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DIGITALISATION OT & IT COLLABORATION Ushering new business models

Jan 3, 2019

In order to be future ready, manufacturing companies have to become real-time information driven, so that production is closely tied to demand, and production & business processes are tightly coupled and autonomously driven. For that to happen, manufacturing firms need more data and tools to analyse them and extract actionable information that can trigger autonomous responses.

Manufacturing companies invest in Operational Technology (OT) and Information Technology (IT) to gather data and initiate actions for managing their operations. While industrial automation systems / OT Systems, such as, DCS and PLC, gather production floor data and generate actionable information & control outputs that help manufacturing companies achieve reliable, productive, efficient, and safe operation of their plants, enterprise solutions, such as, ERP and Supply Chain Management (SCM), generate business level information. Industrial automation systems are a prerequisite for manufacturing operations and they evolved progressively from mechanical and electronics-based to microprocessor based. On the other hand, most enterprise solutions made their entry only after the emergence of the computer. Industrial automation systems are online real-time based & business level enterprise solutions typically work offline and are transaction-based.

The advances in the computer and information technology (ICT) profoundly influenced the automation system architecture and automation industry, resulting in the development and introduction of PLC, DCS, and such others. What spurred the development of PLC and DCS was the emergence of ICT as the technology that had the potential to help automation suppliers to meet the end-users’ need for monitoring parameters from a large number of sensors and transmitters, converting them into useful information, and presenting the same to operators in central control rooms, in efficient and situational-need based manner. With the dominant role of ICT in automation systems already well established, we can expect the growing data handling and processing power of computers and greater convergence between computer and communication technologies to further influence the future of industrial automation systems and shape the automation industry’s future ecosystem and its business model.

Industry 4.0 imperatives

Industry development trends portend the dawn of the next industrial era, often described as Industry 4.0. In order to be future ready, to meet the challenges of the impending transformation, manufacturing companies have to become realtime information driven, so that production is closely tied to demand, and production & business processes are tightly coupled and autonomously driven. For that to happen, manufacturing firms need more data and tools to analyse them and extract actionable information that can trigger autonomous responses.

The Industry 4.0 requirements include that OT and IT systems must work collaboratively so that the manufacturing company is real-time information driven and automation systems are modular, interoperable, expandable, reusable, portable, scalable, and intrinsically cyber-secure. While the use of industrial internet can ensure connectivity, achieving information transparency and making the automation systems modular, interoperable, etc can be achieved only when they are built on open standards; achieving this objective has more do with the way the automation systems are designed, engineered, and architected.

Industrial internet will shape both OT & IT

Increasing demand for connectivity among various devices has resulted in massive investments in the development of inexpensive, embedded computing devices, with large computing power. This development, along with the adoption of IPv6 Internet protocol, which allows a very large number of devices to be assigned Internet Protocol address and the devices to remain connected with the same IP address, even when they are on the move and availability of affordable, efficient and scalable access to cloud computing & data analytics, have spurred the development of Industrial Internet of Things (IIoT). Industrial Internet includes IIoT, edge and cloud computing, Big Data and analytics, Artificial Intelligence, Machine Learning, autonomous robots, and such others. These are seen as the key building blocks that will help transform a manufacturing firm into an information-driven, connected enterprise. These building blocks are expected to play an overarching role in data gathering & analysis and generation of actionable information and thereby, shape the future of both, operational technology and manufacturing.

Role of suppliers

As a consequence of this expectation, an impression has been gaining ground in the minds of the manufacturing companies that automation systems will witness total transformation in the near future. It is necessary for the proponents of IIoT to set the expectations right. Industrial internet, has tremendous potential and the changes it can bring about are only more evolutionary and not transformational. It is an excellent tool for certain applications but not ready yet to replace the existing DCS and PLC architectures. This message needs to be articulated by the automation industry market leaders and in a language which OT professionals and end-users understand. Above all, it is necessary for the proponents of emerging technologies to leverage these technology enablers so that automation systems deliver superior performance, additional functionalities and facilitate information transparency.

With regard to the technology issues, industrial automation suppliers must take a two-pronged approach. Their endeavours must be aimed, on one hand, at embedding the power of industrial Internet, and on the other, at meeting the end-users demand for automation systems that are modular, interoperable, expandable, reusable, portable, scalable, and intrinsically cybersecure. With regard to the first, they should focus on easy-todeploy and manufacturing industry’s problem-solving and performance-enhancing applications, with which automation is directly associated will demonstrate the benefits to end-users and then proceed towards more complex applications, which address the manufacturing industry’s Industry 4.0 enhanced demands. Both the approaches must be directed at value creation to end users and meeting their return on investment criteria. Some of the specific areas where industrial Internet applications can create significant value are related to energy management, enhancement of plant availability, environmental protection, and such others.

Applications that benefit from Data Analytics

Increasing awareness about environmental issues, plummeting prices of solar power, and such other factors are contributing to the growth of distributed generation and microgrid. Generation of electric power from solar panels and wind turbines depends on seasonal and variable factors, such as, cloud cover and wind speed. Industrial Internet can help collect a vast amount of data efficiently from geographically spread assets, with the help of transmitters that measure the related variables and edge devices. Data analytical capabilities available, either on premise or public cloud, can then use the data to assess the asset performance by computing possible generating capacity, expected load, and such others. Analytical capabilities can also be leveraged to analyse wind turbine data, such as vibrations, noise, temperature, and such others, to provide alerts and generate reports to machine specialists about impending problems. Machine specialists can initiate predictive maintenance measures that will mitigate downtime costs and expensive repairs and workplace accidents.

Transformers are a vital part of electrical and distribution grids and their failures result in downtime with consequential financial costs. Their proper maintenance plays an important role in ensuring reliable functioning of the grid. Industrial Internet can be used to remote monitor various parameters of transformers, such as, oil levels and temperatures, moisture ingress, voltages and currents and such others, and analyse & generate appropriate reports, which will provide information regarding the condition of the transformers and their locational details. This will thereby, help initiate predictive maintenance measures of transformers.

Technology companies, with strong competencies in industrial internet related technologies, seeing new business growth opportunities, are establishing centres of excellence to develop and demonstrate their capabilities in leveraging these technologies. While some traditional automation suppliers are forging relationships with them, others are more proactive in their stance. They are offering edge gateways, protocol convertors and such others, that act as the tools that enable end users, eager to leverage the power of industrial Internet, to become connected enterprises.

Implementation demands multidisciplinary & interdisciplinary workforce

Architecting solutions with embedded industrial Internet will require a significant amount of efforts, as their design, engineering, and maintenance demand multidisciplinary and interdisciplinary competencies and expertise. It requires people with skills in automation systems, business process automation solutions, application development, process knowledge, communication and information technologies, data science, Artificial Intelligence, cyber-security, project engineering & management, and more. The other skills required include, knowledge about industrial automation systems and enterprise solution architectures, communication protocols & associated standards, and problem solving capabilities. Above all, multidomain knowledge and industry practices are critical for realising value from industrial internet technology. These resources are scarce but their availability and close collaboration among supplier, user and implementation partner are critical for project success.

While industrial Internet technology holds immense promise, there are challenges that include successful implementation of industrial internet projects that require extensive investments in terms of engineering efforts and time, with cost implications for both suppliers and end users. Both suppliers and end users will emerge winners if they can evolve in an equitable way to share the associated risks and rewards and the new user-supplier business model that addresses this challenge. Recent developments provide indictors about the emerging new business models.

New business model will emerge

Automation systems have a long lifecycle and due to various reasons, it is not uncommon to see manufacturing plants still using PLC and DCS that are more than two to three decades old or even using their predecessor, the panel-board instruments and controllers. As a consequence, suppliers are forced to support and service automation systems over stretched-timeframes and this makes it difficult for them to upgrade their offering in synch with the rapid technological changes taking place. This adversely affects both, end users and automation suppliers. Since they follow capital sales model, there is no major incentive for them to ensure backward and forward compatibility. So the customer suffers. It is time to evaluate the benefits of switching from capital sales model to outcome-as-a-service model.

Technology companies, such as Microsoft, Alphabet, IBM, etc, with strong competencies in enabling technologies, have emerged as strong proponents of IIoT, Artificial Intelligence, Machine Learning, Big Data analytics, and cloud computing. Their business model is to offer platform-as-a-service; examples are Azure (Microsoft), Watson (IBM), Amazon Web Service (Amazon), and DeepMind (Alphabet). Some of them are building partnership agreements with leading automation suppliers. ABB developed its Ability platform in conjunction with Microsoft that enables customers to integrate data, apply Big Data and predictive analytics, and generate insights. GE has announced that it will operate its software and services, including Predix Application Platform on Amazon Web Services, and Microsoft Azure public cloud data centres. Some automation suppliers are also exploring offering outcome-as-a-service or annual subscription based. The days of systems engineered automation systems and changes in the supplier-end-user business relationship & automation industry ecosystem are on the anvil as the influence of IIoT on industrial automation systems increases.

Image Gallery

  • While the use of industrial internet can ensure connectivity, achieving information transparency and making the automation systems modular, interoperable, etc can be achieved only when they are built on open standards

  • Industrial internet, has tremendous potential and the changes it can bring about are only more evolutionary and not transformational

  • While industrial internet technology holds immense promise, there are challenges that include successful implementation of industrial internet projects that require extensive investments in terms of engineering efforts and time, with cost implications for both suppliers and end users

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