Case Study: Siemens, Argentina

Multiple benefits from remote monitoring

In keeping with their Industrie 4.0 strategy, Siemens recently introduced an initiative they call Digitalization, which offers digital solutions “for more efficiency, sustainability, and security.” As part of this initiative, Siemens promotes the use of data-driven services to monitor power plants, helping to ensure a reliable energy supply. Out in the field, Siemens personnel are working to transform those ideas into real-world projects. Here is the story of one project that has improved power plant performance and reduced emissions, while at the same time reducing transportation costs and man-hours.

A few months ago, Alexis Tricco at Siemens Buenos Aires in Argentina undertook their first digitalization project. In his role of providing technical support backup for power plant generation, he and his team are responsible for supervising operations and introducing new technologies to cut costs and ensure greater reliability of the physical plant. In this project, Tricco was tasked with developing a secure and reliable way to collect data from control systems running at power plants located hundreds of kilometers from the Siemens office. The first phase was to be a pilot—to connect his WinCC OA SCADA system to a Siemens T3000 DCS running at a power plant located about 100 kilometers from Buenos Aires. The live data would be used for supervisory control and developing new predictive control strategies.

A significant challenge of the project was that there were two networks involved, the control network and a multi-customer network, connected by an intermediary computer. “My idea was to bring all the process data onto my WinCC OA Server running on the customer network,” said Tricco, “To get this, I needed to replicate the data from the T3000 to the interface PC and from there to the WInCC OA Server. This basic data access was the first stage of the project.”

Siemens Argentina system diagram

For the data communications protocol Ticco chose OPC, because the T3000 had an OPC server and WinCC has an OPC client. However, since OPC DA does not network well, he decided to tunnel the OPC data over TCP, using a company VPN. After reviewing the OPC tunnelling software that could meet his needs, he chose the Cogent DataHub.

“I needed to communicate over different networks, with end points that could convert between TCP and OPC, acting as server and client simultaneously,” he said. “The DataHub has an OPC server on one side and an OPC client on the other side, which is exactly what I needed. The other software I looked at would have required two licenses for each PC. I had to think of the costs.

“What’s more, the DataHub is user-friendly, not complicated to figure out. I just read the manual one time and got it working in less than a day. We did some tests, and when everything was working we presented the idea to company management for their feedback.”

The pilot was successful, and management decided to implement the solution. Tricco can now go online and collect OPC data from the plant’s T3000 DCS and perform analysis in real time. The system is connected to the WinCC OA server in the Buenos Aires main office complex, in the control room for monitoring remote locations. Like Tricco, company engineers can monitor the performance of each of the power plant’s gas turbines, and use the data to optimize combustion and control emissions to meet government regulatory standards. There is no need to go on site.

“Until now, to optimize combustion at a client location site someone had to drive or fly to the site, at significant cost and loss of man-hours,” said Tricco. “Now, we can do it all remotely. In fact, just sitting at home I can connect to our VPN and customize the process in a couple of hours. Getting data from the customer, we can choose which equipment to monitor in which part of the plant, and whether or not to optimize its performance.”

This initial implementation clearly demonstrates the practical value of digitalization for all parties involved. The customer is pleased with the solution, as they know their plants are operating at the highest possible capacity, while actually reducing emissions. Regulatory agencies laud the increased compliance. And, along with a new revenue stream from offering this service, Siemens builds a stronger relationship with the customer. Plans are currently underway to roll out the solution to two more plants immediately, and then expand the program farther afield.

Renewable Power is Now Affordable

In the late 1980s I was working at company in the USA that sold natural gas through direct purchase. Always on the lookout for new opportunities in the energy field, at one point they gave me a special assignment to research solar energy. We needed to know when solar would be cost-effective, competitive with coal, oil, gas, or nuclear.

In those pre-Internet days, I had to head over to the nearby university library and pore through scientific journals and economic publications to come up with some predictions. From all I could gather, the experts seemed to agree that solar would take at least 5 years before it would be worthwhile to invest in. So the project went on hold, but I was eagerly looking forward to a clean, renewable source of energy to become widely available in the early ’90s.

Well, it has actually taken closer to 30 years, but it appears that the tide is finally turning. A recent report from the International Renewable Energy Agency (IRENA) says that renewable power, including solar and wind, were more affordable in 2017 than ever before, and are now strongly competitive in many locations and applications.

A few IRENA report findings

“Renewable power generation costs continue to fall and are already very competitive to meet needs for new capacity.”

“The levelized cost of electricity (LCOE) from solar photovoltaics (PV) decreased by 69% between 2010 and 2016 – coming well into the cost range of fossil fuels.”

“Onshore wind, whose costs fell 18% in the same period, provides very competitive electricity, with projects routinely commissioned nowadays at USD 0.04/kWh.”

“As installation accelerates, the cost equation for renewables just gets better and better. With every doubling of cumulative installed capacity for onshore wind, investment costs drop by 9% while the resulting electricity becomes 15% cheaper.”

I find these statistics very encouraging, because now more than ever, the world needs abundant sources of energy at affordable prices. This is the energy that will power industry, commerce, and households for decades and centuries to come.

Data connectivity plays a role

I’m also pleased that Skkynet is responsible, in a quiet but important way, for some of these cost reductions. With increasingly more efficient and secure data connectivity, our customers who install and monitor wind turbines or solar panels are improving their quality of service and cutting their costs. Ultimately these savings are passed on to the consumers and industrial users of the energy. As the costs continue to drop, investment in renewables will increase.

Of course, conventional power plants, pipelines, and offshore oil platforms are also cutting their costs through secure remote monitoring and supervisory control. Improved access to production data benefits everyone across the board. So, I expect that the changeover to renewables will continue in the same gradual, steady way into the foreseeable future. Let’s see what the next 30 years have in store.

Industrial Product Servitization Via the IIoT

Now there’s a ten-dollar word for you: “servitization.” It has emerged from the trend of industrialized societies to move away from manufacturing-based economies towards service-based economies. Applying this trend to products, the term “servitization” was popularized by Tim Baines at Aston Business School, who sees a “product as a platform for delivering services.” IBM shifts its focus from selling computers to selling business services. Rolls Royce sells propulsion instead of jet engines. Alstom ties its railroad maintenance contracts not to reduced equipment failures, but to fewer “lost customer hours.” These are just a few examples of servitization—a transition from selling products to selling services.

In a recent article, Servitization for Industrial Products, Ralph Rio at ARC Advisory Group shows how the trend of servitization is now impacting the factory floor itself. As production machinery grows increasingly sophisticated, plant managers find their staff less able to maintain and repair it by themselves. They need more services from vendors. Machine builders and OEMs are providing more training, more extensive maintenance contracts, and better condition monitoring of the equipment they supply. “Services have become an inseparable component of the product,” Rio says.


The benefits are significant. Predictive maintenance offered as a service means reduced stoppages due to equipment failure, and fewer but more efficient service calls when problems do arise. A growing trend is to provide condition monitoring services, which guide operators to run their machinery more effectively, increasing the lifespan of the equipment and improving output and product quality.

To be most effective, condition monitoring needs to run 24/7 in real time, ideally via a connection to the equipment vendor or supplier. Thus, the Industrial IoT is the logical choice for data communication. “To implement servitization, suppliers will need to adopt Industrial IoT for condition monitoring,” Rio predicts.

Two-way street

As we see it, this level of service works best as a two-way street. Data related to the condition of the machine flows to the supplier, while guidance and adjustments coming from the supplier can flow back the plant staff and equipment. This kind of feedback is invaluable for optimizing machine performance. A one-way IoT model that simply collects data for off-line analysis may not be adequate for many use cases. Technically more sophisticated, bidirectional data flow is useful in many condition monitoring scenarios, and thus has always been an option for Skkynet customers.

If the lessons of the past few decades are any indicator, the servitization trend will continue to grow, both among industrialized and emerging nations. And the Industrial IoT will almost certainly play an important role in providing data communications. As long as those communications are robust and secure, we can expect to see more and more IoT-based industrial product servitization, even though that term itself may never become a household word.

Extraordinary Remote Service Management through IIoT

We’ve all heard about helicopter parents. You know, that mom or dad that keeps hovering over their child, choosing their clothes and their friends, checking out their Facebook pages, watching their every move. Hey, after all, they’ve invested a lot of time and money into their offspring, and they aren’t going to just let those kids go out on their own and mess things up, right?

While that might not be the best parenting model for human children, it may transfer well to physical products—particularly expensive, complicated products like machine tools. Builders of industrial equipment are often responsible, by choice or by contract, for the performance and maintenance of their machinery for years after the sale. Mechanical failure is not an option for an assembly line whose down-time costs can be in the tens of thousands of dollars per minute. More and more customers buying equipment are looking for 24/7 monitoring and remote service management. And more and more vendors and OEMs are turning to the Industrial IoT (IIoT) for solutions.

With or without IIoT?

Consider the options. Without the IIoT, a lot of time gets wasted between the detection of a problem and a repair. The company calls the vendor, who sends out a rep to inspect. The rep then processes a work order, which may require a second visit by someone with the right skills, tools, and parts to make the repair. The whole process can take hours, even days, while the machine, and sometimes the whole line, sits idle.

With the IIoT, the vendor or OEM maintains a full-time connection to the machine, and can continuously monitor every aspect of its health, such as operating temperatures, abnormal vibrations, fluid levels, and so on, via the web. Before a problem is even noticed by an operator, the vendor can detect an irregularity, assess the situation, manage a work order, and send out repair personnel right away. Sometimes they can even make the repair remotely, without any on-site visit at all.

“OEMs tell ARC that 30 percent or more of the repairs can be made via the web by modifying parameters remotely or with minor assistance by an onsite person,” says Ralph Rio of ARC Advisory Group in a recent article, How IIoT Improves Field Service Management KPIs.

Extraordinary service

The IIoT makes an extraordinary level of service possible. But it’s not just any IoT platform that will be so helpful. Giving a vendor access to a piece of equipment inside a plant requires deep trust. The connection needs to be secure. Within that secure connection, the vendor should not have access to the whole plant network, just to the data. And then, to modify a parameter or change a machine set point requires bidirectional data flow.

Many IoT platforms offer Internet connections, but few of them can securely connect into an industrial plant without opening a firewall. Among those that can, many rely on VPN technology, which opens the whole plant network to the vendor. Of those that are able to make a connection without a VPN and still keep all firewalls closed, most are offering only one-way data flow, from the plant to the cloud. It takes an extraordinary service to provide what Ralph Rio is talking about: the ability to modify parameters remotely, and do it securely. It is exactly this extraordinary level of service that SkkyHub offers. For those vendors and OEMs that want supervisory control over their offspring—their products—this is the kind of remote service management that works best.

Red Lion adds new platforms for cellular RTUs that further IIoT connectivity

Red Lion Controls, a global expert in communication, monitoring, and control for industrial automation and networking, announced that its RAM industrial routers and cellular RTUs now support the Microsoft Azure, Cumulocity, and Nokia IMPACT IIoT platforms.

This follows the recent announcement that Red Lion’s RAM products now support the MQ Telemetry Transport (MQTT) protocol. The addition of these two platforms moves Red Lion RAM products to lead the market in the greatest number of platform integrations, providing greater flexibility for industrial customers to quickly connect to their choice of leading IIoT cloud platforms.

In addition to those announced, RAMQTT, Red Lion’s embedded MQTT client, simplifies implementations with pre-configured profiles for AT&T M2X, Amazon AWS IoT, AutoDesk Fusion Connect and Telenor Connexion. Customers connect using a simple drop-down menu to select their cloud platform of choice. Also, using the RAM Software Development Kit (SDK), connectivity can be enabled with additional platforms, including LEC IQ Web SCADA, Set-Point IPwebcontrol, Skkynet SkkyHub, and Telit deviceWISE.

Cybersecurity Top Concern for Oil and Gas Sector

Among the growing concerns about cybersecurity and the IoT, the industrial sector stands out.  Industrial IoT applications are in some ways more at risk than others.  Control networks traditionally safeguarded through complete isolation are now seen as sources for valuable data for companies to tap.  But connecting plant data to outside networks or the Internet must be done securely.  The consequences of a hack can cost thousands or millions of dollars, and possible loss of life.  Nowhere is this more evident than in the oil and gas sector.

In a recent report, Countering the Threat of Cyberattacks in Oil and Gas, the Boston Consulting Group (BCG) enumerates the concerns in that sector for cybersecurity.  They pointed in particular to upstream systems, such as remote data acquisition systems, gateways, transmission bridges, and controllers in exploratory rigs and drilling control systems.  This equipment and these networks are spread across vast areas, and are responsible for tracking and controlling the extraction and production of the oil and gas resources in the field.  Once considered too remote to worry about, as these systems come online, they should be considered possible targets for an attack.

“Until recently, the industry considered the traditional upstream systems in the oil and gas sector to be relatively safe because they were, in most cases, isolated,” the report said.  “But the industry’s growing use of connected industrial systems and networking technology—coupled with the ever-increasing need for real-time data and analytics—has introduced new risks.”

The BCG report outlines several specific areas of risk, and recommends a number of steps for CIOs and other executives to take.  These fall into three categories:

  • Boundary protection – The exploding popularity of mobile devices has driven operators and others to request or expect the same convenience they get at home or anywhere else in the world at their workplace.  Each device adds to the potential attack surface.  Wherever possible, remote users in the oil and gas sector should be given access to the data only, and not to the control system itself.
  • Remote access – This is essential to monitoring and controlling a wide-spread enterprise like oil and gas production.  Strong control over remote access points includes both physical access and software-based safeguards.  On the software side, we would recommend a secure-by-design, outbound-only architecture wherever possible for remote equipment or devices.
  • Information flows – If a malicious agent is able to interrupt, alter, or redirect the flow of information through the system, it could cause significant problems.  Firewalls, reverse proxies, DMZ technology and hardware solutions like data diodes can reduce or eliminate unauthorized access, while employing network-monitoring equipment and network-use rules can help identify any intrusions that do occur.

In all of these, there are both human and technical factors.  On the human side, operators and managers need to be trained and supervised to ensure that they are keeping security as a top priority, and adhering to the relevant policies.  The technology, for its part, should support those efforts by being as convenient and unobtrusive as possible, while still providing the highest possible level of security.

The BCG report concludes, “To protect themselves, their shareholders, and their customers adequately, industry players must make cybersecurity a highest priority and an ongoing consideration at the executive level.”  We agree.  And we would add that starting from there, this attitude should spread throughout the organization, and be present in each of its members, and the tools they use.