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Trust and the Industrial IoT

They say that in business, it all comes down to trust. American author H. L. Mencken once wrote, “It is mutual trust, even more than mutual interest, that holds human associations together.” To succeed in life, we need to trust people. The same holds true for technology. To succeed in today’s world, we need to trust technology―from products like smart phones and cars to the tools and industrial processes that created them. To whatever extent that we trust technology, we apply it to improve our lives.

But just as there are some people we cannot trust, we should not blindly trust any technology that comes along. Some technologies are more trustworthy than others. So how can you know which ones are best? Take the Industrial IoT for example. Although it offers many benefits, engineers are justifiably cautious in adopting the various IoT technologies available, citing concerns for reliability and security.

Addressing this question, the Industrial Internet Consortium recently published a document titled Managing and Assessing Trustworthiness for IIoT in Practice. It defines trustworthiness as “the degree to which the system performs as expected” and to that end states, “Confidence comes from the assurance that several aspects of the system are under control: security of its data and of its equipment, safety for people and the community, protection of assets, privacy protection of data, reliability of operations and subsystems, and resilience of the system.”

Five Aspects of Trust

The document expands on this idea, locating within both OT (operational technology) and IT five basic aspects of trustworthiness: security, safety, privacy, reliability, and resilience. It shows how each of these may be more or less relevant to the requirements of OT or IT taken separately, and how they are all essential to any Industrial IoT solution. As we see it, this underscores the importance of a truly industrial approach to data communications:

  • Secure-by-design communications should not compromise in any way the security measures that are already in place in a production system. Indeed, the IoT system should measure up to those standards.
  • The safety of plant personnel should not be put into jeopardy as a result of connecting to the IoT.
  • Privacy of data has to be maintained, so that each connecting party gains access only to the information meant for them.
  • Reliability of data transfer must be ensured to the extent possible, given the fact that Internet connections are not 100% stable. Data protocols must be able to indicate the quality (trustworthiness) of the data at every moment so that clients can act accordingly.
  • Resilience of the connection, including the ability to optimize high-speed or low-speed connections over wide or narrow bandwidths, and to recover quickly and gracefully from an outage, keeps the data flowing in the best way possible.

“The network must be built with the expectation of heavy damage,” wrote Paul Baran, one of the developers of ARPANET, precursor to the Internet, back in 1964. So, too, should be the implementation of industrial data communications over the Internet of Things. As with personal relationships, it may be difficult to achieve 100% trustworthiness for this technology. But the value of any Industrial IoT system should be considered in light of how close it comes to that goal.

Food Processing Plants Look to IIoT to Stay Competitive

A recent article in Food Engineering collected insights and opinions from executives at a number of industrial automation and control companies regarding how IIoT, Industrie 4.0 and digitization of the plant floor will play out in the area of food and beverage manufacturing.

The shared view was that these new initiatives are worth pursuing in food processing, as long as they are balanced with caution and good judgement. The article said, “While no one interviewed would suggest that a food or beverage manufacturer convert all its manufacturing software systems to an industrial internet of things (IIoT) platform in one fell swoop, many would suggest that to remain competitive in a fast-changing consumer product environment, it wouldn’t be a bad idea—for those that haven’t already done so—to embark on the ‘digitalization journey’ now.”

Skkynet’s contribution to the conversation focused on the value of connecting real-time production data to management, and what that might look like in the context of food processing. We also shared our thoughts on a number of other topics, such as the value of secure-by-design data communications, but these were outside the scope of the final published article.

Digital Transformation – Challenges and Opportunities

We’ve seen a lot of commentaries lately from industry experts and gurus saying how the Industrial IoT and related digital technologies are driving change in the industrial sector.  Referred to as “digital transformation,” many analysts are suggesting that this kind of change is coming to the industrial world in a big way.  Certainly our customers are gaining significant value from it.

Digital transformation is all around us.  Social institutions and commercial sectors across the board have experienced it, and are still going through it.  Publishing is moving from paper to websites, e-books, and email.  The concept of money has been transformed by debit cards, online banking and bitcoin.  The face of retail has been disrupted by EBay, Amazon, and other online stores.  Even intimate, interpersonal and family relationships are being pulled into new shapes by smart phones, chat, and social media.

Opportunities for Industry

Now digital transformation is expanding from the intangible and social realms into the down-to-earth fields of mining, drilling, energy, and manufacturing―converting raw materials into physical products. Although the inputs, processes and outputs are physical, the information and data associated with them is abstract, and can be digitized.  And as we’ve seen in the domestic and consumer sectors, switching over to digital saves time and money.  There are big opportunities for those who can make the switch.

Jonas Berge, Director of Applied Technology at Emerson Automation Solutions wrote in a recent blog, “There is great opportunity for plant improvement and a great opportunity to sell the digital hardware and software, and to provide the associated services.”  He points out how digital transformation based on the IIoT opens opportunities in many areas, such as equipment monitoring, energy efficiency, and compliance with regulatory standards.

Ralph Rio, Vice President Enterprise Software at ARC Advisory Group, suggests that there are three areas for digital transformation in the enterprise:

  • Re-engineering can be done on current processes by digitizing them.
  • New services become possible as a result of digitizing processes.
  • New business opportunities arise from a digitally transformed plant or company.

For example, a production machine may have a vibration sensor that lights a flashing red alarm on an operator’s control panel when irregular motion is detected.  The machine manufacturer might decide to re-engineer by digitizing the alarm, allowing it to display in a SCADA system or HMI.  By connecting to the digital data via the IIoT, the machine manufacturer can offer a new servicemonitoring their equipment and sending status reports in real time to their customers.  They may also realize a new business opportunity by offering the work that the machine does as a service, rather than selling the machine outright.

Top Two Concerns: Security and ROI

According to Greg Gorbach, also a Vice President at ARC, there are opportunities in many areas, from additive manufacturing, edge processing and advanced analytics to smart products and factories.  And yet, there are challenges as well.  He points to a recent ARC survey that shows the top two concerns: security and ROI.  Security comprises issues like cybersecurity, data security, privacy, and confidentiality.  Taken together these are considered the top hurdle looming in the path towards digital transformation.

The other top concern is ROI, Return on Investment.  As we mentioned previously, the forecast for 2018 is that companies are starting to move from pilots and exploratory trials into finding solid business cases for IIoT.  Scaling up a system from a few test devices to dozens or hundreds has proven to be quite a challenge.  Companies are implementing technologies that were not designed from the ground up to handle large quantities of data, or a multitude of incoming connections.  Also, how to expand the vision from simple re-engineering project to new services and new business opportunities is not always obvious.

In addressing both of these concerns, security and ROI for the IIoT, Skkynet has a solid track record.  Our secure-by-design approach is unparalleled in the industry, and our flexible hybrid cloud solutions open a number of opportunities for digital transformation at all levels of a business. We plan to start sharing some of our success stories later this year.  Would you like yours to be one of them?  Contact us.

Realizing Profits from the IoT

“Most of us understand that innovation is enormously important. It’s the only insurance against irrelevance. It’s the only guarantee of long-term customer loyalty. It’s the only strategy for out-performing a dismal economy.”

– Gary Hamel, management expert

A recent study from MPI Group, “How Manufacturers are Profiting from the IoT” validates the importance of innovation in IoT technologies.  It shows that there is a strong correspondence between understanding the IoT, implementing the IoT, and benefiting from the IoT.  “A good understanding of the IoT is a strong indicator of better operational performance,” the study said.  “Two-thirds of innovators have fully achieved or made significant progress toward world-class manufacturing status,” the study found.

These “innovators” are defined in the study as those companies most willing to use smart devices and embedded intelligence in their processes, their manufactured products, or both. Contrast that with those in the planning stages, labelled “incipients”, and those with no interest at all, called “indifferents.”  The indifferents, according to the study, “are also indifferent to manufacturing success; a whopping 73% have made—at best—only some progress toward world-class status.”

The take-away here is that those companies that understand the IoT and how to apply it to their businesses have for the most part benefitted, and are realizing profits from the IoT, while those that lag behind risk falling futher behind.

Two Areas for Realizing Profits

The study looks at two main areas of implementation of the IoT among manufacturers—in process and in products.  The process areas offering the most profit-making opportunities, according to survey respondents, were shipping and logistics, warehousing, document management, and manufacturing.  The most profit potential from products included adding IoT capabilities to the firm’s own products, as well as selling these capabilities in technologies, devices, software and/or materials to other companies.

There are challenges, of course.  One drawback is that most companies feel that their network infrastructures are not capable of handling machine-to-machine or machine-to-enterprise communications well.  Other top-of-mind challenges to survey respondents were in finding the budget needed for implementation, and in indentifying IIoT opportunities.

By the same token, though, when these companies learn how SkkyHub provides IIoT connectivity on existing networks and can be implemented with no capital expenditure, they may find that the Industrial IoT is within their grasp.  Using an end-to-end, secure-by-design IIoT solution that doesn’t cost an arm and a leg, they may find that realizing profits from the IoT is not as difficult as they thought it might be.

ExxonMobil Seeks Open Automation Solutions

At the most recent ARC Industry Forum in Orlando, ExxonMobil announced that they are not satisfied with business as usual when it comes to industrial automation, and they are looking for something far superior to what is currently being offered.  On January 14, 2016, ExxonMobil announced that they had awarded a contract to Lockheed Martin to serve as the systems integrator in the early stage development of a next-generation open and secure automation system for process industries.  Lockheed Martin is tasked to seek out the architecture and tools needed for an “open, standards-based, secure and interoperable control system” that can be seamlessly integrated with existing facilities, as well as new and future systems.  ExxonMobil wants the hardware and software components to be commercially available and able to function in all current DCS markets.

Rather than simply replace their aging systems with the current state of the art, which is expensive, inflexible, and closed, ExxonMobil wants to leverage new, open, IoT, wireless, and cloud technologies to cut costs, enhance security, and reduce development time. As with other, adjacent areas of technology, they want to see a step-change improvements, not incremental or bolted-on changes to obsolete architectures.

Originally presented at Industry Day on January 26, 2016

Their vision for open automation is standards-based, secure, and interoperable, which will:

  1. Promote innovation & value creation
  2. Effortlessly integrate best-in-class components
  3. Afford access to leading-edge capability & performance
  4. Preserve the asset owner’s application software
  5. Significantly lower the cost of future replacement
  6. Employ an adaptive intrinsic security model

This vision reads like a list of Skkynet connectivity solutions features and benefits:

  1. SkkyHub, DataHub, and the ETK foster innovation and value creation by providing open-standards, real-time data connectivity for hardware and software from almost any vendor.
  2. These Skkynet tools allow users to integrate data from virtually any components.
  3. This kind of real-time data integration enables each component in turn to perform at its highest capacity.
  4. Any generation of equipment, from legacy to state-of-the-art, can be integrated.
  5. Connecting modules can be replaced, and the system itself gets continually updated.
  6. Connections from the DataHub or ETK to SkkyHub are secure by design.

We are currently in communication with Lockheed Martin, and bringing these advantages to ExxonMobil’s attention. We share their vision, and offer tested, verified, working solutions.

Value Propositions for Industrial IoT

A mong all the fanfare and hoopla over the Industrial IoT, the more practical-minded among us quietly but persistently raise the question, “So, where’s the value?” It’s a fair question. The IoT represents a new area of influence for industrial automation. Before embarking on such a venture, it’s good to have some idea what the benefits may be.

As we see it, there are two main parties involved, producers and suppliers, and each of them stands to benefit in their own way:

Producers

By “producers” we mean any company in the industrial sector that produces goods or services, such as manufacturing, energy, oil & gas, chemicals, mining, water & wastewater, transportation, food & beverages, and so on.

OPEX over CAPEX

Traditionally, projects in the industrial sector require large up front capital expenses (CAPEX) and are usually accompanied by long-term commitments. Shifting these costs to operational expenses (OPEX) means that you do not need to justify a large capital expenditure over years of returns. Just like a cup of coffee, you buy it, consume it and when you need more, you buy it again.

The SkkyHub “pay as you go” model cuts costs in this way. There are no long-term commitments and no initial capital investments. Costs are reduced and shifted from high capital expenses to monthly operating expenses, which improves long-term expense planning and looks better on financial statements.

Data as a Service

There is no need for additional IT personnel or extra hardware, no programming and no upgrade headaches. SkkyHub takes care of data connectivity, freeing up customer staff and resources for higher priority tasks, while increasing ROI.

The Efficiency of Big Data

Knowing exactly what is happening at any given time in the system is a useful step that a producer can take towards improving efficiency, enhancing value. Until recently, this kind of analysis was only available to the biggest enterprises. Now SkkyHub provides a cost-effective way to bring the power of big-data collection to even the smallest enterprise. Combined with custom or third-party analytical tools, the real-time data flowing through SkkyHub can power both historical and real-time analysis, boosting KPIs and enabling significant gains in productivity.

Overall Equipment Effectiveness (OEE)

Overall equipment effectiveness (OEE) is a measure of how efficiently production equipment is being used. In manufacturing, for example, OEE is calculated according to three measures: uptime of production equipment, quantity of output, and quality of finished products. Manual methods and historical data archives give a rough idea of OEE, but according to a recent paper published by the ISA, a much more precise and relevant picture can be drawn by combining real-time operational visibility with real-time analytics. Any drop in production uptime or quantity, or in the quality of finished goods will be noticed immediately, and a fix can be applied on the spot, rather than waiting days, weeks, or months for a report to be generated.

Predictive Maintenance

Today’s engineers and managers recognize the need to shift from reactive to predictive maintenance. Instead of asking “What happened?” or “What’s happening?” they want to be asking “What will happen?” Instead of just putting out fires, management and production staff can use the real-time data provided by SkkyHub for optimization, data mining, and fault prediction.

Suppliers

By “suppliers” we mean companies that supply goods or services to industrial companies, in three broad categories:

  1. Raw Materials Suppliers
  2. OEMs (Original Equipment Manufacturers) and Equipment Vendors
  3. System Integrators
Raw Materials Suppliers

Connecting to a customer’s process data via the Industrial IoT provides value by giving suppliers a window into the real-time consumption rates of the raw materials they provide. This allows them to offer just-in-time deliveries, and coordinate their production with demand in real time. A well-known business model shows how the lack of communication between suppliers and producers can cause costly shortages and wasteful overruns. If the Industrial IoT is extended further to include customer order data, then the supply-production-delivery chain could be fully coordinated, with minimal waste and maximum profit.

OEMs and Equipment Vendors

Implemented properly, the Industrial IoT provides a way for OEMs and equipment vendors to monitor their tools and machines in real time. As industrial equipment grows increasingly complex, more and more specialized knowledge is required to maintain and keep it running at optimal efficiency. Meanwhile, customers constantly demand higher uptime rates.

The solution is to stay connected 24/7 in real time. This kind of connection provides vendors and manufacturers immediate notification when something goes wrong, and a convenient channel to check settings and tweak configuration. Rather than sending a technician out to the plant, the tech support team can address the problem using the full set of in-house resources. For the big picture over time, with every machine connected, the vendor or manufacturer can collect histories for every unit in the field, and analyze the data over the entire life of the product.

Given the benefits of OPEX over CAPEX, the growing complexity of machinery, and the convenience of remote monitoring and service, the Industrial IoT may well facilitate a trend towards providing equipment as a service. Plant owners pay a monthly leasing fee for the equipment, and tool manufacturers and/or vendors ensure that it is in place and functioning as expected.

System Integrators

System integration companies come in all sizes, from lone entrepreneurial engineers to mid-sized specialty shops to multi-national giants. Each may offer a different range of skills, products, and services. As the Industrial IoT gains traction, system integrators may begin looking for a way to offer such a service that works well.

Skkynet offers revenue sharing opportunities that meet the needs of any size system integrator working with customers in any sector or niche market. Skkynet partners are able to offer their customers a secure end-to-end solution for the Industrial IoT right now―at a fraction of the cost associated with ad-hoc or home-grown solutions. System integrators who can offer value through best of breed technology to enhance customer performance will deepen relationships with existing clients and grow their customer base.