As presented during the Internet of Things West Conference held in Las Vegas, November 5-6, 2015. The Internet of Things is going to enable data flow that you never thought was possible – from plant to plug!
Schneider Electric is the global specialist in energy management and automation. With revenues of €25 billion in FY2014, our 170,000 employees serve customers in over 100 countries, helping them to manage their energy and process in ways that are safe, reliable, efficient and sustainable. From the simplest of switches to complex operational systems, our technology, software and services improve the way our customers manage and automate their operations. Our connected technologies will reshape industries, transform cities and enrich lives.
At Schneider Electric, we call this Life Is On.
Industry 4.0 and the Internet of Things is an evolution and not a revolution where smart connected products and systems operate as part of larger systems of systems. The plants of tomorrow will be connected and sustainable ecosystems where plants and machines work together in a secure and collaborative way to enable technology at the service of people for greater empowerment and efficiency. This presentation will explore the mega trends, explore technology examples and the challenges of today’s complex market drivers. How will you leverage Industry 4.0 and the Internet of Things to differentiate yourself and uncover the inefficiencies in your processes and turn them into working capital. The Internet of things is here to stay and to the winner goes increase efficiency, lower costs and an improved competitive position and ultimately providing better chances to survive and prosper in the 21st century. - See more at: http://www.remotemagazine.com/IoTWest/conference-sessions/#sthash.E5JPhqHT.dpuf
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As discussed earlier, the change in our world is more profound than ever. We all know that there is a rise in energy demand – in fact, it will double in the next 40 years. But this rise is also bringing with it new efficiency opportunities in three key areas...
Urbanisation is the first area of efficiency opportunities.
By 2050, the world’s cities will be home to an additional 2.5 Billion people. Imagine the stress on infrastructure, on transportation, on public services. The number of cities with more than 10M population is going to almost double to 41 in 2030. Cities need to look into new ways of achieving efficiencies – most importantly energy efficiency. To be a livable city, you have to be energy efficient.
CLICK TO BUILD SLIDE
Digitisation is next.
By the end of the day, I am sure most of us in this room would have streamed a video or a few songs. Believe it or not, we download 7 million songs and watch 4 Billion videos on YouTube a day! Think about the whole value chain that is making that possible. It is not just entertainment. Digitisation is pervasive -- in our homes, in our buildings, in the cloud and in our industries. There will be 50 Billion more connected devices and things in the next 5 years. This implies a continuing rise in energy demand, presenting us with amazing efficiency opportunities.
CLICK TO BUILD SLIDE
This bring us to Industrialisation, yet another area of efficiency opportunities. Industries account for 1/3 rd of the total world energy consumption. This global industrial energy use is projected to double by 2050 in the absence of any new policy measures, and even with the ambitious emissions reduction policy changes, we will still see an increase by at least 50% by 2050. (IEA, 2009c). The IEA, in fact, is estimating that 55% of the additional energy demand in the next 20 years to come from Asia.
NEXT SLIDE Additional Datapoints:
Urbanisation: Globally, more people live in urban areas than in rural areas, with 54 per cent of the world’s population residing in urban areas in 2014. By 2050, 66 per cent of the world’s population is projected to be urban adding more than 2.5 billion people in cities. There were only 10 cities with more than 10M population in 1990. Today, there are 28 and by 2030 there will be 41!
37% of this new growth in urbanisation is coming from India (404M), China (292M) and Nigeria (212M). Source : http://esa.un.org/unpd/wup/Highlights/WUP2014-Highlights.pdf
We can also talk about cities Cities above 10M people: 10 in 1990, 28 today, 41 by 2030 Cities above 500k people: 560 in 1990, 1,000 today, 1,300 by 2030 Urbanization increase = +2.5b people in cities by 2050
Residential and commercial buildings account for 1/3rd of total world energy consumption ( This implies continuing rise in energy demand )
Year Population % Urban 2014 7,2bn 54% 3,9bn 2050 9,5bn 66% 6,3bn Difference is 2,4bn
What about the mega trend of the booming world population ? 1,5B people in 1950 7,2B People in 2014 9-10B People by 2050 This in itself is a historical massive change, and the access to secured energy (as well as health services, food & water) is the real challenge of the century.
Digitization I am sure at least half of us in this room have already watched or will watch at least 1 video – from any source -- today. Videos are fun. We all love it. Especially our kids. Imagine this… more than 3 billion Facebook videos are viewed daily and 300 hours of video uploaded to Youtube every hour! According to IDC we generated some 1.8 zettabytes (1.8 trillion gigabytes) of data in 2011. It is predicted that in 2020 we will generate 40 zettabytes!!! We are digital beings in a digital economy...
This implies a continuing rise in energy demand, including those consumed by the data centers that power the digital economy – think connected machines and devices -- 50Bn connected things by 2020 Data centers alone = 1-2% of total world electricity consumption, but the entire ICT sector = 10%. Consumption doubled btw 2000/2005, and grew at +56% btw 2005-2010. Digitization is also changing lives : Faster, simpler, more collaborative – More efficient
Industrialisation: By 2035, IEA projects growth of energy consumption of 35%. 55% of the additional energy demand will come from Asia.
We saw how energy demand will almost double in the next 40 years – stemming from the twin challenges of access-to-energy and the mega trends of Urbanisation, Digitization and Industrialisation.
However, at the same time, we have to reduce CO2 emission by half to avoid significant irreversible damage to our planet.
Therefore the only way is to become 3 times more efficient, hence the factor of 3.
So let us now go deeper into the rapidly evolving world of energy to see how it is changing and where the efficiency potential is emerging.
Lets focus on Digitization and Industrialization in this presentation...as we talk about IoT and Industry 4.0
Cisco predicts that by 2022 the value at stake form the Internet of Things will be $14.4 Trillion with manufacturing accounting for the largest piece of the pie at 27% or $3.9T!!!
McKinsey: High estimates Low estimates Factories - operations management, predictive maintenance 3,7 1,2 Cities - traffic control, resource management 1,7 0,9 Human - e.g. monitoring, managing illness 1,6 0,2 Retail - e.g. Self-checkout, layout optimization 1,2 0,4 Outside - logistics routing, navigation 0,,9 0,6 Work sites - equipment maintenance 0,9 0,2 Vehicles condition-based maintenance, 0,7 0,2 Homes - energy management, chore automation 0,3 0,2 Offices - worker monitoring, training 0,2 0,1
today for instance many city and towns do not have the money to invest in infrastructure improvements, one way they can do this is with the use of energy savings to fund the investments. The IoT also has a place in our OPEX world where we maximize the use of our assets with the aid of big data and analytic tools not available today.
Now let’s take a look at the convergence of IT and OT where the intelligence of the factory automation and enterprise levels are now connected by a common set of terms and language. Remember when Ethernet was a dream and mostly a nightmare? The deployment of Ethernet and wireless connected devices is pulling IT and OT together. We can even see where Apps can allow plant managers from home log in and see how the process is running in seconds.
Today it takes more than the IT department to pull all of this technology together it takes expertise at the process level to ensure increased operational efficiency. The real challenge for all of us is how to pull all of this together and realize the full potential that the IoT can deliver.
Another dynamic is the overlap that now occurs with Marketing and IT/Web
Where does the term Industry 4.0 come from?
first PLC invented by Modicon / Schneider Electric – root of 3rd revolution proof our pioneer role
Internet is already there. IIOT is an evolution.
Industry 4.0 and Smart Factory are part of the Internet of Things and Internet of Services world… Cyber-Physial Systems imply more embedded and collaborative intelligence: smart factory, smart services, smart devices, smart products…
B2B gets digital while you will do business in different ways than today. Your supply chain might be integral part of your customers product life cycle and vice versa.
Lets talk about key challenges (rather prefer to talk about it as opportunities)...
New Business Models - Our world is changing from a CAPEX world to an OPEX world. “Every business is a digital business,” said Accenture in its paper on unconventional industry growth. "The digital-physical blur is turning industrial companies into customer service companies, and new services, competitors, and ways of operating their businesses will transform their industries. Digital services -- offerings that combine information, transactional and professional services -- will lie at the heart of these shifts.“
Being a “prosumer,” who consumes products and services, shares products, and offers services
Semantics – Schneider is in good position – example we understand what “current” means in energy distribution (current = net quality, power correction factor ) and in industrial automation (current = speed, torque), once you combine that different views you can analyze and identify areas of improvements performance-wise or efficiency-wise or both. The point is that the data you get must be understood, translated and analyzed knowing that it may include variation in the format and interpretation of data (Celsius vs Fahrenheit, for instance), but also in the quality, frequency, and timing of the data. The IIoT will need to adopt standards or find an algorithmic way of handling such data diversity.
Standardization - industrial control space is dominated by proprietary interfaces and equipment designs, IT standards interfacing OT standards
Already, Industrial processes create more data than any other source – so what happens as the Internet of Things becomes more robust, with more and more devices becoming connected and networked? We know that the shear volume of data is increasing exponentially so how do we effectively deal with the complexity of all this data. Going back to the Drive example we used to get alarms which required someone to assess the issue and determine appropriate next steps. Now we will have the operational impact and have the ability to provide only what is necessary for the operator to respond to. This will require that the people operating our manufacturing plants not only be process experts but experts in interpreting the data.
This brings us to the next challange, Talent Acquisition
Finding, recruiting, and contracting that talent and expertise will be a recurring challenge for those participating in the IIoT
The two main issues with workforce management is the shortage of skills and information overload. It is critical to ensure that you are proactively recruiting and have a presence at select universities. Also Intern programs and hiring students before they graduate to ensure you take them off the street.
Big data Robot –Assisted production Self-driving Vehicles Simulation Smart Supply Networks Predictive Maintenance Machines as a Service Self-Organizing Production Additive Manufacturing (3D Printing) Augmented Reality
Additionally it will be important to have those people skilled and competetent to bridge the IT and OT worlds which will not be easy. To drive effeciency to the factory floor we will need a a new breed of engineer and IT professionals to help build the intelligence into our machines and business processes. Getting the data and processing is getting cheaper every day however we will need those who understand the process and can analyze the data.......no easy task.
Breaking Silos - Breaking down organizational, data, and system silos will be both a requirement and an outcome of companies implementing their Big Data strategies. Think about today’s data collection that is going on right now. Many times decisions are based on a forensic, data-mining based analysis. But its “old “ data. Now IoT does change this into forward thinking, real-time data based decision making.
The recent data hack at Sony is a prime example of the kinds of damage that a company can sustain when its information systems get breached.
While the Internet of Things means unprecedented levels of connectivity and data, it also means a need for increased security including data privacy and protection standards Security until recently was always considered to reside at the network or server level. Today this is not the case and has to be done at the device level and be “secure by design”. This means designing the security measures at the time of the design and not after the fact.
There are certifications such as Achilles which is a device level security for wired and wireless industrial products. This is a start however we all know that the internet is always vulnerable to attack.
Smart Connected Products and Systems, and leveraging the cloud and advanced software to deliver real solutions like: Dynamic QR codes for smart diagnostics which help reduce plant downtime Mobile apps to configure and control devices for faster commissioning Wireless and less wire to reduce installation cost Embedded optimization software in drives to reduce energy consumption and increase pump lifetimes System in cloud to configure and test DCS and safety systems for collaboration to reduce project cost and improve quality Decision support systems using advanced data analytics/modelling techniques to advise operators in real time about what to do in case of an unplanned event for geographically dispersed supply chains
Industry 4.0 and the Internet of Things
Industry 4.0 and the Internet of Things
What Does This Mean for You, Your Company and Your Future?
Property of Schneider Electric
Senior Director – Innovation & Technology, Industry Business – Schneider Electric
+2.5B people in cities
Source: United Nations, DESA
50B connected things
+50% Energy consumption
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Megatrends are provoking a rise in Energy Demand
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Resources in the next 40 years
will almost double
need to be
×1.5 ÷2 We have to become
3 times more efficient
Note: Forecast for 2050 compared to 2009 levels
• A dynamic industry is evolving around IoT technology and has a large potential
• IT is becoming an integral part of a product itself
• Technology will transform industrial production
Internet of Things/Industry 4.0 And Its Industrial Impact
An evolutionary opportunity
McKinsey: Internet of Things offers a potential economic
impact of $4 trillion to $11 trillion a year in 2025
Examples of transformation technologiesBCG, Federal statidtical office of Germany: Industry 4.0 is
expected to generate significant productivity gains
Note: Conversion costs = manufacturing costs excl. material
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0 1 2 3 4
Low estimates [trillion $]
High estimates [trillion $]
0 10 20 30 40 50 60
Food and Bev
Productivity conversion cost [%]
Gross production share in GER [%]
Big Data and
1995 2003 2010 2013 2015 2020
Connected people Connected objects
Operational Technology meets Information Technology
The Internet of Things is going to enable data flow that you never thought was possible – from plant to plug
Source Cisco IBSG April 2011 / Internet World Statistics
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Industry 4.0 represents an Evolution...
3rd Industrial Revolution
Use of electronics and
IT for automation
(1st PLC - Schneider Electric
2nd Industrial Revolution
Introduction of mass
by electrical energy
1st Industrial Revolution
Introduction of mechanical
production powered by water
4th Industrial Revolution
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From steam towards intelligent systems
Industry 4.0 and (Industrial) Internet of Things
CPS – Cyber Physical Systems Source: Industrie 4.0 Platform
Business gets Digital Business
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Some Key Challenges
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“The Internet of everything changes everything.”
- John Chambers, Chairmen, former CEO Cisco.
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Understand Your Data -
It‘s About Semantics...
“Do you wish me a good morning, or mean that it is
a good morning whether I want it or not; or that you
feel good this morning; or that it is a morning to be
good on?” ― J.R.R. Tolkien, The Hobbit
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IoT and Standardization -
“IT is from Mars, OT is from Venus”
- Internet blog
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According to Gartner by 2020, the Internet of Things
will consist of 26 billion devices and it will generate
over $300 billion in incremental revenue, the
majority generated by services.Page 12Property of Schneider Electric |
Data Analysts is getting a profession that is highly
demanded. Already today.
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Breaking Down Silos
“We are heading towards a world where everything
is connected and better decisions can be made in
real time.” – Forbes Magazine 2014Page 14Property of Schneider Electric |
Secure by Design
“Security needs to be built in as the foundation of
the Internet of Things.”
– Michael Fey, CTO, IntelPage 15Property of Schneider Electric |
Your Business is Getting Digital
• Internet technology (smart connected products) is already there
• Cybersecurity is a concern.
• Business Practices fundamentally changing to real-time, forward looking decision making.
• We are just starting to understand the IoT opportunity
…and 85% of industrial end points are not yet connected*
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800 Federal Street, Andover, MA 01810
Cell: +1 978 289 3084
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