BC Asia May 2018 by Business Review Asia

Aetna International

Healthcare insurance and a continent ripe for growth May 2018 • ASIA EDITION

EMBRACING TECHNOLOGY TO DISRUPT

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SNACKING MARKET City Focus Taipei

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Commercial buildings in Asia

FOREWORD WELCOME TO THE Asia edition of Business Chief. This month we caught up with Derek Goldberg, Managing Director Asia Pacific for Aetna International to hear about the company’s aggressive regional growth strategy in the health insurance market. This month’s global technology transformation section looks at electric vehicles – is the correct infrastructure in place to provide for the masses of energy they will consume at any given time? Skeleton Technologies CEO Taavi Madiberk discusses what needs to be done to prepare for a new era of transport. We also found out about the US skills gap from Jack Coker at Ducatus Partners, and looked into whether it is a global phenomenon. How might it be resolved? Moving on to sustainability, branding expert Allen Adamson

advises us how to maintain a strong brand identity while diversifying a company’s product range. Our City Focus for May takes a look at Taipei, an Asian export hub which emphasises its high-tech electronics and machinery offering. We have also examined the top 10 most expansive commercial buildings the region has to offer. Be sure to check out our company features where we catch up with the latest news from Pemex, Mondelez International and Yatra Online. We sincerely hope you enjoy the issue, and as always, please tweet your feedback to @Business_Chief

Enjoy the issue!

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F E AT U R E S THE CONFECTIONARY CATALYST TECHNOLOGY AND INNOVATION INSIDE

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Why Aetna International is in rude health

May 2018

TECHNOLOGY

Wider electric vehicle adoption requires global energy solutions

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134 Daimler

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THE CONFECTIONARY CATALYST TECHNOLOGY AND INNOVATION INSID

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Responsible for Mondelēz International’s Global Innovation, Director of IT Henson Sy discusses how the company continues to disrupt the Asian snacking market

ncreasingly busy lifestyles and an evolving global demographic are influencing consumer eating habits like never before. Demand for products which consumers can eat on the go, that are easy, healthy and accessible from a cost perspective, are all important factors which are reshaping the development of new products across the food and beverage industry. Amassing a net revenue of $9.7bn in 2016, and with 30,000 employees worldwide, confectionary juggernaut Mondelēz International houses a number of renowned snack brands. From Cadbury, Côte d’Or, Oreo and BelVita, to Babbaloo and Philadelphia, the company remains committed to driving business growth and fulfilling its ambition to ‘create delicious moments of joy’ for consumers.

May 2018

“When you receive a snack, the feeling you get is a sense of happiness- a moment of joy. We put a lot of that passion into the way we work, and the way we make and market our products,” Director of Information Technology Henson Sy explains. “We have gone through a number of transformations, but at the end of the day we remain focused on wanting to be the best snacking company in the world, by delivering moments of joy.” Responsible for managing global innovation at Mondelēz and furthering its technological capabilities, Henson has streamlined the company’s

FOOD AND DRINK

Henson Sy

Director of Information Technology

Henson started his career in Technology. Having studied, implemented and created technology, his passion has always been to make technology work- to find that intersection where technology enhances lives. Combining his experiences in the large technology companies like Oracle and Apple with large consumer goods companies like Johnson & Johnson and Mondelez, Henson now leads Global Innovation at Mondelez

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MERANET HAS MADE IT POSSIBLE FOR COMPANIES TO HANDLE SUCH COMPLEX ECOSYSTEMS WITH EASE AND HAS ALLOWED

Heera oﬀers the MeraNet solution as a platform and the customers can choose required modules.Customization may be needed in such markets where business processes are diﬀerent and evolving.

WITH SPEED is Heera’s USP, along with deep domain knowledge of such markets, business models and ecosystems. With a complete focus on SUPPLYING

AUTOMATION SOLUTIONS FOR DOWNSTREAM SUPPLY CHAIN MANAGEMENT FOR THE LAST 20PLUS YEARS, Heera developed many

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MONDELEZ ACKNOWLEDGED HEERA’S EFFORTS BY WAY OF GIVING THE BEST SERVICE PROVIDER AWARD CONSECUTIVELY FOR 4 YEARS. MONDELEZ CONSIDERS HEERA AS A PARTNER AND NOT JUST A VENDOR. Heera has always strived for learning new technologies so that it can be used for enhancing existing solutions as well as for creating new possibilities for customer’s business automation needs. With best talent and expertise Heera will always be at customer’s service and customer satisfaction is Heera’s motto.

M O N D E L E Z I N T E R N AT I O N A L

EMBRACING THE FOOD AND BEVERAGE INDUSTRY IN ASIA PACIFIC IS SET TO BE WORTH $2.6TRN IN 2018

May 2018

sales and marketing operations and partnered with manufacturers, global leaders, and in some cases, region and sub-region presidents to look at new ways to drive business growth by utilising new digital tools. “We are telling them, ‘if you want to increase, for example, salesman productivity and improve in-store executions or net revenue management, there are certain technologies that you should be investing in,’ he says.

FOOD AND DRINK

“For example, with sales force automation (SFA), we show what it will look like in the next few years. If I’m bringing in this thinking, it can then be built into their roadmap. When I first joined in 2014, Mondelēz’s sales force were selling via pen and paper. In some rare instances, they may have had Netbooks,” he continues. “We made a big bet for our sales force to use mobile devices. It was a necessary first step. The full deployment of mobile devices has become more cost effective and ubiquitous. It makes data available to us almost instantaneously. We use app stores which are freely available to mass deliver the app. Looking at what’s next, I asked instead of giving sales reps the app, why don’t we give the retail stores the app, where they can have this service on their mobile devices in the store.” “Beyond this, we looked at chatbots via Facebook Messenger and so on. We have different technologies, bringing intelligence behind it as well. Machines can figure out what to sell best in that store based on

“We remain focused on wanting to be the best snacking company in the world, by delivering moments of joy” Henson Sy, Director of Information Technology history and location trends, and let the sales staff just monitor or manage relationships,” he adds. In the area of net revenue management, which is one of the hardest capabilities to introduce to any FMCG company, we implemented a regional tool from Retail Insights. In this space, it is extremely rare to find one tool implemented in a whole region but we did that so every market now views and measures trade numbers the same way. Upon implementing SFA for

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M O N D E L E Z I N T E R N AT I O N A L

THE COMPANY HOUSES BRANDS SUCH AS CADBURY, CÔTE D’OR, OREO AND BELVITA

May 2018

sales reps, Henson also worked to implement cloud technology to support its mobile app platform to strengthen its security mechanisms, minimising potential risks or delays in service. “Last year, we were hit by a malware which took down most of our systems. The only thing that did not go down was the sales apps because they were all on the cloud,” comments Henson. “Using this as an important lesson, cloud technology is now being extended to other functions. We are now bringing technological innovation into our operations, not

FOOD AND DRINK

“We are now bringing technological innovation into our operations, not just in sales and marketing, e-orders, digital marketing or ecommerce, but into supply chains as well, finance and HR” Henson Sy, Director of Information Technology

just in sales and marketing, e-orders, digital marketing or ecommerce, but we’re putting it into supply chains as well, finance and HR.” Innovation culture With the introduction of the Hub for Innovation team, which Henson is a part of, Mondelez is seriously investing into innovations. The team’s focus is to think big, innovate fast and disrupt at scale. It has rolled out proof of concepts around the world that have positively impacted business as well as drive a culture of innovation.

Additionally, the launch of Mondelez University will encourage employees to look at new ways of working and learning. “We partner with Accenture amongst others, in the innovations space, where they have provided a framework to how we set up an innovation culture, how we set up innovation immersion sessions so that we drive the whole culture, from top to bottom,” says Sy. “We also harness best of breed technologies from SAP and distributor management system by Infosys Edgeverve. We have a

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MONDELEZ AND RETAIL INSIGHT: DIGITAL TRANSFORMATION DRIVING THE ORGANISATION’S CAPABILITY JOURNEY Retail Insight have been a part of Mondelēz digital transformation journey for many years. Throughout this relationship, we have always focused on two core outcomes: securing improved business results, and building sustained organisational capability. Picking up results along the way ensures that, despite the enormous scale and complexity of a programme such as the Navigator Revenue Management implementation, we maintain momentum in the right direction on this transformation path. Our focus on organisation capability growth is critical, so that the organisation possesses the skills and knowledge to sustain and drive better results using the new tools and technology at their disposal.

form a best-in class Revenue Management eco system. A true Digital Transformation indeed, and we are excited to continue to jointly build capability through the live Navigator platform.

Our journey together therefore goes far beyond simply implementing and deploying new technology solutions. A strong joint governance team is in place to maintain a relentless focus on the vision that Mondelēz are pursuing on the Net Revenue Management space through Navigator. Facilitating a low barrier environment between the steering team, corporate functions, and the hundreds of end-users across multiple demanding markets, has created a culture where all stakeholders not just feel ownership for achieving a best-in-class Revenue Management function, but also know that their feedback and input is directly influencing the implementation and adoption plan. Digital transformation is not complete until the organisation has embraced and adopted the desired ways of working and supporting technology. A step-bystep capability journey has been key to our adoption success. By mapping strategic business priorities to improved ways of working, supported through intuitive and easy to understand Navigator UX, the organisation has built capability and could point to immediate and sustained results, before progressing to the next level on this journey. This transparent and collaborative set-up has driven organisational adoption, as markets share results and learnings across the region, to

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About Retail Insight We are a global people and technology company, who understand our industries and their trading challenges first hand. But we don’t rest on our experience. We blend this domain knowledge with a curiosity and desire to find new analytic approaches and techniques. This is how we design the most appropriate data driven, analytics solutions to help our clients trade more effectively. We do not believe that one size fits all, so we’ve created dynamically modular and scalable products to meet the needs of our unique clients in over 50 countries. We believe the future of analytics is democratisation; creating and sharing relevant and accessible insight across organisations, top to bottom, left to right. The solutions may be complex, but the output should always be easy to understand for anyone to take beneficial action. Insight should be for the many, not the few.

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FOOD AND DRINK

“We partner with Accenture amongst others, in the innovations space, where they have provided a framework to how we set up an innovation culture” Henson Sy, Director of Information Technology

MONDELĒZ AMASSED A NET REVENUE OF $9.7BN IN 2016

product, which is scalable and just works. When we implemented it in the Philippines, we just replaced all of our legacy client-server tools with this cloud-based solution.” Personalisation The food and beverage industry across Asia-Pacific is predicted to amass $2.6trn in value this year, and is expected to steadily rise, with China being the main country responsible for this rise, according to Statista. Consequently, the company is striving to expand its renowned wellbeing brands, improve the nutrition and ingredients of its snacks, and develop further products which each market will savour. “We know consumers are looking for healthier snacks and meals, paying particular attention to the ingredients used,” observes Sy. “In the US and Europe, we have BelVita, which is an early breakfast snack. When we launched it in China, it was a surprise that consumers didn’t like it. We heavily marketed it as a healthy alternative, but the take-up

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M O N D E L E Z I N T E R N AT I O N A L

was not where we want it to be. “Chinese people and Asians in general do not like to bite into hard stuff in the morning. They eat buns, breads, porridge, something which is easy to bite and digest. Giving them a hard snack such as BelVita wasn’t going to work,” he says. “Another product was Oreo. Although it is quite popular in the US, when we took this to China or elsewhere in Asia, like India, we’ve had to either reduce sugar content or increase it. The twist, lick and dunk ritual is also an American concept that required being accustomed to at first.” “To them, you just eat the biscuit. To make it more exciting, we introduced different flavors that used different ingredients. Take for example, Oreo Green Tea Ice Cream and Oreo Strawberry.” “With the health food segment in China growing substantially in the recent years, we introduced Oreo Thins as a snack with lesser calories. This is an innovation coming out of China. Because it’s thinner, psychologically people think that it’s an

“With the health food segment in China growing in recent years, we introduced Oreo Thins as a snack with lesser calories. This is an innovation coming out of China” Henson Sy, Director of Information Technology acceptable indulgence, and rightfully so because of the lower calories. So, we’ve now exported that thinking to the rest of the world,” he adds. With a number of renowned, powerful brands, Mondelēz is also looking to remain competitive by catering to the growing trend of gifting and the personalisation of its snack products. “It used to be that if you bought a bar of Cadbury, it would be the

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same anywhere. Nowadays, if you tried a Cadbury’s bar in Australia, versus one in India and Malaysia, Malaysia’s version is much sweeter whereas in India it is milkier. It’s almost personalised to the market. We’re undergoing mass customisation,” explains Sy. “Technology grows from mass customisation to mass personalisation. If I want give you a bar of chocolate for your birthday, for example, I would like the ability, as a consumer, to personalise this for you. “Being a healthier choice is another consideration for us. We’re cutting down on sugar, as most markets are introducing sugar taxes.” Such decisions will create further appeal for consumers to engage in purchasing snacks long-term, yet the company will continue to face challenges, ironically as a result of digital innovation. Evolving consumer buying behaviours and the rise in online shopping will continue to impact the company, as Sy acknowledges that snacks are something of an impulse purchase for many.

May 2018

“This is where our challenge is in Asia. A lot more consumers are going online, so we are working hard to be part of that basket size. We have set ourselves up for a $1bn target by 2020 in ecommerce,” he adds. Manufacturing capabilities The establishment of nine technical centres at Mondelez will consequently work to ensure the company remains ahead of the competition. Its most

THE COMPANY ESTABLISHED A CENTRE IN JURON WHICH WILL W RESEARCH, DEVE QUALITY MANAG

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recent launch of its facility in Jurong, Singapore, will be responsible for its work across research, development and quality management (RDQ) and strengthen the company’s position on the global stage. “We will look at innovations in terms of manufacturing and packaging at our technical centres. Take for example how we create the next generation of chewing gum. Sale of chewing gum is banned in Singapore, but the RDQ of

HAS RECENTLY A TECHNICAL NG, SINGAPORE, WORK ACROSS ELOPMENT AND GEMENT (RDQ)

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M O N D E L E Z I N T E R N AT I O N A L

â&#x20AC;&#x153;A lot more consumers are going online, so we are working hard to be part of that basket size. We have set ourselves up for a $1bn target by 2020 in ecommerceâ&#x20AC;? Henson Sy, Director of Information Technology

May 2018

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our gums is based here,” chuckles Sy. “We test how much can you chew on a gum, the force and pressure, how long the taste will last, all at our RDQ centre in Singapore. We also look at how certain packaging compares to other types of packaging and utilise 3D printing.” The facilities will also feed into Mondelēz’s sustainability goals, where it looks into using sustainable ingredients like palm oil and cocoa (in conjunction with Cocoa Life Program). Mondelēz’s strong brands, its creativity and focus on developing wellbeing snacks in alignment with consumer preferences will secure its position within such a competitive space. Utilising digital tools to promote innovation ensure speed to market and provide increased transparency will see it remain a leader and a source of inspiration across the industry.

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L E A D E R S H I P & S T R AT E G Y

Why Aetna International is in rude health MD for healthcare insurer Aetnaâ&#x20AC;&#x2122;s Asia-Pacific region, Derek Goldberg, details the companyâ&#x20AC;&#x2122;s ambitious aims as it embarks on the latest step of an aggressive regional growth strategy Writ ten by STUART HODGE

Healthcare insurance provision is big business across the globe so it is easy to see why Aetna International has identified Asia as being a key region in its overall growth strategy. Figures in The Economic Times last year estimate that the Asian healthcare market is expected to grow from $1.835trn in 2016 to over $2.66trn by 2020, underlining why Aetna’s 32

May 2018

expansion in the region is rampant. The company has been quite forthright about its aim to go ‘broader and deeper’ into local healthcare markets and the global insurer, which was founded in 1980, believes the recent acquisition of Canadian Insurance Company (CIC) will prove vital in its attempts to penetrate within Asia.

L E A D E R S H I P & S T R AT E G Y

“We will have full control and end-toend capability in Hong Kong, allowing us to design and distribute products more effectively and quickly in the region, thereby enhancing our capabilities as a full-service healthcare insurer in Asia” Derek Goldberg, Managing Director, Asia-Pacific, Aetna International

The latest deal follows hot on the heels of Aetna’s purchase of Bupa Thailand in July of last year and the launch of its own Asian Innovation Hub in Singapore back in 2016. Both of those moves, as well as that with

CIC, form part of the company’s greater strategy to “develop regionspecific health solutions tailored for local markets in Asia”. One of the key factors resulting from the takeover of CIC is that it will now 33

L E A D E R S H I P & S T R AT E G Y

May 2018

“All people want to feel that they are respected, heard, and treated fairly; they want to understand how their role fits into a bigger picture of the company’s strategy so they can know that they have an impact” Derek Goldberg, Managing Director, Asia-Pacific, Aetna International allow Aetna to operationalise its own licence in Hong Kong. According to Derek Goldberg, Managing Director, Asia-Pacific for Aetna International, that will provide a major benefit in what is a key market for the insurer. “The new licence will give us more flexibility in developing our products and services to better suit local customer needs in Hong Kong,” he says. “We will have full control and end-to-end capability in Hong Kong, allowing us to design and distribute products more effectively and quickly in the region, thereby enhancing our

capabilities as a full-service healthcare insurer in Asia. It also affords us much more latitude to develop our brand in the Hong Kong market. “It is a very exciting time for Aetna International in Asia. We have already evolved from a company that primarily supports the financial transaction side of healthcare to a company that supports the holistic health and wellbeing of our customers. Our strategy of going ‘broader and deeper’ is reflective of our intent to continue developing in this direction, and to reach more people around the world with market-appropriate healthcare solutions. We understand that a model that works in one country may not work in another, so increasingly we are building out or acquiring broader capabilities in local markets,” Goldberg adds. But what is it about the Asian market, which is not without its challenges in healthcare terms, particularly when it comes to access for poorer people in some countries in the region, that is so attractive to Aetna? “Asia is a very important market for us,” continues Goldberg. “Key growth drivers here include a large emerging 35

ONE MORE QUESTION FOR GOLDBERG What key trends and developments should we look out for in the global healthcare space over the next year or so? “Emerging technologies continue to drive a forceful shift in how industries such as banking and retail conduct businesses, and similar changes, made possible through digitalisation, will also sweep across the insurance industry, reinventing the sector over the next few years. “One key trend that we can observe is how the use of technology will help provide faster delivery of health services. This will mean greater convenience for patients, by allowing them to engage in things like remote consultations by experienced medical staff. To this end, adapting the member experience to reflect current industry trends is an important area of focus at Aetna. “We will continue the global rollout of our virtual health service – ‘vHealth by Aetna’ – over the next few years. Harnessing the rapid 36

May 2018

proliferation of mobile broadband access, this is an online service that allows our members access to video consultations with primary care doctors – who can advise, prescribe, or refer to a specialist on everyday medical concerns. “A big data revolution is also under way in healthcare. Beyond improving profits through optimising operational processes such as distribution, product development and claims practices, big data in healthcare is being used to predict epidemics, cure disease, improve quality of life and avoid preventable deaths.”

L E A D E R S H I P & S T R AT E G Y middle class, growing interest in wellness, and huge advancements in technology adoption. These factors are opening new avenues for healthcare in Asia, and we have an increasingly critical role to play, together with our partners, in connecting more people with health services in the region. This is why you continue to see numerous strategic investments from us in this region, including acquiring Bupa Thailand business in 2017, acquiring CILC in Hong Kong in March this year, and opening our first primary care clinic in Thailand in April this year. “Looking specifically at Hong Kong, its steady political environment, focus on innovation, as well as a strong consumer awareness and familiarity with insurance products, make it a prime market offering good potential for us to introduce new and unique health cover options. “Its per-capita insurance premiums are among the highest in the region; and its close ties to Mainland China and imminent introduction of a Voluntary Health Insurance Scheme, is likely to lead to the creation of new segments of insurance customers, presenting a further

opportunity for product innovation.” The mention of China is very notable, and as Aetna looks to grow its pool of 650,000 members or customers, it is one country the company has pinpointed as being key. Aetna International’s products are now available in eight Asian countries, expanding from only three just five years ago, and the insurance provider hopes to increase that number considerably in the months and years ahead. The aggressive regional expansion has been undertaken with a mindset of “allowing the company to provide highly-localised services matched with the expertise and benefits of a wider global infrastructure”. And it’s already seeing results, with the acquisition of Bupa Thailand alone adding 300,000 members and over 400 healthcare providers to Aetna International’s network. As well as ensuring that the growth strategy is implemented properly in the region, another thing Goldberg is passionate about is the company’s people. Leadership and the personal development of Aetna International’s employees are both topics close to his heart. 37

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â&#x20AC;&#x153;All employees are encouraged to maintain a development plan with the support of their managers and we have also increased training and development opportunities year-over-yearâ&#x20AC;? Derek Goldberg, Managing Director, Asia-Pacific, Aetna International

May 2018

“Based on my own path to leadership, I believe that a good leader should be very hands on in a broad range of roles within the company,” Goldberg adds. “This foundation gave me good perspective across the entirety of the business and served me well as I advanced. “In my experience, all people want to feel that they are respected, heard, and treated fairly; they want to understand how their role fits into a bigger picture of the company’s strategy so they can know that they have an impact; and they want to understand how they can be supported in their personal development and growth of their careers with the company. “By paying attention to these kinds of fundamentals of human nature while showing common sense and respect towards cultural differences, it is possible to lead successfully across a diverse mix of cultures.” But how exactly does that work in a practical sense? “I always tell my team that they can ask me anything, and I’ve always adopted an open-door policy,” explains Goldberg. “I am also proud to have built an inclusive and diverse

workforce, and our hiring practices promote equal opportunity regardless of gender and background. “I have confidence in the team I have built and they are empowered to make decisions that impact their work. I trust that they will have the right judgement and leave them to go their own way in delivering to the objectives - supporting them simply with the resources they need. “A key area of focus for me has been employee development for the people at Aetna. All employees are encouraged to maintain a development plan with the support of their managers and we have also increased training and development opportunities year-over-year. “One of the metrics that points to success is that at least 20% of our team members have benefitted from internal transfer or promotion opportunities within the past two years. We have numerous examples of employees transferring across international borders to take on new roles. This has allowed the talent in Aetna to advance their skills and careers and we intend to build on this going forward.”

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TECHNOLOGY

Wider electric vehicle adoption requires global energy solutions WITH COUNTRIES THE WORLD OVER INCREASINGLY TURNING TO ELECTRIC VEHICLES, TAAVI MADIBERK, CEO AND CO-FOUNDER OF SKELETON TECHNOLOGIES, INVESTIGATES HOW WE CAN ENSURE THIS ADOPTION IS SUSTAINABLE Written by TAAVI MADIBERK

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HE AUTOMOTIVE SECTOR is evolving at an unprecedented rate. According to the International Energy Agency (IEA), an estimated 50mn electric vehicles will be in operation by 2025, and 300mn by 2040. With BMW, Volvo, and Jaguar Land Rover promising electrified versions of their current models, most of the major car manufacturers have now announced significant investment, re-affirming this shift. Furthermore, with Dyson announcing that it is starting to manufacture electric cars and the European Commission forming a consortium that will drive the development of battery technology, there is no doubt that we are moving towards a world with electric vehicles at its centre. While we are certainly on the road to wider adoption, there is still one main drawback that could thwart public interest: charging infrastructure. Fundamentally, in order to support the innovation and commercialisation of electric

May 2018

vehicles, the right energy technology and infrastructure must be in place. This is critical to ensure the experience matches the hype.

THE RISE OF THE ELECTRIC HYPE Fuelled by the rise in air pollution and political momentum to reduce global warming, electric vehicles have grown in popularity and the technology has improved at a record pace to become a benchmark for innovation in the automotive sector. Competition in the marketplace is also increasing. From the first Prius hybrid model launched by Toyota in 1997, to the more recent full electric

â&#x20AC;&#x2DC;THE CASE FOR MORE ENERGY EFFICIENT VEHICLES IS GAINING MOMENTUMâ&#x20AC;&#x2122;

The Range Rover Sport plug-in hybrid electric SUV signals an electified future

TECHNOLOGY vehicle launches of the Tesla Model S, BMW i3 and Nissan Leaf, car manufacturers are investing in hybrid and electric vehicles and demand from consumers is gradually growing. Couple this with increasing environmental and sustainability regulations and the case for more energy efficient vehicles is gaining momentum.Â The adoption of this technology, however, is hampered by a need to optimise infrastructure to ensure it can support the surge in charging capabilities. Crucially, if the infrastructure cannot cope with peak power points, the adoption of electrical vehicles will reach a standstill.

GLOBAL ADOPTION REQUIRES A UNIVERSAL SOLUTION We already see Britain, France, Norway and China committing to ban diesel and petrol cars in favour of cleaner vehicles. This shift was most recently followed by one of the leaders in the automotive industry: Germany. At this point, it is becoming critical to adopt technology that allows us to smooth over the energy consumption needs that advanced countries are yet to experience. We need to take 46

May 2018

Click to watch Skeleton Technologies â&#x20AC;&#x201C; Global Tech Leader in Ultracapacitor Energy Storage

â&#x20AC;&#x2DC;IF THE INFRASTRUCTURE CANNOT COPE WITH PEAK POWER POINTS, THE ADOPTION OF ELECTRICAL VEHICLES WILL REACH A STANDSTILLâ&#x20AC;&#x2122;

a holistic view to managing energy provision, as we will not be able to rely on drivers of electric vehicles to scatter the time when they charge their vehicles to reduce peak demand. With implementation commitment growing at a rapid pace, there is a pressing need for collaboration that will support solutions for energy technology challenges globally. This can only be done if governments, industry bodies and innovators join forces to support energy storage technologies that complement future developments in the sector. There is a need for a serious discussion on how to implement a stable grid that will be capable of withstanding the increased energy consumption inevitable with electric vehicles. Critical to this will be coping with especially high demand peaks and proving that the grid has the resilience needed for electric vehicles to become a success.

REVOLUTIONISING THE SECTOR It is possible to manage the growing demands on our energy infrastructure and ensure that there is a stable and reliable energy support that will drive the growth of electric vehicles, but 47

TECHNOLOGY it requires a fresh look at our energy storage mix. By investing in energy storage technologies that complement battery power, such as ultracapacitor technology, we can manage peak power needs. Ultracapacitors are one of the lowest cost solutions to helping with grid stability, and can play an integral role in supporting the national grid and managing power demands. Wide-scale electric vehicle charging creates serious issues with demand management, which can potentially cause power blackouts. These blackouts are caused mostly by short

May 2018

demand peaks, which usually last under a minute. This is precisely where ultracapacitors excel. As part of the grid solution, ultracapacitors can provide a means to ensure there are no blackouts during sudden changes in demand. On board vehicles, the technology should be evaluated and used in tandem with lithium-ion batteries in order to downsize the pack and increase the battery lifetime. By introducing capacitive technology to the power unit, it is possible to reach longer lifetimes and support the peak power needs of electric vehicles. However,

in order to do so, we must secure a reliable infrastructure to support this trend going forward. By prioritising investment in infrastructure and encouraging discussion and collaboration between governments, car manufacturers and technology companies, we will be able to create an environment where infrastructure, technology and the consumer act as one. Only then will be able to embrace electric vehicle revolution globally and support a future that is dominated by electrification.

â&#x20AC;&#x2DC;WE NEED TO TAKE A HOLISTIC VIEW TO MANAGING ENERGY PROVISIONâ&#x20AC;&#x2122;

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PEOPLE

IS THE US SKILLS SHORTAGE PART OF A GLOBAL EPIDEMIC?

Jack Coker, Principal, Ducatus Partners, discusses how America can make its infrastructure “great again” as Business Chief finds out whether the current skills gap is a global phenomenon Written by JACK COKER Edited by OLIVIA MINNOCK

PEOPLE

“ Although it will take several generations to rebuild the infrastructure workforce to full capacity, companies can kickstart the process” – Jack Coker, Principal Consultant, Ducatus Partners

THE PEOPLE PROBLEM Modern infrastructure in the US was born from President Franklin D Roosevelt’s New Deal for the American people. Between 1935 and 1943, the Works Progress Administration (WPA) built over 500,000 miles of rural roads, 100,000 bridges and 1000 airfields. The WPA built sewers, tunnels and power lines. Hospitals, schools and fire stations sprang up across the nation. 54

May 2018

However, in recent years this spirit of investment has waned. In every report card since 1998, the American Society of Civil Engineers has awarded a ‘D’ to America’s infrastructure, reflecting chronic underinvestment in the sector. The society also estimates that, unaddressed, this could damage the economy to the tune of almost $4trn lost in GDP by 2025, slashing the disposable income of each household

across the United States by $3,400 each year. Fortunately, change is in the air and major infrastructure investment is back on the political agenda. The problem? There are not enough skilled people to meet demand. Whilst the WPA was created in part to soak up excess labour in the workforce, modern programs are hampered by the lack of it. All over the world, the skillsets required

in the labour market are having to adapt to technology transformation. As the US struggles to keep up with this demand, developments are more positive around the world with governments and educational organisations focussing on better preparing the workforce. Across the Middle East, Europe, Asia Pacific and parts of the Americas, employers are beginning to find it easier to find the right talent, but additionally it has been shown that particularly in Europe, contract, freelance and temporary work are all on the rise. This could point to a workforce adapting to fit their existing skillsets around changing demand. Globally, economic migration is on the up, with migrant workers increasingly of a more educated caliber. While migration can help to plug skills gaps across the world, as there is a bigger pool of talent to choose from for a countryâ&#x20AC;&#x2122;s particularly profitable industries, in many cases restrictions on migration are set to increase, particularly in the UK and US. In addition, wage growth across the EME market has been slow and as such it can be easier to hire new employees than in other regions, like Asia and the US. 55

PEOPLE

“ There are essential A VICIOUS CYCLE individuals who Coming back to the US, underinmake the difference vestment in infrastructure has been a topic of discussion for decades. between on-time, However, the paucity of large on-budget projects infrastructure projects has led civil engineers and specialist managers and multimillionto depart from the industry. This is dollar overruns; and compounded by fewer people seeking a career in the space, and fewer students there aren’t enough enrolling in courses. A vicious cycle. of them” Several states have recognised the need for infrastructure investments. – Jack Coker, Principal Consultant, For example, Connecticut and Ducatus Partners Washington are in the early stages of multi-year transportation improvement initiatives. What’s more, some states overruns; and there aren’t enough have resorted to raising extra funds of them. to try and deal with the situation, A number of issues stem from the including raising gas taxes, a key workforce shortage. Lack of source of funding for road construction. experienced workers means companies In California, 20 of the state’s 58 must relocate employees across the counties already have transportation country on a project-by-project basis. sales taxes in place which has led to Relocation can be expensive, especially an exponential increase in infrastructure in states like California. projects. Unfortunately, even as the Another issue is that human resource money is starting to flow, the workforce and leadership teams focus almost has atrophied. In short, there are exclusively on project start-up to the essential individuals who make the detriment of ongoing roles throughout difference between on-time, on-budget the project lifecycle, resulting in projects and multimillion-dollar a backlog of hires which has a direct 56

May 2018

impact on the bottom line. Project and construction managers with five to 15 years of experience are in particular demand, and positions can remain open for months at a time; especially in the aviation, rail, transit and water sectors. This stretches workloads which in turn increases staff attrition. Another vicious cycle, further compounding the talent crisis. This is a particular problem for US infrastructure, but that’s not to say that other regions aren’t struggling to find staff with the specific skills needed as their economies shift and change.

TAKING ACTION Running into this problem with varying degrees, countries are taking different steps to upgrade the skillsets of their workforce in line with new requirements – but exactly where this responsibility lies is a contentious issue. Udemy recently commissioned a ‘skills gap’ report pertaining to the global work environment. This showed that the majority of workers around the world agree there is a growing skills gap, but largely feel “optimistic about their own skills and the competitiveness of their respective countries”. 57

PEOPLE On a worldwide scale, Udemy CEO Kevin Johnson stated: “the nature of jobs is quickly changing with automation, globalisation, government policies and other factors, making it impossible for anyone to predict which skills a job will require in the future. This only serves to widen the perceived skills gap.” In the US, 79% of full-time employees according to Udemy believe there is a skills shortage and 35% “feel personally affected by it”, but 80% of these believe that workforce reskilling will be successful. In terms of reskilling efforts, 41% think the government, through tax benefits or otherwise, should contribute. Udemy’s report analysed five global markets and found that in France, staff largely don’t feel the need to upskill, with 75% stating that they were confident with their current skill set – however in Brazil, 98% of those surveyed acknowledged the existence of a skills gap in their country. In terms of responsibility, 50% of Mexicans felt that it was up to the individual to upskill, with 17% placing responsibility on the government and 13% on employers. It was also found that some people have taken on a second 58

May 2018

job in order to utilise their skills in a more appropriate way, with 39% of Americans describing themselves as having a “side hustle” in comparison with just 18% in both Spain and Germany. In the US, there are doubtless deepseated issues that will not be solved overnight. However, with mega-projects in construction and infrastructure in the offing such as those tied to the 2028 Olympics, California’s high-speed rail and LAX’s $5mn upgrade program, there is no time to wait. With that in mind, the question is: how can companies

“ Human resource and leadership teams focus almost exclusively on project start-up to the detriment of ongoing roles throughout the project lifecycle, resulting in a backlog of hires which has a direct impact on the bottom line” – Jack Coker, Principal Consultant, Ducatus Partners

best manage and mitigate workforce issues to ensure projects are on schedule and on budget?

PROACTIVE TALENT MAPPING AND EDUCATION By partnering with a specialist executive search provider, companies can build a map of where talent is and where it needs to be. Talent mapping is about proactively building a virtual ‘bench’ of talent, anticipating need, and successfully mitigating unnecessary cost. Mapping allows companies to

proactively engage candidates which significantly reduces time to hire. Upon the award of a large infrastructure project, a high-potential candidate pool is identified, engaged, and ready to be mobilised. In locations that are difficult to recruit to, either due to high costs or low desirability, talent mapping is especially useful. Although it will take several generations to rebuild the infrastructure workforce to full capacity, companies can kickstart the process. By working in partnership with colleges, companies can start to mould the next generation by putting the right skills in place, imparting knowledge, and developing talent pipelines through internships. When the time comes for graduates to seek full-time positions, companies may benefit from having built respect and loyalty with interns. According to World Atlas, one of the countries suffering an even greater skill shortage than the US – indeed the ‘worst’ in the world – is Japan, and education is a leading cause. “Japanese companies are faced with potential employees lacking knowledge of the global markets,” the report argues, putting this down 59

PEOPLE to a “rigid” educational system which does not equip Japanese students for the modern world. In China, as it strives to overtake the US as an AI superpower, finding the correctly skilled individuals is paramount and has become a common issue for companies according to the Global Skills Index. Therefore, issues in transforming the economy aren’t

isolated to the US alone, but in China they are increasingly in the form of new technology skills and the ability to manage a tech-based enterprise, which often has to come from employees educated in the US or Europe. High costs of hiring mid-to-high management have resulted in MNCs being reluctant to set up core research centres in China, according to China Daily, which adds

“ In locations that are difficult to recruit to, either due to high costs or low desirability, talent mapping is especially useful” – Jack Coker, Principal Consultant, Ducatus Partners

May 2018

that China is making more efforts to work with universities, “especially top engineering institutions”. It is widely agreed in China that the likes of AI and Big Data should be exploited, but employers are now forced to look at the skills and talent pool on a global scale. The government has launched guidelines on focussing talent development in manufacturing, including integrating industry and education, promoting key adaptable abilities and qualities, and “establishing a high-level management skills pool”. While China leans more toward a planned economy than most, government involvement may be a direction for other economies to consider when dealing with the global skills gap. Although young talent is slowly entering the industry in the US, experienced talent is quickly flowing out. Senior talent is retiring and leaving an institutional knowledge gap. Companies have a responsibility to eliminate this from happening. Developing concrete succession plans to transfer knowledge and skills to the next generation minimises the risks to the retirement process. This applies across the organisation, from the

Jack Coker is a principal consultant at Ducatus Partners, an executive search and leadership consultancy focused in the global energy, infrastructure and process industries. He has significant search experience in both Europe and the Americas, serving a broad range of clients spanning architecture, engineering and construction across the energy, power and civil infrastructure sectors. Jack holds a Master of Science degree in Environmental and Earth Resources Management from Kingston University, London and a Bachelor’s degree, with honours, in Geography from the University of Portsmouth.

C-Suite, project leadership to the experienced niche engineers. Will the rediscovered appetite for infrastructure investment be enough for the US? Or is it a case of a day late and a dollar short? Only time will tell, but companies the world over can be sure of one thing: smart workforce planning and talent management is essential to successful project delivery. 61

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S U S TA I N A B I L I T Y

tay true to what you are

Marketing expert Allen Adamson tells us why businesses must be careful not to dilute their brand when introducing new products Written by STUART HODGE

S U S TA I N A B I L I T Y

E LIVE IN a changing marketplace. Although all of the traditional staples of customer service are still welcome, they are becoming less important to a new generation that had grown up with the ubiquity of online shopping platforms and a plethora of choices like never before. More and more highstreet retailers are suffering at the hands of the growth of at-home pointand-click shopping, and it seems that the power of a strong brand identity is greater than ever before. With this in mind, Business Chief spoke to branding expert Allen Adamson, author of various books esteemed at universities globally on the topic, including his latest title ‘Shift Ahead: The Best Companies Stay Relevant in a Fast Changing World’. He spoke to us about how the power of brands is changing in the modern world, and the challenges of diversifying in a changing landscape. “In my world a brand is what your story is,” he says. “One of the challenges that many marketers face is ‘what is their story? What do they stand for?’ Once you figure out your story, your 66

May 2018

brand, what has become increasingly difficult is ‘how do you get that story out there?’ Like many things, a theory in marketing and branding is pretty easy, but execution is really hard. What I mean by that is people only recommend extraordinarily good things or talk about extraordinarily bad things. They don’t recommend or talk about things that are just ‘okay’.” Consumer habits are no doubt changing too. In fact, a recent study by EFG Companies looking at digital

“ People only recommend extraordinarily good things or talk about extraordinarily bad things. They don’t recommend or talk about things that are just ‘okay’” – Allen Adamson, Co-Founder at Metaforce

purchasing in the car market revealed that half of customers will now check reviews online before even contacting a dealership. Not just that, but the study would also indicate that we are becoming more picky and impatient: 43% of the pool of almost 1,500 respondents said that they were more likely to visit a dealership if it had plenty of information on its website, and 83% expected a response from the dealership within 24 hours of sending an online vehicle inquiry, with 16% 67

S U S TA I N A B I L I T Y

“ If you don’t look good, most consumers are not going to read the product specs to find out what’s inside” – Allen Adamson, Co-Founder at Metaforce

May 2018

wanting information immediately or within the hour. However, the nature of the response people are expecting has changed, with only 9% wanting a phone call from the dealership after they’ve submitted an online request. Not just that, but Adamson believes the way we are interpreting the world around us now is changing the way that consumers are recommending products. He says it’s now more often about how they appear visually than whether they’ve been recommended by one person to another. “Younger consumers are spending more and more of their time sharing stories, sharing ideas, sharing pictures,” says Adamson, who is also the founder of marketing and branding consultancy Metaforce. “With that in mind, I think ‘word of eye’ is becoming more important than word of mouth. I think the quality or the visual appeal of things is growing in importance because people are visual to begin with, and now that they can share pictures as fast as they can share words and ideas, you have to look good no matter what you’re doing. 69

S U S TA I N A B I L I T Y

“A couple of years ago I went to the Consumer Electronics Shows in Vegas and no matter which manufacturer I looked at, from 20 companies from China and from India that I’ve never heard of to Apple, Sony and Samsung, everyone’s products looked spectacular. All of a sudden, even the cheapest products looked incredibly stylish. Now, if you don’t look good, most consumers are not going to read the product specs to find out what’s inside. They’ll make a snap decision and if you don’t look good, you can’t fix it.” Another trap that manufacturers have to avoid falling into is having too myopic a viewpoint. If you are Coca-Cola, don’t just look at Pepsi as your major competitor or you could fall off the pace. With so much choice out there now, every soft drink manufacturer is a competitor. Blackberry is a prime example of a company which has suffered from being too tunnel-visioned in its approach. The Canadian smartphone provider did help to drive the boom in smartphone pervasion, but staunchly believed that consumers would never 70

May 2018

“ You have to make sure that whatever product you go into, the benefit of your brand is still delivered” – A llen Adamson, Co-Founder at Metaforce

move away from using a keyboard. The entire management team was convinced that the iPhone and touchscreens were a toy that kids would be playing with, but that any serious person typing out messages for business would never give up their keyboard. This undiversified view was why Apple and other competitors were able to steal a march and ratchet up their market share.

It’s a danger for every company, but do these changes in consumer behaviour and the requirement for increased brand awareness mean it’s now harder to diversify your line of products within an overarching brand identity? Adamson doesn’t believe so, but he does feel companies need to be a little cleverer about how they do it, ensuring that the integrity of what their company

stands for is not compromised. “You have to make sure that whatever product you go into, the benefit of your brand is still delivered in that new category or that new segment and it reinforces what the core idea is,” he asserts. “I think BMW has been pretty successful switching from sports sedans to SUVs. Yes, their SUVs perform differently than their other models but when they talk about why their SUV is better than other SUVs, it’s still tied to that core idea of ‘the ultimate driving machine’. If you’re in an SUV, ‘the ultimate driving machine’ lets you go through a riverbed and up an incline without tipping the car over, and through mud and muck. If you’re driving a sports sedan, that means you can go around the corner on the highway at 60mph and not feel that you’re going 60mph around the corner. They have a clear definition of what BMW-ness is. “Now they’re experimenting with electric cars, the definition of what ultimate driving means has some latitude but no matter what it is, the worst thing you can do to a brand is to line-extend it or diversify into 71

S U S TA I N A B I L I T Y a product that’s unsuccessful and is rejected by the market. Because not only will you miss the opportunity to sell SUVs if you’re BMW, but you’ll do more damage to your core product line.” An example of a company losing vision of what made its brand truly special, as Adamson illustrates in his latest work, is Sony. “Sony used to stand for magical things when they first were around,” he says. “Their television sets, their screens had matchably better colour than anyone

else’s. When you put on their Walkman 20 years ago, the sound was phenomenal. Then they started to stick the Sony name on products that didn’t give you goosebumps like clock radios, shower radios… not quite toasters, but they put their name on everything and all of a sudden on phones that were not that good. “I think the key part of success today is being able to deliver your brand benefit in whatever form your customer wants it. The trick is not to go so far

“ If you can’t deliver a great experience at these new diversification points then you’re basically diluting your brand, you’re stretching it too thin” – Allen Adamson, Co-Founder at Metaforce

May 2018

where you’re just extending and, like the Sony story, you have nothing special. When we look at brand extension we look at both fits. Yes, the Sony brand can fit in shower radios but does this have any leverage? “If you can’t deliver a great experience at these new diversification points then you’re basically diluting your brand, you’re stretching it too thin. You are looking at short-term sales versus longterm success. More and more brands have stretched so far that they don’t

stand for anything because they become diluted. Famous theory is ‘the stronger the focus, the stronger the brand’. If a brand stands for everything and is in every category it’s going to lose its success. “All of sudden people looked at Sony and said ‘oh, it’s not that special. Their phones aren’t that good. The shower radio is not that great’. They lost their sizzle because they diversified well beyond their ability to deliver a core Sony experience.”

TA CITY FOCUS

Headline

Seque rest volorum aute velestio intem illibus es qui ut alit et, sita iuntur? Writ ten by AUTHOR

LOCATED IN THE NORTH OF TAIWAN, WITH A POPULATION OF 2.7MN, TAIPEI IS CONSIDERED AN ASIAN EXPORT HUB, WITH A PRIMARY FOCUS ON HIGH-TECH ELECTRONICS AND MACHINERYâ&#x20AC;¦

PEI Writ ten by HARRY MENE AR

CITY FOCUS OF TAIWAN’S CAPITAL, Alex Scroxton wrote in Computer Weekly: “It is a humid, crowded and intense place, but for those who seek an understanding of the IT industry that goes beneath the surface, it is a place of pilgrimage.” In 2016, Scroxton travelled to Taiwan to examine the ways in which the small, politically-isolated island is preparing to embrace “the next evolution of IT – the connected, digital, smart society and, of course, the internet of things(IoT).” IoT is predicted to be one of the world’s leading growth industries; according to an American Chamber of Commerce report in

May 2018

2017, “IDC forecasts global annual growth of nearly 17% for IoT hardware, software, services, and connectivity. Another leading research firm, IHS, estimates that more than 30bn devices will be connected by 2020, with the number rising to 75bn by 2025.” According to Scroxton, “at the heart of the IoT are sensors, components and silicon, so… it is hardly a surprise that Taiwan is taking the lead here.” The manufacturing of high-tech electronics is central to the country’s economy. Three of the world’s largest electronics manufacturers are based in Taipei: Hon Hai Precision Industry (which trades as Foxconn)

CITY FOCUS is the world’s largest electronics manufacturer and generated $135bn in net revenue last year; electronics and computer designer Pegatron reported $35.9bn; and notebook manufacturer Quanta Computers reported $27.72bn. Taipei’s identity as a tech exporter results in an economy that is, to a large degree, linked to external markets. According to Forbes, “global strengthening should push growth to 3.6% this year and add another 0.1 percentage points in 2018, the IMF says.” While this heavy dependence on exports exposes the economy to fluctuations in global

May 2018

demand, rising demand for the semiconductors in the production of phones and PCs is predicted to put Taipei’s leading manufacturers in a powerful position to capitalise on the growing Internet of Things. The Taiwanese government announced this year that is has allocated $357.9mn to the improvement of internet infrastructure, mobile broadband services, ecommerce, smart applications, test beds, industryuniversity collaboration, digital

talent, and regulatory adjustment. The government has also set aside radio spectrum in the sub-gigahertz range for IoT use and has approved an initiative to ease restrictions on companies that invest in the IoT. Additionally, large customer-facing corporations are making inroads in the IoT market. Taipei-based corporation Kbro Co. is the nationâ&#x20AC;&#x2122;s biggest

cable television system operator. The company announced in March that it will be providing voice control services on Android-based set-top boxes later this year, according to a report in the Taipei Times. Kbroâ&#x20AC;&#x2122;s CTO,

CITY FOCUS Alex Hsieh, said: “As voice control technology becomes more mature, it is time for us to embrace the IoT era.” In addition to adding voice-control integration to its set-top boxes, Kbro announced its plans to include Chinese-language recognition platforms, and community projects like “smart surveillance services that could include time-lapse videos and a license plate recognition system”. Kbro has set aside $68.3mn in capital spending this year to develop and deploy these new networks and features. The company hopes to increase its subscriber base by 50%, from 40,000 to 60,000 as a result of IoT-integrated services in 2018. According to Scroxton, “it is not merely big hardware companies ... developing IoT systems in Taiwan”. Taipei-based startup incubator Mediatek Labs is “driving this explosion in devices by continuously innovating across a range of systems on a chip (SoCs) to deliver the processing power, battery life, compact size and sensing capabilities at the cost points needed for the mass market”. The company provided

May 2018

CITY FOCUS

$300mn in funding worldwide in 2015. The Taipei-based IoT hardware manufacturing startup Seraphim creates cutting-edge optical tech that sits “at the intersection of hardware and software for wearable technology”. One of its products, Odin, is a mouse that also uses lasers to project a functional workspace onto

May 2018

a desk. Another project, the Keybo, “is the world’s most advanced virtual laser projection keyboard and piano. In just a second, it can turn any flat surface into your keyboard or piano”. The product is currently being funded through Kickstarter. As Serafim CEO, GZ Chen, told Computer Weekly in 2016, “it is not easy to find money

in Taiwan. We got out first funding round from Japanese investors”. Now, however, with increased investment from the Taiwanese Government and the private sector, Taipei’s ecosystem is set to expand. Growth in overseas IoT spending will produce elevated demand for related hardware and tech in Taiwan’s capital.

TOP 10

COMMERCIAL BUILDINGS IN ASIA

Business Chief examines the 10 largest commercia developments in Asia, ranking them by square foo Writ ten by HARRY MENE AR

al otage

TOP 10

10 KEMANG VILLAGE â&#x20AC;&#x201C; 7MN SQ FT www.kemangvillage.com Located in the southern quarter of Jakarta, Indonesia, the Kemang Village is an integrated commercial and residential development with a total floor area of 7mn sq ft. The development centres around a 4.2mn sq ft mall developed by the Lippo Group. The Lippo Mall contains commercial locations belonging to Debenhams Department Store, Hypermart, Cinema XXI, Best Denki, Fitness First Platinum and ACE Hardware. There are also several major tenants such as Marks and Spencer, Timezone, iBox and Eatery Food Court.

May 2018

CENTRAL PARK JAKARTA â&#x20AC;&#x201C; 7.05MN SQ FT www.centralparkjakarta.com Central Park Jakarta is a mixed-use residential and commercial complex in West Jakarta, Indonesia, with a total floor space of 7.05mn sq ft. The complex contains 42 floors of office real estate, 56 residential floors, a nine-floor shopping mall, and a 12-floor hotel, developed and built by the Agung Podomoro Group. Central Park Jakarta received the Asia Pacific Highly Commended Retail Award, and the National Best Retail Development Award from the Asia Pacific Property Awards in 2011.

TOP 10

BERJAYA TIMES SQUARE â&#x20AC;&#x201C; 7.5MN SQ FT www.timessquarekl.com With a total build-up floor space of 7.5mn sq ft, Berjaya Times Square is the largest building in Kuala Lumpur, Malaysia. The development was officially opened in 2003 by then Prime Minister of Malaysia, Mahathir bin Mohamad. The twin tower development contains a hotel, condominium, indoor amusement park and shopping centre complex. The commercial centre is host to over 1,000 stores, 65 food outlets, and 1,200 luxury service suites. Over 2.5mn people visit the mall each month.

May 2018

07 CIPUTRA WORLD SURABAYA â&#x20AC;&#x201C; 8.1MN SQ FT www.hotelciputraworld.com Located in southern Surabaya, Java, Ciputra World Surabaya is the largest commercial building in Indonesia, with a total floor space of 8.1mn sq ft. The complex contains four residential towers named The Via, The Vue, The Viola and Sky Loft, in addition to a hotel and mall. In 2018, Ciputra World played host to the second Soerabaja Start-up Fest, an event focusing on the small-to-medium business ecosystem in Indonesia, was held in the buildingâ&#x20AC;&#x2122;s Atrium.

TOP 10

06 SANDS COTAI CENTRAL â&#x20AC;&#x201C; 9.6MN SQ FT www.sandscotaicentral.com Sands Cotai Central is a luxury resort and casino located on the Cotai Strip in Macao, China SAR. The complex has a total area of 9.6mn sq ft, and is composed of four hotels: the Conrad Macao, the Holiday Inn Macao, the Sheraton Grand Macao Hotel, and the St. Regis Macao. First opened in 2012, by architecture firm Aedas, the development cost $4.1bn, with the final resort tower opening in 2015.

May 2018

THE VENETIAN MACAO – 10.5MN SQ FT www.venetianmacao.com With a total floor space of 10.5mn sq ft, also located on the Cotai Strip, The Venetian Macao is not only the largest commercial building in Macao and the largest single structure hotel building in Asia, but also the largest casino in the world. Developed and constructed by the Las Vegas Sands company in 2007, the Venetian Macao has “virtually quadrupled” the city’s annual revenue in the past decade from $7bn in 2006 to $27.6bn last year, according to the South China Morning Post, which adds: “Macau visitor arrivals have expanded from 22mn to a projected 32mn this year.”

TOP 10

BEIJING CAPITAL INTERNATIONAL AIRPORT TERMINAL THREE – 10.61MN SQ FT en.bcia.com.cn With a total footprint of 10.61mn sq ft, Beijing Capital International Airport Terminal Three is the largest air transport operation in China, and the central hub for government-owned Air China. Opened in 2008, for the Summer Olympics, Terminal Three has since steadily climbed the ranks to become the world’s secondbusiest airport, after Hartsfield-Jackson Atlanta International. According to the National, passenger traffic reached 95.8mn last year, a new record but perhaps unsurprising since China is set to be the world’s biggest aviation market by 2022.

04 92

May 2018

03 CENTRALWORLD – 11.02MN SQ FT www.centralworld.co.th/index.php Located in Bangkok, CentralWorld is the largest retail complex in Southeast Asia, with a total footprint of 11.02mn sq ft. Originally named The World Trade Centre, CentralWorld opened as an eight-floor mall in 1990, expanding and rebranding in 2001, 2006, and 2016, with current renovations expected to be completed by the end of 2018. According to Bangkok.com, CentralWorld is 30% larger than any other shopping mall in the city’s centre, and comprises over 500 shops, 100 restaurants and cafés and 15 cinemas. Centralworld is owned by Pattana PLC, which has maintained an above 90% occupancy rate of the mall’s locations, despite socio-political unrest in 2010.

TOP 10

May 2018

NEW CENTURY GLOBAL CENTRE – 18.9MN SQ FT www.youtube.com/watch?v=Sk6KmhvZNBA Located in the Sichuan Province of southwestern China, the New Century Global Centre opened its doors in 2013 and is currently the largest free-standing multi-purpose commercial and retail building in the world. With a total footprint of 18.9mn sq ft, the centre “is capable of housing the equivalent of 20 Sydney Opera Houses and is almost three times the size of the Pentagon in Washington, D.C.” the Independent reports. The Guardian says that according to its creators, the New Century Global Centre is “a landmark which commands the world and is looked upon by the world with respect”.

01 YIWU INTERNATIONAL TRADE CITY – 59MN SQ FT www.yiwu-market-guide.com With over 59mn sq ft of floor space housing 62,000 individual vendors which sell 400,000 types of product, Yiwu International Trade City is the largest small-commodity wholesale market in the world, according to Business Insider, and by far the most expansive building on our list. Located in the southeastern Chinese province of Zhejiang, the Yiwu International Trade City is comprised of five districts that sell 60-70% of the world’s exported Christmas decorations and toys. CNN reports: “An estimated 40,000 visitors make their way into Commodity City every day. Many of them are retail buyers,” adding that “because of the large number of visitors and their diverse backgrounds, buyers and sellers typically communicate utilizing translators that work in the market permanently”.

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TOP 10

POWERING PEMEX INTO PROFITABILITY Written by Tom Wadlow Produced by James Pepper

RODRIGO BECERRA MIZUNO, CORPORATE DIRECTOR AND CIO AT MEXICO’S LARGEST ECONOMIC CONTRIBUTOR, REVEALS HOW TECHNOLOGY IS PLAYING A CENTRAL ROLE IN THE IMPLEMENTATION OF THE OIL AND GAS COMPANY’S 2017-2021 BUSINESS PLAN

n 20 December 2013, Mexico’s oil and gas industry entered a new age. Having operated under a monopolised umbrella for 75 years, President Enrique Peña Nieto signed a momentous energy reform bill which opened up the country’s largest revenue-generating Technology to private competition. For national oil and gas giant Petróleos Mexicanos (Pemex), this signalled a huge about-turn, an overnight change of course not witnessed since its formation in 1938. A massive transformation was required, from a company operating as a monopoly to one that can stand up to competitors. Once charged with delivering hydrocarbon energy across the whole of Mexico at whatever the cost, Pemex is now focused on efficiency, profitability

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and long-term survival. It was the enormity of this challenge which lured Corporate Director and CIO Rodrigo Becerra Mizuno away from a decade of servitude at Microsoft. “I thought this would be the biggest professional challenge of my career,” he recalls, “so when CEO at the time Jose Antonio González Anaya invited me, I was extremely excited. I knew technology would be at the forefront of this transformation. “On top of this, Pemex is the largest company in Mexico and one of the largest in the world.” The numbers back this up. As the eighth largest oil producer and drilling company in the world, Pemex’s $52bn revenue is equivalent to the entire GDP of Uruguay. It generates 2.5mn barrels of oil and 6mn cubic feet of natural gas a day,

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PEMEX IS THE LARGEST COMPANY IN MEXICO AND IN THE TOP 100 LARGEST COMPANIES IN THE WORLD. HERE ARE SOME OF THE NUMBERS THAT MATTER

>$52BN

ANNUAL REVENUE

70+

NUMBER OF DIFFERENT PRODUCTS SOLD

delivering this to over 11,000 service stations in Mexico and abroad via 83 land and sea terminals. From exploration, production and refining to logistics and marketing, Pemex covers the entire value chain. Technology and the road to profit While the enormity and scope of operations no doubt presents a competitive advantage over new entrants to the market, it exemplifies

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2.5MN

NUMBER OF BARRELS OF OIL PRODUCED A DAY

NUMBER OF PEMEX REFINERIES

the challenge Becerra Mizuno and the Pemex leadership are facing. The 56-page 2017-2021 Business Plan signposts Pemex’s road to profitability, and notably sets a target to achieve financial balance in 2019/2020. Technology will be crucial to realising this ambition. “If certain markets we are serving are not profitable, we don’t have to operate in them anymore,” Becerra

TECHNOLOGY

NUMBER OF PEMEX GAS PROCESSING PLANTS

NUMBER OF PEMEX PETROCHEMICAL FACILITIES

Mizuno says. “In that case, we have to make better decisions with the information or the data that we have. That’s where technology plays a major role, because it can streamline our operations and create a better more profitable and safer environment.” Brief set, what did the technology landscape look like when Becerra Mizuno arrived in September 2016?

“I found that Pemex had a large amount of technology infrastructure. They own it, they develop it, they construct it, they deploy it. Everything was done in-house. I said to myself, we need to change.” Much of this sprawling infrastructure owes its existence to a self-built telco network, the second private largest in the whole country, which includes 130,000 phone lines and 10 data centres. Pemex was founded nine years before Mexico’s national telecoms company Telmex, and hence had to build its own communications capability from scratch. There was a time when people who worked for Pemex had two telephones at home: one from Pemex and the other one from Telmex. “They got used to building their own technology infrastructure from the bottom up,” Becerra Mizuno says, “and they used to do it extremely well. But the world changed, and there are people that can do it better, because they specialise on that.” Privatisation of these telco assets has proven vital in simplifying

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PEMEX’S PARTNER IN DIGITAL TRANSFORMATION Huawei is a leading global Information and Communications Technology solutions provider. Our industry-leading products and solutions have been deployed in more than 170 countries. In the 2017 Global Fortune 500 list, we ranked 83rd, thanks to our customer-centric vision and yearly investment in R&D (at least 10 percent of revenue). Huawei has delivered services to 70 percent of the world’s top 20 oil and gas companies. Mexico and Spain are prime examples. Mexico — Pemex, the largest company in Mexico, dedicated to petroleum and petrochemicals, is undergoing a major Digital Transformation project, expected to be the largest of its kind in the Latin America O&G Industry. Huawei helps Pemex ICT transformation by successfully deploying Agile Campus and IMS(IP Multimedia System) solution. Based on integrated networking and collaboration solution, more than 60,000 employees distributed in 13 branches enjoy ultimate experience. Huawei 8-inch HD video phone provides easy and secure collaboration, Agile campus switch makes network intelligent and smoothly evolution for future. At the same time, Huawei unified solution accelerates and simplifies Pemex network operations, improve O&M efficiency by 50 percent. Spain — CEPSA, one of the leading energy companies in Spain, has to process massive amounts of data during crude oil exploration and production, therefore, there is a need for an effective data analysis solution in order to improve exploration and production efficiency. As CEPSA’s business grew rapidly, traditional databases failed to meet ERP system requirements and were holding back business development. Additionally, traditional servers and storage require high maintenance skills. CEPSA was looking for a cost-effective solution that could be flexibly expanded. Huawei provided solutions for CEPSA, including mission-critical servers, storage, switches to build a reliable and stable new-generation database system. Huawei servers greatly enhance CEPSA’s ERP system performance, which has led to an improvement in production efficiency. CEPSA’s financial analysis system has doubled the number of transactions it can process, meeting strict service requirements.

Huawei servers achieve a failure rate 15% lower than industry average, guaranteeing that the system runs reliably. Huawei uses industry standard components, greatly reducing costs for procurement and future capacity expansion.

Huawei cooperates closely with top global partners in the oil and gas industry. In oil and gas industry, we focus on digital pipeline, oil and gas IoT, High-Performance Computing (HPC), and operations management application platforms. Huawei is committed to providing one-stop ICT infrastructure solutions. Meanwhile, we have established an open, diversified, and win-win ecosystem. These include underlying automation enterprises, upper-layer application providers, and oil and gas engineering design enterprises worldwide. • Huawei’s server and Schlumberger’s reservoir analysis software have completed integration and admission testing • Huawei and Honeywell have jointly developed and officially released a wireless gas detection solution based on Huawei eLTE • Huawei and PCICT, a branch of Sinopec, together have developed a smart engineering solution for oil refining

Huawei is commited to being Pemex’s best partner in its digital transformation. Huawei is dedicated to building innovative infrastructure platforms for enterprise digital transformation by making optimal use of emerging technologies, such as cloud computing, SDN, Big Data, and the IoT. Also, by working closely with skilled partners, Huawei helps enterprises attain their goals of agile, intelligent digital upgrades. To date, 197 companies in Fortune’s Global 500, 45 of which are in the top 100, have selected Huawei as their partner for digital transformation. Huawei looks forward to implementing digital transformation with you and creating a fully connected and intelligent world.

PEMEX

“I FOUND THAT PEMEX HAD A LARGE AMOUNT OF TECHNOLOGY INFRASTRUCTURE. THEY OWN IT, THEY DEVELOP IT, THEY CONSTRUCT IT, THEY DEPLOY IT. EVERYTHING WAS DONE IN-HOUSE. I SAID TO MYSELF, WE NEED TO CHANGE” - Rodrigo Becerra Mizuno, Corporate Director and CIO

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Pemex’s technological landscape, which Becerra Mizuno stresses needed streamlining with a degree of urgency. “We needed to kickstart this immediately because we are working on the political clock, so we had to hit the ground running.” Becerra Mizuno is referring to upcoming presidential elections which, depending on the result, could signal further reform at Pemex. The need to demonstrate the viability of the 2017-2021 Business Plan to any incumbent administration, and indeed the Mexican public, is therefore paramount.

THE GREAT ENABLER Tangible progress has already been made. According to Becerra Mizuno, $50mn of savings have already been realised through strategic moves such as telco asset stripping, and by the end of the year Pemex will be relieved of its data centre management burden, instead operating on a hybrid cloud model and paying on demand for what it uses. Becerra Mizuno also points to a shift in spending priorities. “When

I arrived, our budget was 90% focused on investment, 10% on operational excellence. That means that 90% of things we did here with our budget was purchasing, which is how we arrived at this point where we have amassed a large amount of infrastructure.” “This year, we’re shifting that mix to 70% opex, 30% capex. We’re still not done, but we have changed the way we’re doing business now. We’re hiring service, not buying it.” The CIO points to the influence of both CEOs he has worked under – Jose Antonio González Anaya and now Carlos Treviño Medina. Without their leadership, much of this change would not have materialised. This shift in priorities is better demonstrated by the recent Pemex Drive event, which invited key industry stakeholders to learn about the company’s new technologydriven strategy. “We also wanted to create excitement around the company, which had been lost. It’s only now been revived by this and many other factors as well, including the efforts of the CEO.”

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Automation and the Industrial Internet of Things

Why is is everyone everyone talking talking about about it? it? Why Improved sensing technologies Cost-effective, secure connectivity Advanced computing and analytical methods

Leveraging decades of digital automation expertise, Emerson introduces the expanded Plantweb digital ecosystem, a scalable portfolio of standards-based hardware, software, intelligent devices and services for securely implementing the Industrial Internet of Things (IoT) with measurable business performance improvement. Plantweb becomes the most comprehensive and integrated Industrial IoT portfolio in the industry.

@EMR_Auto_Latam @EmersonAutomationLatam

IIoT, the key to achieve a Top Quartile Performance in the oil and gas industry Oil and gas companies strive to meet business and performance goals. Constantly changing market dynamics and operational challenges can make it difficult. Whether you are producing from a conventional or unconventional field, key challenges like reducing operating costs, minimizing HSE risks, and maximizing production are paramount. For decades, the industry has primarily used closed, private networks to control critical plant functions, or Operational Technology (OT). But in recent years, oil and gas companies have been among the first to explore Internet of Things (IoT) applications that enable more widespread and cost-effective monitoring and control of facilities, along with reduced costs and increased flexibility. Companies are dramatically improving the speed and accuracy of decision-making based on having the right information in the hands of the right expert, no matter where they sit. The Industrial Internet of Things (IIoT) is ushering in a digital transformation that enables companies to exploit technology and expertise better than ever before, but only if the right scalable technology strategy is matched to your business goals. The digital era is a reality for oil and gas leaders like Pemex, where state-of-the-art technology will bring about important operating improvements and increase productivity throughout the company’s value chain. Digital transformation has become a fundamental tool to bring about a change that will lead the company towards modernity and that will help Pemex face the challenges of the new Mexican energy model. This digital transformation will add value to production, reduce the overall costs of production processes, and optimize and streamline logistics, in addition to increasing the operating security of the company. This is why Emerson introduces the extended the extended Plantweb Digital Ecosystem, a scalable portfolio of standardsbased hardware, software, intelligent devices and services for securely implementing the Industrial Internet of Things (IIoT) with measurable business performance improvement. Plantweb Digital Ecosystem harnesses the power of Industrial IoT to expand digital intelligence to the entire manufacturing enterprise, while also providing an architecture for on-premise applications. Plantweb provides a comprehensive framework to help manufacturers achieve Top Quartile performance in the areas of safety, reliability, production and energy. Top Quartile is defined as achieving operations and capital performance in the top 25 percent of peer companies. In addition to highly secure process control, safety and asset management systems, Plantweb supports enterprise-wide operations with an expanded portfolio of Pervasive Sensing field instruments, the Secure First Mile family of software, gateways, security devices and services, the Plantweb Insight™ and Plantweb Advisor™ scalable suite of software applications, the Plantweb Optics™ Platform, and Microsoftenabled, cloud-based remote expert Connected Services.

Pervasive Sensing expands the industry’s largest portfolio of measurement and analytical technologies. Secure First Mile is a security architecture that allows customers to selectively connect highly secure data from protected control and operation systems (OT) to operational performance applications in the cloud environment (IT). Plantweb Insight Software provides a comprehensive, lightweight portfolio of IT-friendly applications with analytics for monitoring asset health which can run independently of existing business systems and distributed control systems (DCS) and provide a simple and powerful entry point to Industrial IoT. Plantweb Advisor Software is a robust suite of integrated analytical expert applications for asset health, performance modeling and facility-wide energy optimization. The widely adopted OSIsoft PI System’s highly scalable open data infrastructure is used as a platform for these applications. Plantweb Optics is a mobile-ready collaboration software platform that provides cross-functional collaboration and decisionmaking to help plants operate safely and profitably. Lastly, Connected Services is an Industrial IoT-enabled cloud services offering for real-time monitoring of important assets’ health, energy consumption and other operational applications. But the Industrial IoT is not only transforming the way information is conducted across the company to improve decision making. Industry is at a critical inflection point where efficiency-focused operational improvement programs have reached a point of diminishing returns, and personnel are being strained to achieve more with less than ever before. In the next era of manufacturing, Top Quartile performers will embrace digital transformation through the Industrial Internet of Things (IIoT) to accelerate, institutionalize, and sustain best-in-class behaviors across their workforces. The Emerson Digital Workforce Experience, is an immersive experiential environment that transforms, via Industrial IoT, the nature of work and improves workers’ lives through real-life work scenarios in five key industrial areas: project engineering, commissioning, control and simulation, maintenance, and reliability. The Digital Workforce Experience empowers workers to transform traditional behaviors and deliver value in fundamentally new ways by adopting innovative approaches enabled by Emerson’s Plantweb digital ecosystem. In summary, the potential of the Industrial Internet of Things (IIoT) is bound only by the limits of our creativity. But its realization will forever be tied to security. This trend is already playing out among early Industrial IoT adopters in the oil and gas industry, where there is tremendous motivation to adopt networked technologies and smart sensors. Many oil and gas facilities, especially offshore platforms, are located in dirty, distant, dull and dangerous environments. In these harsh areas, automation and remote management can increase efficiency, improve performance, and enhance profitability. But most importantly, they keep people out of harm’s way. TO LEARN MORE ABOUT EMERSON’S PLANTWEB DIGITAL ECOSYSTEM GO TO EMERSON.COM

PEMEX

POWERED BY PARTNERS Touting potential partners was also a key objective at Pemex Drive. Indeed, a major facet of the 2017-2021 Business Plan involves the creation of joint ventures along the companyâ&#x20AC;&#x2122;s entire value chain as a mechanism to increase investment and efficiency. One example of this in action is a software factory developed with French consulting giant Capgemini. Based on mutual incentives such as delivering cost savings for one another, this initiative has already helped Pemex to begin cutting the sprawling number of costly applications embedded throughout

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its operations. By carefully identifying which processes could either be outsourced, merged or removed entirely, Becerra Mizuno hopes to cut 800 line of business applications down to 200-250, which even by his admission is still high. Accenture is another company helping Pemex to develop a digital ecosystem based on mutual benefit, while Microsoft and Emerson Work Services are helping deliver important work regarding migration of applications and processes to the cloud. Longstanding partnerships have also been redefined, such as the

TECHNOLOGY

“WE’RE OPEN, WE’RE LOOKING FOR TALENT, WE’RE LOOKING FOR YOUNG PEOPLE, AND WE’RE GOING TO GIVE THEM THE OPPORTUNITY TO DEVELOP THEIR SKILLS”

one with SAP. Having utilised SAP’s oil and gas expertise for more than 50 years, Becerra Mizuno explains how this venture has evolved to provide all important flexibility to Pemex. “We have established a new partnership with them, where it’s not only them charging for their licenses or their service, but it’s also on a payas-you-use scheme on some of their modules, especially the oil and gas modules. Before, we had to pay for these no matter what, but we can now take into account peaks and troughs.” Becerra Mizuno further highlights an increasing number of pilot projects

- Rodrigo Becerra Mizuno, Corporate Director and CIO

being initiated with suppliers in a bid to uncover the next game-changing solution. Typically lasting eight to 12 weeks across all business units, these programmes are helping convert vendors and suppliers into true partners which build solutions tailored to Pemex’s priorities. “I’ll give you a small example,” Becerra Mizuno says. “In the refining process, one of the things that affects us the most is unprogrammed outages, because of the resultant

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maintenance. So, we’re working with Baker Hughes, part of GE, to create a pilot around these. The idea is that we can create savings, which will increase the value of the partnership to both parties. We’re not just buying sensors from them or their software, we’re doing things in a mutually beneficial way.”

CULTURE CATCHES UP Pemex is not just embracing innovation with its partners. Internally, something of a cultural revolution is underway. This is no minor undertaking for Becerra Mizuno, who is responsible for around 3,000 employees spanning engineers, consultants and decision makers, many of whom are from an older generation and more cautious about new technologies. “How do I get an aging work force to adopt new things?” he asks. “That’s usually very difficult. We have to see that becoming digital was largely about a new mindset. It’s a radical change in the way we do things – we’ve run a tonne of programmes to get people who have

not used technology to embrace it.” An initiative which has fostered innovation internally is Idea Lab, which allows employees at all levels to submit pitches in a venture capital style, progressing through various rounds until a winner is chosen and their idea funded. Harnessing innovation by attracting new talent is altogether a different challenge, especially when it comes to luring younger, techsavvy recruits into oil and gas. Partnerships with educational institutions like Mexico City’s Tec de Monterrey will help to bridge this gap. Pemex Drive was hosted on one of its campuses, and Becerra Mizuno says Pemex is working closely with the university to develop interest in oil and gas IT careers. He cites his own example of leaving a private technology giant for a public-Technology oil and gas firm. “When I was at Microsoft, it was an extremely optimised company, so the things that I was able to do were very narrow. They were perfect, but they were narrow. “At Pemex, there’s so much to do,

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“HOW DO I GET AN AGING WORK FORCE TO ADOPT NEW THINGS? THAT’S USUALLY VERY DIFFICULT. WE HAVE TO SEE THAT BECOMING DIGITAL WAS LARGELY ABOUT A NEW MINDSET. IT’S A RADICAL CHANGE IN THE WAY WE DO THINGS – WE’VE RUN A TONNE OF PROGRAMMES TO GET PEOPLE WHO HAVE NOT USED TECHNOLOGY TO EMBRACE IT” - Rodrigo Becerra Mizuno, Corporate Director and CIO

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and we need so much help. If you’re someone that is ambitious, that is young and can see the silver lining coming to work for us, it’s the perfect place. That story has not been told or communicated yet – we’re seen as a monolithic company and what we’re trying to show is a different kind of Pemex. We’re open, we’re looking for talent, we’re looking for young people, and we’re going to give them the opportunity to develop their skills.”

THE ROAD AHEAD Both from a cultural and implementation point of view, Pemex is beginning to make strides, evidenced by the fact that Becerra Mizuno has been recognised as a top 100 CIO in Mexico and a HITEC-50 2018 Award winner. “I think success is something that you share,” he says. “It’s something that you can’t do alone. I’m very fortunate to have the people that I have around me. The most important thing for me has been the support of the two CEOs that I’ve had the pleasure to work with. The current CEO Carlos Trevino is so open, so dynamic and

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so supportive of what we do. He is really the transformation CEO for us.” But what about the path in front of Pemex and Becerra Mizuno? For the CIO, three important targets and ambitions remain. “The first thing is to deliver the things that we said we would deliver. To make sure that we overdeliver what we have promised and that we meet the expectations that we have set for the team and for the technology department of Pemex. “The second thing for us is, as you know, we have a big transition coming with a new administration coming in December. I would love to see a lot of the building blocks and the strategies that we have implemented become lasting. Pemex is going in the right direction, which has been validated by many experts. “The third big piece is to make sure the people in the team continue to believe that there are good things coming ahead, that they continue to be motivated, so the momentum continues whether I’m here or not. That’s the most important thing for me.”

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Written by Laura Mullan Produced by James Pepper

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By leveraging trailblazing technologies, Yatra Online is fulfilling the needs of the burgeoning Indian travel market to ensure that wherever your journey leads, it’s a good one

ith a mushrooming population of around 1.3bn people, a burgeoning middle class, and travel becoming mainstream, the Indian travel sector is growing swiftly, and it shows no signs of slowing down. Vacationers are not shying away from opening their wallets either, with the Indian travel market projected to reach a value of $48bn by 2020, according to an in-depth report by Boston Consulting

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Group (BCG) and Google India. Yatra Online, named after the Hindi word for ‘journey’, prides itself on understanding the true meaning of travel, making sure that whether you’re looking for hotels, holiday packages, bus, rail or flight tickets, it is a name you can count on. As competition from foreign players like Airbnb and Booking.com has intensified, Yatra has steamed ahead with technological innovations that are helping the firm redefine itself

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as a digitally-driven tech company, that just so happens to be in travel. “We are a digital-first organisation which derives most of its value through the use of our technology platforms by customers in various channels – whether it’s a user doing their own travel planning and booking, a corporate user booking for their work travel, or an agent serving a walk-in customer in a remote location,” says Chief Technology Officer Himanshu Verma.

“Technology is front and centre of our operations today and will be a major driver of operational efficiency and service expansion going forward.” The greatest benefit of such a hightech travel offering? It allows Yatra to tap into three sales channels of travel – business to business (B2B), business to consumer (B2C) and corporate sales – allowing it to cast a wide net in the lucrative Indian market. “It gives us a unique valueadding proposition to serve all

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segments of the market in equal measure,” Verma explains. “We are among the top three players in all the segments. We have over 7mn B2C users, we serve over 650 corporate clients, and we have over 19,000 travel agents across the country using our booking platform.” Tapping into the rise of mobile With mobile apps incessantly at our fingertips and mobile internet prices becoming more competitive,

Yatra Online has paid special attention to the rise of mobile users, making it the “front and centre of the company’s strategy”, according to Verma. The results speak for themselves, with the firm’s mobile traffic growing almost 100% and its transactions growing by 130% in recent times. “A large number of people in India are only using the internet on mobile,” observes Verma. “Many of the younger generation, for example,

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have skipped using PCs and have been using the internet only on mobile. “Therefore, from that standpoint, we have really focused on mobile and revamped our entire mobile platform,” he continues. “Over the last 18 months, our traffic on mobile has grown at a fairly fast pace. Today 75-80% of our traffic is on mobile and almost 50% of our transactions happen on mobile and that is the part that has been growing fast.”

Scalable, accessible In a traditional travel company, tools for search, booking, customer support, and housekeeping are usually standardised with staff providing domain expertise, personal service and trust. While this model works, says Verma, it’s not scalable and efficient, whereas in a technology company the interface for customers are endpoints like websites, mobile apps

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and chatbots. Algorithms do most of the tactical decision making and people focus only on what matters – strategic decision making. “Customers can get most of their queries related to their booking resolved either via proactive communication or speaking with our AI-driven bots to get the answers,” Verma explains. This makes services scalable, predictive, and highly accessible wherever the customer is. “While this kind of transformation can be hard, risky, or capital-intensive, it’s not optional for us if we want to remain relevant and progress in the future amidst accelerating changes,” says Verma candidly. “Our quest has been to serve the customers in their travel itinerary as much as possible – from travel inspiration, to planning, to booking, to in-destination services – so that customers can seamlessly use our services end to end,” he adds. “This cannot be done without a consistent technology platform behind it. When it comes to customer

“Technology is front and centre of our operations today and will be a major driver of operational efficiency and service expansion going forward” Himanshu Verma, Chief Technology Officer

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Today, almost

75-80% of Yatra Onlineâ&#x20AC;&#x2122;s traffic is on

MOBILE and almost 50% of its translations happen on mobile

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experience, we want to be wherever the customer is, we want to evolve with our customers and, in some cases, we want to invent new ways for customers to evolve their experiences.” A one-stop travel firm Whether it’s finding travel inspiration or booking your flight, no single travel company today provides end-to-end services. To become a one-stop shop for travel, Verma and his team have seen a root-and-branch transformation of the company’s technologies and platforms. In doing so, Yatra Online hopes to provide end-to-end services for its customers so that they don’t need to engage with endless companies. To this end, Yatra Online has internally developed its website, mobile apps and most of its backend systems as well as its customer relationship management (CRM) and customer support system. Yatra has also built its own decision sciences and intelligence platform, which is being used to power services like algorithmic discounting, cross sell and personalisation of services.

Continually evolving With such a tremendous technology push, this has undoubtedly had an impact on Yatra Online’s team and its company culture. “Our team has doubled in size and there has been a definitive cultural shift,” notes Verma. “We have made continuous learning a key pivot for the organisation so that people are constantly learning new technologies, experimenting with them and figuring out new ways to serve our customers better. “We recognised that we will not be able to find enough people externally who have depth and expertise in technologies like artificial intelligence, machine learning, and hence we focus on re-learning for a sizable number of people from the team.” Continuous improvement is at the very foundation of Yatra Online’s strategy and it is this drive to consistently grow and evolve which has propelled the company into the spotlight as a leading travel firm. Not one to sit on its laurels, the company has ambitious plans for the future.

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“The immediate goal is to build deeper organisational skills in new technologies like machine learning, artificial intelligence, internet of things, big data, analytics and solve some of the deeper problems around automation, personalisation, and optimisation,” Verma says. “We have made significant progress in these areas in last year and we are continuing to invest heavily in them,” he continues. “In the long-term, we want to create a solution for multilingual, voicebased interface so that we can provide personal services to nonEnglish speaking demographics.” Close industry ties The Indian travel market is growing exponentially and, with new groundbreaking technologies coming to the fore, every day. Verma says that Yatra Online’s strategic partnerships are crucial for the firm’s operations. “These partnerships play a significant role not only in our current operations but also on our future preparedness,” he notes.

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Since it was first launched in

2006, more than

7 MILLION CUSTOMERS have used one or more of Yatra Online’s travel-related services

“We have a deep relationship with NetMagic, who is our private cloud hosting provider, we use Akamai deeply for various edge services and we use AWS for everything related to data sciences. “We also have a partnership with Adobe for analytics and marketing, and we have a close relationship with GDS companies like Travelport and Amadeus,” he adds. “Yatra is constantly talking to or experimenting with a widerange of technology partners,

large companies and startups alike, to see if we can leverage their tools and technologies and move our charter further. “These partnerships are incredibly important as we cannot do all the work alone.” India’s travel planner These trailblazing technologies, strong industry ties and a commitment to providing a best in class customer experience has distinguished Yatra Online

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Himanshu Verma, Chief Technology Officer Himanshu Verma joined Yatra as CTO in Apr 2015 and leads the technology strategy, planning and execution for Yatra products across all channels. He has over 20 years of experience in technology industry across a wide spectrum of domains. For past decade, he has been focusing on building products for ecommerce and internet industry working with companies like Flipkart and Yahoo!. Verma worked with Flipkart for three years leading engineering for supply chain and logistics and Yahoo! for six years leading engineering for Yahoo! Front Page, Toolbar, Mobile Web and HotJobs. Prior to this, he also worked with Oracle, InterSolutions and Cadence Design Systems in various technology roles. Verma holds a B.Tech. degree in Computer Science and also attended executive general management program at IIMBangalore. In his spare time, he loves to read and travel.

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as one of the leading travel brands in the country. Since it was first launched in 2006, more than 7mn customers have used one or more of its travel-related services and, with an array of accolades under its belt, it’s clear that Yatra is set to becoming India’s top travel planner. “In the next five years, I envision Yatra to be a technology company which owns and operates one of the largest travel platforms that will provide one-stop marketplace for all travel needs with the widest selection, best prices and personalised service at all steps of travels,” Verma says. “Have we figured out how to achieve it all? Not yet. Are all the technologies available to be able to do it? Not yet. Do we have to fight the organisational and ecosystem inertia to do it? Absolutely. But who said trying to create future is easy.”

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Integrating data, boosting

connectivity Written by Catherine Sturman Produced by Kiron Chavda

Chief Information Officer Lutz Beck discusses how Daimler Trucks Asia is working to drive connectivity across the commercial vehicle industry and to transform it into a data driven organisation

ousing an envied and world-class reputation, Daimler Trucks Asia (DTA) has cemented its presence as a leader in manufacturing and transportation. An integral subsidiary of manufacturer Daimler AG, the organisation has worked to transform its existing business model and diversify its portfolio, developing new products and services to sell to its customers in an ever-growing industry. However, in order for this to happen, its core vision has remained clear – to drive connectivity. “At DTA, we want to lead the commercial vehicle industry into the future and be number one in quality, innovation, customer satisfaction and places to work. We want to connect everything,” explains Chief Information Officer Lutz Beck. “Our transformation is ongoing on an organisational level, but we are in the midst of a cultural change as well.”

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Lutz Beck

Chief Information Officer

Lutz Beck, currently CIO for Daimler Trucks Asia / Mitsubishi FUSO Truck & Bus, is a business savvy, and result driven Senior Executive with extensive international leadership experience and a can-do attitude. A problem solver, analytical thinker and pioneer able to manage critical and complex transformations with an innovative approach to get the job done. He has benchmarking experience working in large multinational companies in the automotive industry and led and motivated large global teams to achieve target outcomes. Beck is global and a leading key player having worked across multiple regions and cultures in the fields of digital strategy and transformation, business process re-engineering and improvement, project and program management, SAP template implementation, system landscape renewal and innovation technology management.Â A true expert on the international scene and digital forefront, motivating and a sensational leader pushing those around him to new heights.

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A DEEPER PERSPECTIVE.

For DTA to be able to achieve its vision of leading the commercial vehicle industry through the power of data, disruption is not only inevitable, it’s mandatory. “We need to use all the technologies and innovations available to redeﬁne our business model,” DTA CIO Beck notes.

“We have to be a disruptor in the industry and disrupt our own company to prepare it for the future.”

The road less travelled. Quality management steps into the spotlight.

80% of these recalls could have been detected in advance based on the historical data patterns.

That disruption began in an unlikely place, one that wasn’t well known for its innovation - quality management. Its department head Michael Moebius admits that what it lacked in futureforward thinking, it made up for in data. Data ﬁlters through quality management from over 150 countries, but its conventional analysis system was outdated and relied on siloed internal sources captured through traditional means. As a result, quality and safety issue identiﬁcation and investigation times were reactive, and focused on historical analysis after the problems had already matured. This long and sometimes inaccurate process yielded high warranty costs and delayed recalls.

Solidifying a futureforward foundation. While the quality management department had access to a wealth of data, it didn’t necessarily know how to analyse it most eﬃciently. Beck conﬁrms: “We were collecting data, but not using it in a way in which you could make decisions or create business models out of it.” This gap in skills highlighted a key area of attention for Beck, who believes that the foundation for everything within a company is its people. It was this desire to lay the correct foundation for DTA’s digital transformation that led to the relationship with Deloitte. Ashwin Patil, Deloitte Consulting LLP Managing Director for Global Manufacturing Analytics, remembers: “We were able to gather folks from strategy, cloud, digital tech, data scientists—we brought key people to the table to help drive this.”

The power of collaboration First, Deloitte analysed all of the available data from 45 of the last major DTA recalls. This included structured data like metrics correlated with its vehicles to unstructured data, such as call centre records, warranty claims, dealer and technician comments and social media engagement. Based on this combined analysis, Deloitte discovered that

The opportunity to look even further into the future became possible with the introduction of live data through DTA’s launch of Fuso Super Great, its first connected truck and foray into the internet of things (IoT). As the truck is driving, geographical data and data from the vehicle’s system like oil pressure, coolant temperature and battery voltage is combined with the historical data, providing DTA with the insight to see the overall health situation of a truck. According to Moebius, this proprietary cognitive system, dubbed “proactive sensing”, enables DTA to implement “predictive intelligent maintenance and service planning, which ultimately helps us get ahead”. The success of Daimler Trucks Asia and Deloitte’s proactive sensing project hinged on the teams’ desire to function as an innovative client relationship. They embraced the “flavor of a startup”, where constructive criticism flowed freely, enhanced by regular meetings at the staff and management levels to create an open environment for questions and ideas. Deloitte also took a second look at DTA’s internal resources and developed skill profiles to identify gaps in capabilities.

Smarter insights, stronger outcomes. The proactive sensing project is expected to save DTA $8mn in warranty costs during the ﬁrst 24 months and even more in recall costs. The system is also able to predict and prioritise quality issues 13 months ahead of its previous process, which helps keep customers on the road with less downtime. “By doing this project, we were able to generate awareness for data at a management level,” Beck states. “The project helped us shape an overall business case for the big data topic. Now everyone wants to have it. The whole company is pushing for it.” The journey for DTA doesn’t stop here, however. The constant cycle of disruption continues, not only for the organisation and the industry, but also for the ever-changing world that is becoming increasingly reliant on connectivity, data and the internet of things.

avasudevan@tohmatsu.co.jp | Ajai Vasudevan,

Director Automotive, Deloitte Tohmatsu Consulting

DAIMLER AG

Connected X Driven by its senior leaders, DTA’s digital strategy, Connected X, has seen the organisation overhaul its outdated infrastructure and application landscape. By deconstructing its back-end and legacy systems, DTA has rebuilt its internal processes through the use of new technologies, enabling it to move into an increasingly digital world based on a new digital foundation. “By transforming into a datadriven organisation, the key aspects will be how we work with data and how we understand the data,” observes Beck. “Integrating all data is also in accordance with our

overall Daimler Truck Asia strategy. “We defined our Connected X strategy based on three pillars – product, process, people – in a bid to drive Daimler Trucks Asia towards a data driven organisation and connect everything by fully utilising the Internet of Things (IoT),” he continues. “We needed to work on core elements such as digital products and services, data driven and modern methods and skill sets.

(Right) Daimler’s new, smart E-FUSO Vision One model

“By transforming into a data-driven organisation, the key aspects will be how we work with data and how we understand the data” – Lutz Beck - Chief Information Officer

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“On the product side we are focusing on improving new as well as existing production sites and vehicles by digital enabling them. On the process side, we work on efficiencies through automation and robotics. On the people side, we

Data-driven technologies The need to collect and enhance all data has been essential throughout DTA’s aim to enable the business units to perform data driven decision-making and innovations. The combination of Truck

VIDEO: Deloitte Client Spotlight Daimler Trucks Asia

started to train, renew and scale up the team, bringing a combination of traditional IT skills and new digital skills which are required to run such complex transformations. “There are not many companies in our industry that are doing this in such a way, so we have become a frontrunner in terms of digitalisation.”

connectivity and analytics helped the organisation in quality management (QM) processes to unlock saving potentials and business value. By collaborating with Microsoft and Deloitte, DTA has integrated its internal data, as well as its external data received from both its sites and connected trucks. The ability to gain

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Mitsubishi Fuso Truck and Bus Connected X by Microsoft AI & MR

By collaborating with Microsoft and Deloitte, DTA has integrated its internal data, as well as its external data received from both its sites and connected trucks

VIDEO: Cognitive Technology in the real world of Daimler Trucks Asia

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real-time data has therefore enabled the development of new solutions and delivered significant cost savings across the board. “There is nothing which we are doing which is not giving us either internal benefits or new business opportunities,” adds Beck. “I do not have cases where we do not have savings or additional revenue streams achieved by introducing new technology.” One key example is the development of DTA’s proactive sensing analytics. Built in partnership with Deloitte, the two companies analysed a large number of QM information surrounding the health of DTA’s trucks. Through this, the companies found a number of patterns in the high volume of data received, paving the way for a solution to be developed. Through proactive sensing, DTA is now able to detect issues in advance, reducing downtime and increasing the safety of its vehicles through predictive intelligent maintenance. “It doesn’t matter if you talk about big data, artificial intelligence, machine learning or deep learning, all these new ideas are helping us to be number one in quality, innovations and customer satisfaction while being more efficient and more cost-effective,” notes Beck. To further solidify its position as a techleader in the commercial vehicles industry, asia.businesschief.com

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DAIMLER AG

Mitsubishi Fuso has also developed and launched the all-electric light-duty truck eCanter which is in seriesproduction since last year, as well as the concept heavy-duty truck, E-FUSO Vision One. Developed from feedback received from customers, the E-FUSO brand will open doors to the development of further connected, electric-powered vehicles across DTA’s fleet, and will also work to reduce emissions whilst strengthening its position in the market.

Experimental technologies Although the organisation has worked to invest in new technologies and extend its areas of innovation, the need to mitigate potential risks within its IT operations has never been more important. Enhancing its cybersecurity has therefore become a key focus within DTA’s digital strategy, and a team has been established to proactively manage security patterns across its manufacturing operations. Interestingly, the organisation is also looking at other ways to transform its production capabilities through the

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increased use of new technologies (such as robotics) and defined the concept of the Factory of the Future based on Industry 4.0 principles. “If I look at the production, we can use much more automation and robotics in the manufacturing space. We are on the way to connect wherever possible our robots in order to collect real-time data, and based on that take real time decisions on predictive maintenance and other topics,” explains Beck. “Secondly, when we are looking into our office environment, there is a lot of automation and efficiency gains which are made possible by using robotics. Therefore, we are looking at how we can gain further efficiency in the office environment through the use of robotics and are looking at automating processes which today are paper-based.” DTA is therefore undertaking increased experimental research in using robots for specific topics. For instance, it is also utilising famous Japanese robot Pepper to look at ways in which it can boost efficiencies.

TECHNOLOGY

“We defined our Connected X strategy based on three pillars – product, process, people – in a bid to drive Daimler Trucks Asia towards a data driven organization and connect everything by fully utilising the Internet of Things (IoT)” – Lutz Beck - Chief Information Officer asia.businesschief.com

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“It doesn’t matter if you talk about bi artificial intelligence, machine learn deep learning, all these new ideas are us to be number one in quality, innov and customer satisfaction while b more efficient and more cost-effect – Lutz Beck - Chief Information Officer

ig data, ning or helping vations being tiveâ&#x20AC;?

CASE STUDY How Daimler Trucks Asia utilised data-driven insights to proactively change the course of the entire organisation

DAIMLER AG

The power of collaboration By collaborating with Microsoft and Deloitte, DTA has integrated its internal data, as well as its external data received from both its sites and connected trucks

Proactive sensing technology has enabled DTA to detect potential issues up to a year in advance

The E-FUSO brand will open doors to the development of further connected, electricpowered vehicles across DTAâ&#x20AC;&#x2122;s fleet

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Competitive edge Through blending traditional ways of working with new ideas and technologies, DTA’s working culture and subsequent development and training of employees, has consequently undergone significant change. “We are continuing to upscale our existing people in new technologies. This is an ongoing task which we do internally and with external support,” notes Beck. “We also looked at the skillset in the market and employed people who had the required skill sets and brought them into the company. We have now built up skills on analytics, artificial intelligence and virtual and mixed reality. We are also taking on new people for our connectivity platform and for our connectivity for our trucks.” It is clear that DTA will continue to disrupt the commercial vehicle industry, where it will seek to develop increasingly connected, tech-driven products and services for its customers. However, speed will remain essential in such a competitive space. “This is a challenge, but we want to take that challenge and see how we can move forward and combine these elements with the new technologies coming in for our customers and for our organisation,” concludes Beck. “We will need to see how we can further use technology to transform the organisation, our business model and how it will enable us to create new business services in the future.”

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FILTRATION POWERED BY DATA HOW MANN+HUMMEL IS HELPING COMPANIES SAVE ON MAINTENANCE AND DOWNTIME Written by John Oâ&#x20AC;&#x2122;Hanlon Produced by Andy Turner

Intelligent filters, smart systems and rapid product development are features of todayâ&#x20AC;&#x2122;s MANN+HUMMEL, a traditional German company that is reinventing itself through the use of data and IoT Charles Vaillant, Chief Technical Officer

MANN+HUMMEL

filter is a workhorse. It’s hard to think of a mechanical system that does not have filters. They protect the moving parts from damaging particles, and in HVAC systems they protect people’s lungs in the same way. As MANN+HUMMEL puts it, they are there to ‘separate the useful from the harmful’: it may not be the most exciting component in any system, but it is entirely essential because without filters the machine, whether it is part of an automobile, a train or an air conditioning plant, couldn’t do its job – and it certainly wouldn’t have a long life. Mann+Hummel, a German manufacturer with a global footprint, is the largest filtration company in the world, with 80 locations, more than 20,000 employees, and annual sales in the region of $3.9bn. An impressive statistic is that it sells 24 filters every second. The company was founded in 1941 and is still owned by the families of its founders, Adolf Mann and Erich Hummel. Its success can be attributed largely to its domination of the automotive and transportation

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sector. It’s a position gained and held in large part because of the trust it has gained with MANN+HUMMEL brands such as Wix Filter, Mann-Filter, Filtron and Purolator. A wonderful history, however, as Chief Technical Officer Charles Vaillant is there to point out at every opportunity, good is never good enough, and the businesses of the future will not be able to grow with the practices of the past. As CTO Vaillant has a very exciting job – no less than to drive the growth of a traditional manufacturer into a digital-age manufacturer, finding previously unconceived value in products that used to be considered dull. For a start, he says, there are large filtration markets that Mann+Hummel has hardly touched. Filtration is a market worth some $60bn a year, and automotive accounts for only 40% of that, despite the fact that automotive and transportation markets give MANN+HUMMEL 90% of its turnover. “We see a great opportunity for us to take our competence and our capability and apply them in new fields such as life sciences, oil and gas (O&G) and a host of other industries.

M A N U FA C T U R I N G

â&#x20AC;&#x153;We see a great opportunity for us to take our competence and our capability and apply them in new fieldsâ&#x20AC;? Charles Vaillant, Chief Technical Officer

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M A N U FA C T U R I N G

We can take the competencies that have made us the world’s largest filtration manufacturer and apply them in new fields.” Currently, he says, the company is investing strategically in ‘intelligent air solutions’ for buildings like shopping malls, hotels and offices as well as premises where super clean air is required such as clean rooms, data centers and operating theaters.

If filters are changed too early just because they are done to a schedule, that incurs unnecessary cost. If they are changed too late, damage may result. A smart solution would trigger the change at the right time and you could really optimize your operating expenditure and maintenance cost.” The bottom line is that the filter may be a low-cost item, but by protecting an expensive The filter asset, its value is Looked at one way, intrinsically high. a filter is passive It’s easy to Number of and something underestimate employees at not considered the waste caused MANN+HUMMEL smart, however, by sloppy tools are now maintenance, available catalyze including ‘cleaning’ that transformation. “Combining the filters by reverse-blowing compressed latest smart technology, such as air through them and then refitting sensors, gateways, data acquisition them. Engine damage and warranty and data mining we can build smart problems caused by dust ingestion in filtration solutions. Even at a basic mining trucks or agricultural machinery level example, they can speak to are to be avoided when a replacement us and tell us what is going through engine can cost up to $50,000, not to them, when they need changing, and mention the cost of downtime. A smart what their operating conditions are. filter can save the operator disasters

20,000

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Charles Vaillant | CTO Charles Vaillant is the CTO for the MANN+HUMMEL group. He joined MANN+HUMMEL in 1997 and is currently responsible for innovation, new technology research, corporate strategy and corporate ventures. Charles has held a variety of positions in the areas of program management, design and development, product engineering and corporate development. He is based Raleigh, North Carolina. In 2015 Vaillant established i-2-m LLC, a startup company to accelerate commercialization of new MANN+HUMMEL technologies in the fields of clean air, clean water, energy and life science. During 2016 he created an IoT Lab in Singapore, at the Heart of Singaporeâ&#x20AC;&#x2122;s start-up ecosystem, to accelerate the digitalization of company products. Later in the year he launched MANN+HUMMEL Corporate Ventures, an initiative to make strategic investments in Technology Startups with a focus on Silicon Valley. Vaillant earned an Automotive engineering degree from LTR Eiffel (France), a Masters in Industrial Marketing from ESIDEC (France) and an M.B.A from the University of Michigan Ross Business School (USA). He lives with his wife and two daughters in Raleigh, NC USA.

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“Once fitted Senzit will connect directly to the network wherever

you are in the world” Charles Vaillant, Chief Technical Officer

like this, Vaillant says. “In construction, mining and agriculture, three of our key markets, they are working in the dustiest conditions imaginable. They get through a lot of filters and they really don’t have a good way to know when to change them.” Smart filters are no longer pie in the sky. In November 2017 at CES in Las Vegas MANN+HUMMEL launched its new digital product Senzit. It measures data such as the status of the air filters of agricultural and construction machines in real time and transmits the results to the user’s mobile device. The smart device creates added value for users by displaying the load status of the air filter as well as its remaining service life and machine hours completed.

It is convenient, saves time, reduces maintenance costs, protects the engine and makes it possible to utilize the full capacity of the air filter. “There are 10 sensors within Senzit,” enthuses Vaillant. “It measures pressure, humidity, temperature, and it has GPS and 2G/3G connection. Senzit is installed directly at the service port of the air filter housing and is suitable for almost all vehicles and all air filter brands, even older ones. Once fitted it will connect directly to the network wherever you are in the world and stream the data to the cloud. From the cloud we push the data back, after we have run some machine learning algorithms, either direct to the customer or to a web portal – it’s their choice.”

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M A N U FA C T U R I N G

Thanks to Senzit, it is no longer necessary to manually inspect the air filter to determine the degree of contamination. It makes it possible to plan maintenance in advance, reduces machine downtime, protects the engine and prevents unnecessary filter changes. Originally conceived as a smart filter, Senzit’s horizons started expanding as soon as it was launched. “Because I know the pressure in the filter I know when the engine is on and when it is off, and because I also have a GPS chip on it I can now provide the users with valuable information. I can provide them with a list of all the trips that the vehicle has done, when they started, when they stopped and where they went. So you have a fleet management component as well. That makes this digitization very interesting for us. By talking to the customers and engaging them we understand their needs and challenges and we are able to provide them additional services in order for them to run a better business. For example, some of the people that we talked to are using very big pickup trucks that they don’t move much. They use auxiliary power to work lifts,

drills and the like. Now they can go on the Senzit app to input an alert that will tell them when the truck has run for more than 50 hours and remind them to change the oil or the belt for example. Many customers are running old machinery that has none of the latest technology built in. Senzit turns these into connected vehicles, and we are adding an anti-theft component so they can see when a machine is moving when it isn’t supposed to.” It’s a revolution, no less. “IoT is really changing the nature of our company,” Vaillant continues. “It’s analogous with the digital service that you get from Amazon or Netflix or connected cars. These are things that are making our lives easier and more convenient. What we are trying to do here is provide the same level of customer satisfaction and convenience to our customers that operate in the harsh environments.” By leveraging data from climate and allergists, MANN+HUMMEL is currently developing smart filters that will make life easier for asthma and hay fever sufferers, for example. “FreciousSmart is analogous to

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the way the company works with agriculture,” he explains. “We are pushing out individual algorithms for every machine, taking into account the different type of dust and the different weather conditions. A great benefit of digitization is that we can customize products without having the cost of developing separate products. It’s about using big data and machine learning and converting the raw data into useful information like how many hours of safe operation they have left.” The internet of things in action Developing smart filters may have been Vaillant’s original objective, but digitization goes much further. “The other piece is the data that we have at our disposal now. On the one side we can have our engineers design better products now that I am collecting data from equipment all over the world. I can see how my product is performing in a real-world environment. In the past we were working with very small samples – today, every single filter can be part of my test fleet. Over the past 75 years MANN+HUMMEL was using mainly lab data to confirm a product performance. Today,

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analytics and data science are a major part of our work and a new skill set for a company like us.” As global CTO, Vaillant is responsible for a team of developers working on a comprehensive range of digital solutions, from sensors and interfaces to cloud programs. At the hub of this effort is MANN+HUMMEL’s IoT lab in Singapore. At this facility, system, hardware, firmware and software engineers and data specialists are working on the development of intelligent technology for filtration. The focus is on intensive cooperation with established technology groups and startup companies. “We have between 15 and 20 people at Singapore, and we are running out of space because we’re growing so fast. The world is our sandbox. We decided we want to be close to our customers, to research centers and universities. By doing this you run a very decentralized organization. Most of our people in Singapore speak Chinese fluently; they are in the same time zone as China and there’s now an extension of our IoT lab in Shenzhen, China.”

M A N U FA C T U R I N G

â&#x20AC;&#x153;IoT is really changing the nature of our companyâ&#x20AC;? Charles Vaillant, Chief Technical Officer

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Within a couple of months Vaillant will find himself in Silicon Valley, Shenzhen, Singapore and Germany, with brief stops at his North Carolina base catching up with reports from his team around the world. He is in Silicon Valley a lot as leader of startups and the venture arm of the company. â&#x20AC;&#x153;We are a traditional manufacturer and you could think that Silicon Valley is only about Tesla and Apple, but we need new materials and smart sensors and you find this in Silicon Valley as well. The world is changing

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at a very rapid pace. Large marketleading corporations like us have been doing the same thing for a very long time and really need to reinvent themselves. We need the courage to experiment with a completely different way of working, and I think IoT is a really great vehicle to show what can be done. Digital companies are able to bring out new products in a very short time compared to, say, automobile manufacturers. Cellphone companies show that itâ&#x20AC;&#x2122;s possible to roll out a new product every six or 12 months, not

M A N U FA C T U R I N G

MANN + HUMMEL is building its new technology center in Ludwigsburg

every five years. That is a big challenge and I think a lot of corporates are struggling with it. At MANN+HUMMEL we have the luxury of a leadership and shareholders that are fully backing us to experiment with new things. They understand that speed is of the essence and time is now!” So how exactly does IoT speed up product development? It’s a matter of escaping from standard manufacturing development processes that are very successive in style and adopting an agile way of working. “I know a lot of people

are using the word agile as a tagline, but what I am talking about is sprint methodology,” Vaillant says. “When we develop IoT products we launch new features in a two-week sprint, check and validate over another two weeks, then start again – so every four weeks we are able to bring new features into our products.” It’s a departure from traditional German product development principles. Minimum viable product (MVP) rather than perfection is the principle. From the start of the Senzit project to commercialization took just 12

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“When we develop IoT products we launch new features in a two-week sprint” Charles Vaillant, Chief Technical Officer

months, including pilot testing, prototyping, ramp up, manufacturing and the launch of the product. “Now we are launching lots of new features. The hardware stays the same but we build on added value in sprints to optimize and enhance the offering to our customers.” That methodology delivered a sensational new anti-pollution technology platform, “the Fine Dust Eater”, is now being trialed in Stuttgart and soon to be seen on the streets of Bangalore and Shanghai. The World Health Organization estimates that 7mn premature deaths a year can be put down to air pollution. In Germany, it’s 47,000. The company has developed applications which are designed

to reduce the pollution caused by particulates. A filter installed on the roof or on the underbody of a vehicle retains particulates from the ambient air. A brake dust particle filter minimizes the release of brake dust to the environment. The vehicle occupants are protected by an NO2 fine dust combi filter. The idea is to improve the air quality in cities by sucking up the ambient dust – if enough mobile and static units can be deployed. We do not know yet the impact these technologies will have, but as Vaillant says “if you try nothing you will not get anything. If your company core competence is to remove the useful from the armful, then it is your duty to come up with answers, isn’t it?”

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