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Realizing the IoE Opportunity with IoT Atlanta Regional Internet of Things Forum

Manufacturing Business Outcomes with IoT/IoE

Chet Namboodri

Global Director, Manufacturing Industry Marketing and Business Development

[email protected]

23 April 2015

Boosting Agility, Efficiency, NPI Revenues, and Customer Experience with the Internet of Everything


The Internet of Everything (IoE) in Manufacturing

Manufacturing Trends and Imperatives

Vision: Connected Factory of the Future

Business Outcomes with Connected Manufacturing

Capture the Value with Connected Factory


Trends in Manufacturing: Driving the Adoption of the Internet of Things (IoT) and IoE

Supply Chain Demand Chain

New Product

Introduction

Acceleration

Robotic,

Automation

Advancements

Manufacturing

Right-Shoring

Additive

Manufacturing,

Materials

Advancements

MFG growth in the US is 2x the

GDP in the developed world


What’s on the Mind of a Manufacturing Executive?

Introduction to Cisco Nexus® 7700 Platform

Security, Security, Security

Lower Total Cost of Ownership

Workforce Productivity, New Skills, Safety-

Aging Workforce Dilemma

Faster Time to Market and New Product

Introduction (NPI)

Asset Optimization… Improving Flexibility,

Uptime, Efficiency


IDC 2015: Business Value / ROI More Important than Ever


General Motors Future Proofs with Next-Generation, Standardized Plant Floor Control Networks (PFCN) for Global Manufacturing Operations

Accelerate entry into emerging

markets, specifically Brazil and

China

Improve product quality and

realize cost efficiencies

Create a globally integrated,

standards-based engineering

and manufacturing platform

Deploy modern, standards

based network architecture

“Plant Floor Communications

Network (PFCN)” enabled by

Cisco

$53M savings in network

operations staff

$76.3M/yr in automotive

production profit contribution

from improved uptime

$5.4M in spare inventory

savings

166% ROI projected over 5

years

75% downtime reduction at

Greenfield assembly plants,

compared to legacy plants

Results Challenge Solution

“PFCN is a tremendous engineering accomplishment for GM. Standardizing

plant networks has reduced costs, improved uptime and provided a flexible

platform for future applications such as collaborative engineering” Nick Bell

Program Information Officer, Global Manufacturing & Labor

General Motors

Click here for case study

http://www.cisco.com/web/strategy/docs/manufacturing/Cisco-AutoCaseStudy-GM.pdf


Harley-Davidson Retooling for Flexibility and Cost Productivity with IoE

Harley-Davidson moved to

reduce costs and increase

efficiencies

Hundreds of motorcycles

built each shift, with low

cycle time per operation

Manufacturing complexity

with 1200 different

configurations

Architect an end-to-end

Converged Plantwide Ethernet

Automation solution enabling

Harley-Davidson to achieve its

goals of world-class

manufacturing, built on RA-

Cisco IE switching and closed-

loop controls fabric

Cisco Unified Wireless

Layer in Visual MFG on the

wired-wireless infrastructure

Model NPI reduced from more

than a year to 1.5 wks

Enabled paperless factory

for rapid response

Increased OEE by 7-12%

(+1% OEE yields upwards of

+4% in Op Margin)

Up to 25x improvement in

build-to-order cycle times

Reduced downtime and

scrap, yielding $200M benefit

Results Challenge Solution

“What used to take hours or days to triage and troubleshoot problems now takes seconds.”

David Gutshall

Infrastructure Design Manager, Harley-Davidson Motor Company


IoT Can Introduce Complexity …

Line of Business Requirements

… So Why Mess With It?

New GTM Business Models

Need for IT and OT to Work Closely

For OT (Controls), New “IT” Vendors

Enterprise-to-Plant-&-Field Integration

Shift from CapEx to OpEx


IDC 2015: Operational Benefits are Main Driver for IoT


IDC 2015: Heat Map of Leading IoT Applications


Converged Plantwide Ethernet (CPwE) / Connected Factory: Solutions Portfolios

Factory

Energy

Management

Factory

Security Factory

Wireless

Factory

Automation

Connected Factory / CPwE


Enabling the Connected Factory of the Future

Automation Pervasive

Intelligence Sensors

Everywhere Machine-to-

Machine

Risk Management Lower Total Cost of

Ownership Fast Time to Market

Improved Asset Utilization

Robots and Machines

Personal Devices

Sensors Security Devices

Real-Time Analytics

Hardened Mobile

M2M Gateway

User- and Control-

Level Factory Security

Ruggedized

Wireless AP

Industrial Routers

and Switches


Business Outcomes - Automation

Faster diagnostics = lower

downtime

Flexible manufacturing = higher

revenue

Converging motion, safety, data,

video, and wireless = higher

productivity

10-25X improvement in build-to-order (BTO) cycle times (ex: 18 months 2 weeks)

Increase OEE (equip. utilization) by 7-12% (1% OEE = 3-4% profitability)

Connected Factory

Automation Wireless

Security Energy

Management

Connected Factory Automation


Business Outcomes - Wireless

Workforce enablement − 82% faster retrieval time

− 80% faster decision making

Wireless tools and assets

reduced cabling costs and setup

time

Continuous asset management

7% production throughput increase

Reduce cabling and other costs for machines that move 95%

Connected Factory

Automation Wireless

Security Energy

Management

Connected Factory Wireless

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Stanley Black and Decker

Get better transparency of

real-time production to

schedule

Dissect why actual labor costs

exceeding standard costs

Need to understand effects of

shift changes

Gain better visibility to real-

time OEE

Leverage Cisco WiFi

throughout the plant

Combine with AeroScout

RFID tags

Integrate RFID Tags to PLC

to Quality Scale

Results Challenge Solution:

“… we are on our way toward realizing our vision of a virtual warehouse and fully

connected factory, with complete visibility and traceability.”

-Gary Frederick,

CIO Industrial Division, Stanley

Toolmaker improves operations with IoT / RTLS

Click here for case study

24% in OEE improvement

in router tool line

Reduced labeling error

rate by 16%

Improved labor utilization

from 80 to 92%

Reduced inventory holding

costs by 10%

http://www.cisco.com/web/strategy/docs/manufacturing/c36-732293-00-stanley-cs.pdf


Business Outcomes - Security

Connected Factory Security

Reduce downtime Increase MTBF and reduce MTTR

Reduce internal and external risks (Manufacturing is the most attacked industry)

Connected Factory

Automation Wireless

Security Energy

Management

Fundamental enabler of the Connected Factory

Securely connect factories to the enterprise

− Physical security

− Cybersecurity

− Identity/role-based access control

Secure remote access - use machine

builder expertise to reduce downtime

Securely monitor and respond to cyber and

physical incidents


Business Outcomes - Energy Management

• Reduce variable costs

(energy is often the largest variable

cost)

• Monitor machine-level energy

consumption

• Demand response - receive alerts and

take action to avoid peaks

• Optimize energy by matching machine

energy utilization with activity

(e.g. idle machines)

Reduce energy consumption 10-20%

Avoid peak energy charges (up to 10X base load cost)

Connected Factory Energy Mgmt

Connected Factory

Automation Wireless

Energy

Management Security


Cisco Can Help You Capture IoT Value Opportunities in the Factory

Business challenges

Best practice sharing

Use case brainstorming

and prioritization

Discovery Workshop with OT and IT

Run POCs in a

showcase manufacturing

facility to prove

the value and technology

POC Design

TCO or OEE Opportunity Quantification

Quantify top value

opportunities for senior

management (TCO,

OEE, and overall

benefit models)

End-State Architecture Assessment

Document future state

architecture (3 to 5 years

out), gaps that exist today,

change management, and a

phased plan to reach goals

© 2014 All rights reserved. Do not distribute. Hosted by 23 © 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23

Sugar Creek Packaging

Get better transparency of real-time

production to schedule

Expand into a new product portfolio

that needs sensors everywhere

(Sous-Vide) for ideal production

Need to understand effects of

emergency issues and help first

responders in case of issues

Gain better visibility to real-time

OEE for all users in all locations

$100m annual energy bill

• Cisco Services for complete

Greenfield design to integrate the

Cisco Connected Factory

architecture

• Includes Cisco Wireless with

AeroScout RFID tags for Location

Based Services, Security, and

communications on one network

• Integrates machine data to digital

signage and mobility applications

using Cisco Analytics

• Cisco EnergyWise for MFG …

Connected Factory Energy Mgmt

Projected Results Challenge Solution:

“With the help of the Cisco Services and Global Manufacturing Industry practice, we

are able to expand our product portfolio, production capacities, efficiencies and

capabilities with a new plant. We’re going to achieve many new benefits with the

additional insights into our operations not previously available.”

-Rob Daley

CEO Sugar Creek

Food Manufacturer expanding product portfolio

Met Greenfield implementation and

start-up schedule, including new

product and process capabilities

Improved labor utilization to 90%

Integrated visibility of all operations

from one screen

New sensors added predictive

maintenance capabilities, lowering

costs and increasing OEE by 25%

Lowered relative energy costs (per

sq.ft) at this facility by 35%

Created blueprint for retro-fit of other

five facilities


Connected Manufacturing and Factory of the Future: The Benefits

Introduction to Cisco Nexus® 7700 Platform

Abundant data from the IoT

A culture of innovation

Strengthened security

Faster new product introductions (NPIs)

Less downtime and higher overall equipment

effectiveness (OEE)


THANK YOU

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