Digital Transformation in the New Normal
See what manufacturers are interested in for their digital solutions
To show you the current state of manufacturing, Hitachi Vantara recently held a virtual conference. The conference showcased solutions from Hitachi and from partnerships with some of our customers. At the end of the conference, we had a Q&A session and this blog captures those questions with their answers. I think you’ll find a lot of useful information and perspectives from the speakers’ answers to the many questions posed by the conference attendees.
Quick Recap of the Conference
This on-line event set the stage for the manufacturing environment today. Certainly, many manufacturing companies have been affected by the pandemic. Some have had to quickly ramp up production to meet higher demand for things like personal toiletries, food and beverage, and medical supplies. Other organizations have dramatically scaled back their production because of suddenly lower demand, including many transportation industry and equipment manufacturers. Still others have switched their production from traditional products to high demand commodities such as facemasks and ventilator equipment.
Things are not normal, but many of the problems that manufacturers faced in the past are now amplified by the pandemic and now more manufacturers are motivated to accelerate their own digital transformation. They are looking into more automation, robotization, supply chain visibility and optimization to deal with the short-term issues. And they are preparing for the future by taking advantage of reduced production to focus their operations and engineering teams on reducing cost through predictive maintenance and higher quality. These efforts are to reduce downtime and waste and drive better profitability and competitiveness in their marketplaces.
The usual concerns of manufacturers are compounded now. There’s still a shortage of skilled workers and the most experienced ones are still retiring. Offshoring of parts suppliers can still reduce costs and improve margins, but it now shows that dependency on these foreign producers affects manufacturers’ ability to meet demand. Many are now onshoring with local vendors who can now participate in the value chain.
Hitachi has been around for more than 100 years as a manufacturing organization and we have seen the ups and the downs in the industry. We also spent millions of hours consulting with customers on solutions in manufacturing. This combined with our IT and OT expertise allows us to help manufacturing organizations retool and transform themselves. Please use the ideas that interest you in this blog and also check out our solutions for manufacturing.
Your Questions, Their Answers
Now on to our Q&A. The panel for this discussion included Fabio Raffo, associate director for Industrial Software at Omdia Research, James Destro manufacturing practice leader at Hitachi Vantara, Trever White, general manager for Information Systems at Toyota Americas, Ron Lumsdon, infrastructure architect and Industrial IOT Leader for Maple Leaf Foods and Gianfranco Messina, digital transformation officer at Hitachi Rail Italy. To reference the presentation recording for more context, please visit this webpage .
Q: How is opex looking in ratio compared to capex in the current environment with the pandemic?
A: (Fabio Raffo) The effect of the pandemic has been to focus more on opex versus capex. This is especially true when it comes to IT budgets and initial projects for IoT today.
Q: Could you explain the maturity model that you have created regarding IoT?
A: (James Destro) We have made the IoT maturity model into four easy to understand steps. . You first need to start off with integration of your data, making sure that the right data model is in place and that you have all the necessary elements to go to the next stage which is analytics. Visual analytics may be enough for some basic alerting and notifications when things go out of spec or operating parameters need to be looked at. The next level of analytics includes predictive and prescriptive capabilities that layer on additional information about the situation and allow people to operate above their knowledge of the operation. This is especially important for the newer workforce. The final level is where you are integrating together your customers and suppliers as part of the IoT system to gain greater insights and optimize the entire operation across the enterprise. We see customers graduating from one level to another rather than trying to jump levels as part of the journey because each one depends on the previous one to enable the new capabilities.
Q: Does there exist some maturity capability model for IIoT?
A: (James Destro) Yes, Hitachi Vantara has a capability maturity model that we use with customers. The intelligent manufacturing journey can be thought of as a continuous journey. Manufacturing maturity for customers is at varying levels. Most manufacturers are in level 1 or level 2 which requires getting connected and basic utilization of data for analytics. The big step change is from level 3 to level 4 when the realization that customer inclusion is central to Manufacturing 4.0.
The typical environment is heterogenous, islands of automation with several monolithic manufacturing systems and applications. The challenge is to get insights that matter and gain control over key pain points. Our focus is to tackle issues that can drive business outcomes and provide you a pathway to progressively drive maturity. Please reach out to us for more information.
Q: At what maturity stage can you use artificial intelligence (AI) and machine learning (ML)?
A: (James Destro) If you are you able to gather data from assets or processes across your plant and you are storing this data with history in context, then you can introduce advanced data analytics to support decision making.
Q: Do manufacturers need to establish and grow internal "services" groups to enable use of SaaS in IIoT to become more aware of operational issues and become more efficient?
A: (James Destro) Typically, in a SaaS model, fewer IT resources are needed internally to maintain the application. Hitachi can provide a full IoT management service for our customers. For the edge or on-premises environment, engineering and local IT resources are needed and need to be well-versed in the OT systems that are connected as part of the solution. The other scenario is where a company wants to increase their own intellectual property in the system. This is where Hitachi has entered into a partnership with the customer which is a mix between the packaged applications that Hitachi can provide, and custom solutions created via co-creation with the customer’s team.
Q: What about security in the network?
A: (Ron Lumsdon) The reality is that when you look at any kind of solutions for IIoT, you must build security in at all levels. If you are looking at the device level, you need to make sure they comply. If you are looking at the cloud, you need to make sure the security is correct there. We looked at typical security architectures following the Rockwell and Cisco models for different levels. Usually devices are built for specific purpose and the security is built into the gateways that connect them together. We created an OT-level secure topology with firewalls at multiple levels. We created a layered security process from the lowest level device to the cloud.
Q: How do you see using public DNS as a security issue?
A: (Ron Lumsdon) This was never an issue for us. With this implementation we kept all device communication within our internal network leveraging express routes so there was no way to “attack” any of the devices. With IoT sensors that had to communicate with the internet we separated the control layer from data layer so that if there was an attack on the vendor it would not impede the flow of data as that was already taking a different path. If the device vendor found themselves under attack, we would only lose control of the device. Because the application we built is available outside of our internal network we did follow standard best practices when implementing those elements to ensure it was protected. One of the key advantages of leveraging the Azure IoT platform is the security options that are available when building and securing solutions.
Q: How is Hitachi adding value to industries by training them through a DIY strategy?
A: (James Destro) Co-creation is a central concept to our approach at Hitachi Vantara. As a vertical, the manufacturing practice can draw upon the industry leading horizontal practices and an extensive partner ecosystem. The challenges from the current pandemic underscores the need for organizational agility on an ongoing basis. Worker safety and supply-chain agility to meet production outputs are even more important. To achieve these outcomes, we need to bridge the IT and OT divide, and enable the digital innovation factory. Transformative vision, with use cases that focus on outcomes, combined with manufacturing domain competency and execution rigor, empower customers to move beyond tactical POCs and scale their digital investments across their organizations.
Q: From a practical point of view, what recommendations can you make to get moving depending on where you're at on your digital journey? An assessment?
A: (James Destro) People certainly have a big influence on moving forward, and a lot of times depending on where you’re at within the manufacturing maturity model, different groups need to be engaged to move from one level to another. At level 1 and 2 it may require more collaboration between your OT and IT teams to make sure that the right equipment is integrated and that the right data model exists for analytics. At level 3 and 4 it may be better interactions between your analysts and IT. Maybe you also need to augment your staff with data science people and collaborate more efficiently between high-level business functions such as planning and scheduling, vendor relationships and marketing. Our digital value assessment workshops help with all these areas regardless of what level you’re at. So, the consulting that we can apply can help to break down barriers and get you moving.
Q: We have seen the role of digital in discrete manufacturing. Major players in this industry have been operating for more than three decades. What is the adaptability of digital technologies and how much is the ROI?
A: (James Destro) We showed some of the typical savings ranges that Fabio presented. [There is also a white paper on the subject that is linked here for additional information.]
Q: With digitalization in place, how can companies reduce their product recall days?
A: (James Destro) Digitization can help to reduce or manage product recalls. One great example here is in traceability across the supply chain. For example, for perishable goods such as fruits, vegetables and meats, digitization can help to track storage temperature across the supply chain to indicate whether an event happened that can cause spoilage. Also, with the multiple changes of hands across the supply chain, the reaction to a recall can be quicker if you have traceability across the supply chain, which is a place where digital can also help. The other big area of courses is quality management and that’s where more stringent monitoring of process values and testing related to products can be better enforced, so that if it’s not possible to test every single product, the quality levels of complete batches can be more tightly controlled. Digitization gives you a picture of what’s going on both inside of your plant as well as when products leave it which helps with the reduction in recalls and also the amount of effort it takes to respond to one once you find it.
Q: What is PDCA?
A: (James Destro) Plan, Do, Check, Action
Q: What do you think about IIOT, is it beneficial for MES or will IIOT kill MES?
A: (James Destro) They are really two different things and it's not an apples-to-apples comparison. IIOT is complementary to MES systems in many ways. One aspect is in the ability to combine data from other systems of record and operations systems with MES to provide higher levels of understanding of what’s going on. MES information can be combined with energy management or maintenance management information to allow easier root cause analysis for making improvements in costs and helping to troubleshoot asset-related problems. MES systems also lack higher level analytics for predictive and prescriptive capabilities so IIOT can add these on top of the existing system. Regarding whether MES will be replaced by IIOT, that remains to be seen. Certainly, the reporting aspect of MES could be upstaged by IIOT dashboards, but recipe management and other procedural activities that are managed by MES systems, which are the operations management aspects, are critical and not typically what an IIOT system would do. A lot of customers today use Excel as an MES system so in respect to replacing this type the system, it could be quite possible.
Q: What are the key challenges during the digital transformation journey? What has helped you?
A: (James Destro) There are several key challenges that come to mind. People can be barriers to adoption so having buy-in by organizations at every level is key. Also, it’s necessary to have the right level of experience in implementing IoT solutions and this is where a partner can really help. Somebody who’s already gone about it and is willing to work closely with your organization to get results. It’s important to pick out specific pilot projects but the overall goal should be a digitization strategy that supports the business with major outcomes identified and tracked. You also need to make sure you have adequate budget and executive level support for the projects that you undertake. One good way to approach this is to make sure you have stages set up in a multiyear plan that will get you where you want to go rather than trying to spend all the money in one year and one budget cycle.
Q: Where is the manufacturing IoT edge? At the data center or on a gateway?
A: (James Destro) The answer is both and it depends on the state of your infrastructure where you decide to run things as well as the capabilities of your staff to maintain the system. Some organizations have high-speed networks and dedicated LANs and WANs from the individual sites to the corporate locations. There is also a good failover and redundancy capability at the site level. So, in this case you could choose to run manufacturing IIoT at the data center level. Also depending on the type of application, such as supply chain optimization applications that needs to network together multiple systems across multiple facilities, running it at any one facility versus at a data center or the cloud level is no less reliable. Also, for applications that require very fast execution, you need to run this type of the system closer to the equipment and the operating sites. Typically, we see a hybrid environment where some of the application components are located on-site and some are at the corporate level depending on functional requirements.
Q: What is the relationship between predictive maintenance scheduling extensions and supplier warranty requirements?
A: (Trevor White) Our predictive maintenance program is centered around equipment availability, especially equipment that could take the plant down for a significant amount of time. We have sensors on that type of equipment and make sure we are doing preventative maintenance and predicting failure based on vibration and heat. Supplier warranty is more around quality information and collecting information on inspections as well as our quality 360 data analytics program. This uses more customer data, driving that back into manufacturing and making sure that we don’t allow any vehicle to leave the plant that has a defect.
Q: What key challenges have you experienced during your digital transformation journey? And what has helped (or you wish you've had) to overcome those challenges?
A: (Trevor White) The key challenge is getting strong support from the business to utilize our internal IoT platform versus choosing external engineering companies and their own cloud instance for ML/data modeling/analytics. We recently put in an internal control (technology user request form – TURF) that requires an IT approval for all projects implemented to make sure the engineers are working with us to ensure security and data ownership. In reflection, we should have implemented this earlier in the program.
Q: Any other examples which you can share in terms of digital twins and digital threads in the oil and gas Industry? What challenges do the IoT implementations face?
A: (James Destro) Digital twins are used heavily in the asset-based solutions for oil and gas to drive equipment reliability, availability and utilization for upstream, midstream and downstream assets. We are also seeing companies expand the digital twin concept to things like the well, reservoir and associated assets in exploration and drilling. The digital thread for oil and gas takes a different meaning as quality, blending and product specifications drive feedstock and operating conditions in refineries as a main example.
Q: Do you link the IOT platform to the running PLC of the floor? If so, how it is connected?
A: (Trever White) Yes. We have a new network architecture that is being deployed that includes an IoT VLAN that we would connect via the Main PLC Ethernet to capture data. This new architecture includes a new security architecture to manage edge devices through active monitoring and patching.
Q: What would be a world class OEE score?
A: (Gianfranco Messina) From a point of process improvement, OEE is very important. This is good for understanding the current status of production, but we are trying to go beyond status to understand things from a predictive and prescribe point of view. We want to use our data to improve our products and processes but also to build in new features into our trains. If you integrate data, you can see dashboards but then to go to analyzing the data it gives you more insights but you really want to get to being able to combine the data with other business data to give even greater insights.
Q: How much of the Lumada platform is reusable? I mean, how much customization is required for implementation?
A: (James Destro) Lumada technology is by design very flexible and uses many open system components. At the same time, we utilize solution cores that are reusable and contain specific functional IP that can be leveraged across the enterprise. Also, because our systems are based on Kubernetes, containerized applications can be applied which also affords a great amount of reuse. We can see amounts of up to 50-75% of the project cost being consumed by custom services and solutions. We also tried to build in the ability for a standard infrastructure that can be utilized by partners more easily, to make them more self-sufficient going forward.
Q: Can you please help advise on challenges in terms of cross-functional training as you developed your IOT systems
A: (Trever White) We trained all engineering and manufacturing execs and managers on our Industry 4.0 / IIoT strategy and plan. We also have an extensive training program on Power BI to develop dashboards with the data exposed in our big data platform. Some of this is coming from our IoT systems.
A: (Ron Lumsdon) Three-part answer to this question. During the initial ramp up to the project we opened this opportunity up to all members of our IT team. Traditional project management would have you look at the resources you have, the availability, the expertise, and fill in what the project needs. Because IoT was new to us, we altered our approach from the traditional model of resource selection. We knew we would have some skill gaps, so the first step was to find the people with the right mindset. So, we launched an internal campaign and advertised what we were doing and what we were looking for. This included a presentation at one of our company townhalls, performing smaller presentations with each of our functional teams (infrastructure and application), and being open to one-on-one sessions from any interested candidate. Our message was clear. The candidate needed to be interested in learning something new, working collaboratively within a team, and open to expanding skillsets and expertise. We defined a list of interested employees who wanted to be part of the project and selected who we believed would be a good fit. We had a lot of interest and had to turn some people away. This was an important first step because we had created a team who wanted to learn and be part of something new. Motivation and desire are essential when you are learning something new so when people want to learn and grow, they will naturally expand their personal knowledge set.
With the candidates’ selection completed, we could now move on to part two which was pairing our internal resources with Hitachi resources. When we selected Hitachi as our IoT partner it was clear that we were going to build a “one team” concept. Hitachi and Maple Leaf resources would work together. We would share our internal technical expertise and they would share their IOT experience with our team. Happy to say that this was very successful, and the two teams worked very well together with lots of knowledge sharing and little to no additional training required.
The third part of this answer comes with selecting work package leaders. These leaders would be responsible for a specific technology stack with defined goals of designing it, building it, documenting it, and cross training their stack with their team. Right from the start they knew the deliverable, so as it was being built it, they were sharing that journey with their respective teams and building the end state documentation that is critical in any solution deployed in and enterprise.
In summary, we had selected candidates with the right mindset, partnered with a company that would supplement and address the gaps, and established work package owners that would not only build the solution, but return to their teams and cross train others ensuring the solution was fully supported.
Thanks again to our attendees and our presenters for these insightful questions and answers. Find more on Hitachi Vantara solutions for manufacturing.#IoTSoftware#ThoughtLeadership#Blog