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THE MAGAZINE FOR THE FOURTH INDUSTRIAL REVOLUTION

issue no. 3 - August 2018

IN THIS ISSUE Exclusive Interview with Ben Peace The Knowledge Transfer Network

Cloud for Industry 4.0

Trends and Developments for manufacturing

Industry Focus – Aerospace

How organisations in the sector capitalise on Industry 4.0

Spinning the Future

The Fidget Spinner and lessons learnt from supply chain issues


Thank you for downloading The

Industry 4.0 magazine

Welcome to the 3rd issue of the Industry 4.0 Magazine, a publication that aims to give you the knowledge to power your own digital transformation. Our lead interview is with Ben Peace of the Knowledge Transfer Network who provides some invaluable insights on the government’s support and strategy for SME’s and the direction 4.0 is headed in the UK. We have looked at two very pertinent yet obscure areas of Industry 4.0 – CLOUD and CYBERSECURITY – to debunk some of the mystery around these areas. The UK Government’s Made Smarter review identified a £17.5 billion opportunity for the aerospace sector over the next ten years through the adoption of currently known digital technologies. Last month we visited the Farnborough Airshow which hosted a new pavilion called Aerospace 4.0. We spoke to exhibitors & ADS, the aerospace association, to get their vision & solutions for Industry 4.0. We’ve also freshly launched Industry 4.0 News an online portal that includes a mix of video and articles providing visitors with a great source of relevant content. We’ll be actively growing our content over the coming months. We hope you will find the articles within informative and educational. If you have anything you’d like to raise feel free to get in touch with me. Kind regards,

THE INDUSTRY 4.0 MAGAZINE IS PUBLISHED MONTHLY BY GB MEDIA AND EVENTS - ORGANISERS OF THE INDUSTRY 4.0 SUMMIT PUBLISHER Gary Gilmour EDITOR Pav Baghla TEAM Matthew Pearsall Digital Manager Lyn Illsley Designer All Editorial and advertising Enquiries to Digital@gbmediaevents.com +44 (0) 207 9932300 +44 (0)1642 438225 GB Media & Events, Wilton Centre, Redcar, North Yorkshire, TS10 4RF. GB MEDIA & EVENTS LIMITED GB Media and Events Limited is a company registered in England and Wales with company number 10114934 /Industry40news JOIN OUR INDUSTRY 4.0 NETWORK ON LINKEDIN linkedin.com/groups/8646038 www.industry40.news

Pav Baghla Editor

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The content of this magazine does not necessarily express the views of the Editor or publishers. The publishers accept no legal responsibility for the loss arising from information in this publication. All rights reserved. No part of this publication may be producted or stored in a retrieval system without the written consent of the publishers.


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Interview with Ben Peace The Knowledge Transfer Network

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Cybersecurity Expert Insights from Market Leaders

Using OEE to drive improvements in operational performance Astec Solutions talk about OEE and it’s implementation

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Cloud Technology Trends and Developments for manufacturing

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Industry Focus – Aerospace How organisations in the sector can capitalise on Industry 4.0

Spinning the Future The Fidget Spinner and lessons learnt from supply chain issues

Case Study – Trialling Industry 4.0 tools in a Victorian Dockyard Insights on the connected enterprise

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Interview with

Ben Peace

The Knowledge Transfer Network

Ben Peace, Head of Manufacturing, The Knowledge Transfer Network Ben heads up the manufacturing team at the Knowledge Transfer Network (the UK’s innovation network). He started his career with ten years of product development within industry – first in a university spinout, then in a multi-national heating manufacturer. He then spent a couple of years in innovation consultancy before joining the Knowledge Transfer Network (KTN) in 2011. KTN’s manufacturing team helps manufacturers to innovate, and innovators to manufacture. It does this by making targeted links to the right knowledge, partners, facilities and funding.

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There’s a lot written about industry 4.0. What is you take on it and where are we heading? I’ll start by saying we are not always served well by thinking of “Industry 4.0”, or the “fourth industrial revolution” as one thing. The implications; the roadmap to adoption, is quite different for each individual business. With that as context, what is clear is that there is a variety of digital technologies that have been emerging in recent years which, when deployed successfully, can have a transformative effect on manufacturing – making it more efficient and productive; delivering better value to customers and high quality jobs. I’m referring to technologies such as additive manufacturing, artificial intelligence, cyber security, sensors, and immersive technologies. Here in the UK we have great home-grown emerging innovation in these areas - both within academia and within innovative businesses big and small. The businesses that will really benefit will be the ones that can successfully integrate a range of such technologies, taking a collaborative approach that adds up to more than the sum of its parts. Indeed it struck me powerfully whilst at the last Industry 4.0 Summit earlier in the year that the solution providers would do well to work together to develop more joined-up solutions; whilst manufacturers will benefit from sharing knowledge on deployment, eg. across sectors. When such momentum starts to build, we will move from something that feels more like a genuine revolution. This is for certain: Even if we don’t adopt the latest technologies we can be sure that other nations will. Our industry will be left behind.

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Image courtesy of The Knowledge Transfer Network

The 4Manufacturing initiative has developed a framework for engaging SMEs on a one-to-one basis which has been deployed in a pilot study to over 175 manufacturing SMEs. This breaks down the broad topic of 4IR into a manageable set of 22 themes which structures the dialogue, enables assessment of capabilities, identification of opportunities, and tracks progress. In a two-way dialogue with an advisor, the companies select a number (typically one to three) of these themes that they wish to engage with. Within each of these themes we have defined a structure of five attainment levels, from (1) basic awareness to (5) exemplar, with descriptive text outlining what each attainment level looks like for a manufacturing business. Thus, the framework establishes a starting point and an aspiration for the company’s 4IR journey. The advisor then helps develop a plan of action and enable this journey via advice, support with regard to finding suitable partners, solution providers and funding. As progress is made it is captured using the same attainment levels.

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 TN has a strong focus on the SME market, what can you do for them and K what can they do themselves to get started on their own 4.0 journey? Industry 4.0 is all about connectivity and system level thinking. So it’s a good fit with the Knowledge Transfer Network’s remit which is focused on making connections across the full spectrum of sectors and disciplines. In short, as the UK’s innovation network, we connect businesses to the partners and funding that can drive innovation and its deployment. In the context of manufacturing and Industry 4.0, our remit can be described in two parts: i) linking manufacturers to those partners that can enable exploration and deployment of innovative technologies; and ii) helping commercialise the innovative solutions by linking the developers to early adopter manufacturers. Our support is not restricted to SMEs, but on both sides of the equation many of the proactive businesses we can help are SMEs, and they benefit greatly from the support we can offer - making the right connections based on their particular needs, and securing the right funding and finance. This saves time and accelerates deployment.

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At the Industry 4.0 Summit you introduced the 4Manufacturing Initiative – can you tell us what this is about and any recent developments? The 4Manufacturing® initiative has now engaged with 230 SMEs and we’ve learnt a great deal about what works and what doesn’t. We have developed a web platform (www.4manufacturing.co.uk) which we hope will enable deployment of the framework at scale. By working with regionally based stakeholders such as LEPs and Growth Hubs, we hope to extend access beyond what KTN could achieve on its own. For a summary see the new report which will be published very shortly on the website. To see how KTN can help businesses contact them on ktn-uk.co.uk/interests/manufacturing 5


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What’s your view of the UK governments ‘Made Smarter’ reviews? Are there things that they should have included? Made Smarter is a very important initiative that KTN maintains a close link to. We’re supportive of the findings which echo many of our own. We’re in close dialogue with partners in the Innovate UK/UKRI “family” such as the Catapults and Innovate UK, working to fulfil our ongoing remit to join things up, which includes Made Smarter and the Industrial Strategy Challenge Fund.

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Is Britain ready to adopt industry 4.0. Are there are hurdles to mitigate?

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What are KTN’S short and long term goals?

It will not happen overnight. It is not a panacea and it feels sometimes like we are at risk of over-hyping it, which can have the effect of putting some businesses off. Many businesses indeed are not ready yet. Others don’t know where to start or who to talk to out of all the competing voices. But we are starting to see early adopters big and small go beyond adoption of digital technologies to genuine system level integration that is delivering benefits to the bottom line. Momentum is starting to build. In parallel, things are starting to join up better across the policy and support landscape, which will bring much needed clarity and enable that momentum to continue.

Ultimately our mission is to deliver economic growth. Industry 4.0 is one of the major opportunities to achieve that. In that context: In the short term we are exploring deployment of 4Manufacturing® with a select group of regional partners as described above. As we do so we will be refining the model of operation with a view to achieving reach across the whole nation. In parallel we are further extending our work and reach with solution providers and developers of new technologies. We are also refreshing and extending our range of Special Interest Groups that serve some of these areas. In the longer term we will be explore the use of a similar approach to 4Manufacturing® in other thematic areas, and the increased deployment of digital technologies in our own operations, to extend further the impact that we deliver.

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 .0 aims to make efficiencies for companies by making their processes more efficient. 4 Will there be jobs in 30 years? That’s a big question and one that I’m probably not in a position to answer any further than to say that there will be rather more jobs if we invest in and support collaborative innovation along with, importantly, with its deployment in industry.

Video:

Innovation for Growth KTN panel discussion at The Industry 4.0 Summit

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Cloud TECHNOLOGY

Trends and Developments for manufacturing

Cloud technology is a critical enabler of the next Industrial Revolution. As Industry 4.0 gathers steam thanks to developments in the Internet of Things (IoT), automation and robotics, things could quickly grind to a halt without the cloud to effectively free these technologies from the connectivity restraints of on-site servers. By embracing the cloud, your processes will operate more efficiently and your business will rise above the competition. Why? Well, with any cloud deployment, you can hire the software and resources you need on a monthly basis and scale appropriately. You don’t need to hire in an IT team to maintain your hardware. And you will be rewarded with a highly reliable service where you don’t have to worry about downtime. But the advantages of today’s cloud technology go beyond reliability, scalability and storage (and the associated cost savings) within Industry 4.0.

Cloud computing provides businesses with a solid foundation to develop a range of technologies, allowing you to innovate and leapfrog over the competition. Research from the Harvard Business Review Analytic Services reveals that 74% of businesses believe cloud computing has given them a competitive advantage. Further research reveals that 60% of technology decision-makers believe an integrated cloud approach will unlock the potential of disruptive technologies. A spokesperson from Deutsche Telekom explained how Industry 4.0 contains a broad technological spectrum, including data analytics, the IoT, machine-to-machine communication and artificial intelligence.

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industry 4.0 Issue no 3 - AUGUST 2018

Cloud TECHNOLOGY

Digitization and IoT at Deutsche Telekom

Video:

Digitization and IoT at Deutsche Telekom

“All this can be integrated into or connected to the cloud so that it can be used without limitations, across different business units or even across company boundaries. These increasingly important technologies can be obtained costeffectively from the cloud in the future. In this respect, the cloud is an important digital component and thus the basis for Industry 4.0.” Cloud computing is also bringing innovative technical solutions onto the factory floor for Lanner, who provide predictive digital twins for businesses who are looking to model, analyse and control their business processes. Lanner’s head of marketing, Graeme Routledge, explained:

“Cloud computing is offering many opportunities for Lanner to increase the performance, reach and use of our technology. Traditionally a technology confined to modellers and analysts, predictive digital twins and their simulation capabilities can now be put directly in the hands of those making business decisions, where they can get access to insights via any device at any time. This has meant that predictive simulation is now used for operational resource planning and scheduling in addition to wider strategic business planning, investment and policy decisions.” Graeme Routledge – Lanner 8

“All this can be integrated into or connected to the cloud so that it can be used without limitations, across different business units or even across company boundaries. These increasingly important technologies can be obtained costeffectively from the cloud in the future. In this respect, the cloud is an important digital component and thus the basis for Industry 4.0.” Deutsche Telekom


Cloud TECHNOLOGY

Issue no 3 - AUGUST 2018

industry 4.0

EDGE COMPUTING To effectively connect so many disparate technologies, a form of cloud computing, known as edge computing, will be a crucial component for the development of Industry 4.0, according to Deutsche Telekom: “This [edge computing] means that IT is decentralising, moving closer to machines and production processes, which significantly reduces latency times.” Edge computing takes many forms but it is broadly defined as pushing applications, data, and IT services away from centralised nodes to the logical extremes of a network. This allows for real-time analysis and automated solutions across the supply chain in real time.

There are many different ways to use edge computing in an industrial setting. For example, vision sensors on the production line could act as edge devices to find defects smaller than the eye can see while a car is being sprayed on the production line. These sensors not only ingest information on the quality of the spray, but also have the capability to analyse how to resolve any defects and carry out preemptive maintenance work. As the volume and velocity of data increases, edge computing provides a highly efficient solution because you don’t need to stream all of this information to the cloud for processing. Approximately 10% of enterprise-generated data is now created and processed outside a traditional centralised data centre or cloud network, and Gartner predicts this figure will reach 50% by 2022.

Video:

Industry 4.0 insights: Scott Mordue, INTEL

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industry 4.0 Issue no 3 - AUGUST 2018

Cloud TECHNOLOGY

The need for standardisation Industry-wide standardisation is an important concept for cloud computing in Industry 4.0, which Deutsche Telekom recognises to ensure its systems can communicate effectively along the supply chain:

Such standardisation will also futureproof the Industry 4.0 supply chain as new technologies and devices are developed and integrated, as Lucy Pamment, head of product development - Supply Chain Solutions at the Access Group, explains:

“The cloud is the basis for all innovative solutions and offers in Industry 4.0. Building on cloud technology, we develop and offer standardised products such as our endto-end solutions for industrial machine monitoring, asset tracking or shipment monitoring.”

“As more data becomes accessible via the cloud it will enable further integration across platforms and also transparency of the supply chain. Machine connectivity, analytics and more real time shop floor data capture are all areas getting more focus. We are working with industry leaders to produce standard interfaces to additional systems.”

“As more data becomes accessible via the cloud it will enable further integration across platforms and also transparency of the supply chain. Machine connectivity, analytics and more real time shop floor data capture are all areas getting more focus. We are working with industry leaders to produce standard interfaces to additional systems.” Lucy Pamment, head of product development - Supply Chain Solutions at the Access Group

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ACCESS GROUP CASE STUDY:

Video:

Production Planning - Martin’s Rubber

INDUSTRY 4.0 SUMMIT & EXPO 10 – 11 APRIL 2019 2

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industry 4.0 Issue no 3 - AUGUST 2018

cybersecurity matters Pamment believes cloud computing is “extremely important” to the development of Industry 4.0, but security concerns must be addressed from the outset of any cloud deployment. “Having all data stored centrally in the cloud means more connectivity and access to information. It’s becoming increasingly critical to ensure your systems are secure and backups plans are in place. As more data gets stored digitally and required for auditing and traceability purposes its even more important, cloud solutions take the risk away from the physical site and can have system recovery in place should anything unfortunate occur.” Cloud security is a key concern for both companies and customers and the significant number of high-profile data breaches in recent times have done little to curb these concerns. Businesses need to take the appropriate measures, as Pamment explained: “Pen testing and other security measures should be in place and proven for anyone considering cloud solutions. It’s also vital the company storing the data has the necessary locations and services backup and recover data if an unfortunate event occurs.” The focus on cloud security has been “further sharpened” in recent times, according to Deutsche Telekom, as the number of interfaces and thus the number of possible entry gates has increased. “Security is also important in the context of the emerging decentralisation of IT. Our cloud solutions are ‘made in Germany’ according to the strict regulatory guidelines on which customers can rely.” As a result, it’s vital to pick a cloud provider based on their security credentials and a wide range of additional factors. Focusing just on cost alone is a mistake, you also need to consider “backup services, experience in the sector, experience with on-premise, and have a proven track record with solving problems with multiple systems,” according to Pamment. 12

Cloud TECHNOLOGY


Cloud TECHNOLOGY

Issue no 3 - AUGUST 2018

industry 4.0

Speedy SMEs While budgetary constraints are at the forefront of the minds of most businesses, the cloud brings further benefits to those investing in Industry 4.0, according to a recent report from the Harvard Business Review: “Most cloud proponents today agree that cloud’s value comes not from cost savings but from speed. Organisations that cut the time between identifying a need for a new capability and delivering it are seeing a real advantage.” The same report reveals 71% of businesses said the cloud has increased their business agility, which allows them to increase their time to market and provide clients with a faster response rate. SMEs are in a unique position to truly embrace such agility as they are not constrained by the legacy systems that hamper many established corporations. As a result, the cloud can keep pace with the growth and expansion plans of these fledgling businesses. However, research reveals only 5% of SMEs are thoroughly networked and only one-third are taking their first steps into digitisation. As such, it is vital for smaller enterprises to implement a clear strategic roadmap if they want to migrate to the cloud. Pamment said: “We offer hosting and SaaS (Software-as-aService), however, many small- to mid-sized firms are still at the beginning of the digitisation journey. So, more appropriate services could be disaster recovery services.”

“Most cloud proponents today agree that cloud’s value comes not from cost savings but from speed. Organisations that cut the time between identifying a need for a new capability and delivering it are seeing a real advantage.”

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industry 4.0 Issue no 3 - AUGUST 2018

Cloud TECHNOLOGY

Automated future Going forward, the cloud will allow Industry 4.0 to develop mature, automated systems that will provide a flexible and fully connected supply chain where human interaction reduces to a minimum through autonomous predictions and self-regulating supply chains. Pamment said: “I would predict, automated machine data and predictive analysis to form part of the manufacturing and ERP systems with no intervention. Real time analysis and details will be available on demand by throughout the supply chain – and audit and traceability reports will be accessed digitally on request.” Routledge agrees that cloud computing opens to door to a range of technical innovations thanks to the scalability it offers: “Cloud computing, or more specifically the technology ecosystem it promotes, means that we can start to take advantage of Big Data and scalable compute power to drive automated optimisations for business – both at the decision level, then the control level.”

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“Rather than humans managing problems/ exceptions with short term planning decisions that are often limited in scope and take time to execute, we can start to look at artificial intelligence and machine learning algorithms that can automatically optimise and control end-to-end business process performance in the most efficient way possible. In the same way we have autonomous cars, businesses could start driving themselves bases on stated objectives and policies.” This brave, new world of advancing automation is already upon us. Cloud platforms are being developed to securely capture and analyse information from a range of devices to automate and optimise business processes. The effect on the supply chain cannot be overstated and the possibilities of cloud technology will exceed our imagination.


CYBERSECURITY

Expert Insights from Market Leaders

Protecting Industry 4.0 The whole concept of Industry 4.0 is one of “super-connected plants” with product and service on demand and instant access to real time data. The principle it embodies includes the creation of interoperable manufacturing environments, integrated sales and delivery data sets, real time plant management data and remote and autonomous service and maintenance management. It is the embodiment of the future that was imagined in the science fiction of the seventies and eighties. However with this all connected, autonomous and self-managed industry environment comes a set of risks and threats and the potential for system breakdown that the same science fictional world relied on for its story lines.

Insecurely Driving Industry Forward

Andrew Cooke, Head of Consulting, Airbus CyberSecurity

Coming back to reality for a moment the drive for efficiency and our ‘on demand’ society has placed an expectation on industry that a consumer’s order today will be delivered tomorrow. This result is a real need for super connectivity to translate demand into service delivery instantly.

Coming back to reality for a moment the drive for efficiency and our ‘on demand’ society has placed an expectation on industry that a consumer’s order today will be delivered tomorrow. This result is a real need for super connectivity to translate demand into service delivery instantly. From that societal requirement consequently comes a need for high availability of plant, the requirement for an ability to make instant configuration change and to maintain plant and equipment remotely to maximise up time and minimise delays from travel and repair time. In order to deliver product and service to the customers expectations supply chains have to be more integrated, services and processes need to be capable of evolving to meet changing need and data needs to be made available instantly to the supplier and the customer to manage the delivery programme. This connected world clearly presents us with a whole set of different cyber challenges. If the supplier has remote access to your systems to manage inventory, upgrade firmware or maintain control systems then you can bet someone who wants to steal goods or intellectual property can get the same access. If power demand and transmission needs to be balanced across a network from a remote control centre then it can equally be interfered with and potentially control taken by a malevolent actor as well. Interoperability and openness of systems is a huge advantage in management and control of process but also allows malevolent code, malware and viruses to spread rapidly around a system as well.

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industry 4.0 Issue no 3 - AUGUST 2018 There are huge efficiency and intelligence benefits in sharing data between systems, functions, suppliers and customers. We must recognise though that it presents a huge risk in terms of aggregation of information and intelligence. It makes breaking in and stealing that data more attractive and more lucrative and presents the attacker with more information potentially allowing him to penetrate deeper into systems and networks proliferating damage or generating more and more intelligence for future attack. The potential for an attacker to access that critical “big data� not only risks the integrity of your systems now but also brings the potential for data loss and a prosecution under the General Data Protection Regulations if you are operating in Europe. It all seems very gloomy at first sight but help really is at hand. Increased digitisation doesn’t have to mean increased threat of attack or compromise. Technology can offer as much protection as it can create the threat in the first place.

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CYBERSECURITY Furthermore it is always tempting to look to for a technological solution to a technological threat yet technology is not always the answer. The first thing that industry must do to protect itself is to understand what it has in the first place. What does its network really look like? What is connected to what? What big data sets are being used to create critical information? What is critical and what information can safely be made available to anyone? Which systems are more vulnerable to external threat? How does the networks and processes work and which processes are dependant on those more vulnerable systems. A large (confidential) European FMCG manufacturer only discovered an external line connecting its control system network to the internet when one of its suppliers engineers was seen by a network discovery tool and a previously assumed air gapped system was revealed to be open to the internet. For any organisation to start to manage the risks it faces as it moves to Industry 4.0 it needs to start with a comprehensive risk assessment. Particularly in the Industry 4.0 environment a cyber risk is a business risk and vice versa.


industry 4.0

CYBERSECURITY

Issue no 3 - AUGUST 2018

In Industry 4.0 business does not exist without interoperable technology and the networks that provide them. Before investing in technology it is critical to invest in an understanding of the risk that that technology is subject to and where the threats to it might come from. Understanding the network and processes and where risk sits on those processes is the first step in developing an effective strategy to protect Industry 4.0.

Once you have this understanding of business risk and how to mitigate then you can look at the technology that can help you to do that. The first thing should always be to have a protective monitoring solution. The protective monitoring regime needs to be appropriate for the business. There is no point in having a solution that generates 500 alerts a minute and is therefore unmanageable, or have the protective monitoring team working office hours while the business works twenty four hours. Similarly there is little point in investing in expensive operational technology threat assessment and protective monitoring equipment if the organisational architecture makes it inoperable.

Once those networks and processes are understood and the risks are identified and quantified then appropriate mitigation strategies can be developed, investment in protection can be planned and technology can be mobilised. Cyber risks are first and foremost business risks so the essential next step is to link the cyber risk to the top level organisational goals. What is important to the business and how can cyber cause you to fail. This will help to prioritise systems and processes and moreover prioritise what data is critical to the mission. Understanding what needs to be kept most secure and what data is less important or more critically needs to be made available to external bodies presents the key to a strategy for sharing it in a secure way.

It all seems very gloomy at first sight but help really is at hand. Increased digitisation doesn’t have to mean increased threat of attack or compromise. Technology can offer as much protection as it can create the threat in the first place.

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CYBERSECURITY

Unblurring the blurred boundaries The second critical technological consideration is in data sharing. Making sure information is available where it is needed but only shared securely and with those who really need it is paramount in having an effective, efficient and secure business. As eluded to above, the most important interface to manage is the sharing of information between operational technology (OT) and enterprise systems (IT). The blurring of the boundaries between OT and IT has both facilitated better more effective information sharing but also raised the risk of malware, viruses and other malevolent code proliferating across operational technology networks. The classic recent example of this is the Ukranian power network attack in December 2016 when the Industroyer malware crossed to the OT network, rapidly spread across the network, disabled control systems with a resulting lengthy power outage across the country. Historically organisations planned to keep those systems separate and not share data but in Industry 4.0 that separation is impossible as operational data is critical to delivering the mission. Data diode based solutions have been used in the past to make sure data can only pass one way and malware can’t get from enterprise technology to operational technology. This is not necessarily the only or even the best technology though to protect operational technology networks. An appropriate risk assessment is needed but increasingly end point protection and encryption devices designed specifically to function with IoT and operational technology protocols can prove more effective and offer greater utility. Industry 4.0 is driving manufacturing and critical infrastructure to adopt 21st century communications and technology into its daily delivery processes. There is no realistic reason why it should bring 21st century IT risks with it.

Video:

Cyber Risk in Advanced Manufacturing

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In summary: •

 se technology to its U best effect to deliver business benefit;

 nderstand your cyber risk U because there are business risks and will map directly against organisational goals;

 nderstand the network U and processes and which processes offer the greatest security risks;

Invest in appropriate technology but Industry 4.0 doesn’t mean technology for technology’s sake;

 rotect the perimeter P of the organisation;

 now what is critical K and what doesn’t need protecting; and

 anage the gap between M IT and OT in an appropriate way that serves business purpose but protects critical data and systems.


CYBERSECURITY

Issue no 3 - AUGUST 2018

industry 4.0

EXPERT OPINION FROM DARKTRACE “Typically, industrial security has been approached differently to IT security. Industrial control systems in manufacturing companies have long operated in isolation from IT and online networks. However, as manufacturers digitise and integrate ‘smart’ technologies into physical controls to boost efficiency, more connections are made to the wider, more accessible, enterprise networks. This means that industrial systems are becoming exposed to the full force of modern cyber-threats. “The reality is attacks on industrial environments have the potential to cause wide-scale disruption and catastrophic damage. Breaches could see assembly lines sabotaged, and supply chains disrupted, leaving manufacturers with hefty financial losses and often irreparable reputational damage. “Historically, manufacturers focused their cyber defence on big IT systems using only perimeter controls, such as firewalls and antivirus software. These defences rely on the attacks of yesterday to prevent repetition. In the midst of the fourth industrial revolution, this approach to securing their networks is no longer enough.

Andrew Tsonchev, Director of Technology, Darktrace Industrial

“Production plants are fast becoming digital jungles, as new technological innovations such as IoT sensors, robotic automation, and integrated cloud services intertwining with antiquated industrial machinery.

“Production plants are fast becoming digital jungles, as new technological innovations such as IoT sensors, robotic automation, and integrated cloud services intertwining with antiquated industrial machinery. Patches simply do not exist for some of these older systems, or at best, take substantial expertise and money to maintain. This isn’t just a problem for SME’s who have fewer security resources. Even a large manufacturing organisation with a cohort of highly-trained security experts cannot pre-empt all the potential threats to their network. “Compounding the challenge, threats in this industry are almost always zero-day attacks. Mass, indiscriminate attacks are likely to fail given the uniqueness of industrial networks. Successful attacks are bespoke to specific machines, in specific organisations. Valuable learnings from previous attacks are therefore limited, and security teams need to adopt proactive defences that spot and stop ‘unknown unknowns’ to protect their networks. “More and more manufacturing organisations realise the need for AI technology in their cyber security posture. Analogous to the human immune system, these technologies use machine learning to learn the normal ‘pattern of life’ for every device, controller and user on the unique network. Using this dynamic understanding, they then detect and autonomously fight back against never-seen-before attacks. “If it seems like the fingerprint sensor used to access a power plant is making strange connections, instead of interrupting the entire system and preventing legitimate access to the plant for several hours, cyber AI will slow down or stop that specific connection. With one million unmanned cyber security positions worldwide, this capability has proven invaluable by granting security teams time to catch up. “The fact that these responses are proportionate, and in real time, means that manufacturing companies halt in-progress threats in their tracks, preventing any damage and system downtime. This new breed of cyber technology can be installed in one hour, learning instantly and detecting subtle threats in a matter of days. Flooded with threat alerts and false positives AI technology enables security teams to focus on only the genuine threats, enhancing the efficiency of the organisation’s security posture.”

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industry 4.0 Issue no 3 - AUGUST 2018

CYBERSECURITY

Tripwire answers questions on the key issues affecting the adoption of Cybersecurity Solutions: What threats are present for manufacturing and why should SME’S be investing in Cybersecurity solutions? There is a significant threat for cyber espionage targeted at the manufacturing industry, as highlighted in Verizon’s latest Data Breach and Incident Report. Therefore, manufacturers should be Gabe Authier, concerned with protecting their company’s intellectual property Senior product manager, and other sensitive data. And of course, manufacturing is all about Tripwire uptime and preventing unplanned downtime. These processes are very dependent on having automation systems up and running in order to complete a particular process. If just one part of the automation system goes down, that impacts the company’s bottom line. The risk of operational disruption increases as more and more industrial control systems are connected to the internet. And it’s not just cyberattacks that can disrupt these processes; it could be a bad configuration change, which is more common. What technologies are available for firms to adopt without a huge investment and downtime? Industrial operators need to get better visibility into what’s going on in their environment. A good starting point it to start leveraging log data more effectively by aggregating all system data, from various devices, into to a centralized place. It’s a very non-disruptive approach. Most automation systems have the ability to send log data, they don’t need to be taken down for this, and it’s fairly cost effective. With log data aggregated and normalized into a central location, you can more easily identify activities that are out of the ordinary. You can set correlation rules to alert you of certain activities. For example: if a particular system is experiencing certain amount of retries for a particular process, and it’s not starting up for whatever reason, an alert can be set for detecting that kind of activity through log data. The log data also enables forensics; after an issue, teams can use the logs to determine what caused a system to go down. As a highly recommended next step, organizations should have a way to ensure their devices are set up and configured correctly, and then see if their environments match up with industry policies and hardening benchmarks (such as IEC-62443 and NIST 800-53). This takes a little more effort and investment than the above, but with a solution that can automate the testing of configuration data against policies and best practices, this isn’t as hard as some operators might think. This would help ensure compliance with industry standards, improve hardening of devices, and reduce risk of downtime caused by a misconfiguration. What considerations are to be taken into account when adopting a cybersecurity solution? All industrial operators will want to adopt a solution that can be implemented relatively easily and won’t disrupt operational processes (or at least have the most minimal impact on process possible). Operators should consider how intrusive a particular tool might be going to do some analysis on their network. Solutions should also be specifically designed to work within operational technology (OT) environments and be implemented with the involvement of the OT team, not just IT. Technology made for traditional IT environments can’t simply be copied over into OT environments as it may cause operational shutdowns. You also need to be sure that the solution can communicate effectively with your OT environments, and should therefore have the appropriate industrial protocols and integrations to give you the most visibility.

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CYBERSECURITY

Issue no 3 - AUGUST 2018

industry 4.0

Video:

How a large Japanese Manufacturing Company made Factory Cybersecurity its Strategic Differentiator

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industry 4.0 Issue no 3 - AUGUST 2018

CYBERSECURITY

CYBERSECURITY FOR MANUFACTURING DIRECTORY Below is a selective list of firms involved with Cybersecurity for Industry 4.0. If you would like to like to include your firm in our online directory of Industry 4.0 firms please send details to digital@gbmediaevents.com

Daresbury Park, Warrington, WA4 4BT, UK. T: +44 1925 741 111 www.abb.com www.linkedin.com/company/abb

30 Fenchurch Street, London, EC3M 3BD, UK. T: 0808 1011169 www.accenture.com/gb-en/security-index www.linkedin.com/company/accenture-uk

Quadrant House, Celtic Springs, Coedkernew, South Wales, NP10 8FZ, UK. T: +44 (0) 16 33 71 30 00 www.airbus-cyber-security.com www.linkedin.com/company/AirbusCyber

Second Floor, MidCity Place, 71 High Holborn, London, WC1V 6EA, UK. T: 0800 783 3040 www.atos.net www.linkedin.com/company/atos

1–3 The Strand, London, WC2N 5EJ, UK. T: +44 (0) 20 7930 1350 info@darktrace.com www.darktrace.com www.linkedin.com/company/darktrace

1st Floor, GPS House, 215 Great Portland Street, W1W 5PN, London, UK. T: +44 (0) 20 7291 9520 www.gemalto.com 22

www.linkedin.com/company/gemalto


Issue no 3 - AUGUST 2018

CYBERSECURITY

industry 4.0

Lovelace Road, Southern Ind Area, Bracknell, RG12 8WD, UK. T:Â 01344 656000 www.honeywellprocess.com www.linkedin.com/company/honeywell-process-solutions

Kaspersky Lab UK Ltd. 2 Kingdom Street, London, W2 6BD, UK. T: +44 (0)20 3549 3499 www.kaspersky.co.uk www.linkedin.com/company/kaspersky-lab-uk

Bletchley, Denbigh Road, Milton Keynes, MK1 1EP, UK. T: +44 870 242 5004 www.rockwellautomation.com www.linkedin.com/company/rockwell-automation

UK House, 180 Oxford St, London, W1D 1NN, UK. T: +44 0 203 907 6280 F: +44 0 870 085 8556 www.secureworks.co.uk www.linkedin.com/company/secureworks

3 Furzeground Way, Stockley Park, Uxbridge, UB11 1EZ, UK. T: +44 (0) 330 808 4684 www.linkedin.com/company/tenableinc

US Headquarters, Tripwire, Inc. 101 SW Main St., Ste. 1500, Portland, OR 97204, USA. T: 503.276.7500 www.tripwire.com www.linkedin.com/company/tripwire

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INDUSTRY FOCUS - AEROSPACE How organisations in the sector CAN capitalise on Industry 4.0

Is Aerospace ready to capitalise on Industry 4.0? Aerospace was identified as one of the sectors with most to gain from Industry 4.0 and its associated technologies. Industry 4.0 magazine takes a look at how organisations in the sector can capitalise on these opportunities. The UK Government’s Made Smarter review identified a £17.5 billion opportunity for the aerospace sector over the next ten years through the adoption of currently known digital technologies. The report’s authors stated: “Of all the sectors we examined, aerospace offers the greatest potential in terms of both cost reduction and new business models.”

How can the sector achieve this potential? According to Sameer Savani, Head of Innovation & Engineering at ADS, the biggest quick win for aerospace when it comes to implementing Industry 4.0 is simply to get started on any part of the journey. “Getting started with Industry 4.0 isn’t about individual technologies or lengthy planning; rather it takes experimentation and simply getting to be more comfortable with what is possible,”

“Getting started with Industry 4.0 isn’t about individual technologies or lengthy planning; rather it takes experimentation and simply getting to be more comfortable with what is possible,” Sameer Savani, Head of Innovation & Engineering at ADS 24


INDUSTRY FOCUS - AEROSPACE

Issue no 3 - AUGUST 2018

industry 4.0

Getting Started Companies within the aerospace sector share similar innovation drivers: to increase the rate of production as demand from the global aerospace sector grows; to drive down costs; to add value to products and services; and to protect and improve quality. But while the sector might share objectives, individual starting points across the sector are very different – meaning the Industry 4.0 journeys that companies will find themselves making will be very bespoke. “By asking where you want to create value and understanding where you are starting from in terms of digitalisation, you can find the two end points of your journey,” says Savani. He insists there are a lot of quick wins. For example, integrating low-cost sensors and off-the-shelf data visualisation and analytics can be a good introduction to understanding what data can do and how it can be converted into actionable information – and can start to deliver real benefits quite quickly.

Even something as simple as installing sensors so that a product can be measured while it is being machined, rather than when it comes off the machine, can have a significant impact in time and cost savings. Measurement is key in order to understand the ROI you’re getting from any improvements, says Savani. The ability to quickly respond to the actionable information derived from data will be a decisive success factor in any Industry 4.0 initiative.

“By asking where you want to create value and understanding where you are starting from in terms of digitalisation, you can find the two end points of your journey,”

Video:

Aerospace 4.0 – Factories of the Future

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industry 4.0 Issue no 3 - AUGUST 2018

INDUSTRY FOCUS - AEROSPACE

Experimenting with New Ideas Even for tier one manufacturers with wellestablished data analytics capabilities, Industry 4.0 is delivering some quick wins. At this year’s Industry 4.0 Summit in Manchester, the hackathon run by Digital Catapult featured a challenge laid down by Rolls Royce to look for innovative solutions that tackled the issue of low yield from a highly complex manufacturing process.

“Hack and Pitch is a very easy format for us which effectively is concentrated horizon scanning. For us, the data analytics bar is set quite high anyway. Even so, some ideas which emerged here are very interesting. After 50 or 60 years of manufacturing in this way, the winner has suggested we intervene in a lowimpact way to acquire some more data and that may help us to solve the problem we set – he has opened our eyes to something we weren’t expecting.” Nigel Jackson, Programme Manager at R2 Data Labs

Video:

Aerospace 4.0 at The Farnborough Airshow

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Nigel Jackson, Programme Manager at R2 Data Labs, a new Rolls Royce initiative organised to sprint at solutions and quickly solve problems across design, manufacturing and after-market service, was impressed by the willingness of SMBs to engage with the challenge. “Hack and Pitch is a very easy format for us which effectively is concentrated horizon scanning,” Jackson explains. “For us, the data analytics bar is set quite high anyway. Even so, some ideas which emerged here are very interesting. After 50 or 60 years of manufacturing in this way, the winner has suggested we intervene in a low-impact way to acquire some more data and that may help us to solve the problem we set – he has opened our eyes to something we weren’t expecting.”


A New Mindset Once businesses have found this mindset of “try, test and adapt” a whole world of new possibilities open up for them, says Savani. The key is to quickly drop what doesn’t work and focus on scaling up what does work. Making this decision comes back to data; information empowers you to act quickly. This agility does not naturally fit well with the complexity, extended product lifecycles and traditionally rigid supply chains of the aerospace sector, but some companies are innovating around ways to build more agility into their processes. Kostas Efthymiou outlined such an initiative, led by engineering firm Meggitt, at this year’s Industry 4.0 Summit. Meggitt’s Modular Modifiable Manufacturing (M4) project seeks to build additional flexibility into the firm’s manufacturing processes. The project got the green light following the success of an earlier, small-scale project at Meggitt to create intelligent workplaces that could guide operators through process steps. Early success here led to the initiation of the larger scale M4 project.

“The project hasn’t been linear; when we started the project we had a basic understanding of the tech we wanted to use, but we weren’t 100 percent sure. After three years, we have made a lot of decisions and changed our ideas about the tech we finally implemented,” Kostas Efthymiou, Technical Architect for Meggitt PLC

Efthymiou’s experience of the project clearly illustrates the need for flexibility and good data to ensure the success of such an initiative: “The project hasn’t been linear; when we started the project we had a basic understanding of the tech we wanted to use, but we weren’t 100 percent sure. After three years, we have made a lot of decisions and changed our ideas about the tech we finally implemented,” Efthymiou explains. By designing the work so that they could keep their options open, the M4 project team were able to flex as they progressed.

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industry 4.0 Issue no 3 - AUGUST 2018

INDUSTRY FOCUS - AEROSPACE

Scaling Up What Works The lab-built prototype lines have received good engagement from the firm’s production sites and demonstrated improvements in terms of reducing work in progress, inventory and floorspace and, importantly, transforming the current paper-based record keeping to an automated system that will make it dramatically easier to retrieve data. This has won enthusiastic buy-in and, as a result, the M4 team are beginning to industrialise some of the prototypes in the project and will be applying M4’s intelligent workbenches and statistical tools to the design of Meggitt’s new supersite in Ansty.

Measuring, monitoring and analysing what works has shaped the development of the project at Meggitt – both enabling success and making it possible to demonstrate it. “Robotics, automation and AI are all great things,” Savani says, “When companies begin to think about Industry 4.0, it can be tempting to ask, ‘how can I use VR goggles?’ or ‘what will AI analytics do for me?’. It is great that we have such a rich collection of technologies coming online – it means we have a really full and exciting toolbox. But it is still a toolbox; you’ve got to know what to do with those tools.”

The New Toolbox The potential of automation, robotics, AI, AR, VR and advanced analytics to transform the way we do business is as exciting a prospect for aerospace as it is for any sector. However, some of the characteristics of the sector significantly shape the scope of that potential. First, the long lifecycles of aircraft and their component parts means the sector is burdened more than most with legacy equipment and systems. Second, there’s the way the aerospace supply chain is tiered. The rigid vertical supply-chain structure that is intrinsic to aerospace makes supply chain connectivity one area where aerospace needs to lead Industry 4.0. Third, and perhaps most important, the opportunities associated with supply-chain integration, when combined with the safetycritical nature of the industry, make security – and the development of associated standards – a crucial development consideration. These characteristics are creating new opportunities for those in the supply chain who have been quick to recognise the way they shape of the potential of Industry 4.0.

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“Being able to innovate quickly is key to shortening the development lifecycle,” says Stephen Dyson of custom prototypes and lowvolume production parts supplier Protolabs, “manufacturers are looking for suppliers who can respond quickly. The speed of additive manufacturing makes the rapid production of design iterations possible, which helps to hasten pre-compliance testing, improve risk avoidance, and get to the design and manufacture of real parts quickly.”

“Being able to innovate quickly is key to shortening the development lifecycle,” says Stephen Dyson of custom prototypes and lowvolume production parts supplier Protolabs, “manufacturers are looking for suppliers who can respond quickly. The speed of additive manufacturing makes the rapid production of design iterations possible, which helps to hasten pre-compliance testing, improve risk avoidance, and get to the design and manufacture of real parts quickly.” Stephen Dyson Head of Industry 4.0


INDUSTRY FOCUS - AEROSPACE

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industry 4.0

New Opportunities for Innovation in the Aerospace Supply Chain 3D-printing technologies, like those Protolabs deploy, have been heavily invested in throughout the aerospace sector, Dyson says. “The most salient innovation additive manufacturing promises aerospace is in lightweighting,” he explains, “the honeycomb internal structures that additive manufacturing enables couldn’t be created through traditional processes; and this opens up exciting possibilities to reduce weight – and therefore fuel consumption – in both new and replacement parts.” The technology is also enabling an existential shift – from mass production to mass customisation. “We’re seeing an immediate benefit through the additive manufacturing technologies we deploy in terms of the cost and speed of development,” continues Dyson, “We’re working with our customers to develop in a shorter time and without the high upfront costs. But we recognise Industry 4.0 technologies present a wider opportunity to bring down costs and lead times further throughout the supply chain. From our perspective, this means looking at methods for more integrated access to share CAD designs with our clients. But it goes way beyond this – every organisation has a challenge it wants to solve.” As Savani asserts, any Industry 4.0 journey must start with business objectives: “For me, it’s all about knowing what you want to have as business outcomes, then seeing Industry 4.0 as a set of tools that can help you achieve these outcomes.”

Protolabs Case Study

ISAR Gears - Electronic Drives for Aerospace Company: Isar Gears Product: Electronic Drives Industry: Aerospace Service: Direct Metal Laser Sintering Aerospace engineering has always been one of the most innovative industries. Every design is characterised by exceptional load capacity with minimum weight and space requirements. The increasing demand for electric drives brings further challenges. Isar Gears in Ismaning, Germany, is only too happy to take these challenges on - with expert knowledge and support from Protolabs.

View FULL CASE STUDY

Video:

Meggitt and Industry 4.0

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Using OEE

To drive improvements in operational performance

Back in the 1990’s, the discipline of lean techniques helped to lay the foundations of manufacturers’ digital transformation, although they didn’t know it yet. Then came the buzz about OEE, lean production and six sigma, which gave rise to a surge in solution implementations focused on improving overall equipment effectiveness. For the companies that invested in this way of working, constantly developing and adjusting lean methodology has become second nature; OEE is an integral part of their commitment to continuous improvement. Relatively small percentage savings in availability, performance and quality quickly accumulate, boosting profitability and market share. Despite this, the well-known productivity metric is still greatly under-utilised in manufacturing today. This view is consistent with a recent report by McKinsey, which reveals most companies today merely scratch the surface of potential applications for the data: on a modern oil-production platform, for example, only 1 percent of the data generated by the 30,000 sensors is ever examined.

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One of the common reasons for untapped digital opportunities often lies with ineffective change management. OEE expert and Astec Managing Director Andy Tripp explains; “It would be reasonable to assume that global organisations would take the lead in strategic and cultural evolution, but it is not unusual to find local sites completely detached from global head office initiatives. Even when a Business Change Manager is employed, this alone isn’t sufficient to galvanise mid-level management into action. Many UK manufacturing sites are either half-heartedly adopting new advanced analytics programs or even worse, ignoring them and missing the opportunity in its entirety.” To help alleviate change inertia, Astec offers guidance through the process of maturing pilot projects to an organisation-wide approach – the embodiment of the ‘think big, start small, scale fast’ mantra.

“It would be reasonable to assume that global organisations would take the lead in strategic and cultural evolution, but it is not unusual to find local sites completely detached from global head office initiatives. Even when a Business Change Manager is employed, this alone isn’t sufficient to galvanise midlevel management into action. Many UK manufacturing sites are either half-heartedly adopting new advanced analytics programs or even worse, ignoring them and missing the opportunity in its entirety.”


Issue no 3 - AUGUST 2018 “We specialise in cross-functional integration across departments and organisational functions. Our holistic approach takes into account factors from across the enterprise. Large data sets can be combined and visualised so customers can assess the true business impact of process and equipment losses from issues such as unplanned downtime and faulty equipment.” For larger industrials in particular, the current disruptive climate can certainly present challenges. A recent study from PwC research arm Strategy& found 66% of manufacturing leaders do not have a clear smart factory vision and strategy, and only 25% believe their employees have suitable qualifications to master a digital future.

industry 4.0

Beyond the traditional focus on maximising efficiency, the next step in performance improvement will require companies to establish an IT-centric, robust technical infrastructure. One possible route to achieve this is to outsource implementation, training and support. This approach has the benefit of bringing immediate value while simultaneously extending the skill sets of existing employees. With the correct capabilities, infrastructure and management – including benchmarking and new ways of monitoring progress, industrial manufacturers can remain confident in a rapidly changing climate.

“We specialise in cross-functional integration across departments and organisational functions. Our holistic approach takes into account factors from across the enterprise. Large data sets can be combined and visualised so customers can assess the true business impact of process and equipment losses from issues such as unplanned downtime and faulty equipment.”

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industry 4.0 Issue no 3 - AUGUST 2018 Case Study

Lewmar: it’s not all about greenfield

The company’s Portsmouth-based manufacturing facility contacted Astec last month to update their legacy SCADA system to the latest version of GE’s iFIX. Lewmar is a world leader in quality deck hardware and marine equipment for sail and powerboats, with products ranging from pulleys to winches and hatch seals. Their SCADA system is used to oversee specialist production machinery, including an impressive glass forming machine. The machine is designed to produce large curved sheets of toughened glass for high-end craft, and has proven to be an important asset, enabling Lewmar to supply high value glass parts as part of their product portfolio. Although the machine is only in use infrequently due to its high value-low volume demand, mechanical or system failures would force the need for outsourcing. This would have a dramatic impact on the profit margin on this particular product portfolio. The SCADA system (being used as an HMI and parameter recipe system) was running on old computer hardware with an outdated Operating System and obsolete versions of the SCADA software. A failure of one component rendered the HMI and the machine inoperable, but due to the age of the hardware and software, no quick fix was available.

Video:

Within 2 weeks from order placement, Astec was able to: Review and understand the Italian-designed system Procure the relevant computer hardware and SCADA software Migrate the customer application to the latest versions of software Successfully install and commission onsite Astec MD Andy Tripp comments, “The work we have recently completed for Lewmar is another great example of how we can provide fast turnaround solutions for customers needing upgrades or enhancements. While it is always going to be desirable for any System Integrator to work on new systems, a significant proportion of Astec’s revenue comes from maintaining legacy assets – and ensuring our customers meet their customer’s demands! We appreciate manufacturers need agile solutions that meet their immediate need. Our domain expertise and knowledge means customers can stay operational, make use of their existing infrastructure and benefit from a greater return on their original investment.”

Deborah Sherry, GE Digital Europe sharing insights on industry 4.0

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For more information visit www.astecsolutions.com


Spinning the Future The Fidget Spinner and lessons learnt from supply chain issues 2017 was the year of the fidget spinner. The story of this unassuming children’s toy is one of unexpected demand, lapsed patents, digital printing, exponential sales growth and circumvented distribution channels. With the help of research student Kai Chong Sim from the University of Manchester and Dr. Carl Diver of Manchester Metropolitan University, Industry 4.0 magazine takes a look at what the craze can tell us about the future of manufacturing, the supply chain and Industry 4.0. The addictive little spinning toy which swept through playgrounds, classrooms and shops around the world throughout 2017 initially got off to a few false starts. The origins of the fidget spinner start in Orlando, where Floridian Catherine Hettinger designed a circular disc much akin to what we know as a fidget spinner. She owned the patent for eight years but surrendered it in 2005 when toy manufacturer Hasbro – which had been testing her design – decided not to proceed. Hettinger has said she could not afford the $400 patent renewal fee. It wasn’t until years later that two young entrepreneurs in Seattle began developing the first spinner with metallic bearings – much closer to the fidget spinners on the market today. In September 2015, Scott McCoskery and Paul de Herrera began selling their ‘Torqbar’ on Facebook for $300 – a high-end version of the toy aimed at executives rather than children. McCoskery and de Herrera chose not to acquire a patent since they did not have the funds to enforce it. Instead they sought to raise funds for the project on a GoFundMe campaign. The initiative didn’t succeed as the pair fell short of their goal.

Dr Carl Diver, Reader, Manchester Metropolitan University

A similar initiative was initiated on Kickstarter the same year by Matthew and Mark McLachlan for their Antsy Lab’s Fidget Cube. By August 2016, the campaign had raised $6.4m but, despite this success, all did not go to plan. When the very twenty-first century sales strategy of Kickstarter collided with the very twentieth century problem of manufacturing lead times, the market was wide open for exploitation. Dr. Carl Diver, Reader at Manchester Metropolitan University, makes the point “Fidget spinners skipped the normal marketing channels – effectively going viral overnight thanks to social media. This contrasts with earlier toy crazes, such as Rubik’s Cube, Furby and Cabbage Patch Kids, which were driven by the toy companies and planned for months in advance.”

Kai Chong Sim, Phd Student, MACE University of Manchester

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The viral nature of demand for fidget spinners gave a competitive advantage to companies willing to innovate to serve demand faster. Traditional toy companies were held back by the processes that previously made them so successful; the long-term planning with integrated marketing and logistics planning. Dr. Diver explains, “Production lead times for a toy would usually be long, allowing for the development of specialist machine tools to produce the parts. Once demand takes off, the company can ramp up production because the tooling is already in place or they can produce in advance to meet the predicted demand – they have time to plan for it. This didn’t happen with fidget spinners. What happened here, is 3D printing made it possible to skip the traditional long lead times and expensive tooling for injection moulding machines and start production immediately as demand arose.”

Video:

Siemens Global University Challenge 2018

Phd students at the University of Manchester’s are one of 10 finalists at the Siemens Global University Challenge. Here they showcase their entry for an Edge App for Condition Monitoring and Assistance to Complex Tasks in the Industrial Context.

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Spinning the Future

Issue no 3 - AUGUST 2018

industry 4.0

This is exactly what New York high school students Allan Maman and Cooper Weiss did. Taking inspiration from the Fidget Cube, they began producing a fidget toy using a 3D printer in their school’s Physics labs. Their ‘Fidget360’ toy was among the first to be mass produced; netting the pair $350,000 in sales in six months. Their use of 3D printing technology not only helped solve the problem of manufacturing lead times, it also helped deliver a cost-effective production process that delivered high profit margins for the two young entrepreneurs. Industry 4.0 tools combined with ‘Marketing 4.0’ as Maman and Weiss leveraged social media to create a perfect go-to-market strategy: an ad Weiss placed on Instagram for $15 resulted in nearly $2k of sales. To meet demand, they set up a small Brooklyn factory with thirty 3D printers. This helped the duo to secure a deal in late 2016 to supply Walmart with 300,000 of the toys. According to Walmart, fidget spinners received the highest number of customer enquiries for any product Walmart has sold in the past five years. Peak fidget spinner hit mid-2016. By February 2016, Fidget spinner videos were trending on You Tube. Within weeks, the trend had crossed the Atlantic and gone global says Frédérique Tutt, global toy market analyst for NPD. Google searches for fidget spinners increased 500 percent between February and April 2017. By May 2017, seventeen of the twenty best-selling toys on Amazon were fidget spinners. The supply chain was under pressure. With manufacturers of ball bearings and plastic housing parts suddenly enjoying high demand, the mainly Chinese manufacturers supplying the market were charging premiums of anything between 50 percent to 200 percent. This premium-pricing strategy came as a shock in a market previously characterised by its low-cost competing-on-price model. Demand for the toys was such that retail giant Walmart was struggling to supply its stores; with implications for its well-established supply chain. To meet its customer demand, the company imported spinners direct from China by air freight, circumventing its distribution centres to directly replenish inventory at its 3,500 superstores. Walmart wasn’t alone in finding its supply chain wasn’t able to cope with demand. The sudden eruption of the online fidget spinner frenzy had appeared ‘out of nowhere’ as far as retailers – used to stock planning 18 months ahead in many cases – were concerned. In many ways, the fad was a wake-up call as to the degree of agility in manufacturing and supply chain management that will be required in the future if businesses are to respond effectively to – and benefit from the full economic opportunities of – any subsequent social-media-driven product crazes. Lessons can also be taken with regards to how this could influence other products in the future also. In response to the challenge, retailers and manufacturers are experimenting with cognitive computing and AI-driven analysis of unstructured social media data, activity and trends in order to find quantifiable insights about consumer interests.

“As industry moves to localised hubs of widely distributed manufacturing sites – a highly distributed, connected network of production capability that is freely able to collaborate on certain projects then form new networks to meet new demand – logistics will become more complex and connectivity and real-time information will be key to success.”

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industry 4.0 Issue no 3 - AUGUST 2018 The vision for these cloud-based analytics engines is the ability to generate detailed, actionable recommendations about product mix a nd market potential. Combined with flexible manufacturing capabilities, 3D printing and integrated supply chains characterised by speed and precision, these analytics promise to give retailers and manufactures the ability to capitalise on future social-media-driven trends that would hitherto have been unexpected. What’s more, these analytical capabilities offer an opportunity for retailers and manufacturers to predict declining trends and demand – avoiding the problems of over-supply and avoiding the situation we see with the fidget spinner in 2018, with highly discounted models flooding discount stores now that demand has dropped off. Instead, manufacturers will be able to stop production and retailers can reduce supply at a time which minimises the risk of overproduction when supply is declining – helping to maximise profit at every stage of the sales cycle. This will also minimise the environmental impacts. In this way, we can see that the story of the fidget spinner has much to inform us about how the technologies of Industry 4.0 can be leveraged to respond more effectively to market demand and capitalise on commercial opportunities as they happen. What’s more, the use of 3D printing means manufacturers won’t have invested in specialist tooling to make the parts and products, so there is no pressure to sweat assets or deal with the depreciating value of investments. “The story of the fidget spinner highlights the way additive manufacturing is enabling much more flexible production operations. These new production operations don’t have the same upfront tooling costs and long lead times as traditional manufacturing,” says Dr. Diver. “But the story also exposes the real potential additive manufacturing has for consumer-driven customisation and personalisation on an individual level. Without being held back by complex production schedules and machinery, companies are able to meet customer demand quickly – making it possible to fulfil highly customised orders and still meet customer expectations of rapid delivery.” This opens up new possibilities for more localised production that is closer to customers – with production facilities no longer being driven by economies of scale but by agility. “In the future we can expect to see connectivity between people and all parts of the supply chain taking on even greater significance,” says Dr. Diver. “As industry moves to localised hubs of widely distributed manufacturing sites – a highly distributed, connected network of production capability that is freely able to collaborate on certain projects then form new networks to meet new demand – logistics will become more complex and connectivity and real-time information will be key to success.” While these new patterns of working will bring opportunity, they will also bring challenges, says Dr. Diver. In particular, risk and regulation will present a particular challenge as flexible outputs test accepted standards and conformity processes. It will be important for industry and regulators to start planning now how to deal with these challenges. For now, however, it is safe to say the opportunities Industry 4.0 technologies present dwarf these risks. 36

Spinning the Future


Case Study

Trialling Industry 4.0 tools in a Victorian Dockyard Insights on the connected enterprise

Continuing our series on actionable takeaways and new insights from every speech delivered at this year’s Industry 4.0 Summit 2018 –we look at the presentation by Jim Sibson, Head of Technology Development at Babcock International Group. Babcock provides skilled, bespoke engineering services which allow companies to improve performance and reduce costs. The company works in highly regulated environments managing complex assets for both civil and defence customers. Jim presented on digitally enabled asset management and the shift for firms to the connected enterprise.

Babcock and Brown have created an Industry 4.0 Demonstrator at Davenport Naval Base using tablets, sensors and AR Glasses to assess the savings on energy costs and maintenance costs. They demonstrated a business case for 4.0 technologies in the area of managing facilities and critical assets. His presentation looks at the analysis and collection of data and implementation of the findings in a 17th century dockyard.

Video:

Babcock International Group: trialling Industry 4.0 tools in a Victorian dockyard

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