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Who Owns the Factory?

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My local Toyota dealer owns my car.  My name may appear on the ownership papers, but I know better.  The dealership tells me when I’m due for maintenance, what each thing will cost, and why it’s important to repair or replace it.  Sometimes I think they care more about my car than I do.  Of course, they get paid for this service, but it is also in their best interest to keep my car running in tip-top shape, because a satisfied customer is a repeat customer.

It wasn’t always this way.  In younger days when money was scarce and time was free, and I could do anything I put my mind to, I got a few books and set about doing my own car repairs.  After some trial and error, I was able to do normal maintenance, and even undertake a few more complicated repairs like change a radiator core or rebuild a carburetor.  But over the years cars have gotten more complex, and time has become more valuable.  Now I’m more than happy to turn the whole project over to the experts.  As far as I’m concerned, the dealership owns the car.

Who owns the project?

Seems like factories may be going in the same direction.  To get the most out of “smart” manufacturing, the IIoT, and Industrie 4.0, factory owners and operators are relying more and more on outside expertise.  System integrators are stepping in to fill the gap, and some of them are realizing that they can provide the most value to their customers by taking ownership.  Maybe not the factory itself, but the projects they implement.  The question, “Who owns the project?” really boils down to, “Who takes responsibility for it?”

Robert Lowe, co-founder and CEO of Loman Control Systems Inc., a certified member of the Control System Integrators Association (CSIA), recently suggested this idea in an Automation World blog, End-User Asset ‘Owned’ by a System Integrator. He sees a need for system integrators to take on more responsibility by supporting their clients “beyond the project.”  He proposes a new acronym, SIaaS, for System Integration as a Service.  Providing “service and support for maintenance, machine monitoring, machine performance, process performance, reporting, technology upgrades, cybersecurity and so forth” frees the end-user to “focus on making its product and not be dependent on inside resources for sustainable performance.”

Lowe goes on to explain how system integrators are in a unique position to partner with companies on a project they have completed, because they understand well how it works.  Not only did they build it, but they have more experience monitoring, maintaining, and upgrading similar systems.  Rather than finding, training, and maintaining specialized staff to keep the system running, the plant owner can keep his or her people focused on the bigger picture of getting their product out the door.  And the system integrator who owns the asset will ensure that it performs well, because a satisfied customer is a repeat customer.

Skkynet supports system integrators who want to provide their expertise as a service.  On the one hand, our technical solutions—DataHub, SkkyHub, and ETK—are all available “as a Service”. More significantly, research and experience have shown that many IoT projects run into unexpected difficulties.  Rather than expending the resources to build and maintain a secure and reliable IIoT system on their own, plant management and system integrators can hand that responsibility over to those with the expertise, and cut their costs as well.

IBM Realizes the Value of the Industrial IoT

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A recent report in Fortune magazine claims that one of the key areas for growth at IBM this year has been its Industrial IoT (“IIoT”) business.  In the past 9 months alone, the number of their IIoT customers shot up 50%, to 6,000.  The area of IIoT is one of IBM’s “strategic imperatives”, which contributed an overall increase in growth of 7% for the company.  In contrast, the more traditional hardware and services areas experienced a 14% decline year-on-year.

The report quotes a survey released last month from IDC (International Data Corporation) that found the trend towards IIoT implementation is increasing industry-wide. Over 30% of the companies participating in the survey have already launched IoT initiatives, and another 43% expect to do so in the coming year.  “This year we see confirmation that vendors who lead with an integrated cloud and analytics solution are the ones who will be considered as critical partners in an organization’s IoT investment,” said Carrie MacGillivray, Vice President, Mobility and Internet of Things at IDC.

Results of the IDC survey of 4,500 managers and executives from a wide range of industries in over 25 countries suggest that many companies have completed proof-of-concept projects, and are now moving towards pilot implementations and scalable IoT deployments.  This trend is acknowledged by Bret Greenstein, IBM’s vice president for IoT platforms, who commented in the Forbes interview, “There was so much tire-kicking a year ago. Now you are seeing adopters in every single industry actually building solutions.”

What is driving this demand for IoT among IBM’s customers?  The Forbes article didn’t say, but the IDC survey found that much of the value of the IoT is seen to be internal to the company itself, to become or stay more competitive.  Respondents cited boosting productivity, streamlining procedures, and cutting costs as reasons for implementing the IoT, rather than any direct services or other benefits for customers.

Although the IDC survey was for the IoT in a broad range of industries, including manufacturing, retail, utilities, government, health, and finance, its results correlate with the experience of IBM in the Industrial IoT.  The company plans to bring on 25,000 new people for IIoT-related projects and services worldwide, with 1,000 of them in their Munich global IoT headquarters alone. As we see it, both the survey results and the experience of IBM point to a common reality: the Industrial IoT is quickly moving into the mainstream.

Manufacturers and Machine Builders Weigh In on IIoT

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With all the conversation swirling around about Industry 4.0 and the Industrial IoT, you sometimes have to wonder what’s actually trickling down to those people who are expected to buy in, like manufacturers and machine builders.  The bottom line is that someone is going to have to invest in the IIoT, and they expect to get a return on that investment. IIoT proponents are counting on manufacturing companies and OEMs to put some skin in the game.  But who is talking to them?

At least one person is.  Larry Asher, Director of Operations at Bachelor Controls Inc., a certified member of the Control System Integrators Association (CSIA), has been meeting with long-term customers in a number of industrial fields, and asking them for their thoughts on the IIoT. Their responses indicate an overall positive view of the potential.

Asher first reiterates a growing understanding that the IIoT is not just a new term for industrial networking, or SCADA as usual.  He says, “Though it is true that networking has existed as part of industrial control solutions for many years, traditional isolated control networks will not support the level of integration required for large-scale data and analytics, nor will they support the number of connected devices that will be a part of IIoT-based solutions. IIoT-based solutions demand connectivity, accessibility and security, making the network infrastructure critical.”

He then shares the insights garnered from his conversations, organized into four areas that the IIoT is expected to impact: data analysis, mobile/remote access, supply chain integration, and preventative maintenance.

Summary of Insights

Here is a summary of how the manufacturers and machine builders he met with view the impact of the IIoT:

Data and Analytics: Everyone agrees that investing in IIoT to enhance data collection and develop more sophisticated and powerful analytics is a good thing.  Applying this higher level of analysis is already impacting procedures and control implementation on the plant floor. Some manufacturers are even revising company organizational structures to bring in people who can maximize performance and profit using IIoT data.

Mobile/Remote Access: Access to data via mobile devices and/or from remote locations has seen less interest, but that is expected to change.  Right now the implementation is fairly low, despite the significant number of products and options available, perhaps due to a perception of high cost.  But, as Asher reports, “mobility remains as a central theme and poised for rapid growth with a change in the value proposition.”

Supply Chain Integration: As to supply chain integration, there was a wide range of experience.  Some saw little or no difference between current practices and what the IIoT has to offer, while others reported that the integration is so complete that suppliers now effectively have direct access to user inventory levels.

Preventative Maintenance: Manufacturers and OEMs alike appreciate the value of IIoT-based preventative maintenance.  With machines and equipment connected directly to the vendor, manufacturers can automatically generate maintenance work orders or request spare parts.  Vendors gain a competitive advantage when they are able to monitor and remotely service their equipment 24/7, which also provides them with a source of recurring revenue.

Overall, the views of those at manufacturing plants responsible for ensuring ROI validate the practicality and cost-effectiveness of the Industrial IoT.  As word gets out, and more decision-makers understand the benefits, we expect to see increased levels of adoption.

Realizing Profits from the IoT

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“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.

Case Study: Plastics Manufacturer, Scandinavia

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Leading plastics manufacturere uses live process data to optimize production, saving time and materials

One of Scandinavia’s leading plastics manufacturers has chosen DataHub® software from Cogent Real-Time Systems (a subsidiary of Skkynet) to extract data and interact with their state-of-the-art plastic manufacturing equipment. The firm can now access any desired process data for the purposes of engineering analysis and enterprise-level resource planning.  DataHub software was the only additional piece of software required to realize substantial savings of time, materials, and production costs.

“The DataHub application is exactly the kind we needed,” said the project coordinator. “Our system is extensive, and we need to visualize a lot of production parameters. We looked at other solutions but they were too expensive and more complicated.”

plastics-manufacturer-plantWhen the company installed new equipment recently, the necessary system integration grew very complex. Progress was slow. After almost a year they were facing a deadline and had little to show for their time and effort. The goal was to pull together data from 15 machinery units, and feed it in real time into the company’s business processing systems. And if possible, to enable plant engineers to view and work with the live data as well. When they found DataHub software they were pleased to learn that most of the work had already been done.

The first test was to connect a DataHub instance to an OPC server and put live data into ODBC databases, Excel spreadsheets, and web browsers, as well as to aggregate OPC servers and tunnel data across a network. DataHub technology proved to be easy to use and reliable, and it performed remarkably well. The next step was to set up a test system.

The test system connected all of the OPC servers for the plant’s plastics production machines to a central DataHub instance. Another DataHub instance at a network node in the engineering department is connected to the central instance by a mirroring connection, for tunnelling data across the network. This second DataHub instance is then connected to an Excel spreadsheet to give a live display of the data in real time. When a piece of equipment machine starts up on the production line, the chart comes to life—cells spontaneously update values and bar charts spring into existence.

The engineering department was able to develop a custom TCP application that uses the DataHub C++ API to make a direct connection from the DataHub instance to their SQL Server database. Once connected that database gets updated in milliseconds with any change in the plastic-manufacturing machinery. From the SQL Server database the data is accessed by the company’s ERP and accounting software. Using DataHub software in these ways allows the company to:

  • Aggregate the data from all machinery into one central location.
  • Distribute the data across the network to various users.
  • Do decimal conversions of the data as it passes through the DataHub instance.
  • Put selected subsets of data into Excel for engineers to view and run calculations on.
  • Feed values into a SQL Server database in the company’s IT and business processing system. The OPC points are read-only to ensure a clean separation between the management and production areas.

“This system pays for itself,” said a company spokesman, “and we save money in many ways. We have seen substantial gains in productivity and performance because we can monitor our processes far more effectively. Our accounting and planning departments have, for the first time ever, an up-to-the-second record of actual production variables and statistics. At the same time, our engineering staff can use real-time data in their calculations, and feed the results directly back into the process.”

DataHub technology also saved substantial programming costs. The time alone saved on development work has paid for the system many times over. With a single tool the project coordinator has met the various needs of both the engineers and company managers. “The software is easy to install and it works well,” he said. “It’s at the correct level for our needs.”

Case Study: TESS Engineering, Japan

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Remote Monitoring for Boiler Systems

A hot topic in Japan right now is energy production, use, and conservation, with a renewed concern for the environment. Industrial and commercial users are looking seriously at implementing alternative energy systems, and making the best use of their resources.

One company that has built a solid reputation in this arena is TESS Engineering, in Osaka. TESS provides installation and remote monitoring for solar generation systems, co-generation systems, boilers and other equipment. They are always looking for new ways to save energy, reduce costs, and preserve the environment.

TESS logo

A major challenge facing TESS has been monitoring and maintaining boiler systems for large, decentralized companies. Site visits are expensive, particularly at remote, out of the way locations. Each visit requires shutting down the boiler, taking readings of up to 500 data points, and then restarting. This approach can lead to inaccuracies, since in a rapidly-changing system environment the data may be out of date even by the time the engineer returns to the home office.

For some time TESS had considered remote monitoring via the Internet, but there were drawbacks. “Some of our client’s remote locations don’t have Internet access,” said Mr. Kinya Oji, General Manager at TESS, “and for those that do, creating a process visualization system would require a significant development effort over a long period of time. If we were going to make such an investment, we wanted a complete solution.”

Nissin Systems logo

Through Cogent’s partner in Japan, Nissin Systems Co. Ltd., TESS learned about the Cogent DataHub®, as well as a new service that Cogent has started offering on a limited basis in Japan: remote, real-time data access through cloud computing. Engineers at TESS determined that this approach might be sufficiently flexible to meet their needs, and easy enough to implement that they would not need to embark on a lengthy development project. So, TESS assigned an engineering team to investigate.

Working closely with Nissin Systems, the TESS engineering team began by creating serial I/F links between each boiler and a number of device servers (typically 10 or so), and then brought all that data to a gateway device. In locations where the gateway device had access to the company LAN, it was then connected to a DataHub on the LAN. In locations too remote to connect to the company LAN, the gateway device was connected to a 3G phone network. In both cases, the data was sent from the gateway device―via LAN or 3G―to a DataHub running on a cloud server.

“When everything got connected, we were able to aggregate all the information coming from each boiler, and access that data in real time from the DataHub running on the cloud server,” said Mr. Oji. “The next and most important part of this system was an HMI. We needed something simple and intuitive for operators to use, without investing a lot in development costs. Using WebView™ we were able to create a user-friendly monitoring system in reasonable time, and not too much effort.”

Case Study - Tess Engineering, Japan

The complete, functioning system not only provides web-based access to data from every boiler in the system, but TESS is realizing additional benefits from a fully integrated middleware solution. Live and archived data is currently being used for analyzing boiler performance, keeping regular records of operations, and for sending out alarms and emails to operators and managers.

“We can view our historical data trends graphically in WebView,” said Mr. Oji, “while at the same time using the DataHub’s Data Logging and Historian features to connect databases and store the data. During monitoring, if any abnormal conditions occur, we can generate alarms and send out emails. We also use the DDE feature to automatically generate spreadsheets for our daily, monthly, and annual reports.”

“By networking through the cloud, we have been able to establish an effective method by which the customer can monitor the changing states of all of their boilers, in real time. Now the company operators and managers can respond quickly to boiler conditions at individual sites.”

“Our customer was very satisfied by this solution. They can now operate their system efficiently and safely, and plan to install this system in more than 100 more boiler sites in the near future. Here at TESS, we are looking forward to using the DataHub and WebView to develop this kind of solution for other customers.”