Plant Magazine – September 25, 2014
When Google purchased Nest Labs Inc. for $3.2 billion in January, the internet giant was buying more than a company that manufactured “smart” thermostats and smoke detectors – it was buying a position in the race to digitize people’s homes.
The thermostats learn how inhabitants like their homes to be heated and cooled, and then automatically adjust the temperature.
Google certainly has the bankroll to hedge bets on deals like the one with Nest, a fairly new company that grew fast. Co-founded in 2010 by two former Apple engineers, the company had more than 130 employees by the end of 2012 and now analysts at Morgan Stanley estimate it’s selling 100,000 thermostats a month. At $250 each, annual revenue is expected to top $300 million. That’s a drop in the bucket when you consider Google has more than $60 billion in revenue, but it’s money that can be used to develop a suite of smart home products including locks, doorbells, baby monitors and humidity monitors, all packed with sensors that capture user information and a wi-fi chip to relay the data.
Nest’s “smart” innovations are a prime example of the capabilities home automation and “connected” technologies are playing in the current consumer market place. Other technology giants, including Apple, Samsung and Sony, are developing wearable devices such as watches and smartbands that collect data about users’ activities and provide them with details such as how many steps they’ve taken in a day or how many calories they burned on a weekend bike ride.
Now thanks to this growth in the consumer market, costs of sensors, controllers and communications have dropped, and connected devices are making a big splash in business.
A sector that will truly benefit is manufacturing.
Intelligent sensors, cameras and tracking devices are transforming how companies operate and changing how businesses use data. The basis of what’s called “Industry 4.0” builds on the fundamentals of its first, second and third iterations. But it also takes mechanical and mass production, and the electronics and control systems of today to a new level where manufacturing is driven by machine-to-machine (M2M), person-to-machine (P2M), and person-to-person (P2P) connections within the Internet of Everything (IoE, a.k.a Internet of Things).
It connects everything from industrial equipment and systems to the internet via wireless and wired networks to gather and transmit data that manufacturers use to improve efficiency, productivity, asset health, quality, safety and environmental impact.
Big money, big possibilities According to research conducted by General Electric, enabling internet-connected machines could add up to $15 trillion to global GDP by boosting annual productivity growth by 1% to 1.5% in the US.
“It’s extremely important that we explore the potential of connectivity, says Victor Woo, general manager for IoE at Cisco Canada. “We’re gaining intelligence from dark assets, such as machines and other systems that will help businesses make better decisions.”
A report for Cisco by Lopez Research suggests as costs decrease for standard “smart” sensors with IP communications and embedded controls, solutions will be implemented across manufacturing equipment and into new areas that have not seen much investment in automation, such as Balance of Plant equipment and supply logistics. The benefit for manufacturers comes from the information collected by these sensors that’s communicated back to shopfloor workers, plant managers and software systems. Although in its infancy, IoE is already having an impact, and manufacturers are reaping the benefits. Some of the world’s largest industrial players are leading adoption, including Cisco, General Electric, General Motors, Toyota, Samsung, Intel and Dell.
A forecast prepared by IT research firm IDC Canada and telecommunications company Telus Corp. suggests companies are preparing to increase their spending on data collection and analysis, the beginning of a rapid industrial-scale innovation that will have far reaching implications.
IDC estimates Canadian companies will spend $21 billion on such projects in 2018, up from $5.6 billion last year – a 375% increase. About 13% of study respondents were already working in the IoE, while another 30% say they are planning to adopt the technology within two years.
The survey suggests advancements in the reach and speed of wireless networks and technologies such as cloud computing are fuelling growth for IoE and opening up its potential for manufacturing.
Connecting machines creates intelligent networks along the entire value chain that communicate and control each other autonomously with significantly reduced intervention from operators. Machines predict failure and trigger maintenance processes autonomously, while self-organized logistics would react to unexpected changes in production, such as materials shortages and bottlenecks.
“IoE can not only increase productivity, it enables entirely new business models. Companies need to examine its possibilities as a competitive advantage or they risk falling behind global innovators already utilizing new applications to creatively reinvent their businesses,” says Tony Olvet, group vice-president of research at IDC Canada.
Equipping people with mobile technology, you dramatically shrink the delta between when a problem occurs and when it’s acted upon, says Mark Bernardo, general manager of automation software for GE Intelligent Platforms, in the Cisco study.
“If there’s a quality control problem in a production line, they can shut down the line before it continues to create products that will all be waste.”
For example, Harley Davidson installed software at it’s York, Pa. plant that records how different equipment is performing, such as the speeds of the fans in its painting booth. Software automatically adjusts machinery if it detects a measurement, such as fan speed, temperature or humidity, has deviated from acceptable ranges.
General Motors has implemented a standards-based network architecture called the Plant Floor Controls Network. It standardizes the design of each of its plant networks to establish a single engineering team that monitors and troubleshoots network operations globally. The automaker has since reduced network downtime by 70%.
And at a General Electric plant in Schenectady, NY, tens of thousands of miniature sensors are collecting data about each step in the manufacturing of batteries. The sensors know information relating to humidity on the shop floor and how much pressure each machine must apply to particular battery components. The company says it’s using the data to improve its factories by determining which conditions are associated with the best products.
Meanwhile, Cisco Canada is in the process of opening an IoE Innovation Centre in Toronto, one of four locations around the world, where it expects to spend $100 million over the next 10 years on the development of infrastructure and technology. “Convergence is the key work here,” says Woo. “We have to bridge information within the business by connecting the shopfloor to the top floor.”
Woo, looking at Cisco research, estimates that IoE will drive net profits of $3.9 trillion in the global manufacturing sector alone over the next 10 years. Canada’s share would be about $100 billion.
He contends manufacturing has the most to gain from IoE globally.
Leveraging value While sensors and computerized automation have been around for decades, PLC and PC-based controllers and management systems are largely disconnected from IT and operational systems. They’re organized in a hierarchal fashion within individual data silos that often lack connections to internal systems.
But Dave McPhail, the CEO of Memex Automation in Burlington, Ont., says that’s changing thanks to IoE.
“Having the ability to connect equipment via ethernet is providing businesses with a new value stream based on the fact that you can pull data in a cost effective way,” he says.
Memex develops real-time shop-floor-to-top-floor technologies, and its flagship product MERLIN provides overall equipment effectiveness (OEE) metrics in real-time to allow manufacturers to enhance their production through shop-floor data analysis.
The company has strategic partnerships with Microsoft and tool builder Mazak, which has installed the MERLIN OEE system at its plant in Florence, Ky.
Thanks to new sensor information, wireless connectivity and big data processing tools like Memex’s, IoE would help manufacturers improve OEE by gathering information related to equipment health to minimize machines failures.
The next step in IoE development, McPhail says, is a ubiquitous platform.
“We have the hardware part figured out. Now we need an open source protocol that allows data to be consumed by any number of applications to add even more value, such as overall equipment effectiveness, total predictive maintenance and the cost of core performance,” he says. “I think we’ve only scratched the surface in terms of how we can use data. Our imagination is our only limitation.”
So you want to enter the IoE realm? A Cisco research paper suggests there are four elements that provide the foundation for smart manufacturing within IoE:
Network. “Smart” manufacturing environments require a standardized IP-centric network that enables all devices within a plant to communicate to operational and enterprise business systems. A standard IP network also makes it easy to connect and collaborate with suppliers and customers to improve supply chain visibility.
Security. Safeguards must be built into any solution, including security procedures such as hardware encryption, physical building security and network security for data in transit.
Software systems. Systems must translate information from the physical world into actionable insight that humans and machines can use. For example, Toyota is using Rockwell Automation software for real-time error corrections at its Alabama plant to minimize rework and scrap rates. The software is saving the automaker $550,000 annually.
Big data and analytics. Processing tools are enabling real-time data stream analysis that provides dramatic improvement in problem solving and cost avoidance.
Smarter manufacturing may only have scratched the surface of the Internet of Everything, but sooner rather than later, the sector will leverage the age of the machines, and unlike James Cameron’s Skynet (artificial intelligence run amok) in the Terminator movie series, that’s a good thing.
This article appears in the September 2014 issue of PLANT.
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