Manufacturing with Internet of Things
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This document discusses how manufacturing companies can leverage the Internet of Things (IoT) through digital transformation. It explains that technology now allows unprecedented capabilities like mobile engagement and cloud delivery. Manufacturers can derive business benefits like reducing defects by 49% and downtime by 48% through IoT solutions. The document outlines key capabilities needed for digital transformation, such as collecting/capturing data, analyzing/distributing insights, and enabling fast execution. It recommends starting the transformation by prioritizing use cases with clear business impacts and developing a phased approach balancing people, processes and technology. Examples from Cisco supply chain demonstrate benefits like improved productivity through IoT applications.
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Manufacturing with Internet of Things
- 1. Smarter Manufacturing with the Internet of Things (IoT)
- 2. Cisco Confidential 2© 2013-2016 Cisco and/or its affiliates. All rights reserved. An approach for how to leverage digital capabilities to transform Processes, Organizations, Strategy, and/or Business Models within their organization or across their value chain What does digitization mean to manufacturing companies?
- 3. Cisco Confidential 3© 2013-2016 Cisco and/or its affiliates. All rights reserved. Why now? Technology is having an exponential impact, It’s what’s different with this wave of Transformation - Things are possible now that were not before: Mobile engagement, analytics, cloud delivery - Technology is PART of the value organizations can deliver, as opposed to just an enabler - More scalability in transformation today because of the pervasiveness of technology – nearly everything is connected (or will be) “Smart, connected products are changing how value is created for customer, how companies compete, and the boundaries of competition itself.” What does digitization mean to connected products?
- 4. Cisco Confidential 4© 2013-2016 Cisco and/or its affiliates. All rights reserved. Reduction in Defects 49% Defect rate down from 4.9% to 2.5% Reduced Downtime 48% Unplanned downtime down from 11% to 5.8% OEE Improvement 16% Average OEE improved from 74% to 86% Improved Inventory 35% Inventory turns increased from 14 to 19 Reduction in Energy Use 18% Annual energy cost down from $8.4M to $6.9M The Real Economic Value is Immense New Product Introduction 23% New product introduction cycle time reduced from 15 to 11 Source: SCM World/Cisco “Smart Manufacturing & the Internet of Things 2015” survey of 400 Manufacturing Business Line Executives and Plant Managers across 17 vertical industries. What specific business benefits does it provide?
- 5. Cisco Confidential 5© 2013-2016 Cisco and/or its affiliates. All rights reserved. Where and how do you start? To Capture Value, Manufacturers Must Build Foundational Capabilities of a Digitized Business Build a Hyperaware Organization Ensure quality and uptime Respond to customers and end users in real time Achieve unprecedented standards of excellence Make Informed Decisions Transform data into insight Generate value by gaining insights from data Ex: KM & collaboration platforms, dashboards, analytics Execute Fast Enable innovation and business-model change Break down silos between IT/OT and engineering/services (ex: preventative maintenance) Outpace the competition
- 6. Cisco Confidential 6© 2013-2016 Cisco and/or its affiliates. All rights reserved. Where and how do you start? Digital Transformation Capabilities Required Analyze / Distribute Personalize/ Predict Interact / Collaborate - Real time accessibility and Visibility into info and insights. In order to be able to deliver on Digital Business Transformation, organizations need to excel at a number of capabilities including: - Providing context and recommended action - The ability of people/customers/value chain to collaborate, communicate, and make better decisions Capture/ Collect - Organizations need to become Hyperaware by increasing their ability to sense, monitor, and identify Act thru Automation - Automate where possible (closed loop) SECURITY
- 7. Cisco Confidential 7© 2013-2016 Cisco and/or its affiliates. All rights reserved. Off-Line Factory Communication, Collaboration, Data Strategies & Platforms Connected Factory Analytics & Big Data Virtualization & Compute Connected Machines Factory Collaboration Location-based Services Connected Enterprise Value Chain Collaboration Design & Service Synchronization Value Chain Orchestration Digital Manufacturing Maturity Model + 16% OEE - 35% Inventory + 23% NPI - 49% Defects - 48% Downtime Capture/Collect Analyze/Distribute Personalize/Predict Action (Automate & Collaborate) Hyper- Aware Informe d Decision Making Fast Execution Where and how do you start?
- 8. Cisco Confidential 8© 2013-2016 Cisco and/or its affiliates. All rights reserved. Start w/clear understanding of business strategies across the entire value chain Brainstorm areas of improvement use-cases, develop hypothesis statements w/business impacts Prioritize and group common use-cases with clear, measureable business outcomes Develop phased, balanced approach (people, process, technology) Where and how do you start?
- 9. Cisco Confidential 9© 2013-2016 Cisco and/or its affiliates. All rights reserved. Client Examples “We have cases where downtime is costing over $20,000 per minute. The ability to predict service requirements will have a tremendous impact.” - Rick Schneider – NA CEO FANUC Robotics https://www.youtube.com/watch?v=DN4duKoNsak
- 10. Cisco Confidential 10© 2013-2016 Cisco and/or its affiliates. All rights reserved. Complexity inhibits growth productivity Enterprise Resource Planning Transition Define capabilities for growth & value capture Business Architecture 2013 2014 IOE PLATFORM Breakthrough Value 2012 Collaboration Applications Enterprise Resource Planning (ERP) System Data Management Client Examples – Cisco Supply Chain
- 11. Cisco Confidential 11© 2013-2016 Cisco and/or its affiliates. All rights reserved. Internet of Things Edge Computing Data Analytics Cloud Collaboration Mobility Energy Management AutoTest Predictive Quality Universal Order Visibility Supplier Collaboration VMES for Quality Intercloud Pilot Augmented Reality Warehouse Mgt Build Metrics Build/Ship Revenue Ship Metrics Distribution and Inventory Visibility Innovation CONNECTED Supply Chain CONNECTED Factory CONNECTED Supplier CONNECTED Customer CONNECTED Warehouse Cisco ioE Enabled Supply Chain
Editor's Notes
- Stress: Typically, Business Transformation impacts Technology, People and Processes. In Digital Business Transformation, Technology has an increased level of importance. Typically, Business Transformation impacts Technology, People and Processes. In Digital Business Transformation, Technology has an increased level of importance Inflection point on # of connections – driving incredible amounts of – ULTIMATELY enabling new insights (visibility, trends, …) Some estimate 500 BILLION connected ‘things’, will fundamentally transform business and our lives and drive tens of trillions of $’s in economic value over the next decade NEW business models will rise and fall as unprecedented speed (ex: Uber, Airbnb, …) Tremendous disruption (some estimate 40% of existing enterprise customers will not exist in a meaningful way in ten years) SUMMARY – need to prepare for this, if you do not change, you will get left behind! This is NOT only about technology, but technology is at an inflection pt and will help drive this shift TODD NEUVILLE NOTES – Life Sciences MFG & Supply Chain integration (vs past) 1. Foundational platforms to drive value chain orchestration, near real-time, 2. Operationalize – limited visibility globally 3. MFG lead times – batch to continuous, plant in a box, 4. Transformation – completely different methods, mfg, w/cultural challenges (aging workforce) STRONG COMPLIANCE DEMANDS
- FOCUS: Make information applicable to your customers; make sure to reference these themes and consider including additional points appropriate for your practice Focus on “Why Now?” Highlighting a connected-product example –stressing: Fundamentally changes competitive landscape, customer value and our clients end-to-end business models Stressing customer-centricity – from improved alignment to initial requirements, through improved connected-product performance ** Should also highlight the increasing Importance of cyber security in ‘connected’ examples like this
- These represent real examples Cisco has helped our clients drive Cisco and SCM world surveyed over 400 manufacturing business line leaders – and mfg leaders expect dramatic improvements across the key manufacturing KPIs by focusing on connecting devices in the factory and optimizing the use of data. Highlight a few examples (outlined in red above) - Reduced Downtime – GM, Harley Davidson, … (foundational connectivity & Security to improve production), along w/business agility, and increased quality NPI – tighter connections from traditional PLM processes to production (DFM), quicker product launch issue resolutions/launch timelines Energy – connectivity, security, driving broader collection and correlation of energy data driving 10-20% energy savings (VERY sub-segment industry specific). Beyond energy savings, this platform provides NEW INSIGHTS into other areas of process improvements too
- To unlock the full potential or connected machines and other service-oriented models, manufacturers will need to go further in converging services with digitization. To fully digitize the organization and capture the full potential of service value requires building three foundational capabilities: hyperawareness, informed decision-making, and fast execution. Hyperawareness is an organizational capability to recognize real-time insights and future trends. A critical component of hyperawareness is the ability to see first-hand how products and services are being used in practice. To attain hyperawareness, digital tools—including social networks, connected devices, and analytics—must act in concert to constantly monitor and share critical information, which in the case of manufacturing could be directly from the factory floor. Those connected industrial machines will be collecting critical and relevant data. Too often, however, organizations fail to act on data insights. Informed decision-making is the capability to actively analyze information that arrives through hyperawareness and ensure that it reaches those who need it most. Informed decision-making requires a technology foundation that include knowledge-management systems to organize insights, collaboration system to facilitate remote conversations, dashboards to display relevant information, and analytics systems to provide evidence-based insights. Those informed decisions must be turned into action (say, predictive maintenance when a plant-floor machine shows early signs of fatigue). Having an organizational culture that encourages experimentation and tolerates failure is central to fast execution; but bureaucracy and organizational silos can undermine it. Digital capabilities encourage action at all levels of the company hierarchy.
- Set this up to align to iOT Reference arch on next slide (foundation/security, drives data, automate where possible and drive to ACTION at top) Present bottom up – foundations needed, Mention “Oversight and governance” as critical elements – often missed,
- We’ve developed a MFG maturity model – a phased best practice approach
- 1. Fanuc – Connected Machine examples (and importance to xform their business), $20K/min downtime impact (single instance $2M) – this is working today! 2. GE example – “Digitizing the industrial space”, fundamentally changing their business (products to services, …), KEY components include Predix (OS for theitr connected product strategies), and ‘Brilliant factory’ (internal implementation of same concepts across their 1000 plants) 3. Mazak – significant early results, support improved up-time, and an as-a-service model as required 4. Other examples include (1) Flex / Cisco energy optimization, (2) Marathon Life Safety, RTLS-based, http://www.mckinsey.com/business-functions/organization/our-insights/ges-jeff-immelt-on-evolving-a-corporate-giant http://www.mckinsey.com/business-functions/organization/our-insights/ges-jeff-immelt-on-digitizing-in-the-industrial-space https://www.ge.com/digital/about-ge-digita
- Cisco Supply Chain is ‘walking the walk’, constantly ranked in the top-10 supply chains globally. Past years, we focused on migrating to a single ERP instance globally (in 18 months). This helped set the foundation for our focus in 2015/2016+ -- IOT PLATFORM use-cases. Most supply chain practitioners have done six sigma, we’ve done lean; we’ve done value engineering; we have done outsourcing. We have wrenched every last bit of value from these. But to really drive break through value… I fundamentally believe that building an IoE platform is the next one.
- If you look now at the Internet of Everything technologies such as cloud, mobility and cloud, we’ve only covered a few of the many experiments we have underway not just with a connected supply chain but with connected factory, connected warehouse, connected supplier and connected customer. We continue to uncover more value, give our teams the freedom to try out new areas of experimentation. We are balanced between incremental use-cases, and more disruptive use-cases (ex: Real-time quality monitoring, augmented reality in distribution, …)