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Data plays critical role in corporate sustainability says BASF Canada president

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Marcelo Lu, President, BASF Canada
Marcelo Lu, President, BASF Canada. - Photo by DX Journal
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“Digitalization and sustainability are two of the most powerful market influences in today’s corporate landscape,” writes the MIT Sloan Management Review. Nowhere was that more clear than this week’s GLOBE Forum.

Taking place in in Vancouver, the event is one of the largest international leadership summits on sustainable business, attracting more than 2,000 attendees from business, government and civil society from more than 50 countries.

The intersection of digitalization and sustainability was the focus of a keynote talk lead by BASF Canada President Marcelo Lu, followed by a panel discussion with DX Institute Managing Partner, David Potter. Lu spoke about the power of connecting devices and unlocking data in order to create new opportunities within an organization and with customers.

BASF unlocks data to create customer value

The largest chemical producer in the world, BASF is undergoing its own digital transformation initiative with a focus on realizing efficiencies and opening up new opportunities for innovation for both itself and its customers.

Take for example, BASF’s new supercomputer called “Quriosity”, which offers around 10 times the overall computing power previously available to BASF researchers. The company is currently adding all of its R&D data into it in order to learn more, faster — like calculating the most promising polymer structure from thousands of possibilities — as well as uncover previously unknown relationships.

These digitalization efforts are also focused on creating new value for customers, including providing customers with real-time information and creating an integrated supply chain to share logistic and relevant data with customers.

“In agriculture, for example, there is a massive amount of data being collected on farms,” said Lu. “Weather, soil conditions – it’s unbelievable. We’re helping customers use that data for precision agriculture. We are now acting as a trusted advisor to help a customer use information from their own land.”

Trends Driving Digitalization

Lu noted several major trends that are driving innovation across the organization:

  1. Connected devices mean data is always flowing
  2. There is a shift from being a company that creates or produces things into a data business
  3. There is increased transparency produced by data, with the ability to fix things based on real information
  4. Data usage allows you to quantify and profile, allowing an organization to deliver mass customization
  5. When you collect data, you can share data, to un-silo learning

Digitalization & Sustainability 4.0

Digitalization is also being used as a tool for organizations to achieve sustainability 4.0 — be it energy and building efficiency, reducing carbon emissions or improving waste management.

Lu was quick to give examples from different industries.

“If there is one industry that has not adopted digitalization, it’s the construction industry,” Lu said. “It will be revolutionary once that happens in order to drastically reduce waste.”

In the convergence of digitalization and sustainability, data is the new oil and becomes an invaluable resource to power the circular economy. It helps companies understand how to keep resources in use for as long as possible, minimize disposed residual waste, extract maximum value from products and recover and regenerate products and materials at the end of service life.

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Manufacturing

How Cummins is embracing disruptive change to stay innovative and attract talent

New skills and ideas are needed to keep up with the digital transformation of manufacturing

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Sponsored by Cognizant

“It’s really hard to say we’re a leading-edge product engineering company if our business tools are dated and do not appeal to the talent we want to attract and retain at Cummins,” said Sherry Aaholm, CIO at 100-year old engine and generator manufacturer Cummins.

Transformative tech and attracting talent are two of the main issues manufacturers need to address in order to stay competitive and grow.

Consider this:

  • 71 percent of manufacturing executives say they need to innovate faster to stay relevant, according to a Fujitsu report
  • In the U.S., the manufacturing industry needs 3.4 million workers over the next decade just to replace retirees, according to The Manufacturing Institute.

The Talent Gap

Replacing retirees is only part of the talent shortage challenge for manufacturers. The other is finding workers with the right skills.

Related: Designing Manufacturing’s Digital Future

“We will need people who are able to manage these new operations, manage the robotics, to program them and maintain them,” said François Barbier, the president of global operations and components at Flex. “People who used to produce things with their hands, they’ll start to produce things with their brains.”

Gone are the days where a high school degree is enough to have a lucrative career in manufacturing, said Cummins Chairman and CEO Tom Linebarger, speaking on a panel about manufacturing and logistics, adding: “It hasn’t been that way for a long time.”

[Download]: Designing Manufacturing’s Digital Future

Manufacturing jobs are still here, they just look different, says Linebarger. As new tech emerges, workers need to have the skills necessary to perform maintenance and programming, he says. Rather than hiring for traditional roles in manufacturing, companies are hiring for tech-oriented roles where workers are tasked with not just building, but improving.

Staying Innovative

To keep their innovation sharp, Cummins has also created a Digital Accelerator where ideas around manufacturing, the customer or supply-chain are tested and, if successful, then commercialized.  

The focus is on three key themes,” says CIO Aaholm. “How can we improve product quality and up-ime availability? How can we help with new services for our customers? And how can we find value within the company?”

[Download]: Designing Manufacturing’s Digital Future

One example from the accelerator is the Cummins X15™ engine. Cummins says it has reduced the overall cost of ownership by as much as 40 percent, compared with a Cummins 2010 ISX15 engine, and it provides between a 2 percent and 12 percent gain in fuel economy.

The focus on innovation helps attract and retain customers too. John Savage, the executive vice president of transportation services company, Savage Services, says: “Cummins has always been a technology leader, helping us to meet new emission standards whether we’re operating in California or across the nation. When it comes to reliability, Cummins is progressive. They don’t sit back on their laurels.”

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Distributed Manufacturing: Next in line for blockchain innovation

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries.

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By: Jagmeet Singh

Blockchain has already disrupted business processes in the financial sector, and is poised to impact companies across industries. Because the technology can provide an immutable digital record of contractual interactions and transactions across an ecosystem, we believe that manufacturing is likely next in line.

Blockchain is a mutually shared ledger of all transactions in a given transactional relationship. Combined with its consensus mechanisms and use of public key infrastructure (PKI) to verify and authenticate all changes made to the ledger, blockchain can enable the network itself to ensure trust among participants. The result: a whole new way to support distributed manufacturing across the value chain.

The Importance of Trust

Consider, for example, the ways in which blockchain can simplify how trust is developed within a manufacturing ecosystem. In the traditional manufacturing world, parties transacting with each other spend considerable time and money on establishing external mechanisms to ensure trust, in the form of contracts, service-level agreements, quality checks, inspections, audits, scanning, escrows and regulatory compliance reviews, to name a few. As the number of parties increases, so does the complexity. Reconciling separate ledgers, enforcing contracts, ensuring supply chain transparency and protecting intellectual property when multiple entities are involved are all laborious and burdensome processes, prone to error and vulnerable to fraud.

Related: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Research shows that companies that build a culture of trust can fuel stronger performance by enabling departments to interact better and perform better across multiple dimensions. Establishing trust betweencontracted parties has similar positive effects. All these measures, however, amount to a costly “trust tax.”

For participants in a blockchain network – product designers, production shops, 3-D printers, logistics partners, sales and customer service  – that tax is greatly reduced. A secure, distributed ledger infrastructure accessible to multiple parties enables a new level of real-time transparency and efficiency for transactions involving the transfer of anything of value – whether that means ideas, money or ownership.

In our recent global study that included 281 manufacturing professionals, in fact, “trust” was a top driver for blockchain adoption.

Distributed Manufacturing Next in Line for Blockchain Innovation

Ensuring Transparency, Security, Auditability

Blockchain ledgers are:

  • Shared: Separate entities share a common source of truth.
  • Distributed: Blockchain relies on peer-to-peer collaboration, with no central ownership.
  • Secure: Cryptographic algorithms verify, authenticate and secure transactions.
  • Time-sequenced: Data is written consecutively and is time-stamped.
  • Immutable: Once written on the blockchain, data cannot be changed, tampered with or deleted.

Through smart contracts with supply chain partners on the blockchain network – programmed agreements that are independently verifiable and automatically executed when predefined conditions are met – companies can minimize human intervention and ensure performance transparency, transaction certainty and auditability.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Within industries and even across interlocked, tiered manufacturing sectors, distributed ledger systems allow companies to develop new, platform-based process flows. A user might execute a smart contract for a custom-configured order, for example, combining designs from multiple sources. The encrypted design data would be recorded on the shared platform; materials and services could be autonomously sourced; and a shared factory could produce the customized product. Payments, including royalties to designers, would be issued when the product is delivered. A record of all transactions, from design selection to payment, remains on the blockchain.

A Rising Tide Lifts All Boats

Blockchain technology thus enables distributed manufacturing, offering participants unprecedented opportunities to develop new product and service lines, create new customer segments, enter new markets and find new ways to use and share assets:

  • Through supply chain transparency. All parties transact on a common platform, gaining real-time visibility into processes in the value chain, and simplifying materials sourcing and the interaction of design, manufacturers and other service providers. Supply chain processes, including payments and trade finance, can be streamlined and automated using smart contracts.
  • Through digital product memories. Immutable records of asset provenance, materials, production data, ownership and other data ensure authenticity and minimize transaction risk.
  • Through secure digital intellectual property. Parties to a transaction can be assured that their intellectual property is protected. Using blockchain to manage a contracted production run from a 3-D printer of ceramic components, for example, would allow a manufacturer to encrypt proprietary 3-D print files from end to end while creating an immutable history of the transaction. Similarly, escrows and royalty accounting would protect designers and other owners of IP.

There are many more circumstances in which adopting blockchain technology can deliver value. Participants can slash inventory costs and service times. They can eliminate reconciliation, and automate and speed financial and process flows. They can reduce manual interventions and reduce fraud. And they can create new ways to extend the lifecycle of products and optimize the use of assets.

What’s Next? Evaluating Readiness

As manufacturers move toward a shared and distributed model, business leaders can consider four questions when evaluating readiness:

  1. Where in the value chain, internally and externally, are we paying the highest “trust tax” in terms of excess cost, effort or lack of agility?
  2. How would the availability of a digital product memory drive value for our company, our customers and our business partners?
  3. Which types of partners, in what geographies and with what expertise, could we work with if transaction costs and efforts were lower?
  4. Which information assets (e.g., manufacturing, maintenance, operational and usage data) about our products could we monetize if there were a secure way to do so?

A blockchain-enabled, collaborative database is optimal for ensuring agreement between all participants in a value chain. It’s time for manufacturers to examine the implications for their business model. Organizations that gain hands-on experience with blockchain technology thorugh pilot projects will have an advantage as consortia start to form, and will be better equipped to lead the effort and make key decisions around structure and governance, prepare for the corresponding cultural shift, build skills and capabilities, and understand how it will impact business strategy going forward.

Get in the blocks. The race starts now.

[Download]: Blockchain in Manufacturing: Enhancing Trust, Cutting Costs and Lubricating Processes across the Value Chain

Olesya Gorbunova, a Senior Consultant in Cognizant’s Blockchain & Distributed Ledger Practice, contributed to this blog.

This article originally appeared on the Digitally Cognizant Blog

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Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.

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Manufacturing

When IoT meets manufacturing

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By: Frank Antonysamy

One of the more negative iconic images of the Industrial Revolution was of child workers being sent into coal mines. Thankfully, that’s an age long behind us.

Our own era promises a different revolution: one in which miners no longer need to descend into the mine shaft, wield a pick, endure suffocating temperatures or constant jarring vibration, or risk their lives for underground goods like coal, gold or diamonds.

Related: How manufacturers can unlock value with IOT analytics

Tomorrow’s mines will increasingly rely on sensor-equipped, software-driven machinery, a complex technology evolution enabled by the movement toward the Internet of Things (IoT). And it’s not just mining that’s benefiting from the IoT.

While the technology sector conjures an image of silicon chips and clean rooms, processors and analytics, sensors and the cloud, manufacturers across sectors are moving toward a world of IoT-enabled intelligent products and systems.

Intelligent Solutions: There’s Gold in Them Hills

Ordering dinner through an app, calling Lyft to get to a restaurant or paying bills through a smartphone are the accepted conventions of today’s digital world. Now a new technology wave is transforming remote-operated or software-driven equipment into IoT-enabled, autonomous, self-learning machinery that reacts to changing circumstances in real time.

Driverless heavy machinery is already functioning at multinational metals and mining company Rio Tinto’s massive open-pit iron mining operations at Pilbara in Western Australia, with 400-plus-ton trucks larger than two-story houses hauling massive loads of ore and waste material. Operated from a control room hundreds of miles away, the trucks work alongside other vehicles and heavy machinery, adjusting in real time to a mine’s changing layout as ore and waste are removed.

Soon, most new mines will use pilot-less drilling machines at the coalface, equipped with sensors that allow them to follow seams of ore, monitor temperature and air quality, detect vibrations that may signal danger, and make sensor-informed decisions based on complex risk-driven algorithms.

Trucks, drilling machines, even transportation systems will be interoperable automated systems — in effect, an amalgamation of specialized systems in a single, highly complex machine. The result: more efficient operations, fewer workers exposed to risk, better performance and an improved bottom line.

The Changing Face of Manufacturing

Today’s manufacturers are actively leveraging IoT initiatives to realize internal process efficiencies. Many are changing how they design their production facilities to transform their business – streamlining production and improving productivity.

Consider a renowned heavy equipment manufacturer that has leveraged IoT in its production lines, slashing the time it takes to produce customized equipment at its U.S. facility from 42 minutes to 22 minutes. It did so by automating factory line processes and equipping them with beacons and Intel’s Retail Sensor Platform integrated with Microsoft’s Azure IoT platform. The company has doubled production times, improved quality compliance at the workstation level and boosted employee utilization by 20%.

[Download]: How manufacturers can unlock value with IOT analytics

Increasingly, the definition of a product is evolving to a broader, customer-centric construct, in which sensors gather data on customers’ use of products and their performance, enabling predictive maintenance, insight into future product enhancements, even customer-focused features and improvements, along with better customer service. All are based on deeper insights into users’ behavior, collected and aggregated from the products’ sensors. By outfitting products with smart sensors and connecting them to key systems and networks – and even to each other – manufacturers are replacing transaction-oriented relationships with whole-lifecycle engagement.

An Expanding IoT Influence

With its proven efficiency and productivity gains, it’s no wonder the demand for IoT devices is exploding. According to IDC, 60% of global manufacturers are using analytics to sense and analyze data from connected products and manufacturing. By 2018, IDC says, the proliferation of advanced, purpose-built, analytic applications aligned with IoT will result in 15% productivity improvements for manufacturers regarding innovation delivery and supply chain performance.

Mining? Yes. Oil and gas drilling? Sure. Manufacturing? Certainly. But IoT is not limited to these sectors. Many companies in consumer-facing sectors will also experience change from IoT, from banking to retail to airlines. Connected products and smart manufacturing are here to stay, and they’ll be all around us.

[Download]: How manufacturers can unlock value with IOT analytics

This article originally appeared on the Digitally Cognizant Blog

Cognizant

Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.

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