Industry 4.0 might be too smart for its own good

?Industry 4.0 was introduced as a concept 12 years ago, and based on most surveys and research (#IoTanalytics, #RSindustria, #Pathfindr) the adoption of even baseline applications such as remote monitoring, predictive maintenance and energy management is still under 20%.

How is this possible?? The benefits are so clear; technologies are proven and stable; and there are a wide range of vendors and solutions that can reduce the risk and cost of deployment.? It should be a no-brainer for manufacturing companies to transform their business.

“Transform their business”?? That is a phrase that strikes fear in the hearts of many traditional manufacturers.? People don’t want to change, much less transform.? And some vendors compound the error by bragging about having a “disruptive” technology!

Is it possible that as an industry we are making things more complicated than many prospective customers are willing to accept??

Hyperscalers, systems integrators, network vendors, component suppliers, analytics typically take a top-down, outside-in approach to selling customers on Industry 4.0., which is clearly not resonating with customers:

??

Let’s walk through an example of what might happen.? A pump manufacturer, Pumps-R-Us, has spent two years and a big budget to create connected devices, a dashboard and some cool applications that will allow remote condition monitoring and predictive maintenance.? They are shipping the connectable devices and are excited to show their customers how much additional value they can provide.? The phases of adoption that they are likely to go through, while not quite as bad as Dante’s 9 Circles of Hell, will still cause them an unexpected amount of pain:

Phase 1:? ACME, one of their biggest customers, has just ordered 20 pumps to replace end-of-life devices.? The Pumps-R-Us account exec gives ACME the good news, “We are sending you our shiny, new connected pumps.? When they are installed, please connect, activate and start sending us your data.? In a few months we will have enough data to come back to you with something useful.”

And they don’t connect.? Why should they change their operating procedures for the sake of monitoring what might be 5-10% of their pumps?? And why should they send their production data to the Cloud?

Phase 2: Pumps-R-Us recognizes that they need to do something with older pumps, and start a program to retrofit and connect existing equipment.? This incurs an additional cost, but it will create a broader value proposition and perhaps convince more customers to connect and activate.

Phase 3: ACME says, “Thank you Pumps-R-Us, but we have pumps from three other manufacturers, and we don’t want to end up with dashboards from four different vendors.? Can you connect and monitor the other pumps as well?”? If they can, they will become the dominant pump manufacturer; if not, the risk is that one of their competitors will, and marginalize Pumps-R-Us as a provider of commodity hardware.

But let’s keep in mind that fewer than 20% of manufacturing customers have even started going down this path.? They have all been inundated with offers from a lot of suppliers and service providers, so it is not a lack of opportunity.? The other 80% have made a conscious decision to not adopt connected devices.

My suspicion is that for many manufacturers adoption will be a bottom-up, inside-out process:

?

Phase 1:? You want data?? They’ve got data.? They have years and years of data from their historians, PLCs and SCADAs.? The starting point might be to apply analytics to the existing equipment, and provide some basic condition monitoring and predictive maintenance.? While not as beneficial as real-time connectivity, it starts to prove the value of IoT with a minimal disruption of the existing operations.

Phase 2: Add real-time monitoring and analytics, but do it on the edge.? Edge technology has advanced so quickly that many of the benefits that previously could only be achieved through the Cloud can now be done in-house.?

Phase 3:? Complete the transformation by leveraging Cloud-based technologies to optimize operations when this makes sense.? Multi-site manufacturers, for example, will want to aggregate and analyze data across their entire operation.

To be clear, I am not suggesting that the bottom-up approach is the optimal path to Industry 4.0.? I am a big believer in full transformation, and companies that have the vision, resources and commitment to be more ambitious will outpace their competition in terms of product quality, productivity and profitability.

However, that has proven to be a very small part of the addressable market.? In order to bring in the rest of the market, it might be necessary to dumb down our razzle dazzle solutions and solve problems in a way that doesn't require our customers to leave their comfort zone.? Sometimes it is better to take one step back in order to move two steps forward.

#iiot #smartmanufacturing #industry40

?