How digital technology is transforming business

It’s well established that the digital technologies propelling the Internet of Things (IoT), Industrial IoT (IIoT), Industrie 4.0, Smart Manufacturing, etc., are changing the automation landscape. But they’re also transforming how work is being done in the process industries. “Digital technology is advancing rapidly and pervasive in society, and it’s rising in manufacturing,” said Dr. Thomas Fiske, principal technology strategist, Yokogawa, to attendees of his session on digital transformation at the 2016 Yokogawa Users Conference and Exhibition, this week in Orlando. The rise of IT in operations is bringing new business opportunities, Fiske said.

For example, a chemical supplier installed sensors on dispensing units to track how chemicals are being used, and is now able to offer new services to help its customers optimize their use of chemicals. A vibration-monitoring equipment company now offers monitoring as a service, with analytics in the cloud so they can tell a customer when their equipment needs maintenance. A polyolefin manufacturer has developed a new business making materials for 3-D printing.

In process industry plants, user challenges including safety, efficiency and compliance offer great opportunities for improvement through IIoT, with reliability at the top of the list. “Reducing asset downtime is a great opportunity,” Fiske said. “Unscheduled downtime typically takes away 5% of capacity, and a single major incident can wipe out half a year’s profit.” Many incidents (40%) are caused by human error, often due to lack of information or using the wrong procedure. These and others could be prevented by access to better information or through remote monitoring via IIoT.

Other opportunities include greater agility, flexibility, supply chain synchronization and optimizing asset utilization by integrating the plant floor with business systems. “Where are the materials? What should we be making considering current prices and inventories?” Fiske asked. “There’s a move to real-time performance management.

“We’ve all heard about autonomous operations—those nearly unmanned facilities need systems that predict abnormal situations, automatically correct for them, and manage by exception. They call for more integrated, distributed controls that are information-driven and fault tolerant.” Further, plants can optimize and integrate maintenance with operations to perform service at optimum times so it doesn’t disrupt production. “We can obtain real-time KPIs, design in safety and security, and automate work processes,” Fiske said.

Millennials rising

A major force behind digitization is the fact that millennials now outnumber baby boomers in the workforce. Every day, 10,000 boomers retire, and their skills are leaving with them. “Each day industry loses 400,000 years of experience,” Fiske said.

[sidebar id =1]“Millennials think, work and act differently,” he added. They are experiential learners, he discovered the hard way. “We sat them in a classroom, tried traditional ways of training, and the attrition was 50%. They don’t want to look at manuals. They’re social media consumers, so that’s how you train them. They have a different skillset, and you have to take advantage of that."

Immersive and virtual reality are supporting gamified training. “It’s a great way to train millennials,” Fiske said. “It creates a realistic environment to learn that’s safe so they won’t destroy a unit.

“Millennials don’t think of boomers as subject matter experts – that’s what Google is for.”

Cyber security looms

Cyber security is “everybody’s top concern when you talk about industrial IoT,” Fiske said. “It has to be designed into the system, but until then, we have to work with what we have, which is bolt-on systems.”

With the proliferation of technologies such as drones, sensors are increasingly miniaturized, smart, multivariable, passive, wireless and intrinsically safe. “Put them anywhere, and you can get a whole host of data you never had access to before. And not just for control. You can sense smells and odors as well as temperature and pressure.” Wearable sensors are coming to wristbands, vests, goggles and helmets as well as traditional mobile technologies. “You can get information from anywhere, pushed automatically to a table,” he said. “I’m wearing a tracker right now.”

In the digital world, “We used to abhor the cloud. Now it’s all we talk about,” Fiske said. “Analytics is the hottest commodity in the business right now…search is the new read, do is the new learn, small is the new big, and information is the new wealth. We have to dig into that data, and see what it’s telling us.”

Along with data analysis, the cloud is being used for collaboration. “There’s a lot of interest in novel ways to use it—to share information among facilities, for benchmarking, for analytics within a company and within a sector – we’re seeing a lot of oil companies use it in that fashion,” Fiske said. Data can be moved directly to the cloud, or processed at the edge (near sensors) and the results put in the cloud, where it can be used to perform virtualization and optimization.

“We can go from the Purdue model to two layers with edge computing,” Fiske said. The cloud handles large quantities of data but with latency, and real-time calculations are done with edge computing where latency is small. “Fog” lies between the edge and the cloud, and looks at multiple devices.

“Process automation and IT integration offers the opportunity to combine information that wasn’t previously available, in context,” Fiske said. For example, with IT, a pressure sensor, controller and valve can be used to predict cavitation, stiction and the need for maintenance. IT-enabled smart sensors now include smart motors, drives and pumps: “Smart machines that can learn and tell you when there’s a problem in itself, or in the process equipment, and share that information with other machines,” he said.

Where is the value?

To take advantage of digitization, you have to determine where there is value. “What will you do with it?” Fiske asked. “You have to use it to do things in a different way, to power innovation or new business models, to get to the transformative part.”

Digitization can change industry structures and boundaries. For example, when farming equipment company John Deere’s revenue dropped 5%, it looked for new business and realized it was already gathering data from equipment in the field for maintenance. That data plus other information such as weather, fertilizer, seed characteristics and commodity prices could be used to guide farmer practices. Deere expanded to doing farm management – a new business model.

Mining equipment company Joy Global built a similar new business in mine management. Uber disrupted taxi service without owning a single car. Phillips invented a light bulb that detects intruders.

Fiske said any plan to extract value should follow certain steps:

1. Obtain top management buy-in.

2. Form a task group to find opportunities.

3. Create an internal structure with language terminology that everyone understands.

4. Determine where to start, “Asset management has low-hanging fruit,” Fiske said.

5. Decide who will own, gather and maintain data.

6. Do things differently: in new ways, with new supplier and business models.

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