January 19, 2021

At the Forefront: How Innovation is Transforming Industry

Forbes Mgazin, Russia

Original Online Version: https://www.forbes.ru/partnerskie-materialy-photogallery/414295-na-peredovoy-kak-innovacii-transformiruyut-promyshlennost

Author: Anna Kholyavko, Forbes Contributor

Digitalization is changing even such conservative industries as manufacturing. Without new technologies, it is almost impossible to adapt to the rapid changes in the post-COVID environment and market conditions. What kind of solutions help to improve production efficiency? What do you need to implement them? What kind of stop factors can there be? We talked about all of this with experts from Microsoft and its partners. 

The 5th Industrial Revolution can happen when digital solutions that are being implemented now as pilot projects become a reality for enterprises. According to a forecast by experts at McKinsey, in 2025, the contribution of industrial digital technologies to the value chains for manufacturers and suppliers will exceed $3.7 trillion, which can lead to a qualitative breakthrough in the industry. The latest technologies are already being actively implemented in production - according to data from PwC for 2019, 71% of US manufacturers create or test solutions related to the Industrial Internet of Things (IIoT). Most of them (60%) use IIoT in projects within their companies – 57% when working with partners, contractors and in supply chains, and 58% when working with their B2B clients. 
“Organizations today have to work in conditions of rapid changes. Without the use of modern technologies, it is very difficult for a business to provide the necessary level of flexibility in order to adapt to them. Technology has become a key tool in rebooting enterprises, driving innovation even in traditional areas such as industry,” says Christina Tikhonova, President of Microsoft Russia. “Companies realize that technologies not only allow effective organization of business processes and interaction between employees at large enterprises – they also ensure compliance with industrial safety requirements, release people from routine and hazardous production processes, reduce the cost of equipment maintenance, and much more besides.” 

The scenarios for applying innovation can be quite different. For example, cognitive services can be used to solve specific production and organizational tasks, such as image analysis to control regulatory procedures, and digital twin technology can be used for complex optimization of the supply chain, including identification of possible failures before the operation begins. In addition, the technologies of predictive analytics and maintenance in combination with IIoT network elements are effectively used for planning maintenance of capital assets, optimization of equipment operating modes, etc. 

Learn more in our slideshow about how digitalization is changing industry and what effects businesses are achieving: 

Forbes Article

First Level: Connected Devices
Industry 4.0 has greatly changed the very approach to the perception of production processes. “Technology is a key tool for business transformation, and the Internet of Things is no different”, said Kinga Pikuch, Director of Industrial Solutions for the Corporate Sector at Microsoft in Central and Eastern Europe. 

Sensors and other devices monitor in real time both the progress of processes and the condition of equipment. According to PwC, 44% of manufacturers are already using the Internet of Things for predictive maintenance, with another 27% planning to do so within two years. 

The development of the Industrial Internet of Things allows for a broader view of manufacturing. “Thanks to accessible and understandable information, the operator gets a clear idea about all the conditions of the process, on the basis of which better decisions can be made, which makes the operation of the enterprise safer and more predictable”, says Andrey Vanyukov, Head of Sales at Emerson Solutions. “Digitalization provides vital advantages in a competitive environment: for example, it increases work efficiency because of information that was previously impossible to obtain at all, or only after major investments. Initially, wireless solutions were focused on single remote locations away from the main production facilities, but now they are being applied in almost all industries”, adds Denis Tagirov, CIS Measurement Business Development Manager at Emerson Automation Solutions.

According to Emerson, online monitoring can help reduce unplanned equipment downtime by 43% and the number of hazardous incidents at a plant by 50%, while saving up to 50% in equipment repairs by detecting problems before a failure occurs.

Another important effect, especially in a rapidly changing environment, is time savings. According to Honeywell, another leading provider of solutions that enable businesses to integrate data from multiple devices from different manufacturers on a single platform, the Internet of Things enables companies to complete projects faster by reducing design time by three to four months and reducing engineering labor costs by 20%. In one particular project, Honeywell was able to reduce unplanned downtime by 90%.

Dionysios Stavrakas, Director of Sales for Enterprise Solutions at Honeywell, notes that many manufacturers do not even know what is happening in their plant, because it is too expensive and time-consuming to find out. Until recently, industrialists shied away from investing in IIoT because they believed this was just an easier way to view the data they were already receiving. “Of course, IIoT goes far beyond simple data collection. The main value lies in understanding and recommendations on how to improve the processes in the company that are done in real time,"emphasizes Dionysios Stavrakas.

The expert identifies three main advantages of IIoT implementation: productivity increase, maintenance of the company's sustainable development, and safety of employees. “Our Honeywell Forge enterprise management software helps customers aggregate disparate operational data and gain the insights they need to make actionable decisions using cloud computing, all-asset connectivity and artificial intelligence. This enables higher productivity to be achieved," says Dionysios Stavrakas. 

He adds that digital solutions have been actively implemented in the fuel and energy complex and in aviation. For example, cloud-based Honeywell Forge's analytics optimizes aircraft operations and routing, resulting in measurable fuel savings on every flight. 

The most active solutions of the industrial Internet of Things are being implemented in oil and gas companies, power engineering and metallurgy. One of the most striking Emerson cases is a project to automate production and maintain reservoir pressure in an oil and gas field in Kazakhstan based on IIoT PlantWeb. There was no control over the reservoir pressure on the pipeline, as a result of which its ruptures were not identified in time. 

This led to significant monetary losses in the form of under-pumping of water into injection wells and, as a result, lost profits for oil, as well as increased water supply costs. With the introduction of wireless monitoring technologies, the company was able to improve safety, improve and facilitate the working conditions of the maintenance personnel, and increase the production rate of wells, while reducing the well maintenance costs by 65%.

And within the framework of the Emerson project in the Volga region, it was necessary to quickly automate control of the level of petroleum products and pressure in storage tanks. PlantWeb wireless technology has reduced automation costs by 34% and quickly eliminated the injunctions of regulatory authorities by cutting start-up times by six times while improving installation quality. 

However, manufacturing enterprises in other spheres have also already appreciated the effect of digitalization. Carmelo Cinardi, vice president of PTC, recalls the case of a European food packaging manufacturer. Thanks to the digital asset monitoring system and production KPIs alone, the company managed to save more than $20 million. 

The growing focus on sustainability and resource use efficiency is another incentive to implement solutions that enable real-time monitoring of production processes and equipment operation. Dionysios Stavrakas of Honeywell notes that a cloud platform combining HVAC data helps building owners control costs better and reduce their carbon footprint. 

Forbes Article

Second Level: Integrated Solutions 

All major industrial companies now understand that complex, integrated solutions deliver greater value – either at a single production site or across the entire enterprise. “We are seeing exponential growth in all of our digital transformation solutions,” said Carmelo Cinardi, PTC vice president. 

"These integrated solutions can help companies reduce costs and risks while improving efficiency and effectiveness, not to mention the fact that they can support significant strategic shifts, including changes in business models."

The increased interest of companies is primarily due to high expectations of effects and benefits, confirms Nikita Atamasov, senior consultant in the practice of platform solutions at SAS Russia and the CIS. “Companies are ripe for large-scale digital projects in terms of the amount of data and the maturity of basic automation. 

At the same time, for new industries, the effect will be more noticeable and significant than for those companies that have already traversed a significant part of the digital path," says Atamasov. 

According to Carmelo Cinardi, implementing an IIoT platform solution allows companies to be more agile, efficient and effective: “In fact, by being able to receive real-time data from the shop floor and monitor throughput, overall equipment efficiency and other aspects, companies can increase operating efficiency and reduce business risks – both traditional and arising from the new norm. Integrated solutions give the manufacturer the flexibility to improve service quality and customer satisfaction."

An important area of application of complex digital solutions in industry is occupational safety. According to PwC, 39% of manufacturers have improved enterprise safety using the Internet of Things, and 44% plan to do so within the next two years. The use of technology – biometrics, image recognition, and environmental sensors – allows manufacturers to better control the physical access and security of assets and systems, as well as the safety of the shop floor. Such control can be carried out at all parts of production – for example, for a mining and processing plant, this can be a shop floor area, a quarry, and loading and unloading operations. 

During the COVID-19 pandemic, the tasks solved using video analytics systems have increased. Now enterprises are using them to look for those who do not observe social distance, take off their masks or make too long contact with colleagues. The system itself detects violations on video, sends notifications to the responsible person (in the format of online reporting, sms, e-mail - as convenient), maintains a list of offenders and even offers to clarify the rules if it sees significant problems in their implementation. The trend in computer vision was noticeable long before the pandemic, but now the demand is growing, according to Andrey Matveenko, senior consultant at SAS.

Forbes Article

Third Level: Ecosystem

The Industrial Internet of Things plays a key role in creating an ecosystem around a company: the supply chains of one enterprise become linked to the supply chains of another enterprise, one enterprise exchanges information with another. IIoT solutions can track the status of products from the moment raw materials are extracted for their manufacture until they arrive at their final destination. Machine learning systems help optimize shipping routes, reduce errors and minimize fraud. According to PwC, 41% of industrial manufacturers have already felt the benefits of IoT implementation in supply chains, while another 40% hope to see an effect within two years.

During the pandemic, organizations faced raw material shortages and delays in supply, resulting in increased production times and costs for the company. The Internet of Things has become one of the technologies that has helped to minimize these problems. For example, Blue Yonder's Luminate Control Tower maps the spread of COVID-19 and the associated adoption of restrictions across regions so that potential bottlenecks can be identified when correlated with data from the firm's supply chain. Powered by the Microsoft Azure cloud, AI and machine learning predictive systems, this solution utilizes data from the entire digital ecosystem to reduce costs by up to 30% and improve planning efficiency by 60%.

A digital twin is the exact virtual representation of the physical asset, pulling in data from across the lifecycle of the asset and from the ecosystem of suppliers, contractors and operators. “Everyone benefits from the effective use of digital twins and the ability to share their up-to-date information – company, its employees and its contractors, says Anne-Marie Walters, Industry Marketing Director at Bentley Systems. – Engineers spend less time searching for and verifying information and can spend more time on evaluating different options and determining better solutions. Maintenance and operations personnel have access to accurate plant information and can make decisions quickly, focusing on improving reliability and avoiding unnecessary shutdowns. Plant owners have a safer, more productive plant, and equipment suppliers and contractors can deliver more added-value services.”

Bentley Systems partnered with Schneider Electric to create a digital twin of Microsoft Asia Pacific's new six-story headquarters in Singapore: facility managers use the digital copy to monitor energy consumption, quality of air, room occupancy and temperature levels throughout the office, and more. There are also projects of bigger scale, for example, digital twins of railroad network’s sections in Great Britain and Italy. Using digital twins to integrate design decisions with operations information, an iron and steel plant in Laoting, China reduced energy consumption for parts of the plant by up to 70%, and a cement manufacturer in Fujian cut an estimated 30% off the operating and maintenance costs.

It is possible to create a consolidated ecosystem of Internet of Things within one vertically-integrated holding, combining the data from different enterprises. Such a solution Bentley Systems offered to Volgogradnefteproekt (VNP). VNP’s client was building seven platforms, put into service in the Caspian Sea. Volgogradnefteproekt was tasked with managing all the engineer and technical information from multiple contractors during the design to create a consolidated 3D model for use during construction. Volgogradnefteproekt themselves were responsible for the design and engineering of the conductor platform and are now responsible for many modifications projects.

Volgogradnefteproekt is also responsible for the as built 3D model of the assets and associated technical information used by operations. For this they use Bentley’s AssetWise bringing together data and information from multiple different systems into a single, connected data environment. As a result, the project team has made an information-rich digital model of the oilfield infrastructure, which corresponded to already built objects. This solution provided a direct support for engineer, construction and operation teams to make [better] decisions. Through the creation of a single ecosystem, the time of data searching went down by 30% and the time of data exchange between platforms – by 70%. Due to the use of digital models the company expects to reduce annual operations costs of the field at least by 30%.

Forbes Article

Fourth Level: Challenges and Recommendtions

It would seem that there is no need to prove the benefits of digitalization. Nevertheless, many industrialists are in no hurry to introduce new technologies. 

According to SAS experts, many of them are stopped by difficulties in calculating the economic effect in some areas. For example, if the goal is to improve the quality of the manufactured goods, then it is possible to clearly estimate the percentage of rejects and the degree of growth in the share of high-quality products. But if the goal is to prevent abnormal situations with equipment, it will be difficult to take into account all possible financial losses from an accident when calculating the economic effect. To overcome this barrier, experts advise starting digitalization from those parts of production where the maximum tangible effect can be achieved. 

Indeed, the digital transformation process is not so easy, and business can get lost, not knowing where to start, confirms a Honeywell spokesperson. But even now, the market is offering cloud solutions and software that can centralize data and provide a single point of integration, regardless of which platforms the customer has used previously.

Microsoft's Kinga Pikuch cites implementation complexity and lack of resources as constraints. Most of the time, the IoT customer's experience consists of three phases, each of which involves specific business outcomes and investment returns, from cost savings to an improved customer service experience, Kinga said. First, conduct a concept check to clearly identify business needs. Second, prepare for scaling (synchronization between separate business units). Third, scale throughout the organization.

Where should a company start when implementing digital solutions? With a session on developing ideas for business scenarios, in which both managers and technical specialists will take part, advises Pikuch.

Before moving on, a company must understand its current level of maturity in relation to organizations with successful IoT adoption, typically evaluating itself against three metrics: human resources, technology, and business. “Next, start implementing the chosen scenario by collecting information about physical objects, connecting them to the cloud to increase operating efficiency. Choose a cloud platform such as Microsoft Azure IoT, capable of connecting any IoT device, supporting multiple solutions, and allowing them to scale quickly, advises Pikuch. - Analyze and visualize physical object data using predictive analytics and machine learning to identify patterns based on historical and near real-time data. Define principles for building a strategy for working with enterprise data. Then, focus on integrating into existing business processes and building a sustainable long-term infrastructure to utilize the IoT throughout the organization.”

“All the resources and services you need are now available in a click, but it's important to remember that they are also available to your competitors,” warns Kinga Pikuch. “Your task is to be the first, to leave the others behind.” 

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