine business.
  • SAP has several solutions for IoT
  • Cloud-based predictive maintenance!
  • “social network for assets”: Asset Intelligence Network
  • They did the Harley York PA plant! — one line, 21-day per bike to 6 hrs.  (displays all around the plant with KPIs)
  • 5 layers of connectivity in manufacturing “shop floor to top floor”  SAP Connected Manufacturing
  • They have a IoT Starter Kit — neat
  • SAP Manufacturing Integration and Intelligence
  • SAP Plant Connectivity
  • SAP Event Stream Processor
  • SAP MobiLink
  • SAP SQL Anywhere/SAP ultralite
  • 3rd Party IoT Device Cloud (had never heard of “device cloud” concept — specialize in various industry verticals).

“Becoming an Insight-Driven Organization”  Speakers: Jag Bandla and Chris Dinkel of Deloitte.

  • Deloitte is using these techniques internally to make Deloitte “insight-driven”
  • “an insight-driven organization (IDO) is one which embeds analysis, data, and reasoning into every step of the decision-making process.” music to my ears!
  • emphasis on actionable insight
  • “when humans rely on their own experiences and knowledge, augmented by a stream of analytics-driven insights, the impact on value can be exponential”
  • benefits to becoming an IDO:
    • faster decisions
    • increased revenue
    • decreased cost of decision making
  • challenges:
    • lack of proper tech to capture
    • oooh: leaders who don’t understand the data…
  • 5 enabling capabilities:
    • strategy
    • people
    • process
    • data
    • tech
  • developing vision for analytics
  • Key questions: (only get a few..)
    • what are key purchase drivers for our customers?
    • how should we promote customer loyalty?
    • what customer sentiments are being expressed on social media?
    • how much should we invest in innovation?
  • Value drivers:
    • strategic alignment
    • revenue growth
    • cost reduction
    • margin improvement
    • tech
    • regulation/compliance
  • Organize for success (hmm: I don’t agree with any of these: want to decentralize while everyone is linked on a real-time basis):
    • centralized (don’t like this one, with all analyzed in one central group.. decentralize and empower!)
    • consulting: analysts are centralized, but act as internal consultants
    • center of excellence: central entity coordinates community of analysts across company
    • functional: analysts in functions such as marketing & supply chain
    • dispersed: analysts scattered across organization, little coordination
  • Hire right people! “Professionals who can deliver data-backed insights that create business value — and not just crunch numbers — are the lifeblood of an Insight-Driven Organization”
    • strong quantitative skills
    • strong biz & content skills (understand content and context)
    • strong data modeling & management skills
    • strong IT skills
    • strong creative design skills (yea: techies often overlook the cool design guys & gals)
  • Change the mindset (critical, IMHO!):
    • Communicate: build compelling picture of future to steer people in right direction.
    • Advocate: develop cohort of leaders to advocate for program.
    • Active Engagement: engage key figures to create pull for the program
    • Mobilize: mobilize right team across the organization.
  • How do you actually do it? 
    • improve insight-to-impact with “Exponential Biz Processes” — must rebuild existing business processes!  Involves digital user experience, biz process management, enterprise science, all data, and IT modernization.
      • re-engineer processes from ground up
      • develop intuitive, smart processes
      • enable exception-based management
  • Data:
    • “dark data:” digital exhaust, etc. might be hidden somewhere, but still actionable.
      • they use it for IoT: predictive personalization (not sure I get that straight…).
    • want to have well-defined data governance organization: standards, data quality, etc.
  • Technology: digital core (workforce engagement, big data & IoT, supplier collaboration, customer experience
    • HANA
  • Switch to digital delivery: visualizations are key!
    • allow for faster observations of trends & patterns
    • improve understanding & retention of info
    • empower embedded feeds and user engagement

 

IoT and the Data-Driven Enterprise: Bob Mahoney, Red Hat & Sid Sipes, Sr. Director of Edge Computing, SAP

  • What’s driving enterprise IoT?
    • more connected devices
    • non-traditional interactions such as M2M and H2M
    • ubiquitous internet connectivity
    • affordable bandwidth
    • cloud computing
    • standards-based and open-source software
  • Biz benefits:
    • economic gains
    • new revenue streams (such as sale of jet turbine data)
    • regulatory compliance
    • efficiencies and productivity
    • ecological impact
    • customer satisfaction
  • example of Positive Train Control systems to avert collisions. Now, that can be replaced by “smarter train tech”
  • SAP and edge computing (can’t move all of HANA to edge, but..)
    • improve security in transmission
    • reduce bandwidth need
    • what if connection goes down
    • actual analysis at the edge
    • allows much quicker response than sending it to corporate, analyzing & send it back
    • keep it simple
    • focused on, but not limited to, IoT
  • they can run SQL anywhere on IoT, including edge: SQL Anywhere
  • Red Hat & SAP doing interesting combination for retail, with iBeacons, video heat map & location tracking: yields real insights into consumer behavior.

Testing the IoT Waters: 1st Steps in Creating an IoT Corporate Strategy

What if you’re interested in the Internet of Things, but are a little scared of making a major commitment and making major expenditures until you build your familiarity level and start to enjoy some tangible results?

That concern is understandable, especially when prognosticators such as I emphasize what a transformational impact the IoT will have on every aspect of your operations and strategy.

So where to begin?

I’ll speak on this issue at SAP’s  IoT 2016 Conference, Feb. 16-19, in Las Vegas, and hope you can attend. But, if not, or if a teaser might convince you to make the plunge, here’s a summary of my major points, which I hope will motivate you to act sooner, rather than later!

Managing_the_Internet_of_Things_RevolutionThis is an issue that I first visited with my “Managing the Internet of Things Revolution” e-guide to IoT strategy for C-level executives, which I wrote in 2014 for SAP, and which has been successful enough that they’ve translated it into eight languages.

I suggested that the best reason to begin now on creating and executing an IoT strategy was that a lot of the requisite tools for an IoT strategy were also critical to optimize your current operations:

  • invest now in analytical tools (such as SAP’s HANA!), so that you can make sense of the rapidly-expanding amount of data (especially unstructured data) that you are already collecting, with new benefits including predictive analytics that allow you to better predict the future.
  • even before capital equipment is redesigned to incorporate sensors that will yield 24/7 real-time data on their operations and status, consider add-on sensors where available, so you can take the guesswork out of operations.
  • where possible, process sensor data “at the edge,” so that only the relevant data will be conveyed to your processing hub, reducing storage and central processing demands.
  • develop or contract for cloud storage, to handle vastly increased data.
GE Brilliant Factory benefits

GE Brilliant Factory benefits

As I’ll explain my speech, even without launching any major IoT projects such as product redesign or converting products into services, initial IoT projects such as these will dramatically boost your profits and efficiency by allowing unprecedented precision in operations.  I’ll emphasize the example of GE, whose “Brilliant Factory” initiative is aimed at increasing both its own manufacturing efficiency and its customers’ as well. They make a modest, but astonishing claim:

“GE estimates that a 1% improvement in its productivity across its global manufacturing base translates to $500 million in annual savings. Worldwide, GE thinks a 1% improvement in industrial productivity could add $10 trillion to $15 trillion to worldwide GDP over the next 15 years.”

Remember: that’s not exploiting the full potential of the IoT, but simply using it to boost operating efficiency. I see this as bringing about an era of “Precision Manufacturing,” because everyone who needs real-time data about the assembly line and production machinery will be able to share it instantly — including not only all departments within your company but also your supply chain and your distribution network.

In many cases, resupply will be automatic, through M2M processes where data from the assembly line will automatically trigger supply re-orders (and may lead to reshoring of jobs, because the advantages of true “just-in-time” delivery of parts from a supplier located a few miles away will outweigh the benefits of using one on the other side of the world, where delivery times are measured in weeks).  Instead of the current linear progression from supply chain to factory floor to distribution network, we’ll have a continuous loop uniting all of those components, with real-time IoT data as the “hub.”

Again, without making a full-fledged commitment to the IoT, another benefit that I’ll detail is how you’ll be able to dramatically improve workplace safety, especially inherently chaotic and fast-changing worksites such as construction projects and harbors, whose common elements include unpredictable schedules, many companies and contractors, many workers, and many vehicles — a recipe for disaster given current conditions!  However, the combination of simply putting location sensors on the equipment, vehicle, and people can radically decrease the risk. For example,  in Dubai — home to 25% of all construction cranes in the world — SAP partnered with a worldwide leader in construction site safety, SK Solutions. Sensors are located on machinery throughout every site, reporting real-time details about every activity: machinery’s position, movement, weight, and inertia and critical data from other sources (as with the GE Durathon factory’s use of weather data), including wind speed and direction, temperature, and more. Managers can detect potential collisions, and an auto-pilot makes instant adjustments to eliminate operator errors. “The information is delivered on dashboards and mobile devices, visualized with live 3-D images with customizable views.”

As I’ll tell the conference attendees,

“Equally incredible is the change at the Port of Hamburg, Germany’s biggest port, which must juggle 9 million containers and 12,000 vessels a year, not to mention a huge number of trucks and trains. You can imagine the potential for snarls and accidents. Since installing HANA, all of these components, including the drivers and other operators, are linked in real time.  Average waiting time for each truckload has been cut 5 minutes,  and there are 5,000 fewer truck hours daily. The coordination has gotten so precise that, if a trucker will be held up by a bridge opening, the nearby coffee shop will send a discount coupon to his iPad.”

I’ll conclude by mentioning a couple of the long-term components of an IoT strategy, such as redesigning products so that they can be controlled by apps and/or feedback constant information on their status, and considering whether to market products instead as services, where the customer only pays for the products when they’re actually being used, and creating optional data services that customers may choose to buy because they’ll allow the customer to optimize operating efficiency.

But the latter are the long-term challenges and benefits.  For now, I’ll tell the audience that the important thing is to begin now investing in the analytical tools and sensors that will help them boost efficiency.

Hope you can be there!


Oh yeah. Why get started on your IoT strategy now, rather than wait a few more years? Last year, former Cisco Chairman John Chambers said that 40% of the companies attending a recent seminar wouldn’t survive in a “meaningful way” within 10 years if they don’t begin now to embrace the IoT. Sobering, huh?

Why Global Warming Must Be IoT Focus for Everyone

Thanksgiving 2015I want to offer you six great reasons — five of them are seated with my wife and me in this photo — why we all should make global warming a primary focus of IoT projects for the foreseeable future.

There simply is no way to sugar-coat the grim news coming out of the Paris climate talks: even with the most dramatic limits that might be negotiated there, scientists warn we will fall short of the limits in temperature rises needed to avoid global devastation for my grandchildren — and yours.

Fortunately, the Internet of Things can and must be the centerpiece of the drastic changes that we will have to make collectively and individually to cope with this challenge:

“Perhaps one of the most ambitious projects that employ big data to study the environment is Microsoft’s Madingley, which is being developed with the intention of creating a simulation of all life on Earth. The project already provides a working simulation of the global carbon cycle, and it is hoped that, eventually, everything from deforestation to animal migration, pollution, and overfishing will be modeled in a real-time “virtual biosphere.” Just a few years ago, the idea of a simulation of the entire planet’s ecosphere would have seemed like ridiculous, pie-in-the-sky thinking. But today it’s something into which one of the world’s biggest companies is pouring serious money.”

Let me leave you with a laundry list of potential IoT uses to reduce global warming compiled by Cisco’s Dr. Rick Huijbregts:

  • Urban mobility “apps” predict how we can move from A to B in a city in the most environmental friendly manner. Real time data is collected from all modes of city transportation.
  • Using solar energy to power IT networks that in turn power heating, cooling and lighting. Consequently, reduce AC/DC conversions and avoid 70% electricity loss.
  • IP­based, and POE (Power of Ethernet) LED lighting in buildings reduced energy by 50% because of LED and another 50% because of control and automation.
  • Sensors (Internet of Things) record environmental highs and lows, as well as energy consumption. Data analytics allow us to respond in real­time and curtail consumption.
  • Real time insight in energy behaviour and consumption can turn into actionable reduction. 10% of energy reduction can be achieved by behavioural change triggered by simple awareness and education.
  • Working from home while being connected as if one were in the office (TelePresence, Cisco Spark, WebEx, just to name a few networked collaboration tools) takes cars off the road.
  • Grid modernization by adding communication networks to the electrical grid to allow for capacity and demand management.
  • Planning, optimizing, and redirecting transportation logistics based on algorithms, real­time weather and traffic data, and streamlined and JIT shipment and delivery schedules.

These are all great challenges and offer the potential for highly profitable IoT solutions.  For the sake of my six grandchildren, let’s get going!

Data Is the Hub: How the IoT and Circular Economy Build Profits

Fasten your seatbelts! I think I’ve finally zeroed in on the Internet of Things’ (IoT’s) most important potential economic benefit and how it could simultaneously help us escape the growing global environmental crisis:

make real-time IoT data* the hub of a circular economy and management mentality. It’s both good for the bottom line and the planet.

I started writing about circular business models back in the 90’s, when I consulted on profitable environmental strategies, i.e., those that were good both for the corporate bottom line and the planet.  It galled me that executives who railed about eliminating inefficiency thought reducing waste was for tree-huggers. Semantics and lifestyle prejudices got in the way of good strategy.

Ford’s River Rouge Plant (1952 view)

I could see that it was vital that we get away from old, linear models that began with extracting resources and ended with abandoned products in landfills. Ford’s massive 1 x 1.6 mile River Rouge Plant, the world’s largest integrated factory, was the paradigm of this thinking: ore was deposited at one end, made into steel, and cars came out the other (Hank’s penchant for vertical integration even led him to buy rubber plantations! If you have any illusions about the ultimate impossibility of top-down control, watch the PBS documentary on Ford — he simply couldn’t share power, even with his own son — and it almost ruined the company). The linear model worked for a long time, and, truth to tell, it was probably the only one that was feasible in the era of paper-and-pencil information flow:  it was so hard to gather and transmit information that senior management controlled who got what information, and basically threw it over the transom to the next office.

As for any kind of real-time information about what was actually happening on the factory floor: fugetaboutit: all that was possible was for low-level functionaries to shuffle along the assembly line, taking scheduled readings from a few gauges and writing them on a clipboard. Who knew if anyone ever actually read the forms, let alone made adjustments to equipment based on the readings?

Fast forward to 2015, and everything’s changed!

The image of the circular corporation popped back into my head last week while I was searching for an image of how the IoT really can change every aspect of corporate operations, from product design to supply chain management.  I was happily surprised that when I Googled “circular economy” I found a large number of pieces, including ones from consulting gurus Accenture and McKinsey (the most comprehensive report on the concept is probably this one from the Ellen MacArthur Foundation), about the bottom-line and environmental benefits of switching from a linear (‘take-make-dispose’) pattern.

But how to make the circular economy really function? That’s where the IoT comes in, and, in my estimation, is THE crucial element.

Visualize everything a company does as a circle, with IoT-gathered real-time data as its hub. That’s crucial, because everything in a profitable circular company revolves around this data, shared in real time by all who need it.

When that happens, a number of crucial changes that were impossible in the era of linear operations and thinking and limited data became possible for the first time:

  • you can optimize assembly line efficiency because all components of the factory are monitored by sensors in real time, and one process can activate and regulate another, and/or managers and assembly-line workers can fine-tune processes (think of the 10,000 sensors on the GE Durathon battery assembly line).
  • you can integrate the assembly line with the supply chain and distribution and sales network as never before (provided that you share the real-time data with them), so materials are delivered on a just-in-time basis) and production is dictated by real-time data on sales (the SAP smart vending machine, integrated with logistics, is a great example).
  • you can optimize product redesign and upgrades and speed the process, because sensor data from the products as they are actually used in the field is immediately fed back to the designers, so they have objective evidence of what does, and doesn’t work properly (think of how GE has improved its product upgrade process). No more ignorance of how your products are actually used!
  • from an environmental standpoint, having sensors on key components can make it possible for you to recover and profitably remanufacture them (closing the loop) rather than having them landfilled (I was excited to learn that Caterpillar has been doing this for 40 years (!) through its Reman Program, which “reduces costs, waste, greenhouse gas emissions and need for raw inputs.”).
  • you can create new revenue streams, by substituting services for actual sales of products.  I’ve written before about how GE and RollsRoyce do this with jet engines, helping clients be more efficient by providing them with real-time data from jet turbines in return for new fees, and Deere does it with data feeds from its tractors. Now I learn that Phillips does this, with industrial lighting, retaining ownership of the lighting: the customers only pay for the actual use of the lights. Phillips also closes the loop by taking the lights back at the end of their life and/or upgrading them.

As I’ve written before, creating the real-time data is perhaps the easier part: what’s harder is the paradigm shift the circular economy requires, of managers learning to share real-time data with everyone inside the enterprise (and, preferably, with the supply chain, distribution network, retailers, and, yes, even customers). When that happens, we will have unprecedented corporate efficiency, new revenue streams, satisfied customers, and, equally important reduce our use of finite resources, cut pollution, and tread lightly on the earth.  There you have it: the secret to 21st-century profitability is:

real-time IoT data, at the hub of the circular enterprise.


*Oh yeah, please don’t drop a dime on me with the grammar police about the title: in fact, I’m a retired colonel in the Massachusetts Grammar Police, but I’ve given up the fight on “data.” From my Latin training, I know that data are the plural form of datum, but datum is used so infrequently now and data with a singular verb has become so common that I’ve given up the fight and use it as a singular noun.  You can see the issue debated ad nauseum here

I’ll Speak Twice at Internet of Things Global Summit Next Week

I always love the Internet of Things Global Summit in DC because it’s the only IoT conference I know of that places equal emphasis on both IoT technology and public policy, especially on issues such as security and privacy.

At this year’s conference, on the  26th and 27th, I’ll speak twice, on “Smart Aging” and on the IoT in retailing.

2015_IoT_SummitIn the past, the event was used to launch major IoT regulatory initiatives by the FTC, the only branch of the federal government that seems to really take the IoT seriously, and understand the need to protect personal privacy and security. My other fav component of last year’s summit was Camgian’s introduction of its Egburt, which combines “fog computing,” to analyze IoT data at “the edge,” and low power consumption. Camgian’s Gary Butler will be on the retail panel with me and with Rob van Kranenburg, one of the IoT’s real thought leaders.

This year’s program again combines a heady mix of IoT innovations and regulatory concerns. Some of the topics are:

  • The Internet of Things in Financial Services and the Insurance sector (panel includes my buddy Chris Rezendes of INEX).
  • Monetizing the Internet of Things and a look at what the new business models will be
  • The Connected Car
  • Connected living – at home and in the city
  • IoT as an enabler for industrial growth and competition
  • Privacy in a Connected World – a continuing balancing act

The speakers are a great cross-section of technology and policy leaders.

There’s still time to register.  Hope to see you there!

 

 

The IoT Will Reinvent Replacement Parts Industry

Of all the Internet of Things’ revolutionary impacts on industry, perhaps none will be as dramatic as on replacement parts, where it will team with 3-D printing to reduce service time, inventory and costs.

I came to that realization circuitously, upon noticing Warren Buffett’s blockbuster purchase of Precision Castparts, the major precision parts supplier to the aeronautics industry.  Having read last year about yet another breakthrough innovation by Elon Musk, i.e., the first totally 3-D printed rocket engines, I was curious to see what Precision was doing in that area.  Unless my search of their website was flawed, the answer is zip, and that suggests to me that Buffett, who famously once said he doesn’t invest in technology because he doesn’t understand it, may have just bought …. a rather large dinosaur.

I noticed that one of Precision’s biggest customers is GE, which not only is using 3-D jet fuel nozzles on its engines but also ran a high-profile contest to design a 3-D printed engine mount that was open to you, me and the kids trying out the new 3-D printer at our little town’s library (note to Mr. Buffett: might be good to schedule a sit-down with Jeff Immelt before one of your biggest customers takes things in-house). As I’ve written before, not only is GE a world leader in the IoT and 3-D printing, but also in my third magic bullet, nanotech: put all three together, and you’re really talking revolution!

OK, I know 3-D printing is sloow (in its current state), so it’s unlikely to replace traditional assembly lines at places such as Precision Castparts for large volumes of parts, but that doesn’t mean it won’t rapidly replace them in the replacement parts area.  I talked to a friend several years ago whose biz consists of being a broker between power plants that need replacement parts yesterday and others with an excess on hand, and couldn’t help thinking his days were numbered, because it was predicated on obsolete technology — and thinking.

Think of how the combined strengths of the IoT and 3-D printing can help a wide range of industries get replacement parts when and where they need them, and at potentially lower cost:

  • sensors in IoT-enabled devices will give advance notice of issues such as metal fatigue, so that repairs can be done sooner (“predictive maintenance“), with less disruption to normal routine, cheaper and reducing the chance of catastrophic failure.
  • because data can be shared on a real-time by not only your entire workforce, but also your supply chain, you can automate ordering of replacement parts.
  • perhaps most important, instead of a supplier having to maintain a huge inventory of replacement parts on the possibility they may be needed, they can instead be produced only when needed, or at least with a limited inventory (such as replacing a part in inventory as one is ordered). This may lead to “re-shoring” of jobs, because you will no longer have to deal with a supplier on the other side of the globe: it might be in the next town, and the part could be delivered as soon as printed, saving both delay and money.
  • your company may have your own printer, and you will simply pay the OEM for the digital file to print a part in-house, rather than having to deal with shipping, etc.

And, as I mentioned in the  earlier post about GE’s leadership in this area, there are other benefits as well:

  • “We’ll no longer do subtractive processes, where a rough item is progressively refined until it is usable.  Instead, products will be built atom-by-atom, in additive processes where they will emerge exactly in the form they’re sold.
  • “Products will increasingly be customized to the customer’s exact specifications. The products will be further fine-tuned based on a constant flow of data from the field about how customers actually use them.”

Sooo, Mr. Buffett, it’s time that you come to terms with 21-st century technology or Berkshire Hathaway’s financial slide may continue.

 

McKinsey IoT Report Nails It: Interoperability is Key!

I’ll be posting on various aspects of McKinsey’s new “The Internet of Things: Mapping the Value Beyond the Hype” report for quite some time.

First of all, it’s big: 148 pages in the online edition, making it the longest IoT analysis I’ve seen! Second, it’s exhaustive and insightful. Third, as with several other IoT landmarks, such as Google’s purchase of Nest and GE’s divestiture of its non-industrial internet division, the fact that a leading consulting firm would put such an emphasis on the IoT has tremendous symbolic importance.

McKinsey report — The IoT: Mapping the Value Beyond the Hype

My favorite finding:

“Interoperability is critical to maximizing the value of the Internet of Things. On average, 40 percent of the total value that can be unlocked requires different IoT systems to work together. Without these benefits, the maximum value of the applications we size would be only about $7 trillion per year in 2025, rather than $11.1 trillion.” (my emphasis)

This goes along with my most basic IoT Essential Truth, “share data.”  I’ve been preaching this mantra since my 2011 book, Data Dynamite (which, if I may toot my own horn, I believe remains the only book to focus on the sweeping benefits of a paradigm shift from hoarding data to sharing it).

I was excited to see that the specific example they zeroed in on was offshore oil rigs, which I focused on in my op-ed on “real-time regulations,” because sharing the data from the rig’s sensors could both boost operating efficiency and reduce the chance of catastrophic failure. The paper points out that there can be 30,000 sensors on an rig, but most of them function in isolation, to monitor a single machine or system:

“Interoperability would significantly improve performance by combining sensor data from different machines and systems to provide decision makers with an integrated view of performance across an entire factory or oil rig. Our research shows that more than half of the potential issues that can be identified by predictive analysis in such environments require data from multiple IoT systems. Oil and gas experts interviewed for this research estimate that interoperability could improve the effectiveness of equipment maintenance in their industry by 100 to 200 percent.”

Yet, the researchers found that only about 1% of the rig data was being used, because it rarely was shared off the rig with other in the company and its ecosystem!

The section on interoperability goes on to talk about the benefits — and challenges — of linking sensor systems in examples such as urban traffic regulation, that could link not only data from stationary sensors and cameras, but also thousands of real-time feeds from individual cars and trucks, parking meters — and even non-traffic data that could have a huge impact on performance, such as weather forecasts.  

While more work needs to be done on the technical side to increase the ease of interoperability, either through the growing number of interface standards or middleware, it seems to me that a shift in management mindset is as critical as sensor and analysis technology to take advantage of this huge increase in data:

“A critical challenge is to use the flood of big data generated by IoT devices for prediction and optimization. Where IoT data are being used, they are often used only for anomaly detection or real-time control, rather than for optimization or prediction, which we know from our study of big data is where much additional value can be derived. For example, in manufacturing, an increasing number of machines are ‘wired,’ but this instrumentation is used primarily to control the tools or to send alarms when it detects something out of tolerance. The data from these tools are often not analyzed (or even collected in a place where they could be analyzed), even though the data could be used to optimize processes and head off disruptions.”

I urge you to download the whole report. I’ll blog more about it in coming weeks.

Intel’s IoT tech improves its own manufacturing efficiency

This demonstration IoT manufacturing project hits my buttons!

I love IoT-enabled manufacturing (what I call “precision manufacturing“) and I REALLY love companies (such as GE, at its Durathon battery plant) that eat their own dogfood by applying their IoT technology internally.  Gotta walk the talk!

 

That’s why I was happy to learn how Intel is  applied its own IoT technology to its own factories. In the accompanying video, Intel VP for IoT operations and group marketing Frank James says:

“The real opportunity is how to combine … data differently, which will ultimately give you insights not only into how your factory is running but, what’s more important, will let you predict how your factory will run the next minute, the next hour, the next shift, the next day.”

The pilot factory automation project is a collaboration with Mitsubishi Electric (more points for a key IoT “Essential Truth” — collaboration!).  The project, at Intel’s Malaysia manufacturing facility, combines two critical components, end-to-end IoT connectivity and big data analytics. The benefits were impressive: $9 million in cost avoidance and improved decision making, plus:

  • improved equipment uptime
  • increased yield and productivity
  • predictive maintenance
  • reduced component failures.

That hard-to-quantify improved decision making, BTW, is one of the things that doesn’t get enough discussion when we talk about IoT benefits: decision-making improves when there is more data to consider, more people to analyze and discuss it simultaneously (not sequentially, as in the past), and when you’ve got tools such as data dashboards to allow visualizing the data and its patterns.

The companies plan to roll out the services commercially this year.

Here are the specs:

“Using an Intel® Atom™ processor-based IoT gateway called the C Controller from Mitsubishi Electric’s iQ-Platform, Intel was able to securely gather and aggregate data for the analytics server. Data was then processed using Revolution R Enterprise* software from Revolution Analytics*, an analytics software solution that uses the open source R statistics language, which was hosted on Cloudera Enterprise*, the foundation of an enterprise data hub.”

 

Sensors remain critical to spread of Internet of Things

What happens with sensor design, cost, and security remains front-and-center with the Internet of Things, no matter how much we focus on advanced analytical tools and the growing power of mobile devices.

That’s because, on one hand, truly realizing the IoT’s full potential will require that at least some sensors get to the low-power, tiny size and cheap costs needed to realize Kris Pister’s dream of “smart dust” sensors that can be strewn widely.

On the other hand, there’s the chance that low-end sensors that don’t include adequate security firmware can’t keep up with the changing nature of security risks and may give hackers access to the entire network, with potentially disastrous effects.

That’s why several reports on sensors caught my eye.

PWC released a report, Sensing the Future of the Internet of Things, zeroing in on sensor sales as a proxy for increased corporate investment in the IoT, and concluding that by that measure, “the IoT movement is underway.” Based on its 2014 survey of 1,500 business and technology leaders worldwide, there was one eye-popping finding: the US lags behind the entire rest of the world in planned spending on sensors this year: 26% of Asian and almost as many from South America (percentage not given)  followed closely by Africa, with 18%.  The surprising laggards? Europe with 8% and North America, dead last at only 7%.  Hello?????

Equally interesting was the company’s listing of the industry segments leading the deployment of sensors and examples of the sensors they’re using:

  • Energy & Mining: 33%. “Sensors continuously monitor and detect dangerous carbon monoxide levels in mines to improve workplace safety.”
  • Power and Utilities: 32%.  Instead of the old one-way metering, “Internet-connected smart meters measure power usage every 15 minutes and provide feedback to the power consumer, sometimes automatically adjusting the system’s parameters.”
  • Automotive: 31%.  “Sensors and beacons embedded in the road working together with car-based sensors are used for hands-free driving, traffic pattern optimization and accident avoidance.”
  • Industrial: 25%. “A manufacturing plant distributes plant monitoring and optimization tasks across several remote, interconnected control points. Specialists once needed to maintain, service and optimize distributed plant operations are no longer required to be physically present at the plant location, providing economies of scale.”
  • Hospitality: 22%. “Electronic doorbells silently scan hotel rooms with infrared sensors to detect body heat, so the staff can clean when guests have left the room.”
  • Health Care: 20%. “EKG sensors work together with patients’ smartphones to monitor and transmit patient physical environment and vital signs to a central cloud-based system.”
  • Retail: 20%. “Product and shelf sensors collect data throughout the entire supply chain—from dock to shelf. Predictive analytics applications process this data and optimize the supply chain.”
  • Entertainment: 18%. “In the gaming world, companies use tracking sensors to transfer the movements of users onto the screen and into the action.”
  • Technology: 17%. “Hardware manufacturers continue to innovate by embedding sensors to measure performance and predict maintenance needs before they happen.”
  • Financial Services: 13%. “Telematics allows devices installed in the car to transmit data to drivers and insurers. Applications like stolen vehicle recovery, automatic crash notification, and vehicle data recording can minimize both direct and indirect costs while providing effective risk management.”

The surprises there were that health care penetration was so low, especially because m-health can be so helpful in diagnosis and treatment, while the examples of telematics seemed off the mark in the financial services category. Why not examples such as ApplePay?

More compelling were the relatively high rates of sensor deployment in high-stakes fields such as energy, utilities, and automotive: those are such huge industries, and the benefits of real-time data are so compelling that they show the IoT is really maturing.

Finally, the percentage of companies investing in sensors grew slightly, from 17% to 20%, with 25%of what PWC labels “Top Performers” are investing in them compared to 18% the previous year. Surprisingly, most companies don’t get it about sensors’ importance: only “14% of respondents said sensors would be of the highest strategic importance to their organizations in the next 3–5 years, as compared to other emerging technologies.”

Most important, 54% of those “Top Performers” said they’d invest in sensors this year.


 

Sensors’ promise as the size decreases — radically — and functionality increases was highlighted by The Guardian.  It focused on PragmaticIC Printing, a British firm that prints tiny, hairlike sensors on plastics. CEO Scott White’s hope is that:

” the ultra-thin microcircuits will soon feature on wine bottles to tell when a Chablis is at the perfect temperature and on medication blister packs to alert a doctor if an elderly patient has not taken their pills.

“With something which is slimmer than a human hair and very flexible, you can embed that in objects in a way that is not apparent to the user until it is called upon to do something. But also the cost is dramatically lower than with conventional silicon so it allows it to be put in products and packaging that would never justify the cost of a piece of normal electronics,” said White.

 

These uses certainly meet my test of real innovation: what can you do that you couldn’t do before. Or, as White puts it, “It is the combination of those factors [price and size] which allows us to start thinking about doing things with this which wouldn’t even be conceivable with conventional silicon based electronics.”

Another article that really caught my eye regarded a new category of “hearable” — and perhaps even, more radically, “disappearables” –sensors which the headline boldly predicted “As Sensors Shrink, Wearables Will Dis-appear.” But they were barely here in the first place, LOL!  The article mentioned significant breakthroughs in reducing sensors’ size and energy requirements, as well as harvesting ambient energy produced by sources such as bodily movement:

“Andrew Sheehy of Generator Research calculates that, for example, the heat in a human eyeball could power a 5 milliwatt transmitter – more than enough, he says, to power a connection from a smart contact lens to a smartphone or other controlling device.”

 The same article mentioned some cutting-edge research such as a Google/Novartis collaboration to measure glucose levels in tears via a contact lense, and an edible embedded microchip — the size of a grain of sand — and powered by stomach juices, which would transmit data by Bluetooth.
Elsewhere, a sampling of sensor design breakthroughs in recent months show the potential for radical reductions in costs and energy needs as well as increased sensitivity and data yield:

HOWEVER, as I said above, here’s what worries me. Are developers paying enough attention to security and privacy? That could be a real downfall for the IoT, since many sensors tend to be in place for years, and the nature of security challenges can change dramatically during that time.  Reducing price can’t be at the expense of security.

Let me know what steps you’re taking to boost sensor security, and I’ll mention them in a future post!