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!

 

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.

Brexit and the IoT: Let’s Capitalize on the Opportunity, Not Wallow in Despair

Wow: as the old Dinah Washington ditty went, “What a Difference a Day Makes.” Since last Thursday, I doubt even the most diehard IoT zealots have thought about anything but Brexit and its implications.  Now that we’ve had a little time to reflect and digest exactly how dire the possible problems are, I’d like to suggest we look at the bright side, and think the IoT could play a major role in improving everyone’s life in the future — not just the economic elites.

Wei ji: crisis combines danger and opportunity

Wei ji: crisis combines danger and opportunity

I used to be a corporate crisis manager, called in when major corporations had done amazingly stupid things and their reputations and sometimes even their survival was in question. For those occasions, I kept a battered greeting card in my briefcase with the calligraphy for wei ji, the Chinese ideogram for crisis. I’d point out that it c0mbined danger — that was obvious! — with the less-obvious one for opportunity. I still believe that, even in the global confusion and concern resulting from Brexit, and I think there’s a role for the IoT in the new world order.

Above all, this should be a wake-up call for the global economic and political elites that, going forth, change must benefit everyone, not just them.

When it comes to the IoT, that means that it can’t be yet another excuse for automating jobs out of existence, but must instead be a way of empowering workers and creating new opportunities:

  • One that occurred to me is near & dear to my heart, because I thought of a primitive version 25 years ago: creating 30″ high 4′ x 8′ garden “boxes” planted using Mel Bartholomew’s “Square Foot Gardening” methods, that would allow people worldwide to grow their own veggies in very small spaces.  Add in IoT water sensors so that the beds could be watered precisely when and in the amount needed, and people everywhere could become self-sufficient (e-mail me if you’re interested in commercializing the approach)!  It would be the cheapie’s variation on the neat, but costly, Grove Labs home ag solution.
  • smart asthma inhaler

    smart asthma inhaler

    Increasingly, global populations will be centered in cities, so the whole smart cities approach will improve everyone’s quality of living by cutting down traffic, reducing municipal operating costs, and improving public health. Even fat cats get upset when their limos are stuck in traffic, so this is a win-win.
    One of my favorite examples of the smart city approach is the asthma inhaler cum GPS that automatically alerts public health authorities when a user — most frequently, sadly, a low-come minority person — uses the inhaler, allowing them to identify dirty air “hot spots” where cleanup efforts need to be focused.

  • I’ve always been impressed about the outside-the-box mobile device apps coming out of Africa that make their lack of conventional infrastructure into an advantage. One of the coolest examples of that when it comes to the IoT is the example INEX’s Chris Rezendes told me about: how Grundfos, the world’s leading pump company, releases the data from senors on its pumps for village water supplies in Africa and some smart guys have come up with an app that allows the village women to check in advance whether the village well is working before they trudge miles to get the watch (which, BTW, I hope they’re carrying back in these way-cool appropriate technology rolling water carriers, the “Hippo”).

  • Also, the IoT could empower assembly-line workers and others if smart managers realize that they too should be among those sharing real-time IoT data: yes, a lot of IoT data can be used on a M2M basis so one machine’s status will regulate another’s, but there’s also a potential role for workers, with their years of experience and horse-sense, using that data to fine-tune processes themselves to optimize efficiency. Artificial Intelligence is great, but I still think there’s a role for enlightened humans, even if they don’t have a lot of education and prestige within the corporation.

Those are just a few ideas on how the IoT might be used to improve everyone’s lot in the coming years and undermine the current status quo that benefits only a few.  Let me know if you have ideas on how to foster this revolution and make Brexit the catalyst for positive change.

 

 

My IoT Day Interview With Sudha Jamthe

Oops: I’ve been preoccupied with all sorts of dreck since returning from my SAP event, so I haven’t been able to post.

Did want to call your attention to a long IoT Day interview I did with the estimable Sudha Jamthe, author of The Internet of Things Business Primer.  We covered a range of topics, including the state of the IoT in Boston (and my enthusiasm about GE’s move here, because of their track record of working with IoT startups and even individuals), how I got involved in my IoT-based “SmartAging” crusade, and how the IoT may make possible “circular enterprises” orbiting around real-time IoT data.  Enjoy!

Live Blogging from SAP’s SCM CRM IoT 2016 – Day 2

Greg Gorbach, ARC Advisory Group, Industrial Internet of Things:

  • ARC is an analyst firm, in Boston.
  • new service models
  • new products
  • new production techniques
  • new business processes
  • new competitors
  • new partners
  • new workers
  • new business opportunities.
  • innovation improves competitiveness: value-based competitiveness raises value of output.
  • Drivers:
    • reduced machine or asset downtime
    • more rapid service response
    • improved process performance
    • improved personnel productivity
    • reduced machine or asset lifecycle costs
    • improved asset utilization/RoA
    • opportunity for business innovation
    • ability to sell products as a service
  • manufacturing momentum for digital transformation: factors include 3D printing, IoT technologies, changing economies of scale, new service models
  • goal is digital transformation
  • software transitioning from monolithic to microservices

Richard Howells, SAP:

  • IoT is all about re-imaging things:business process, customer experiences
  • SAP solutions for IoT
    • SAP Connected Assets
    • SAP Connected Manufacturing
    • SAP Network Logistics Hub
    • SAP Augmented Reality Solutions
  • SAP Predictive Maintenance and Service: leverage operational insights to drive innovation & new business models
    • Deere putting sensors everywhere, doing predictive maintenance of tractors. In some cases, leasing instead of selling, so they have incentive to keep it operating.
    • Kaeser Compressors
    • Asset Intelligence Network
    • Connective Manufacturing: leveraging big data to drive new insights into operations.
      • Example of Harley Plant in York, Pa.  Many new design options (1,700 options), but do 25% more bikes with 30% fewer people. Went from 21 days for a custom cycle top 6 hours.
      • Pepsi: improving asset utilization with SAP Connected Manufacturing: collect all downtime and loss data in real time.  Went from 65 to 85% asset use.
    • SAP Networked Logistics Hub
    • SAP AR Warehouse Picker
    • SAP AR Service Technician

Where is IoT going??

  • 68% of companies see IoT being strategic or transformational to their business.
  • 78% plan to invest in IoT  in next 24 mo. — 24% already have.
  • Increasing productivity and improving customer experience are top business benefits
  • Challenges to deploying IoT include unclear ROI, lack of industry standards, costs, and data security.

 

Next was my presentation on “Getting Started With the IoT,” in which I emphasized that companies that have hung back from the IoT are still in the majority, but had better heed John Chambers’ warning that they’ll be toast in just a few years if they don’t start now.  I emphasized that an ideal early focus is to build the efficiency or “precision” of your existing operations, and to build operating safety (especially in inherently dangerous settings such as construction sites), then move on to more radical transformation.  I cited GE’s rather modest goal (I think they’re understating it, based on their own internal results) of a 1% increase in productivity for the IoT as something that most companies could achieve, and then talked about GE’s Brilliant Factories as a model for increasing operating efficiency, zeroing in on my favorite example, the Durathon Battery plant, where a sensor on every battery and 10,000 on the assembly line give them tremendous flexibility to cope with differing situations and to increase efficiency.  Finally, I suggested that the companies begin to rethink the role of their products and to begin considering the “circular enterprise” vision I’ve articulated as they look to the future.


 

Kris Gorrepati, SAP “IoT: from Big Data to Smart Data to Outcomes.”

  • OK, I’d never heard of a Brontobyte before…
  • “IoT relevant to all industries.” Agreed.
  • Amazon Dash service (Whirlpool now building it in!)
  • Uses same curve that other SAP guys do: from connect to transform to reimagine (latter being empowering new biz models, value-added products and services.
  • HANA Cloud Platform for the IoT.

Internet of Things Can Pay Off for Small & Medium Businesses Too

Think again, if you’re a small and medium-sized business (SMB) that is holding back on Internet of Things projects until the price of software and components such as sensors came down and the technology is more robust!

INEX Advisors’ IoT Impact LABS, an accelerator program in New Bedford, MA brings together IoT startups, top technology and industrial suppliers such as Analog Devices, Dell, and PTC/ ThingWORX, plus legal and policy experts to use the IoT help innovative, sustainable small and medium-sized businesses in the region in fields such as “smart cities,” food and agriculture, water and maritime, and energy and transportation.

One is particularly noteworthy because it is bringing fishing into the 21st century.

Island Creek Oysters of Duxbury MA, was plagued by the need to do a five-step, paper-based food safety inspection reporting on variables such as water temperature and pH, that had to be recorded precisely during the two-hour window after low tide when it had to harvest the oysters.  It’s difficult to do both.

The Mass. Department of Fisheries Management brought together INEX and Island Creek to develop a real-time digital program to both monitor the oysters and do the data collection. Chris Rezendes, partner at Inex Advisors, said the department contacted IoT Impact Labs to figure out a digital traceability program for shellfish farmers in Massachusetts, which includes Island Creek’s farm in Duxbury Mass., just a half-hour south of Boston.

IoT Impact Labs put together a solution to enable monitoring of conditions in real time, wirelessly.

“There are just dozens of instrumentation opportunities. That means dozens of opportunities for sensors, and firmware, and connectivity, and analytics vendors,” Rezendes told CRN.

The project included replacing time-consuming human monitoring of more than 60 water pumps with wireless sensors.

The LABS will release more information about the other projects in coming months, and will host one of our Boston/New England IoT Meetups on February 29 in New Bedford (6 PM, 1213 Purchase Street), with speakers including:

  • Dave Wiley, PhD. NOAA, Research Director, Stellwagon National Marine Sanctuary. He has led the development and deployment of sensor buoys and marine mammal tracking, including supporting a recreational marine application based on his team’s work.
  • Dave Duquette, Founder and CEO, Littoral Power Systems which recently closed its Seed Round, including a prestigious ARPA-E grant. Their kinetic energy harvesting systems are breaking ground in tidal energy capture.
  • Brian Coffey, environmental sensing and instrumentation lead at Analog Devices.

 

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?

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

Live Blogging from the IoT Global Summit

Keynotes:
Came in on end of presentation by Rep. Suzan DelBene, D-WA, co-chair of the House IoT Caucus and an IT industry vet. Her litany of federal inaction in the face of rapidly-evolving 2015_IoT_Summittech — especially regarding privacy protections, where  the key law was enacted in 1986 — was really dispiriting, although it’s good to know there are some members of Congress who are aware of the issue and working on it.

EU Ambassador to the US, David O’Sullivan: the IoT is a “quantum leap” because of combining digital and physical world, and will have huge implications.  Europe has created single digital market. Major investments in IoT & funding research on it.  Very open research projects.  Key is breaking down barriers within the economy. They’re doing research on every aspect of IoT. Priority must be overcoming vertical silos, such as cars and health care. Must balance regulation and innovation. Security and privacy: working on a new set of protections.

Dean Brenner, SVP for Gov. Affairs, Qualcomm: everything will need some form of connectivity. Will need new connectivity paradigm. 4G LTE gives solid foundation for cellular IoT growth.  5G will be fully-deployed by 2020.

Dr. Rakesh Kushwaha, Mformation (hmmm?) Business Leader, Alcatel-Lucent: securing IoT devices. Tech & standards that are already in place to secure mobile devices can be model for I0T devices: they worked with whole range of devices. Fundamental principle of the security: securely update through device/firmware update package.   Only about 40% of IoT will be cellular-based.  Alcatel securing vehicle-mounted devices using FW/SW updates. They will launch a project called IoT Connect.

Session 2: Security for the IoT

Dean Garfield, president & CEO, Information Technology Industry Council: think of security as a design feature, not afterthought. Have to think of it in global sense (including between vertical silos). Chinese government security demands are actually counterproductive. Security can be a differentiating feature.

Joseph Lorenzo-Hall, chief technologist, Center for Democracy and Technology: “IoT Spectrum of Insanity” — such as #IoT door locks, require protections be built in. Security by design. He thinks privacy is a bigger factor than security.

Stephen Pattison, vp of Public Affairs, ARM. Hacker only has to get it right once. You have to get it right every time!  Sensors will have to be very cheap ($5 or less), which will require real creativity.  Security will drive acceptability of IoT. Security breaches will be a major risk for IoT companies.

Chris Boyer, asst. vp, Global Public Policy, AT&T: different security concerns in each vertical domain. Functional classification determines the risk (for example, some affect interruption on critical infrastructure, or life risk). Virtualize security around the end device. Industry activities: application layers, service layer, network layer, access technologies. Looking 4 acceptable risk management levels.

Rory Gray, global head of sales, Intercede: “need world of trusted digital identities.” “Identity is the new currency.”

Government procurement standards may drive privacy and security by design.

Adam Thierer: are we overestimating how much people really care about IoT security (vs. the “cool” factor??).

Afternoon Privacy Panel:

Gary Shapiro, president & CEO, CSA: he disagrees that you should HAVE to give permission to have your info shared: cites all the benefits of sharing data. Thinks we went overboard with HIPPA & privacy. Announcing agreement on guiding principles for sharing health info from #QS devices. A sense that products will be unwelcomed if they create privacy or security issues: example of an Intel engineer who has vision problems. On a personal basis, his mother had terrible time with Alzheimer’s: he’s upset he won’t have access to a Google face recognition technology.

Rob Atkinson, president, Information Technology and Innovation Foundation: “privacy fundamentalists” argue really heavy regulation is way to protect privacy.  BUT, no empirical studies underlying that. Pew survey showed few people believe their landline or credit card data will be private, YET almost everyone uses credit cards or phones: i.e., no correlation between people’s belief in privacy of various technologies and their actual use of the technology.  Overly stringent privacy regulations will reduce their availability. Much of real value of IoT data is from secondary use of the data, which would be undermined by tough regulation. Way too early to put regulatory regime into place for IoT: too early.

Maneesha Mithal, assoc. director, Division of Privacy & Identity Protection, Bureau of Consumer Protection, FTC: two fairly controversial aspects of their 2013 workshop: minimizing data collection debate — said you shouldn’t collect all sorts of data forever, BUT, perhaps collect less sensitive data if they could still derive value. Second issue was “notice and choice.” Tried a middle ground: room for notice and choice,  Discussion of regulation: middle ground on regulation: shouldn’t have specific IoT regulation, but should have general, baseline privacy and security protections. We don’t bring “gotcha cases.”  Could have program that would provide incentives for self-regulation.

Gilad Rosner, Founder, Internet of Things Privacy Forum:  “notice & choice” has been the default privacy & security approach for Internet, but it “fundamentally places the burden of privacy protection on the individual.” A presidential group said the responsibility should rest with the provider, not the user.  Hallmark of a civil society is being regulated.

Day Two:

smart health panel:

You can access my “Smart Aging” presentation on Slide Share.

Peter Ohnemus of dacadoo, a Swiss company, gave an overview of IoT and healthcare and talked briefly about his company’s Health Score, a 0-1000 score assigned to participating individuals based on their real-time scores on factors including movement, nutrition, sleep and stress.

Chantal Worzala of the American Hospital Association gave an overview of issues such as information interoperability and new wellness incentives.

Robert Jarrin, senior director of gov. affairs for Qualcomm, talked about some of the policy issues. FDA now has dedicated staff for electronic devices, and they are now not requiring regulatory compliance for some basic devices.

Smart Home panel:

Hmm. Little actual focus on smart homes in this one…

Cees Links, ceo, Green Peak Technologies: they are a chip manufacturer, “wireless plumbers.” Shipped 1M Zigbee chips. “IoT is not about things, it’s about services.” “Smart Home should be called a butler.” Confusion about IoT standards: thinks ZigBee & Bluetooth will survive, proprietary standards won’t.

Ilkka Lakaniemi, chair, European Commission’s Future Internet Public-Private Partnership Program: working on smart cities strategies, esp. ones that are scalable. Working with NIST on common standards for the demo grants in US & EU. 61 cities involved.

Tobin Richardson, president & ceo, ZigBee Alliance. ZigBee, wi-fi & Bluetooth will form basis of a stable ecosystem. Dollar chip is the goal, getting there quickly.

Paul Feenstra, sr. vp of government & external affairs, The Intelligent Transport Society of America: evolution over last 5 years from car focus to a really varied multi-modal transportation industry. Shocking how we accept the high death rate & congestion on highways. 80% of crashes could be avoided by connected cars.

Business Models for the IoT:

Ana Sancho, Libellium: they manufacture sensor networks for the IoT. Solve problems from smart cities to agriculture & water resources. More than 90 different sensors. They just see very early testing the water with IoT on part of their clients: not widescale implementation.