Hooking your factory into an Industry 4.0 world (part two)

In part two of our Industry 4.0 feature, Michael Freyny, Executive General Manager, Digital Factory, Siemens Australia tells Brent Balinski about the effects on the “servitisation” of manufacturers, exploiting data, and what it all means for Australian manufacturing firms.

Manufacturers’ Monthly: Do you see this accelerating current trends, such as the move towards manufacturers being more service oriented, and for a smaller and smaller proportion of the overall value being created at the point of production?

Michael Freyny: Yes, we see this trend. Let me give you an example of the machine tool builder company SW (Schwäbische Werkzeugmaschinen) in Germany. As a highly specialised medium-sized company with about 300 employees, they naturally don’t have service engineers in every country who can support customers locally. But that’s not actually necessary. Based on their Machine Tool Analytics Services, they can now provide assistance to their customers in China, the US, and elsewhere right from their base in Germany.

A deep understanding of customer needs and processes is essential in creating value. By focusing on smart data, instead of only big data, engineers can “smartly” combine product know-how and process expertise with data analytics to help customers reduce unplanned downtime and improve operational efficiency. Data creates transparency and enables better decisions.

Siemens Digital Services provides connectivity, data integration and analytics, as well as cyber security. It can securely connect our devices and equipment anywhere in the world, thereby enabling remote monitoring and remote maintenance. By integrating the masses of data they produce with data from other sources, such as weather forecasts or field service data, and by performing advanced analytics, Sinalytics can create new insights. These insights enable our experts to predict and prevent failures, and uncover opportunities for performance improvements, as well as energy and cost savings.

Here are just a couple of Siemens examples:

  • The Siemens traffic management system in Potsdam, Germany, processes six terabytes of traffic, weather, and environmental data to devise environmentally friendly traffic control strategies.
  • A gas turbine generates on average 30 gigabytes of operating data daily. Smart evaluation of this data can determine when turbines need to be serviced, so customers benefit from less downtime.
  • At Snowtown II windfarm in South Australia, over 800 sensors collect data which is transmitted to a global centre and the performance of turbines can be optimised in real-time.

Manufacturers’ Monthly: What are some trends you see in terms of exploiting data from MES, manufacturing operations management and elsewhere?

Michael Freyny: There’s no doubt that people are looking for solutions here because data if used correctly get’s you those percentage gains needed to have a competitive advantage. And the opportunities to improve are all around us if we only know where to look – which is why we talk a lot about smart data. And Siemens has been expanding and building a portfolio of solutions exactly in this area.

In March this year, Siemens announced that it is now bringing the “MindSphere – Siemens Cloud for Industry” onto the market. MindSphere has been designed as an open ecosystem that industrial companies can use as the basis for their own digital services, such as in the fields of preventive

maintenance, energy data management or resource optimisation. Machine manufacturers and plant constructors can use the platform to monitor machine fleets for service purposes throughout the world, reduce their downtimes and consequently offer new business models. MindSphere also forms the basis for data-based services from Siemens, such as for the preventive maintenance of machine tools (Machine Tool Analytics) or integrated drive systems (Drive Train Analytics).

In addition, manufacturers need to connect their global supply chain Big Data sources with effective, fast solutions. Siemens can help them do this. Omneo is a cloud based, software-as-a-service (SaaS) solution recognised for its distinctive product data analysis capability that can identify and predict lifecycle or value chain flaws for instant resolution. It delivers the product performance intelligence needed to make impactful decisions across a global value chain. By providing greater visibility into both products and supply chain performance, it easily identifies and monitors supplier issues, prevents costly recalls, identify emerging trends, solve quality problems faster and improve customer’s experience.

Manufacturers’ Monthly: Are there any standout examples of what such processes can offer manufacturers? Are there any (preferably) local case studies that are worth considering?

Michael Freyny: One good example is how Dell leverages Omneo to explore billions of records and analyze millions of data combinations in under one minute with the help of data analytics. At the launch of Dell XPS13, it was noticed that the LCD was flickering on 2 of 6 demo units. Dell was able to identify and isolate the problem in 3hrs vs. 3days. If you’d like to hear more about this customer success on data analytics, I’d recommend you watch the Michael Shepherd video on our web site.

Manufacturers’ Monthly: What opportunities do the above present to Australian manufacturers, and how should they be looking to approach them?

Michael Freyny: We should approach this fourth industrial revolution with optimism. For the first time ever, advancements in technology are allowing Australian manufacturers to be part of a much bigger global picture. Through digitalisation technologies we can participate in global supply chains. Also, with this new world, the cost of labour becomes less and less of the equation because the real value will be in the design, engineering, process expertise and services. Many traditional roles will be automated – whether in China, Australia or anywhere else.

For a company looking at what they should do, it’s important to start at the top. Industry 4.0 transforms the entire business. The immense scope of change it brings, and the level of investment required means that it belongs on the CEO’s agenda. It encompasses not only digitising both horizontal and vertical value chains, but also revolutionising corporate product and service offerings, with the final goal being to better satisfy customer requirements.

Industry 4.0 also requires investment. From now until 2020, German industry will invest 40 billion Euro annually in Industry 4.0 applications. Industrial firms surveyed say they will invest, on average, 3.3 per cent of their revenues in Industry 4.0 solutions over the next five years. This corresponds to nearly 50 per cent of all planned capital investments.

This is really happening and something you should be taking urgent action on. Within five years, in Germany, over 80 per cent of companies will have digitalised their value chains. The companies expect that by 2020, 86 per cent of horizontal and 80 per cent of vertical value chains will achieve a high level of digitalisation, and will thereby be closely interconnected.

I would also recommend you try to understand the benchmark – where do you sit next to your competitors? What technologies are being used by your competitors? What can we do immediately and what do we need to plan for?

The potential for digitalisation is high. Another thing is to understand what data are you currently capturing or able to capture and what are you doing with it? Is it enough and is there something more you can do with the data?

And on a final note, look for a technology ‘partner’ rather than seeing technology companies as a typical ‘vendor’ relationship. We’ve found that the companies where we are proactively and deeply connected are competitive – not just locally but often globally as well.