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Jim Fulcher

AI on the plant floor

Posted by Jim Fulcher Apr 29, 2017

Amid much recent industry interest in the use of increased robotics on the plant floor, I was interested to see that industrial technology supplier ABB and IBM have announced a strategic collaboration which combines ABB’s digital offering, ABB Ability, with IBM’s Watson Internet of Things cognitive capabilities for customers in utilities, industry, transport and infrastructure. The first two joint solutions powered by ABB Ability and Watson will bring real-time cognitive insights to the factory floor and smart grids, ABB and IBM explain.


ABB has an installed base of 70 million connected devices, 70,000 digital control systems and 6,000 enterprise software solutions, while IBM is known for its artificial intelligence and cognitive computing. This combination of solutions marks “the next level of industrial technology, moving beyond current connected systems that simply gather data, to industrial operations and machines that use data to sense, analyze, optimize and take actions that drive greater uptime, speed and yield for industrial customers,” says ABB CEO Ulrich Spiesshofer.


“This important collaboration with ABB will take Watson even deeper into industrial applications—from manufacturing, to utilities, to transportation and more,” says Ginni Rometty, IBM Chairman, president and CEO. “The data generated from industrial companies’ products, facilities and systems holds the promise of exponential advances in innovation, efficiency and safety.”


In one solution, ABB and IBM will leverage Watson’s artificial intelligence to help find product defects via real-time ultra-high definition production images captured through an ABB system, and then analyzed using Watson IoT for Manufacturing Cognitive Visual Inspection. Previously these types of inspections were performed manually, which was often a slow and error-prone process. By bringing Watson’s real-time cognitive insights directly to the shop floor in combination with ABB’s industrial automation technology, companies will be better equipped to increase the volume flowing through their production lines while improving accuracy and consistency, according to IBM and ABB.


As parts flow through the manufacturing process, the solution will alert the manufacturer to critical faults—not visible to the human eye—in the quality of assembly. This enables fast intervention from quality control experts, IBM notes. Easier identification of defects impacts all goods on the production line, and helps improve a company’s competitiveness while helping avoid costly recalls and reputational damage. Based on early testing of a production cycle that typically takes eight days with half of one day required for necessary visual inspection, the new IBM and ABB solution reduced inspection time by 80 percent and cut manufacturing defects by seven percent to 10 percent, IBM reports.


“By bringing cognition to the factory floor, IBM is helping usher in the fourth industrial revolution where entirely new levels of efficiency, flexibility and product excellence in manufacturing can become an everyday reality,” says Harriet Green, General Manager, IBM Watson IoT, Customer Engagement and Education. “With our new Cognitive Visual Inspection capabilities, we’re bringing a new set of intelligent eyes to the manufacturing floor which have the potential to help manufacturers not only virtually eliminate product defects, but may also help businesses maintain product excellence, build brand reputation and increase revenue.”


What are your thoughts about using artificial intelligence and cognitive computing to decrease defects and improve yield? What other processes would be good fits for this technology?

Last week, during Walmart’s Sustainability Milestone Summit, the company launched a sustainability platform inviting suppliers to join Walmart in committing to reduce greenhouse gas (GHG) emissions from their operations and supply chains. The initiative, called Project Gigaton, will provide an emissions reduction toolkit for a broad network of suppliers striving to eliminate one gigaton of emissions, focusing on areas such as manufacturing, materials and use of products by 2030. That’s the equivalent to taking more than 211 million passenger vehicles off U.S. roads and highways for a year, according to a Walmart spokesperson.


“We’re proud of the improvements we’ve made in reducing our own emissions, but we aim to do more,” says Kathleen McLaughlin, senior vice president and chief sustainability officer for Walmart. “That’s why we’re working with our suppliers and others on Project Gigaton.”


Walmart’s plan calls for first reducing its absolute Scope 1 and 2 emissions by 18 percent by 2025, defined as:

Scope 1: These are emissions that arise directly from sources that are owned or controlled by the supplier.

Scope 2: These are the emissions generated by purchased electricity consumed by the supplier.


Second, Walmart will work to reduce CO2e, or carbon dioxide equivalent, emissions from upstream and downstream Scope 3 sources by one billion tons (a gigaton) between 2015 and 2030. These are emissions created by the activities of a supplier, but are generated by sources not owned or controlled by the organization. Walmart has identified energy, agriculture, waste, packaging, deforestation, and product use and design as the goal areas in which to focus its Scope 3 climate efforts. Participating suppliers have been encouraged to focus their commitment in one or more of these goal areas.


To help suppliers make commitments to emission reduction, or to establish emission reduction projects, Walmart collaborated with NGOs, like World Wildlife Fund and Environmental Defense Fund, and additional like-minded organizations to create an emissions reduction toolkit. In this toolkit, Walmart highlights the business case for why suppliers should consider joining Project Gigaton.


Supply chains are the “new frontier of sustainability,” says Carter Roberts, president and CEO, World Wildlife Fund. The journey products take from “source to shelf will collectively shape our planet’s future,” he says.


“Project Gigaton is a testament to the transformative impact that leaders of industry can have on our greatest common challenges,” Roberts continues. “As more companies follow in the footsteps of Walmart and their suppliers, we can achieve the critical mass needed to address climate change. Today’s commitment represents an important step toward a safer and more prosperous future.”


Through the years, Walmart leadership has seen that integrating sustainable practices into the company’s operations improves business performance, drives technological innovation, inspires brand loyalty and boosts employee engagement, says Laura Phillips, senior vice president, sustainability, at Walmart.


“Our suppliers recognize the opportunity to realize those same benefits in their businesses,” Phillips says. “By working together on such an ambitious goal, we can accelerate progress within our respective companies and deep in our shared supply chains.”


What are your thoughts on sustainability? Do your company and its suppliers have plans to reduce greenhouse gas emissions?

The good news, according to the results of a new survey, is that 70 percent of women said they would stay in manufacturing if they were to start their career today. On the other hand, the study also shows that many manufacturers aren’t doing enough to target women (a critical talent pool), which could help them close the skills gap.


The study, “Women in Manufacturing: Stepping up to make an impact that matters,” was conducted by The Manufacturing Institute, Deloitte and APICS, and is the result of more than 600 survey responses from women professionals in the manufacturing industry, along with nearly 20 manufacturing executive interviews. The insights explain how companies may effectively recruit, retain and advance talented women in manufacturing, and illustrates ways that women in manufacturing are making an impact in the industry through programs like STEP (Science, Technology, Engineering and Production) Ahead.


I was interested to see that some of the most important employment factors for women in manufacturing—according to the respondents—include opportunities for challenging and interesting assignments, attractive pay and good work-life balance. The most impactful programs to help retain women in manufacturing include formal and informal mentorship programs, flexible work practices, and increasing the visibility of key leaders who serve as role models, according to survey respondents.


“The industry is missing out on a critical talent resource to help advance innovation in manufacturing, increase America’s competitiveness in the global manufacturing landscape and close the skills gap,” adds Trina Huelsman, vice chairman, co-author of the research, Deloitte & Touche LLP. “Unleashing the potential of women in manufacturing can reap big rewards. Organizations that make recruitment, retention and advancement of women a strategic priority can bring diverse decision making perspectives, drive innovative and creative solutions, and may achieve overall better business performance.”


While there has been an overall positive change in the industry’s attitude toward women employees, women still only comprise 29 percent of the U.S. manufacturing workforce, while they make up approximately half of the total U.S. labor force. To help address that challenge, The Manufacturing Institute is promoting the role of women in manufacturing through mentoring, recognition, research and leadership with its STEP Ahead initiative, which was launched in 2012 to celebrate women in the manufacturing industry who are making a difference through advocacy, mentorship, engagement, promotion and leadership.


Toward that goal, the study also examines the positive impact of STEP Ahead, reporting insights from former honorees and emerging leaders who indicate STEP Ahead has helped raise the visibility of opportunities for women in the industry, manufacturing opportunities in the community, and opportunities for women within their companies. The STEP Ahead honorees and emerging leaders have reached an estimated 300,000 individuals—from peers in the industry to school age children—through their industry engagement. Indeed, nearly 90 percent of the STEP Ahead honorees indicate they are engaged with individuals to raise the visibility of the industry; 92 percent said they are engaged in efforts in the development of women; and 70 percent said they are engaged with the K-12 system to encourage young girls and boys to consider careers in manufacturing.


“Many outstanding women leaders are making huge strides in building and promoting the manufacturing industry and are demonstrating what modern manufacturing offers: rewarding and fulfilling careers with limitless opportunity for growth,” says Jay Timmons, president and CEO, National Association of Manufacturers. “Today’s manufacturing employees are building and designing the future, and women in manufacturing serve as ambassadors to move this industry forward.”


What are your thoughts on the number of women in manufacturing? Does your company do enough to recruit, and retain, women?

Although many companies are unprepared for the Industrial Internet of Things (IIoT), most executives at those companies realize that the future of their business depends on it, according to a new study from the Business Performance Innovation (BPI) Network.


The results of the survey suggest that large-scale integrators and other channel partners will be among the largest IIoT beneficiaries over the next several years, a report from BPI Network explains. They will likely play a significant role in planning and implementation at many companies due to major internal gaps in the technical skills and management know-how needed to deploy and integrate IoT into operations and new products, the report notes.


The report, “The Impact of Connectedness on Competitiveness,” was developed by the BPI Network in partnership with the CMO Council, Penton’s IoT Institute and The Nerdery, a digital strategy, software engineering and design firm. It’s based on a global survey of 350 global executives and interviews with innovation leaders at large global enterprises, including Airbus, Balfour Beatty, Embraer, Philips Lighting, Whirlpool, LafargeHolcim and Hitachi.


“Executives tell us that IIoT technologies are about to play a significant role in business and industrial performance, delivering significant improvements in operational efficiency and uptime, as well as growth from new business models, products, services and customer experiences,” says Dave Murray, Head of Thought Leadership for the BPI Network. “Nevertheless, less than two percent of executives at large companies say they have a clear vision for how to move forward, or have large-scale implementations underway. That dichotomy suggests we’re experiencing the lull before the storm of IIoT transformation. This is an opportunity for real competitive differentiation and advancement.”


Indeed, according the survey responses, 52 percent of executives at large enterprises—and 41 percent of executives at all companies—expect IIoT to have a significant or major impact on their industry within three years. However, just 1.5 percent of executives at large companies say they have a clear vision with implementation well underway, while another 57 percent are either beginning implementation, have pilots underway or are committed and in the planning stages.


According to the survey respondents, companies will focus their IoT investments on new products and services (cited by 35 percent of the respondents), followed by customer touchpoints (cited by 29 percent) and manufacturing (cited by 23 percent). The main benefits of IIoT are expected by the respondents to be more cost-efficient operations (cited by 47 percent of the execs), product and service differentiation (36 percent), and improved customer engagement and satisfaction (34 percent).


Making the transformation to IIoT-enabled businesses clearly requires new skills and mindsets. Chief among those requirements, according to the executives, are new technical skills (cited by 51 percent), better data integration and analytics capabilities (cited by 41 percent), and rethinking the business model (cited by 33 percent). Most executives, however, say their companies have significant gaps in these areas: 31 percent of the executives said their organization faces a “major skill gap” in IIoT readiness, while another 31 percent say the talent gap is “large, but improving somewhat.” It’s encouraging to see that 20 percent of the executives said their company’s employees’ IoT skills are quickly improving, while another seven percent said they believe their organization’s employees have most of the skills in place.


“Global businesses are clearly working to put the needed skills in place to address the opportunity of connected, intelligent products and machines, but those talents are in short supply,” Murray says. “We can expect—for the time being—that system integrators, consulting and software engineering firms with the right skills in connectivity, sensor technology, data analytics and complex integration will benefit from the race to keep pace with IIoT enablement.”


What are your thoughts on the IIoT? Do you agree it will have a significant or major impact on your industry within three years? At the same time, does your organization have a skills gap in IIoT readiness?

Leveraging the Internet of Things to promote supply chain innovation, delivering more than $16 million in cost savings, transforming processes to save 450 work hours per week and reducing expedited freight costs by more than 70 percent are just a few of the personal achievements of this year’s winners in the 30 Under 30 Rising Supply Chain Stars Recognition Program. Run by and Institute for Supply Management (ISM), this is the third year of the program, which recognizes individuals who have demonstrated leadership, innovation, collaboration and other outstanding attributes.


“Our 30 Under 30 winners are fast becoming leaders in the digital industrial economy,” says Tony Uphoff, president and CEO of Thomas Publishing Company. “They combine talent, innovation and technological savvy in their work, and we’re excited to honor them.”


One of the aims of the program is to help position supply chain careers as viable and rewarding choices for the Millennial generation. This is especially important given that the industry faces a looming talent shortage as the Baby Boomers who dominate supply chain management begin to retire.


“Creating a pipeline of young talent needs to be a top priority across the industry,” Tom Derry, CEO, ISM, said last year when kicking off this year’s program. “By showcasing the talent, accomplishments and passion of our program’s winners, we help build awareness and enthusiasm for the profession. We encourage everyone in supply chain management to nominate more deserving superstars for the program.”


Due to changing demographics, younger generations in the workforce are stepping into leadership roles earlier than their predecessors. This is particularly evident when looking at this year’s winners, with some as young as 24, who are making an impact at companies that include SpaceX, Dell Technologies, 3M Company and GE Aviation, in the aerospace & defense, oil & gas, automotive, healthcare, pharma, retail, manufacturing, business services, operating services, non-profit, military and government industries.


This year’s “Megawatt Star” is Daniel Kaskinen, 29, who was recognized for his significant achievements as strategic sourcing manager with Sonic Automotive. He is now manager, strategic sourcing at Premier, Inc.


In nominating Kaskinen, Jeff King, director of procurement at Sonic Automotive, said that Dan is a “go-to player [who] is tasked with things that have no ‘instruction manual.’” He explained that Kaskinen was able to design processes that create more efficiencies for Sonic Automotive, such as a formalized partner request process and a formal RFP.


When asked about the value of careers in supply chain management, Kaskinen said he believes procurement and supply chain are “fantastic fields to evaluate opportunities and come up with strategies on how to execute new initiatives.” He went on to say that, in many ways, procurement is a “great environment to practice and hone” entrepreneurial skills.


“It’s a very unique line of business that allows you to scratch many, many different itches—you can grow your professional career in such a wide range of exposure, all from within the same department,” Kaskinen said.


What are your thoughts on the 30 Under 30 program? Secondly, do you work with or know any “rising stars” who are Millennials?

The U.S. Securities and Exchange Commission (SEC) said last week that it’s suspending enforcement of the costliest requirements of the “conflict minerals” rule, after a court remanded it back to the regulator because part of it violates the U.S. Constitution.


Acting SEC Chairman Mike Piwowar, a Republican, said he has asked staff for a recommendation on how to proceed with the rule, which requires companies to disclose if their products contain certain minerals from the Democratic Republic of Congo, a Reuters story reports. For now, Piwowar said, companies won’t be required to conduct a due diligence review or an audit, which are both part of the process used to determine the origin of the minerals. The move isn’t totally unexpected because a leaked document from the Trump Administration that has been floating around Washington for weeks calls for the rule to be temporarily suspended.


“Until these issues are resolved, it is difficult to conceive of a circumstance that would counsel in favor of enforcing” the due diligence requirements, Piwowar said in a statement, Reuters reports.


The move drew immediate backlash from SEC Democratic Commissioner Kara Stein, who accused Piwowar of acting beyond his authority to gut the meat of a rule mandated by Congress, adopted by the SEC and reviewed by the courts.


“It’s unprecedented for one commissioner, acting alone and without official notice and comment, to engage in de facto rulemaking,” Stein said, Reuters reports. “It represents a troubling attack not only on the Commission process, but also on the restraints of government power.”


The conflict minerals rule is required by the 2010 Dodd-Frank Wall Street reform law and is supported by human rights groups which want companies to tell investors if their products contain tantalum, tin, gold or tungsten mined from the Democratic Republic of Congo, in the hope that such disclosures will curb funding to armed groups known for human rights abuses. Business groups, however, have contended that the rule forces companies to furnish information that is irrelevant to making investment decisions and that it’s cost prohibitive for companies to trace the source of minerals through the supply chain.


Interestingly, an EPSNews article notes that while the electronics industry has maintained the rule is costly and burdensome, many electronics companies have embraced the effort that seeks to boycott minerals sourced from the Congo and other regions in Africa known for armed conflict. Indeed, capacitor manufacturers such as AVX Corp. and Kemet—significant users of tantalum—have spearheaded electronics industry efforts toward conflict-free sourcing, the article explains. What’s more, AVX and Motorola Solutions were founders of the Solutions for Hope tantalum program that tests the feasibility of responsible sourcing, and Flextronics, Hewlett-Packard and Intel have joined the effort, the article continues.


It’s unlikely, given the electronics industry’s investment, that compliance efforts will simply be dropped, especially since companies increasingly embrace the ideals of positive change through corporate social responsibility programs. In 2015, for example, the electronics industry was one of the most conflict-minerals compliant segments in U.S. manufacturing, according to Dr. Chris Bayer of Development International, who conducted the Conflict Mineral Benchmarking Study RY2015, EPSNews notes. The top 13 compliance leaders—companies which met all compliance criteria outlined by the SEC and the Organization for Economic Co-operation and Development’s (OECD)—were Qualcomm, Intel, MSC Industrial Direct, China Mobile, Curtiss Wright, Chicago Bridge Iron, Hughes Satellite Systems, Internet Initiative Japan, Aptargroup, Key Technology, Hasbro, Cree and Nvidia.


What are your thoughts on the role of due diligence and its impact on reducing conflict minerals in the supply chain?

As far as technology goes, this was probably bound to happen sooner than later, so I wasn’t too surprised to read earlier this week about a Swedish startup hub known as Epicenter, which offers to implant its workers and startup members with microchips the size of grains of rice that function as swipe cards to open doors, for instance, and operate printers. The microchips are injected into employees’ hands, between the thumb and index finger.


“The biggest benefit, I think, is convenience,” Patrick Mesterton, co-founder and CEO of Epicenter, says in an Associated Press story. As a demonstration, he unlocked a door by waving his hand near it for a reporter to watch. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”


Epicenter, which houses more than 300 start-ups and innovation labs for larger companies, began implanting workers in January 2015. Now, about 150 workers have implanted microchips, AP reports. A company based in Belgium also offers its employees such implants, and there are isolated cases around the world where tech enthusiasts have tried the technology as well. The implants have become so popular at Epicenter that workers stage monthly events where attendees have the option of being “chipped” for free, AP reports.


The technology itself isn’t new, and outside of the supply chain, the microchips are perhaps best known as the “chips” injected into pet dogs and cats as virtual “dog tags” used to track missing pets. The implants use Near Field Communication (NFC) technology, the same as in contactless credit cards or mobile payments. When activated by a reader a few inches away, a small amount of data flows between the two devices via electromagnetic waves. The implants are passive so they have no built-in power supply, and although they contain information that other devices can read, they cannot read information themselves.


As would be expected, there are significant privacy concerns when it comes to “chipping” humans. In an interview this week with the Washington Post, however, Mesterton emphasized that the technology doesn’t allow for any kind of worker monitoring by employers.


“It doesn’t even carry that ability. It’s exactly the same as if you would use a single key card,” Mesterton wrote in an email to the Washington Post. “If a person is worried about being traced, their mobile phone or Internet search history poses a bigger threat than the chip we use ever would do.”


Ethical and privacy issues would certainly become a concern if future microchips have more functionality and organizations embrace the technology, nonetheless. That’s one reason management consultants say such chips are unlikely to show up in American workplaces anytime soon.


Michael Chui, a partner with the McKinsey Global Institute who leads its research on the impact of long-term technology trends, told the Washington Post that while there is “a broad awareness for the technical ability for this to happen,” right now there is “zero interest in actually doing it.” For starters, the business case isn’t very high, with “smart badges” and biometric scanners able to do much of the same work. Furthermore, he adds, “there is a general creep factor about it.”


Then again, some people do believe the technology could be tried in the U.S. within a few years, at least as the next iteration of biometric scanners used to log people in and out of work sites, just as fingerprint or hand scans are increasingly more popular as a means to avoid lost or forgotten badges, prevent workers from “buddy punching” the timeclock, and secure the transfer of particularly sensitive information or increase facility security.


What are your thoughts on microchipping humans? Do you see it gaining widespread adoption anytime soon or do you think privacy and ethical concerns will stop its development?

Managing unpredictability is a fundamental part of a supply chain executive’s job. The first months of Donald Trump’s presidency, however, have added new uncertainty about operations, and raised urgent questions concerning how companies can prepare for the “twists and turns” that administration statements have triggered in trade, taxation and investment, observes Yossi Sheffi, director of the Massachusetts Institute of Technology’s Center for Transportation & Logistics, and author of “The Power of Resilience: How the Best Companies Manage the Unexpected.”


On one hand, the new administration promises reduced corporate tax, less regulation, more U.S. investment, and support for domestic manufacturing and large infrastructure projects. Such policies could increase the competitiveness of U.S. firms and boost profits. Then again, as Sheffi wrote in an article that ran in the Wall Street Journal yesterday, there are so many possible scenarios and policy shifts in each part of the world that it’s increasingly difficult for supply chain planners to determine how their companies might fare. The incessant chatter about trade restrictions, new taxes on imports and limits on immigration and visas may further undermine their confidence, he wrote.


Sheffi goes on to note that there are several steps supply chain executives can—and should—do to prepare for this climate of volatility. First, they must ensure the company maps its supply chains. Many companies might have a reasonable picture of their supply chain that includes first-tier suppliers. However, companies should begin mapping supply chains further upstream in more detail. To understand the potential impact of an act such as creating a border tax, companies should have closer and more frequent contact with vendors, and share ideas on how potential changes in trade or regulatory restrictions may affect costs and the flow of goods.


Executives should also ensure flexibility is included in all new supply contracts so a company may change suppliers, volumes, routings and other key requirements in response to changes in the economic, tax or regulatory environment, Sheffi explains. Suppliers are likely to ask for this type of flexibility from a customer, so preparing to embed it in supplier contracts is useful preparation.


It’s also important to slow down capacity investment. The current uncertainty means that significant capital investments outside the U.S.—particularly those in manufacturing capacity—should be critically reviewed. If feasible, Sheffi writes, it may be better to simply wait for now.


Companies should also simulate responses in drills. Focus on one or two possible scenarios and make sure team members from legal, tax, finance, manufacturing and other functions are involved, Sheffi writes. While it’s unlikely that many scenarios will materialize, the preparations and exercises across offices with different responsibilities can be valuable if the need to respond does arise.


It's also important to create a communications strategy, if one is not already in place, to address supply-chain concerns. That way, Sheffi explains, if significant changes occur, the appropriate message may be crafted for suppliers, customers and investors to avoid knee-jerk reactions in the market.


Finally, it’s imperative to monitor the competition, Sheffi notes. When big changes occur, understanding how events may affect the broader market and how a company’s peers are responding can be crucial in mapping out an appropriate response, he says.


Even with all this preparation, supply chain executives also should be careful to not “overplan,” Sheffi writes. Some industry observers have cautioned that despite the heated rhetoric, there won’t be much substantive change anytime soon, and trading markets lately reflect a more confident view of the prospects for change. The country is facing possible changes in trade and regulatory policy, after all, not another Y2K scare or economy-crushing financial crisis, Sheffi continues.


What are your thoughts on preparing a company and supply chain for volatility?