We are already moving from an
Outcome-based Economy (connected ecosystems, platform enabled market place, pay-per-outcome)
to an Autonomous Pull Economy (continuous demand sensing, end-to-end
automation, resource optimization, waste minimization and workforce
transformation).
Key digital enablers
Digital transforms physical
industries through connected products, systems, processes, people and
artificial intelligence:
-
Cloud with its inexpensive
& abundant storage enables aggregation of data streams from a large variety
of sources.
-
Advanced Analytics offers descriptive
and increasingly prescriptive decision support leveraging algorithms,
automation, deep domain expertise such in material science, electrical
engineering, etc.
-
Real-time Analytics enables
real-time response to cyber physical systems.
-
Ubiquitous connectivity
extends to physical products, infrastructure and all types of things.
-
Machines, devices,
facilities, fleets and networks connect through intelligent sensors, software
applications and controls.
-
New technical data standards and technical architecture
bring together the different players across the ecosystem.
-
Data-driven decision making (DDD) – research indicates
that companies, which use it considerably more competitive and profitable
The
opportunities to aggregate and optimize
The learning experience of each machine can be
aggregated into a single information system that accelerates learning across
the entire machine portfolio and even entire network of the overall
organization. Learning exponentially increases.
An aggregate view across machines, components, sub
components and even materials enables optimal products, parts and other inputs
delivered, at the right time to the right location, in the most efficient way.
With big data and new data compression techniques
plant managers can track massive data streams of all devices continually and correlate
diverse data from different devices & source to generate valuable insights
for improvements formerly impossible. New visualization abilities, growing
knowledge banks, etc. further improve decision making.
The cloud allows to overcome traditional information
& data silos within organizations. It allows enables to bridge former
boundaries among organizations, industries and locations.
Real-time diagnostics and predictive analytics will
reduce maintenance costs and prevent machine breakdowns before they occur,
avoid capital damage, revenue loss and accidents. Engineers can question
systems on irregularities and receive intelligent response within seconds. Fleet
and logistics will be optimized in real-time, improving the entire supply
chain.
Everybody speaks
about the Consumers, but the impact on the industrial companies is at least as
big!
Industrial Internet advances will enable enhanced
asset reliability by optimizing inspection, maintenance and repair processes.
It will improve operational efficiencies across all operations down to the very
device level.
GE has done a tremendous work on analyzing the impact
of digital to the industrial sector. They estimate the potential benefit of
digital (they call it Industrial internet) to the global economy worth $80
trillion by 2025, approximately one half of the entire global economy!
Just a one percent productivity increase in the commercial
aviation industry, for example, would translate to $30 billion over 15 years.
And this only counts fuel cost savings!
A one percent productivity gain in the global
gas-fired power plant fleet could yield $66 billion savings in fuel
consumption. Health care savings could amount $63 billion. World rail networks
$27 billion. Similar savings and productivity gains apply to all industries…
Manufacturing
becomes important again
Research proves that Services becomes the major GDP
contributor and driver in developing countries. Among the leading nations it is
between 72 percent (Japan) and 80 percent (USA).
However, manufacturing is important to sustain wages
and living standard of the overall population. Industrial nations need to
revisit this issue and re-build their manufacturing sector.
The Industrial Internet allows again to effectively
compete with developing nations’ low manual costs.
Important
success drivers
Security
Robust cyber security is essential to manage
vulnerabilities and protect sensitive information and intellectual property as
well as personally identifiable information (PII). It must cover the devices,
networks and the cloud with vulnerability lifecycle management, end-to-end
protection, intrusion detections/ prevention systems, firewalls, logging and
network visibility, and sufficient security training for engineers, management
and users.
Data needs to be encrypted on the devices as well as
in the transmission of data.
Every player in the ecosystem has a role to play:
Technical vendors (product design, supply chain, embedded security features), Asset
Owners/ Operators (secure facilities and networks, cooperate with regulators
and law enforcement), Regulators & Policymakers, Academics (train
specialized people such as digital-mechanical engineers, data scientists, etc.)
Data Centers
The data is increasingly exponentially. From 2012 to
2025 the data will multiply by perhaps 40 times! The majority of data centers
to process it in 2025 have yet to be built.
Job losses and
new roles
Digitalization will bring an unprecedented change in
the global job market. Many traditional professions and positions will be taken
over by programs, robots and other emerging technologies. Automation will
eliminate many people in the low skill levels. But also very educated people
will be affected. (Read my blog on IBM Watson and the health care industry).
With the elimination of jobs new roles are emerging:
Next generation engineers (blend traditional engineering skills with
informatics & computing to serve as digital engineers), data scientists (who
can blend statistics, data engineering, pattern recognition, advanced
computing, uncertainty modelling, visualization) and user interface experts (industrial
design of human-machine interaction, operation through gesturing and facial
recognition, etc.)
The difference between
Industrial revolution and the Industrial Internet
The instrumented industrial machine systems have
connected with the physical & human networks and entered into a continuous cycle
of communication, exchange and mutual learning.
While the industrial revolution focused on resources
and physical objects, the Industrial Internet focuses on innovation, knowledge,
software and intelligent systems & devices.
Network, fleet, asset and facility optimization happens
through intelligent devices, systems and decision making.
Potential
Problems & Challenges
The Industrial Internet promises us operational improvements
across all industries worldwide. Based on the benefits of the Internet we can
extrapolate the positive outcomes of the Industrial Internet:
-
Cost-deflation (similar as when companies adopted ICT
equipment)
-
Labor productivity growth (1996 -2004 it generated 3.1
percent on average)
-
Average GDP growth could be 25 to 40 increase (based
on a productivity increase of 1 percent)
However, all calculations are based on the assumption
that labor and capital would accumulate at the same pace. That is not realistic,
given that perhaps 20 to 25 percent of jobs may become obsolete by 2025. And it
is simply not sensible to believe that shop keepers, manual labor workers and
other less skilled people can be up-skilled enough to stay competitive. What to
do with these people?
+++
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