Real Time Supply Chain Analytics

Real Time Supply Chain Analytics

By Sairam Bollapragada & Rajesh Mohandas

Supply chain managers have seen increasing challenges to create, and keep, efficient and effective supply chain methods, Customer Service, Operating Cost Control, Planning and Risk Management, Inventory Control, GTM Speed, Supplier / Partner relationship management, Green Supply Chain and Talent (Resources) are a few burring issues that are on the top of the charts that burn the midnight oil. A survey by McKinsey says the companies who have already engaged in leveraging Digital Technologies have managed key trade-offs on barriers to better performance : raising risk, lack of collaboration and low CEO involvement.

The fall of this decade has seen major shift in the supply demand dynamics, the traditional supply chain solutions are not equipped to handle complex scenarios due to lack of visibility. There is a competitive demand for real-time responsiveness which can be addressed by the combination of Data Science and Emerging Technologies connecting customer service with Social and Mobile platforms that are cloud enabled on one hand and strengthening visibility into operations with IOT based real-time analytics. The icing on the cake is emergence of machine learning which is all set to address the tactical challenges and give signature ready recommendations for decision makers to gain maximum mileage.

Supply chain management will gradually be disrupted by the rising adoption of IoT and advanced analytics.  The challenge faced by the supply chain practitioners and players is inability to take advantage of technology to the fullest extent while they are trying to simultaneously integrate their supply chain systems across a much wider range of information sources due to lack of 360 degree view of both business and customer.

  1. Strategic Planning: The very first component of the supply chain, Strategic Planning, comprises of Strategic supply design and Strategic sourcing. Here real time analytics can be used for Supply Chain alert monitoring and the insights will flow into Long term planning, Bid Management, Contract management, Catalogue management and Source determination, real time information can be accessed by decision makers that are geographically dispersed to take collaborative decision on a cloud enabled mobile application. 
  2. Demand Planning: The Next component of the supply-chain value stream is Demand Planning the three crucial capabilities here are Forecasting, Promotions and Demand Consensus. Advanced real-time analytics help with Macro calculations and planning bill of materials leading to collaborative demand planning and characteristic based forecasting.
  3.  Supply Planning: The heartbeat for any supply chain is the supply planning which comprises of capabilities like Safety stock planning, supply network and outsourcing decisions, Distribution planning, Customer and Supplier collaboration. The best component in the value chain where Emerging technologies can be used with the fullest potential is here, the power of cloud enabled CRM systems and Communities connecting the enterprise giving a 360 degree view to the entire ecosystem including the suppliers, customers, partners and the enterprise following with the power of advanced analytics and big data enabled deep learning algorithms come handy. Some examples where one can leverage advanced real-time analytics are in the area of multi-level supply demand matching, whereas the artificial intelligence neural network algorithms can be plugged into supply network planning.

Procurement, Warehousing and Order Fulfilments are three equally crucial parts of the supply chain operations that are interlinked and often become bottleneck in the supply chain due to lack of visibility. In a connected supply chain environment the intelligent algorithms need to be plugged in here such that all three areas are interconnected and all repetitive processes can be automated through RPA, what with NLP loaded Analytics providing intelligence and insight into the process.

4. Transportation: The last component of the value chain is Transportation. Often the biggest complaint from the players of supply chain is “Visibility to the Tail”. This is already being accomplished by real time analytics, bringing in a predictive model that combines features like load consolidation, intelligent route optimization, carrier selection and shipment trending which are few elements of the Transport planning while the Transport execution can feed in data from the shipping interfaces capable of distance determination services. The last inputs come from the freight-costing component that strengthens the predictive model and the machine learning algorithm continuously churns the data and gives real-time insights for both strategists and operations.

Hence, Analytics working in tandem with Cloud, Mobility, and AI, can play a very critical role to bring in great value add to the Real Time Supply Chain scenarios for all those who embrace and leverage. This is even more critical with markets moving towards a more C2C value chain where the customer experience and expectations are fast changing. Retailers, Warehouses, Suppliers, Logistics, and all the agents in the Supply Chain have to work in an orchestrated mode need to be on their toes to remain competitive and relevant to the market expectations.

Advertisements

VUCA in Digital Manufacturing

By Sairam Bollapragada Sairam & Rajesh Mohandas

In our first part of this series Digital in a VUCA World we walked thru various facets of Digital being impacted, the first paper was domain agnostic and we will today focus on the impact of VUCA on DIGITAL MANUFACTURING!

 

Manufacturing roughly contributes to 1/3rd of the global GDP as per the world bank figures and approximately 10% of the global workforce is directly employed by manufacturing companies. The “Multiplier Effect” brings in nearly 37% of the entire global workforce is indirectly connected with manufacturing sector as per the Forbes. Compared to that of discrete manufacturing there is more technology penetration and today the emergence of Digital and Adaptive manufacturing has clearly redefined this prone-to-be disrupted sector, adding predictability, efficiency, effectiveness and above all cost optimization with improved productivity as challenges.

 

VUCA conflates four distinct types of challenges that demand four distinct types of responses; the need of the hour for companies during an economic downturn is business developers and not problem solvers or better a combination of the two.

 

Along with VUCA came the concept of working world 4.0. Derived from industry 4.0, the fourth industrial revolution, it names its immense and rapidly spreading impacts on many areas of work and life. It changes the way we communicate, get and read information and prepare decisions. The special feature of Industry 4.0 is networked manufacturing, i.e. the further development of digitisation through emerging technologies…

 

ART OF THE POSSIBLE in the VUCA world for manufacturing sectors leveraging Digital …

 

Volatility: The Manufacturers are increasingly becoming aware of the fact that to alter their manufacturing strategies face the raising volatility. One has to firstly understand the volatility exposure and assess how agile are internal business processes, the business operations and at least 75% knowledge about the customers customer in all three B2B, B2C and C2C markets.

 

Manufacturers are under constant pressure of continuously improving QPM, especially in the fluctuating market demand irrespective of the magnitude. One bad product and the digital reach being so large and quick, it can dent your credibility.

 

Big Data with Predictive analytics and bots leveraging machine-learning algorithms will bring in mechanisms to tackle volatility and hence automate a large chunk of the manufacturing process.

 

Uncertainty: The manufacturing sector has lived thru multiple uncertain eras and has indeed mastered the art of change management, in the digital world the same can be replicated with “USE-PREPARE-FOCUS-FIND” cycle

 

  • USE : use Data: Knowledge – Process – Technology, to arrive at strong data analytics platforms to predict and handle uncertainty. Data lakes can help drive multiple inferences and leverage on historical information. The shift to Virtual prototyping, IoT based surface modelling QAC, Sheet metal design, CAPP, AR based marketing, process simulation, are all areas that need to be understood well.

 

  • PREPARE: be well prepared to tackle situations raising out of events unknown, with digital technology like cognitive computing, neural networks, artificial intelligence algorithms etc. to speed up effective decision making capabilities with a “First – to – Market” objective. Prepare well to use tools like SAMCEF, NASTRAN, ABAQUS (to name a few), etc. for FEA, embedded M2M based information analytics, Connected Device Platforms (CDP), AEP, etc. You need to move fast and as much to Intelligent Manufacturing.

 

  • FOCUS: The market is shifting towards customer specific demand fulfilment, hence analytics, cognitive computing and plethora of such tools available can help you focus on very specialized “M2C – Manufacturer to Customer” markets – hence the agility and reach. Continuously focus to improve the PLM, from conception to service and disposal.
  • FIND: the digital marketing and media provides platforms for very fast feedback which can be leveraged catalytically to improve the products and build variants, thus maximizing footprint.

 

Complexity: Looking the way Digital Manufacturing is being challenged, the four influencing factors are:

  1. optimized resource usage,
  2. shortened lead times,
  3. personalized fit-to-purpose manufacturing,
  4. increased (squeezed?) productivity

(refer https://itservicesdelivery.wordpress.com/2016/05/05/digital-manufacturing-through-industrie-4-0-2/)

 

The complexity in the Digital Manufacturing space is predominantly, due to the fact, that manufacturing is shifting focus from pure play product philosophy to Product & Services philosophy. Hence, the challenge shifts to balancing maintenance with production.

 

Ambiguity:  

Haze in vision to the roadmap on how technologies can better your product or services can be a killer. You need to have a dynamic strategy which keeps refreshing its goals every 6 months to a year. 64% of the leadership time is being spent on articulating shared vision as per a CII-EY report.

 

Any organization unclear of the path it wants to tread to embrace technological advances to transform itself, will not be kindly treated by the market demands and especially in Manufacturing segment. In fact, the Industry 4.0 is exactly about that. 27% of the so-called $19 Trillion Digital economy is due to the manufacturing sector.  Hence in this ambiguity (though not a choice anymore), crafting out leadership opportunities can be indeed be an opportunity.

 

 

Manufacturers, with so much at stake, simply can chose either to run the race or to become legacy as they are challenged every day to the field by new and modern entrepreneurs who are coming up with some very interesting and disruptive innovations continuously shifting the co-ordinates to newer business parameters. The VUCA in DM is all of that – to be strategized and attacked in a truly multi-pronged approach.

 

Digital in Rail Fleet Management: A viewpoint

By Sairam Bollapragada & Rajesh Mohandas

Rail is a vital service to global society and the transport backbone of a sustainable economy. Many of the Rail entities around the globe are sprinting towards Digitization.  In the Global Vision for Railway Development (GVRD) document by the International Railway Research Board (IRRB) the core themes include delivering smart solutions as regards to safety, security, punctuality, availability, accessibility, seamless operation, capacity, connectivity and sustainability. These are the critical success factors of a rail network across any country.

The overall rail supply market has witnessed a substantial growth at 3%, driven for the main part by the Asian Pacific region. At over EUR 159 bn, the world rail supply market has reached a record high level. From a product segment perspective, the largest contribution to the market’s growth in the 2013 – 2015 stemmed mainly from the rolling stock and services segments. Added, these two segments clock at 72 % of the total rail market in the 2013 – 2015 period; and still growing. In line with overall market growth, the infrastructure in operation grew by 26,000 km, primarily in the urban and very high speed track segments, with track infrastructure in sum reaching more than 1.6m kms of urban and interurban tracks.

Some of the salient points to understand and take forward in this segment are:

  • The bulk of the additional track kilometres are attributed to the Asian Pacific region due to the construction of new routes in China and India.
  • As reported by UNIFI: European Research Firm, the total market for rail supply is set to continue its growth of recent years at 2.6 %. The rail supply market is foreseen to reach approximately EUR 185 bn per annum in the 2019 – 2021 period.
  • The highest growth rates are expected in Western Europe and Africa/Middle East, 3.1 % and 3.0 % respectively.
  • Frost and Sullivan claims in its research report that Europe alone is set to replace 10,298 locomotives and 1,860 rail cars between 2015 and 2022.
  • With the above, Africa and Middle East market size is expected to double by 2022, while India and Malaysia in the coming 5 years will see 2x infrastructure expansion.
  • India and China, due to the population challenges, are considering increasing the network length to lower the load while in Argentina, Brazil, Canada, Russia and the US private fright operators own most of the rail network.
  • Spain, France and Turkey are expected to have the largest networks by 2022.

Growth Brings Challenges and opportunities too…, one of the areas where the challenges are widely seen is the FLEET MANAGEMENT, the exponential growth followed with high expectations and customer experience certainly needs to be addressed and people are now looking at DIGITAL solutions to ease Strategic and Tactical Operational issues. Key issues with respect to Fleet Maintenance today can be broadly categorized as below:

  1. MAINTENANCE PROGRAMME REDESIGN by comparing experiences of key maintenance approaches and methodologies to assess how each impacts cost and availability, energy flooring and driverless pods become the innovative elements of redesign driven by cost of Energy which is the biggest expenditure incurred by the railways.

  Not to forget the railway telematics through plug and play applications on mobile devices allowing you to report the availability and utilization of locomotives. If we bring in more rigor into planning, safety, operations and execution, with the existing railway infrastructure, we can take an additional capability of 40% through digital means and so on. The overall operational aspects can be improved through digitization as is being proven over the past few years.

  1. INFO MANAGEMENT by examining approaches and new systems for transforming raw data into information to optimize maintenance planning and cost-effectively trigger automatic maintenance operations leveraging the power of BIG DATA and ANALYTICS. Analytics can help us in bettering the routing algorithms, better connectivity, and hence multiple better options, optimize operational costs, a more reliable railway, a better dashboard in the driver’s cabin plugging in critical information for increasing safety (helps avert any mishaps when trains need to cross busy junctions), reliability, punctuality, arrival accuracy, planned travel duration, SoS,etc.
  1. REMOTE CONDITION MONITORING: with so many locomotives on the move, one should continuously know about their health so that you know when it needs attention. One can create the ecosystem whereby all the drive-data is stored (on cloud?) and enabling immediate notification for any anomalies. It will also allow you to anticipate a potential problem and help plan a predictive maintenance. Drones will play a vital role in predictive maintenance and improved security. Electronic tagging or cargo for reliable tracking and reduced delays will improve remote monitoring efficiency.

While solutions like Smart windows are a given for an enhanced customer experience, the bigger offerings are around features like wireless locomotive monitoring and checks for better asset utilization, optimized asset planning with reduced shed times, near real-time locomotive inventory, with component level monitoring bringing in huge efficiency in the entire maintenance processes.

  1. RELIABILITY-CENTRED MAINTENANCE by Identifying a best practice model for applying RCM and examining the extent to which the methodology has increased reliability and eliminated unnecessary maintenance costs leveraging the power of Artificial Intelligence. Swarm robotics is another area for future transport and infrastructure projects, the intelligent robots will be used more and more for repair and maintenance activities. Automatic Gauge change for cross border travel powered by IoT will be the new norm.
  1. MANAGING SUPPLIER CONTRACTS by Identifying opportunities to increase control of the supply chain with optimized material costs through efficient supplier contract management and using Cloud based solutions coupled with Social CRM applications as the global consumption of resources will nearly triple to 140 billion tons per year by 2050. The Fleet of tomorrow will be digital enabled with virtual shopping mall experience for the user to benefit adding convenience and ease.
  1. EXTENDING FLEET LIFESPAN: Optimizing component life-cycle, fleet connectivity, fleet integration plans and obsolescence management to extend lifespan of the fleet with the best in class asset management solutions that can be plugged into the existing architecture. Advances in nanotechnology may lead to new materials that are lighter, stronger, smarter and greener. Availability of information of a hub-spoke inventory management through mobility services from the cloud stored data for access will enable Just-In-Time services optimizing the shelf dwell times and hence the level of re-orders needed to be maintained.

While the above 6 key factors can be essential to improve the operations and maintenance, there are multiple other areas (both Strategic and Tactical) like Fleet Planning, Fleet Acquisition, Fleet Distribution and Fleet Disposal which are being addressed leveraging Digital Technologies. We will discuss in a sequel about how the Digital world would bring about strides of changes in these areas. Collaboration between business and IT will drive efficiency and strengthen engagement benefiting both the industry and the economy.

The best way to predict the future is to invent it.” …our focus and goal in line with Digital 2020 should be to tap into these opportunities and assist the players overcome the challenges in the  Collaborative Digital Transformation that will enable a Win-Win situation, thus embarking into a new journey, partnering and contributing to the overall GROWTH…!

Digital Manufacturing through Industrie 4.0

by Sairam Bollapragada

From the 1784 first mechanical loom to the current definition of Smart Manufacturing in the era of IoT, the manufacturing industry has come a long way and we have left the first programmable logic controller of 1969 far behind.

What started early in 2012 as the research alliance,  the German Mechanical Engineering sector has worked hard to freeze on the launch of the joint platform in mid-2013 and ensure it had a vision ready for field test in late 2014.

Though initially meant for the German industry, the concept and standards are propelling to fuel the market, hand-in-hand with the IoT fever acting as catalyst.

Taking a leaf from my earlier note on the manufacturing (https://itservicesdelivery.wordpress.com/2016/03/28/smaciot-and-manufacturing-a-perspective/),  there is an ever increasing pressure on

  • Optimized Opex, upwards demands on flexibility and productivity,
  • Compulsions of competitive differentiation creation,
  • Progress in communication and sensor technologies,
  • Production and operational processes getting more robotic in nature,

the Industrie 4.0 is here to challenge all the manufacturing industry players and push them to the brink further on

  • optimized resource usage,
  • shortened lead times,
  • personalized fit-to-purpose manufacturing,
  • increased (squeezed?) productivity,

– with technology opening up new and sustained methods of innovation, production, consumers demand-supply through faster and better information flowing through the processes.

Will too much of IoT/automation eat away into our jobs then?

Yes and No. Yes because the repeatable jobs will be taken up by bots. No because the need for a knowledge worker will still persist. For all supported processes, while data required will be faster acquitted, the data quality would still need to be the essence. This will need appropriate invention since ¾ th of the data so acquired may not be having self-correcting capabilities.

Also a NO because the supported products could expect the onboard service revenue increase in its industry revenue share down the line due to connected products. Supply chain experts will look beyond silos to get more from the eco system (a value-network interconnecting objects, devices, human) creating a potential real-time optimized system.

The new manufacturing industry would rally around traditional parameters with the following changes:

  • Design and conceptualization – the demand of an Industrie 4.0 construct will keep the manufacturers to be in an “all time ready” mode. Understanding of new technologies, devices  to be factored towards design of the smart products clubbed with their feasibility, environment specifications, data to be captured, communication channels to be used, etc. will become part of any design engineers mainstream thought process.
  • Demand Planning – when customization is leaning more towards a mass B2B, the demand planning should be done meticulously. The demand-variants will be many. The challenges staring would be stocking inventories with different materials and smart component leading to Smart Inventory Management. These in turn become the capability to churn out customized orders in bulk.

However, networked machines are expected to optimize the production. Sensors fitted to transmit data into the data lake for getting analyzed for increasing efficiency while cutting on downtimes.

  • Shop floor activities will need to re-cast themselves as the design teams would start catering to the ways and means of interfacing smart component into their traditional device production.
  • Product Operations: Instead of being a discrete process which ends when the product is packaged and shipped, the operations cycle would extend till the product grave. The objective is continuous product improvement
  • Supplier Network Design- In order to have such a dynamic planning done for the clients, the material supplier network would need to keep itself most active. What I mean is all vendor partners would need to keep themselves committed to deliver timelines (anytime) to the variant needs.

The design of such a network would be driven by the single goal of optimized T2M (time-to-market). Even after so many years, conventionally this is still an area of concern for most product companies. With Industrie 4.0, the demands will stretch the ask even more.

  • Supplier Management – Smart Logistics, Smart Mobility, Smart products, and smart machines – all will make the supplier management more drawn to bringing virtual and physical parameters of the connected B2B world together.

The suppliers will expect to be managed more efficiently with reduced warehouse dwell times and increased material utilization levels. The connected devices would call for the distribution and logistics companies to configure and re-configure the networks with most finely tunes service level management.  Hence the supplier management is targeted to become more effective than ever before.

  • The framework consideration for the Industrie 4.0 would push a huge focus on data security, communication infrastructure, innovation funding, and reference architectures.
  • Supply Chain Visibility – the capability to respond quickly to the events in the upstream and downstream supply chain through the Industrie 4.0 defined standards will, making the zero-latency supplies more realistic. The connected devices will be able help transmit the data pertaining to their locations, (mal)functioning, associated bugs, etc. and hence the supply chain visibility.

What about post-services?

  • Remote Services will become a critical part of the services league which will kick in once the connected devices hit the markets. Sysmex is a classic example. It is a simple blood/urine sample collection equipment used by pathology clinics. Loaded with connectivity feature, the same is used for remote monitoring and servicing. When the offshore and onsite difference is defeated, the objectives of service costs, equipment utilization, and CSAT makes these connected devices a winning enabler.
  • Using the predictive analytics in the connected devices, the early warning signs of a “to-be faulty” machines can be helpful. It helps to slot out the preventive and proactive maintenance of devices and keeps the uptime high for the better performance.
  • Value Added Services is another thing which will catch up as each connected device is identified with a signature address. The performance parameters data gathered for equipments, especially ones which are complicated in size and function, is analyzed by the product engineering/development companies for advising how best to use, optimize, accomplish efficiencies, and eliminate potential showstoppers.

Every connected device is a potential entry point into the network for cyber-attacks. The devices exposed must be provisioned with smart ways to get a security blanket covering it against any potential vulnerability.  Similarly, means to detect early intrusion and a mechanism to study, analyze and improve the device security against a break-in should be a continuous effort from product engineers.

The risks arising out of penetrating connected components in aircrafts, automobiles, medical equipment, generators, and others could be far greater than the risks from a breach of a business e-mail server. That seems much simpler now.

Will the new Industrie 4.0 lead to new culture?

The Organizational behavior will be compelled to see a big change. The silos across the organization need to be erased. The organization would need much more orchestration to manufacture smart devices. Every unit within the organization, be it design, prototyping, shop floors, CNC teams, inventory, supply chain, invoicing-billing-finance, logistics, HR, training – all need to be in a perfect sync to be able to target (in-tandem) the shortest time-to-market – to beat the competition and be a leader! In the next blog, I will focus on how the IT industry will need to align to its manufacturing clientele as the latter change their organization norms, working policies, and more importantly the structure.

The Digital Era Skill Demands

By Sairam Bollapragada

Many companies – product manufacturers, product vendors, sales, marketing, technical design entities, information technology service providers were so far marred by the lull(recession) before the storm (the Digital wave). The advent of the new areas in the connected world, has swept all by the feet and the ride on this tiger demands new skills across the value chains of technology and conventional manufacturing outfits, as well as new working styles and cultural norms. There is accepted acute shortage of skills.

IT fraternity has so far got habituated to the “…been there, done all, know all” feeling and the new wave is compelling the folks to change that mind set with a new learning curve. The sooner the folks get out of the traditional mindset, the sooner they can insure their careers.

The brighter side of the story is that the skills needed to design, make, sell, and service smart, connected products are in high demand but short supply.  There is a sudden urgency for finding the right talents and in the wake of market flooded with startups, the pay packs for these technology geeks and mavericks have skyrocketed.  The learning is found to be fast shifting from Mechanical Engineering to Software Engineering, from pure software coding to stepping into real-time product testing, from product repairs to getting used to SLAs for availability, and working with varied partners.

Along with crazy talent demand, the learning curve has gone berserk too.

Folks in the shop floor may soon have to hire experts in applications engineering, user interface development, and systems integration. The list does not end there – the need for data scientist across all the verticals who can blend technical and business data to lend the capability to create, build, and run analytics for predictive analysis and upfront fitment to market demands as well as creating those action plan blueprints, will be inevitable.

However, the demands stated are fine, but the bigger challenge is how informed and ready are the manufactures for these changes – especially in growing economies. This is more so in the case of traditional and conventional manufacturing entities where technologies and product manufacturing are treated totally disparately.

Some are taking rapid steps to move closer to technology abundant cities. By 2020, the manufacturers will need to establish collaborative learning between academics, product innovation and technology.  New hiring models like internship programs (international at that), infusing technological staff at their factories for product advancement and innovation with technology, and incubating labs to continuously bake their next products will be order of the day.

Build-your-future-staff and Internships: The internships should create a scope for these companies to bring together a blend of talent from technology, engineering and business to build collaborative platforms to build newer models, conceptualize disruptively innovative ideas, and drive the “build-your-future” culture. Imagine a mechanical engineer, an electrical engineer, an information sciences engineer(data analyst) and( lead by) a production engineer – all brainstorming to create a new concept in companies like a Schneider or a GE or GM. The brilliant lot of the ideas will flow into the IoT/Smart lab for PoCs and incubation and to production after successful trails. The crux will be matching the speed of thought and working between these team members.

Compensation and incentives: Manufacturers will also need new approaches to attracting, motivating and retaining talent. With the acute shortage of skills, the talented folks will call the shots. It is said that against the 45000 jobs being created out of 1b$, the industry will now see around 15000 jobs per billion. People with high skills and continuous learning capabilities will take better jobs. Going forward, as per NASSCOM, the selection process during intake will now be based on ability to learn rather than just knowledge. The $130 billion industry, which employs 3.2 million people, will add another 1.2 to 2 million. Investments in training will actually go up, even as training extends to almost a year from three to six months at present on projects in engineering. Companies and universities will collaborate like never before to improve quality of talent.

Perks like job flexibility, concierge services, sabbaticals, and free time to work on side projects of personal interest are the norm in high-tech firms employing the type of talent manufacturing companies will increasingly require.

Where do we go from here?

The existing IT companies living out of annuity business face a larger survival threat. The folks who are looking at AD/AMS kind of activities and sticking on to it are also in the red zone from capability standpoint. Migration to newer skills and capabilities is inevitable. For non-IT folks who have for some strange reasons created “I don’t need IT” mindset would be challenged to deliberate and discuss next ideas with IT engineers. If you cannot engage in such discussions, strong indicator is that your survival itself is at risk.

These synergies between two camps is what is going to drive the digital wave – higher the team-knowledge, higher the tide!! In next part we will discuss on the new learning eco systems where we will focus on how organizations need to embrace the change through steeper learning curves.

For all those, who are sitting back thinking what next to do, the prompt is get on to the learning curve fast. Get onto it now!!

IoT Security is everybody’s business!! – Part 1

By Sairam Bollapragada

With the Digital wave, the structure of the IT organizations, especially those racing to embrace new technologies and IoT is poised for a paradigm shift. Every brilliant side of technological revolution comes with a darker patch as well. With so much of data slated to being generated via connected devices, the Cyber Security can no longer be the forte of IT folks ONLY.

While technology brings in convenience, it also comes at a cost (read flip side).

In the recent past in India, we have started seeing mobile wallets increasingly being used for payments and other financial transactions to another device or account. The connected wallets also create opportunities for hackers to break in and creatively lay their hands on the information pertaining to transactions, account details, the payee details, their numbers, the payment patterns, sources of funds, and many such confidential data which one would not like to divulge.

Cyber security, will don a new hat with the advent of new technology and devices working in tandem. Trying to stop break-ins will need a lot more intelligence and smart techniques to be devised. The provisioning of security to these mushrooming applications and connected devises will need to be really understood well so that people know they are secure while transacting with gates to personal data. The approach itself requires comprehensive techniques.

The mobile channels will provision more incentives with increase in volumes of both devices and transactions. The global reach of the mobiles have opened standard techniques for the hackers across the global hacking communities. Ubiquity and connectivity are vulnerable and enables folks to get to mobile devices. The incentives are more for mobiles which use financial transactions, undoubtedly. It may not be hard for hackers to know which user uses which number to carry out financial transactions.

The richer the features of the mobile, the more it becomes a target for the hackers.  The concern about the privacy invasion by advertisers is rising steeply with these smarter devices. In 2010-11 Wall Street conducted a test for 101 Android/iOS applications and found that more than half sent device information, 47 shared location data, and 5% users –  personal information to advertisers without the consent of the users.

More than 1000 malware target mobile devices globally. An instance of worm attack can infect mobiles rapidly to the tune of millions of handsets.  As mobiles are getting more advanced so are the worms accomplishing more sophistication – raising their quality of attack as well.  As technology carriers are improving the device capability, the blue-tooth and Wi-Fi is also becoming airborne contaminators. Some viruses dial international numbers while the subscriber is sleeping.

The mobile computing increases the data loss as well. With the connected devices expected to transmit data across applications and other devices, the hackers would try means and ways to create opportunities in the chaos. Mobile banking has also brought in rogue applications which are smartly working their way to gather financial information from devices through even legitimate applications topped with these malware at app stores.

Over all this, it is said that more than 37% of the service providers do not have any threat intelligence programs.

Impacting Scenarios

As hackers take control of the connected devices, the very capability for which the IoT was brought in (efficiency, productivity, ease, etc) will be compromised.  It is scary to even think what if the folks are unable to stop machines, controlled by connected devices for convenience- large ones at that. IT security itself will not stand ground here.  The extended knowledge across applied industrial controls and production processes would become mandatory to put the checks and balances in place. (What if one is not able to stop a blast furnace in steel plants?…)

Water Management:  Anything which is scarce and essential comes under the cloud of threat and catches attention for disruptive opportunities. Water management through connected devices is becoming a lucrative offering from many vendors ensuring appropriate water quality, controlled water supply, water treatment, metering and other features. Water consumption, like electricity is also vulnerable where automatic vaults and control mechanisms for pressure and flow are devised to be controlled through technology. A loss of control would create wastage of water across and lead to a water crisis.

Patients Health Records (PHR)

The PHRs of patients are too personal a data to be privy to. These personal health records reveal several confidential parameters of personal health profile of an individual with historic ailments, health issues in the recent past, blood group info, and many more data which can lead to people either playing with or destroying the data for obvious reasons or holding the same for ransom. Very dangerous but true, not because we need to be scared, but the awareness of such a threat is missing till the first casualty occurs.

The Nuclear plants, used for positive reasons, like generating power can be a huge source of risk – if they were to lose hold over the control process of nuclear reactors.  If IoT based controllers were deployed in these plants for the purpose of analytics and other accompanying research advantages, there should be exhaustive sets of checks and audits built in – plus multiple approvals at multiple governance decision points to ensure disasters would be at least minimized.

Likewise, hacking connected or smart cars can lead to road disasters.  This includes the hacking of smart traffic management – feature of smart cities. Insurance transactions can be blocked and claims disabled or diverted, where insurance segments are moving from statistics to individual fact-based policies.

Cloud is another source of vulnerability. The plethora of data being stored on cloud will require tighter secured solutions, and hence the cloud data security will only become more crucial.

It is said that M2M communications will themselves generate about $900 billion in revenues by 2020.

Dependency on the connected devices for various aspects of the futuristic work-style like improved real-time decision making, better design of solutions, reliability on the so-generated data analytics (what about data quality?), driving future product conceptualization, fleet management,  and many others could be a challenge if the systems malfunction due to malware or cyber-attacks.

The above are potential scenarios where the flip side of technology, if misused, can create disasters and can cause unimaginable disruption. However, it is not too late to create a strategic security blueprint and get the awareness levels in the public embracing these newer emerging solutions in future.

We will discuss the potential next steps on what we should do, what the state agencies should do and what the general users should know in the sequel to this blog shortly. Till then happy reading….

SMAC/IoT and Manufacturing – a perspective

By Sairam Bollapragada & Narayan Katti

With stress levels on automation and robotics going northwards, every manufacturing unit is investing hard on ways to pull down the cost of production and RPUs, increase the customer retention for sustenance, increasing business process efficiencies, creating differentiators, being able to most competitively price, continuously innovate, optimize operations, manage supply chain and others – but the largest investment being human interaction.

Manufacturing also has seen a significant shift from pure play product philosophy to product and services philosophy. Customer is at the center of all initiatives that the manufacturing industry is embarking on.  Customer-centricity is now the new mantra of Manufacturing Industry.  Be it, Automotive, Consumer Electronics or Industrial manufacturing, manufacturers are looking at delighting customers with various innovations across the value chain of manufacturing.  SMAC/IOT is a channel which will create scope for these innovations.

As per IDC, “…55% of discrete manufacturers are researching, piloting or in production with IoT initiatives…”. The oil and gas industry, hit with the downwards spiraling oil prices, is still investing in technology space driven by optimism and compulsion to reduce the cost of production.

Globalization is pushing everybody to compete in the market place without compromising on universal standards.  The ever demanding customers are pushing for decreased business cycles, hence re-inventing business processes, with more demands around personalization and better service levels. (ref: The caging of SMAC/IoT). The other issue is complexity and erratic value chain in the industry. The real time process integration for manufacturing and supply chain has always been a persistent problem to solve with newer radical innovations around  business processes further challenged by emerging market growth and behaviors.  Globalization of demand-supply chain is also playing a pivotal role in how the markets behave.

There is a discussion about a $ 19+ Tn economy in the next decade with manufacturing garnering at least 27% of the share. The manufacturing Industry is betting big on   IoT and emerging technologies to help shape up their future. Manufacturers would need to redesign their thought processes, with a significant focus on analytics connected devices, and related areas.  One could visualize a shop floor where each device is connected with its own IP identity and communicating with the centralized automated monitoring mechanism.  The data from such connected devices and also the analytics could get into the supply chain processes. This would provide all necessary information in real time for better decision making and also better time to market!! Managing the inventory dashboards across warehouses and manufacturing units in real time will be a challenge, interesting to handle and change your supply chain plans on the fly.

IDC says that by 2018 more than 40% of manufacturers will depend heavily on connected devices.  The innovations would be around product innovation, product services and productized services. Each connected device will generate critical data to further their own efficiencies and hence the generation of data will be beyond petabytes across similar industries and each company would need to demonstrate aggression to mull, mine and read into this data to stay ahead of the curve. A transition journey will commence to these new technologically driven services for higher profits and far superior CSAT. The manufacturers will indeed hire or create their own data scientist teams for this.

Connected devices will also increase the complexity of communication between themselves re-defining the product design to manufacturing to marketing to after-sales services. The smart connected products being manufactured will necessitate building new technology infrastructure made up of hardware, software, engineering components, running on remote cloud based servers, using security mechanisms to protect the information leakage and integration of business processes through completeness of information which will enable extraordinary new product capabilities; products which can monitor and report their own condition periodically, bringing in near-zero manual preventive maintenance processes.

This product and product-generated data will become the new value-add in the business processes. The seamless dovetailing into other product generated data will make it very valuable for analytical reasons. The connected devices with addresses – both, virtual and physical, data on spare parts, data emitting parts, laced with sensors for capturing material characteristics of various products or parts will take us to the meticulous levels,  unheard and unforeseen thus far.

Security: However, since the adoption is in nascent stages, the Industry standards and best practices are still being explored and reviewed in the IoT Labs. Security would play a key role in IoT areas as the expanse of touch points is enormous. While it is a big boon for the customer for all connected devices, it is a big challenge for IoT implementers with respect to security. There would be lot of opportunities for IT security players, as the scope for a COTS security product in this area in near future is bleak.

People aspect:  Hence the first casualty will be the manpower optimization and this will move jobs to automation. The severe lack of manpower will be the result of the historical paradigm where IT and production engineers have been working in silos for so long. Getting them aligned to each other and also to a common goal will take time. The learning curve is on both ends but whoever does it first will stand to gain unquestionably. The core competency of the production engineers will need to be blended with cloud, mobile, analytics, social media  and both the sides will need to collaborate heavily to innovate. These innovations would deal with how best to leverage on creative business processes across ERP, CRM, PLM, SCM platforms.  The need to have high end partners and third-party advisors would become essential in many cases that will be expected to not only keep them honest but also bring speed into the collaborative innovative processes.

Here is where the current avatars of Service industry will need heavy transformation. All the experience of helping manufacturing industry – whether BPO, ITO, KPO and other services will need to be brought to the table and devise a mechanism to understand transformation parameters like costs, differentiators, growth targets, and partner-eco systems apart from others to create the strategic  transformational  roadmap for them….