It’s Time for IoT-enabled “Real-Time” Regulation

Pardon me, but I still take the increasingly-unfashionable view that we need strong, activist government, to protect the weak and foster the public interest.

That’s why I’m really passionate about the concept (for what it’s worth, I believe I’m the first to propose this approach)  that we need Internet of Things enabled “real-time regulation” that wouldn’t rely on scaring companies into good behavior through the indirect means of threatening big fines for violations, but could actually minimize, or even avoid, incidents from ever happening, while simultaneously improving companies’ operating efficiency and reducing costly repairs. I wrote about the concept in today’s O’Reilly SOLID blog — and I’m going to crusade to make the concept a reality!

I first wrote about “real-time” regulation before I was really involved in the IoT: right after the BP Gulf blow-out, when I suggested that:

The .. approach would allow officials to monitor in real time every part of an oil rig’s safety system. Such surveillance could have revealed the faulty battery in the BP rig’s blowout preventer and other problems that contributed to the rig’s failure. A procedure could have been in place to allow regulators to automatically shut down the rig when it failed the pressure test rather than leaving that decision to BP.”

Since then I’ve modified my position about regulators’ necessarily having first-hand access to the real-time data, realizing that any company with half a brain would realize as soon as they saw data that there might be a problem developing (as opposed to having happened, which is what was too often the case in the past..) would take the initiative to shut down the operation ASAP to make a repair, saving itself the higher cost of dealing with a catastrophic failure.

As far as I’m concerned, “real-time regulation” is a win-win:

  • by installing the sensors and monitoring them all the time (typically, only the exceptions to the norm would be reported, to reduce data processing and required attention to the data) the company would be able to optimize production and distribution all the time (see my piece on “precision manufacturing“).
  • repair costs would be lower: “predictive maintenance” based on real-time information on equipment’s status is cheaper than emergency repairs.
  • the public interest would be protected, because many situations that have resulted in disasters in the past would instead be avoided, or at least minimized.
  • the cost of regulation would be reduced while its effectiveness would be increased: at present, we must rely on insufficient numbers of inspectors who make infrequent visits: catching a violation is largely a matter of luck. Instead, the inspectors could monitor the real-time data and intervene instantly– hopefully in time to avoid an incident.

Even though the IoT is not fully realized (Cisco says only 4% of “things” are linked at present), that’s not the case with the kind of high-stakes operation we’re most concerned with.  GE now builds about 60 sensors into every jet, realizing new revenues by proving the real-time data to customers, while being able to improve design and maintenance by knowing exactly what’s happening right now to the engines.  Union Pacific has cut dangerous and costly derailments due to bearing failures by 75% by placing sensors along the trackbed.

As I said in the SOLID post, it’s time that government begin exploring the “real-time regulation” alternative.  I’m contacting the tech-savvy Mass. delegation, esp. Senators Markey and Warren, and will report back on my progress toward making it a reality!

My O’Reilly blog post about how the IoT will transform manufacturing

Posted on 29th April 2014 in 3-D printing, Internet of Things, M2M, manufacturing

Woopiedoo! I have a post in today’s O’Reilly SOLID blog (which is, among other things, promoting their SOLID conference in SF next month) about how the Internet of Things will transform manufacturing.

In it, I emphasized the manufacturing variation on the two transformative aspects of the IoT that I think will characterize its effect on every aspect of our lives and economy:

  1. for the first time, we will have real-time information on the current state of all sorts of things
  2. we will also be able to share that information, again, on a real-time basis, with everyone who could benefit from that information.

We’re already starting to see signs of that transformation, with GE’s Durathon battery factory (with 10,000 sensors on the assembly line plus others designed into the batteries themselves), SAP’s Future Factory, and Siemens’ Electronic Works factory.  As the price, size and energy demands of sensors continues to plummet, the trend will accelerate.

As a result, manufacturing will no longer be isolated from real-time activities in the rest of the enterprise:

  • “Designing sensors into products, rather than adding them on retroactively, will allow companies to identify defective products immediately, rather than waiting for post-production testing.
  • The built-in sensors will also allow companies to create new revenue streams. They will be able to sell customers real-time data on product operations that will allow the customers to optimize their use, and they may also choose, instead of selling the products, to lease them, with the price determined dynamically based on how much the product is actually used — take, for instance, jet turbines that are now priced on the basis of how many hours they actually operate.
  • The product design cycle will accelerate. Companies will be able to monitor a product’s actual usage in the field, then implement more rapid upgrades.
  • ‘Just-in-time’ supply chains will become even more efficient as real-time production data triggers resupply orders, just as distribution systems will become more closely integrated on the other end of the production cycle.”

The SOLID conference focuses on the convergence of hardware and software. It’s about time the two are fully integrated, and the results will be incredible!

 

 

IoT will streamline supply chain, reduce environmental impact

There’s a new Deloitte white paper that echoes a theme I’ve been repeating since 1990: smart businesses eliminate inefficiency by eliminating environmental waste.

I predict that the Internet of Things will speed that trend by allowing real-time data sharing throughout the supply chain, further increasing its efficiency.

The white paper, “The Evolving Supply Chain: Lean and Green,” says that:

“Leading companies are now finding that a green supply chain doesn’t just improve the public’s perception of their company and brand; it can save money by using resources more efficiently and reducing waste. It can also help to manage risk by insulating a company from shortages and price shocks, and by reducing the chances that a supplier will do something that gets them in hot water.”

It continues by identifying five key factors to reduce:

“Leading companies create value by modifying their supply chains to manage five key inputs and outputs: energy, carbon, water, materials and waste. These five resources are ubiquitous throughout the supply chain and thus offer vast potential for improved efficiency and cost reduction. Energy is expensive to use; carbon, in the form of emissions, represents dollars gone up in smoke; scarcity and commodity inflation are driving up the price of water and materials; and waste is a potential profit thrown away.”

In my speeches on the “Zero-Waste Economy,” I used to suggest that executives that were contemptuous of tree-hugging environmentalists and could care less about generating wastes should just substitute the work inefficiencies for waste. What hard-nosed company could justify inefficiency?

It’s great to see that the message is finally getting mainstream acceptance, and I really do think that the IoT will boost supply chain efficiency and thereby reduce environmental impacts by allowing everyone in the supply chain who needs operating data to share it simultaneously and in real time.

So there’s really no excuse any more for not practicing smart environmentalism, is there?

PS: To get the specifics about how to translate smart environmentalism into profits, check out Gil Friend’s Natural Logic. He’s got the operating manual.

Fewer, faster, finer: good values for #IoT innovators!

Just had a great conversation with a brilliant consultant, Michael Woody, the president and founder of International Marketing Advantages, Inc (he and I have the same wonderful literary agent, Michael Snell).

Woody helps small, innovative companies successfully compete with China, using a simple formula: fewer, faster, finer.

  • Fewer: think of China’s Foxcom, and its huge factory complexes and huge production runs. By contast, “American Dragon” companies ” lower minimum order sizes; the lower a minimum order size, the better. If a product can be customized, even better still.”

  • Faster: think about how far away China is, and how long it takes to ship products: “In today’s business environment of tighter margins, it is likely that your U.S. customers currently buying from China favor low inventory levels and just in time delivery. Given these conditions, short production lead times and physical proximity of supply chain partners becomes more critical.”
  • Finer: “…means not only that your product is of the highest quality, but also that it is safe. Overseas manufacturers, particularly those in China, have little to no understanding of the product safety regulations in the United States. Even large multi-national corporations, some based in the U.S, who have outsourced manufacturing to China are learning that lesson the hard way. These tougher regulations are your friend, so use them to your advantage.”

Check out the American Dragon site, and think hard on how to apply these principles in conjunction with your innovative Internet of Things product design, and I think you’ve got the formula for manufacturing success!

 

Automated factories: that’s not the IoT’s potential!

It’s easy to see why some people make the assumption that one of the results of the Internet of Things will be fully-automated factories.

After all, if automatic, real-time machine-2-machine data sharing would allow self-starting and self-regulating machinery, wouldn’t that allow us a utopian vision of completely autonomous manufacturing?

Instead, I think Bosch’s Volkmar Denner nailed it with this blog entry. He says that rather than complete automation:

“Instead, it’s about finding ways to increase agility. Putting that into figures, optimizing resource allocation within a more flexible production process can result in a jump in productivity of as much as 30 percent. Our goal is to be able to customize even the smallest unit volumes while retaining optimum productivity, and ultimately leading to achieve optimized multi-variant series production.”

I agree totally that what’s going to happen is an end to centralized management and top-down control of information (see my last post, on “Buckyball Management”!, with decentralized, self-management emerging that could threaten old industry leaders who don’t get it (see my posts about how GE does get it!) :

“… And I’m convinced that this shift will provide opportunities for established companies to offer new business models. But they too need to watch out: the IoTS is shaking up what until now has been very much a closed market, opening it up for entirely new players such as IT companies. Here, the IoTS is not just about connecting objects, machines, and systems. On the contrary, it’s also about how to use the data that this connectivity generates. And instead of using this information only within the plant itself, now everyone along the manufacturing chain can be given access to the data over the internet. Once again, the knowledge gained from these data can be applied to generate new business models.”

Denner says that one of the #IoT services that Bosch — the leading supplier of automotive sensors and one of the leaders in industrial sensors — is developing is predictive maintenance, which innovators such as GE (with its jet turbines) and the railroads (I’ve never traced my ancestry on my father’s side, but I harbor the possibility that I’m descended from the Stephensons, pere et fils, who invented the locomotive, so I have a warm spot in my heart for that industry…) are already doing.  As Denner says, “Having such a solution in place allows organizations to offer their customers new and improved levels of service, including a guarantee of reduced downtimes.”

So don’t count out the human element in manufacturing once the IoT is commonplace: in fact, it will be more important, and more valuable, than ever!

O’Reilly free e-book gives overview of “industrial internet”

Posted on 18th April 2013 in energy, Internet of Things, manufacturing, transportation

O’Reilly has published a free e-book,  “Industrial Internet,” (underwritten by GE, which, not so coincidentally, uses the industrial internet as the advertising slogan for its own involvement in the field…) about the “coming together to software and big machines.” It’s a great introduction to this crucial portion of the Internet of Things.

The message of the book? “With a network connection and an open interface that masks its underlying complexity, a machine becomes a Web service, ready to be coupled to software intelligence that can ingest broad context and optimize entire systems of machines.

“The industrial internet is this union of software and big machines… It promises to bring the key characteristics of the Web — modularity, abstraction, software above the level of a single device — to demanding physical settings, letting innovators break down big problems, solve them in small pieces, and then stitch together their solutions.”

Author Jon Bruner emphasizes that industrial internet devices don’t necessarily have to be connected to the public Internet: “…rather, it refers to machines becoming nodes on pervasive networks that use open protocols.”

Machines are reconceptualized as services, “…accessible to any authorized application that’s on the network. Those applications make it possible to simplify optimization of the physical devices without requiring as much knowledge. Most importantly, “…the industrial internet makes the physical world accessible to anyone who can recast its problems in terms that software can handle: learning, analysis, system-wide optimization. (my emphasis)”

Bruner points out that the bigger the network (think the entire US air traffic control system) the more optimized it can become. As Big Data takes over software intelligence “will become smarter and more granular.”

Hallmarks of the industrial internet will include:

  • fewer, smarter machines
  • less labor required to operate them
  • “Any machine that registers state data can become a valuable sensor when it’s connected to a network.”

One point that really struck me was that physical products will be able to be improved on the fly, rather than just when a new model is introduced — think of what that means, in particular, for cars, which can often last up to 15 years: it will become possible to change engine settings simply by a software upgrade transmitter via a smartphone app!

“A software update might include a better algorithm for setting fuel-air mixtures that would improve fuel economy. Initiatives like OpenXC8, a Ford program that gives Android developers access to drivetrain data, portend the coming of ‘plug and play intelligence,’ in which a driver not only stocks his car with music and maps through his phone, but also provides his own software and computational power for the car’s drivetrain, updated as often as his phone. One driver might run software that adjusts the car’s driving characteristics for better fuel economy, another for sportier performance. That sort of customization might bring about a wide consumer market in machine controls.

“This could lead to the separation of markets in machines and in controls: buy a car from General Motors and buy the intelligent software to optimize it from Google. Manufacturers and software developers will need to think in terms of broad platforms to maximize the value of both their offerings.”

WOW!

The e-book includes a chapter on the crucial issue of security, arguing that, paradoxically, it may be easier to provide security on an Internet-based network — on the premise that the Internet is constantly challenged by hackers and constantly adapts — than on a more limited network. It mentions Shodan (I’ve been seeing a lot about that one recently!) and Basecamp2 as magnets that attract those who might want to hack the Internet of Things.

There’s also a chapter full of helpful case studies from pioneering industrial internet companies in fields including utilities, HVAC/building controls, automotive (I found that one particularly interesting), aviation, railroads (paradoxically, one of our oldest industries is among the most advanced in its use of sensors and other industrial internet technology, as I’ve reported previously), health care, and manufacturing. Any smart manager should get ideas for his or her company by reading them!

“Industrial Internet” is a must read! Download it today.

 

 

 

 

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