How IoT is changing manufacturing

 

co-authored with Prasad Satyavolu

Designing products in manufacturing has never been so exciting--and challenging--thanks to new, IoT-based technologies. Changes in manufacturing processes, supply chain, robotic plants, embedded sensors in products and manufacturing machinery are all driving real-time operational efficiencies, reducing risks, and at the same time creating grounds for innovation and business impact.

The boundaries of competition are changing the marketplace with new business models. Uberization is now a verb.

Just look at the leaders: GE, Siemens, Caterpillar, Harley Davidson, Ford, and recently Foxconn are all emphasizing digitizing their plants to improve efficiencies, cut costs and allow decisions to be made at unit level. GE is even shifting its brand to one as a software company.

Breaking down “digitization”

Digitization impacts all four elements of the organization: informed products, processes, people and infrastructure – the integration of which is essential to an automated, smart and streamlined manufacturing.

Products: Products are becoming ‘Smart’ meaning, they’re getting embedded (usually via sensors) with intelligence connected directly to the customer to monitor usage, productivity and help guarantee reliability. Advanced sensors and software applications like analytics and cloud-based programs have made this possible.

A ‘smart’ or informed product also take autonomous action, improving productivity and efficiencies through real-time supply chain improvements.

But it goes beyond better efficiencies: when products are smart, new business models are possible. New business models will be built around analyzing and monetizing sensor-generated data. And customers can be directly involved in ideation and design of products. Just take a look at Procter & Gamble’s ‘Connect plus Develop’ program wherein customers and partners share ideas and insights in new product development.

People: People are critical, but skillsets will shift. On the shop floor, it’s not going to be about machining skills, it will be about making meaning from loads of generated data for informed decision making and quick action. It will be about marrying the physical shop floor with the ability to redesign and reinvent old processes and systems.

According to research conducted by Cognizant’s Center for the future of work, the top two capabilities sought by companies are product designers and data scientists. With an estimated skills shortage of over 3 million in manufacturing in the next decade, and supply chain alone creating up to 1.4 million job vacancies by 2018 according to MHI research people are, to put it simply, not going anywhere soon.

Processes: A real-time information highway between supplier and customer re-configures the supply chain by making it more flexible and adaptable. Rote processes are automated, and data generated by automation helps with granular visibility and meaningful insights across the global value chain.

That said, while modern processes imply breaking information silos within the company and encouraging collaboration among different functional groups as part of the strategy, one of the most neglected pieces of the puzzle has been the cultural aspect of driving change within the organization. Moving away from “This is how we’ve always been doing “to creating new sets of operating principles will require strong change management initiatives.

Infrastructure: And last but not least, the role of an informed infrastructure – a combination of hardware and software applications to create an ecosystem for enhancing performance and efficiencies. An example is Cisco’s Virtual Manufacturing Execution System (VMES) platform for managing real time production operations.

Though smart infrastructure has been around in manufacturing plants for some time, robotics, cloud, mobile and analytics have taken it to whole new levels of intelligence and productivity. However, the big concern would be to not only manage the infrastructure complexities but also keeping it secure from digital threats.

In a nutshell

Short of unpredictable geopolitical events that upend trade and manufacturing, it’s the shifts in consumer demand cycles, ownership models and product transformation to “Smart” that is creating a new cost and revenue dynamics for the traditional manufacturer. For next generation manufacturing to succeed, organizations must embrace digital technologies across the four pillars of the organization to elevate performance, improve productivity, and create profitable business outcomes.


Why it is Critical for Leaders to Grow Their Digital Presence

Market pundits keep telling you that every business is a digital business. Digital is your future and the path to transform the business. When so much is at stake, shouldn’t be leaders growing their digital presence? Our latest whitepaper highlights that many business leaders are not on LinkedIn, and most of them are yet to open a Twitter account. Another report reveals that 70% of Fortune 500 CEOs do not have a social presence themselves. In Australia, a 2015 survey found four CEOs of the top 20 publicly listed companies have a Twitter account.

We call this attitude the “lack of time syndrome” as leaders feel they have more strategic tasks to fulfill than managing their tweets. “Digital thinking” must be injected into a company’s core, and that extends to the social media presence of the company’s leaders. However, the failure to fix or expand their digital presence will impact the future of their own role and business. The personal participation in the digital realm is the key to understanding the digital consumer’s state of mind and unlocking digital’s real value. Not a surprise that more than half of the companies surveyed for our report agreed that they do not have a clear, shared vision of digital transformation which is well-communicated and understood throughout the organization.

Leaders need not to become digital experts neither we are suggesting it. But, they need to take their ideas and transform them with the power of digital simply to jettison old habits and paradigms, with the goal of leading a digital-first company. It’s time to say goodbye to analog leadership. The biggest issue here is organizational complacency, resistance to change and an ability to recognize the urgent need to change. Senior leadership must stop asking their teams to just “fix the problem” and instead ask them to “fix their digital quotient.” By communicating the digital vision clearly, leaders can ensure the entire company is marching in one direction — building digital at the core of the business.

DBS Bank in Singapore has taken a different route to developing future-ready digital leaders. As part of its DBS MegaHackathon initiative, the bank’s employees are encouraged to create new apps, processes and prototypes by collaborating with relevant startups to tackle business and societal challenges. The organization has already changed the mindset of hundreds of business leaders throughout the bank, which aims to impart digital thinking to every DBS employee before the end of 2016.

So, what should be the first step? Improve the company-wide digital quotient? I think undertaking a digital leadership assessment across the organization, including the board and the CEO, to understand the current state of digital leadership, and act accordingly.

What’s your take on the digital presence of leaders? Is it essential for them grow their digital presence to win in the “digital-first” world?.

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The Future of Questions

Computers are useless; they can only give you answers”. Pablo Picasso

For anyone paying attention – as I know, dear reader, you are – you’ll have no doubt noticed that the debate about artificial intelligence is becoming almost as intense – almost – as the US Presidential campaign.

Every day new articles, new movies, new TV shows, new conferences, new books, appear, warning us that the robots are coming. The latest recent gathering of the global socio-economic elite, in Davos – Woodstock en Piste – majored on the role of AI in the “4th Industrial Revolution” and the impact AI will have on the future of jobs. If there was a Sypder Index Fund tracking AI commentary (traded algorithmically, naturally – pun intended) it would be worth stuffing into your 401k.

There are, of course, many similarities between the AI debate and the political one; both are really, as the WEF recognized, about the future of work; how to get work, how to secure work, what work fundamentally is, in an age where code can do more and more things that humans have traditionally traded for money. And both are examining the nature of artificially; “authenticity” versus “political expediency” is a central tenant of the political race; “wetware” versus “software” is core in the race against the machine.

And just as in the political debate, the loudest, most extreme voices seem, at present, to be capturing most of the oxygen in the room. For Trump and Sanders in politics, read Kurzweil and Musk in AI. For Ray Kurzweil the singularity is near. For Elon Musk, AI represents “our greatest existential threat”.

As per usual your humble correspondent can see both sides of the argument. (In my defense your honor, I present F.Scott Fitzgerald’s famous words, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function”). On the one hand it’s not hard to imagine that the offspring of the computer that won Go http://bit.ly/1PTnLAK aren’t going to stop there. On the other hand though, a future where people are oppressed by malign machines seems straight from a back lot in Hollywood or Watford; fun to chew on with some popcorn on a Saturday night but hardly something your angst needs to grind on right now.

If you are increasingly anxious about the rise of machine intelligence though I’d strongly recommend the recent book What to Think About Machines That Think http://amzn.to/1QEAPg6 edited by John Brockman, Editor and Publisher of the very cool http://edge.org/ Brockman has rounded up essays by a lot of top wetware including Paul Saffo, Tim O’Reilly, Kevin Kelly, Nick Bostrom, and Esther Dyson, amongst many others, who all take different cracks at figuring out quite how worried/excited/blasé we should be. If there’s a consensus amongst the thinkers about what to think about machines that think it’s pretty hard to discern. Better software than what I have on board would be needed to figure that out. There are some, like Bruce Schneier from Harvard Law School, who wonder what happens when a omputer (not its operator) breaks the law. Others, like Josh Bongard from the University of Vermont, suggest that when “machines are commanded to “survive, reproduce, and improve in the best way possible” they will probably give us humans a very short window to relish that insight”. But then again, others feel aligned with Steven Pinker from the Department of Psychology at Harvard, who writes “My own view is that the current fears of computers running amok are a waste of emotional energy – that the scenario (i.e. the rise of AI) is closer to the Y2K bug than the Manhattan Project”.

Which brings me full circle back to that primo piece of wetware (not featured in Brockman’s book) Pablo Picasso. In 1968, when he made the remark above, computing was – as seen from 2016 – in its infancy. But it was powerful enough to fire the imagination of many who wondered where software would take us and what it would be like when we got there. Arthur C. Clarke was worrying about HAL. Philip K. Dick was dreaming of electric sheep. Michael Moorcock was already leaping ahead to speculate about the final program (US spelling!). It wasn’t hard, even then, to extrapolate that software would get cleverer and cleverer and one day get cleverer than us. Of course the Turing Test was already almost 20 years old by then, long enough for the kings of the swingers to worry how long they’d be the jungle VIPs (Disney’s The Jungle Book came out in 1967 ...)

Picasso though was less impressed and less concerned. His, at first gnomic, but on reflection, devastatingly profound statement, was spot on then, but even more spot on – even with the technological advances of the last 50 years – today. Computers have gotten great at giving us answers; ask Siri “what does the fox say” and she’ll (!) correctly answer “fraka-kaka-kaka-kaka-kow”. Waze will tell us to avoid Route 17 because there’s just been a fender bender. Zapier will automatically create a Google Calendar event from an Evernote reminder. IFTTT will tell your family when you’re on the way home from work. But these are still all answers. We – the wetware – are still thinking of the questions. Even on the very far edge of the new frontier – the aforementioned game of GO – the real VIPs are humble and understated in their claims for where things stand; “It’s (sci-fi AI) very, very far in the future from the kinds of things we’re currently dealing with, which is playing Pong on Atari”, Demis Hassabis told the FT last year http://on.ft.com/1P3i59q. This nice compilation of quotes http://read.bi/1GTtZge, rounded up by Business Insider, also injects a dose of healthy skepticism from those really in the know.

Now I wouldn’t go quite as far as Old Pablo in saying computers are useless; I quite like my iMac, iPad, PC, Apple Watch, E20, TV, car, etc etc (computers one and all). But I do think that Pablo Diego José Francisco de Paula Juan Nepomuceno María de los Remedios Cipriano de la Santísima Trinidad Martyr Patricio Clito Ruíz y Picasso (would a computer think of that?) was onto something then and is still onto something now. We – not software – are the future of questions and questions remain more important than answers. Questions come first. Every answer begets a question.

Questions – curiosity –are/is (I would argue) the central defining characteristic of intelligence (as it is manifested in our human form). From our first words http://bit.ly/20ErHNk to our first steps to our first journey it is intrinsic to our very being to want to know who what why or where. Nobody tells us to ask questions. No parent, or teacher, or TV show, or social media feed tells us – programs us – to want to know “zup?” We just do. I wonder why? C’est une bonne question...

When computers start asking questions – “just what do you think you’re doing Dave?” – then I guess we can start worrying. But that – it seems to me – is as far as away in the future as it was 50 years ago.

I hope.

Please note that this is article was written by me, Ben Pring, not by Automated Insights or Narrative Science.