Manufacturing Executive

Heading Off the Hackers

By Chris Chiappinelli | Published: December 21, 2009

Last week came the news that hackers had infiltrated the U.S. military’s Predator drone transmissions, allowing them to see exactly what the automated planes could see. News reports such as the AP video below point the finger at insurgents in Iraq, who may have used the inside info to evade attacks by the drones.

Let’s be clear: This is ridiculous. I’ve written about network vulnerabilities before, and I’ve been surprised by big data breaches at large corporations, but this is a new low. If our highly advanced, technologically superior military doesn’t enlist basic security measures (e.g., encryption) to guard its strategic assets, how are we supposed to persuade anyone of the value of digital security? That kind of slipup makes for a good joke on the late-night circuit, little more.

Speaking of the late-night circuit, a couple of nights before the drone-hacking news broke, I had a chat with some colleagues at a holiday party. Yuletide revelry tends to loosen lips, which always makes for interesting conversations. During the course of the night, individuals who will remain nameless admitted that in their foolhardy, younger days they had, for instance, lashed together some electrical components to create a pay phone hacking device. And they might have sold it to friends, who then might have made a large number of phone calls on Ma Bell’s dime.

The point is that these people are now well-performing members of society. The curiosity and ingenuity that drove the illicit activities of youth are now driving their careers. Part of that transformation must have come from the educational system that helped steer them toward productive careers. There are, of course, the questions of opportunity — many hackers may feel that they have little opportunity to earn riches and acclaim in the world of legitimate employment. But what if the educational system focused more on steering their ingenuity and curiosity toward productive ends? Today’s schools should look for signs of technical capability among its young students and educate those kids on the many paths those skills suggest. That may not stem the tide of Romanian hackers or Iraqi insurgent hackers, but it could go a long way at home.

(Check out CNN’s story on the U.S. Cyber Challenge, which brings some of our best hackers into the limelight and probably decreases the chances that they’ll put their skills toward illegal ends.)

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Preparing Students for Analytics, the IBM Way

By David R. Brousell | Published: December 11, 2009

Data overload is one of the biggest problems in business today. Companies are awash in data, both structured and unstructured, generated from myriad computer and communications systems. And there appears to be no end in sight. A recent report on Roche Pharmaceuticals, for example, published in Manufacturing Executive, MA’s sister publication, revealed that Roche has two petabytes of data under active management, a volume that is growing at 60% per year.

Roche is far from alone. Nearly all companies are experiencing explosions in data volume. IBM, for example, estimates that computing systems are generating 15 petabytes of new information every day, which it claims is eight times more than all of the information in all of the libraries in the U.S. (A petabyte, according to Wikipedia, is one quadrillion bytes, or 100 terabytes. Numerically, it is 1,000,000,000,000,000). This uncontrolled growth has resulted, paradoxically, in productivity problems in companies as people struggle to deal with the growing tide. In addition, decision-making has gotten harder as companies try to make sense of it all.

So it is no surprise that the technology called business intelligence, also known under the broader categorization of business performance management, is a hot ticket these days for many companies. Analytical tools that can help separate the wheat from the chaff are at the top of IT purchase lists.

As a result, there is a growing market for people with the skills to effectively use these tools and manage the business issues associated with them. Hoping to capitalize on this need, IBM and Fordham University 0n Wednesday said they are collaborating on the development of a business analytics curriculum to help prepare college students for careers in a variety of industries that will be big users of these tools.

Fordham’s Schools of Business is introducing a course called Business Analytics for Managers that will be based on IBM technology (IBM, of course, owns Cognos, one of the market leaders in business intelligence technology). Beginning in the spring of next year, IBM said, Fordham students will be able to obtain training in BI, data analytics, data warehousing, data mining, dashboards and scorecards, and online analytical processing (OLAP) techniques. Students will also be able to learn about managerial decision making and how analytics technology can improve such functions as marketing, sales, finance, business development, human resources, and manufacturing.

Will industry–academia collaboration of this kind help get the data explosion under control? Probably not, but it will give more people the skills to deal with its effects. And that’s a good thing.

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SAP Seeks Sustainability Leadership

By Jeff Moad | Published: December 1, 2009

This month, SAP is expected to launch the next major leg of its sustainability strategy with the release of a new software offering from its Business Objects unit to be called Sustainability Performance Management. The product will primarily target C-level users, allowing them to easily track and act on a wide range of sustainability key performance indicators.

Sustainability Performance Management is just a piece of SAP’s broader push to become an acknowledged leader in global sustainability. Besides targeting C-level executives with such tools, the company is also focusing on operational managers with applications such as its Carbon Impact (formerly Clear Standards) on-demand service for managing and reporting on carbon and sustainability initiatives. And SAP is targeting financial managers with sustainability tools from its Governance, Risk and Compliance unit.

At the same time, SAP CEO Leo Apotheker has clearly placed a strategic emphasis on SAP significantly improving its own sustainability performance. Last year, the company created a new position, Chief Sustainability Officer. The title went to Peter Graf, whose team is overseeing SAP’s internal sustainability efforts while collaborating with SAP development groups on new, sustainability-oriented products like Sustainability Performance Manager. Recently, the company was named the highest-ranking software company on the Dow Jones Sustainability Index.

Clearly, SAP believes that these sustainability efforts and tools will pay off as manufacturers begin to get more serious about accounting for and mitigating their own carbon footprints and improving other aspects of their sustainability performance. Large SAP competitors such as Oracle and venture capital-based startups such as Hara Software are pushing hard in the same direction.

It remains to be seen, however, just how quickly manufacturers will be willing to invest in new software and equipment specifically intended to improve their sustainability performance. Despite the widespread focus on sustainability in the press, experts at AMR Research and elsewhere report that spending on software and services targeting sustainability and other GRC issues has lagged over the past two years due to the depressed economy.

Recently, I got some insights into why manufacturers may be holding off on sustainability investments. At Rockwell Automation’s Automation Fair event last month, Will McBride, a consultant at the giant Prudhoe Bay oil field on Alaska’s North Slope, said in a panel discussion that the oil field’s three owners — British Petroleum, ExxonMobil, and Conoco Phillips — are dragging their feet on investing in an overhaul of the field’s energy-generation facilities and carbon-monitoring capabilities until Congress decides whether to pass some form of cap-and-trade legislation. Until that happens, McBride said, the oil field’s owners can’t place a value on carbon emission reductions. And, without knowing the market value of carbon emissions, they can’t come up with a meaningful ROI calculation to justify the investment.

My guess is that a lot of other manufacturers are in the same boat, postponing major investments in software and equipment for sustainability improvement until the regulatory and investment pictures become more clear. Once that happens, SAP’s efforts to become a leader in sustainability should pay off.

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Born to Be Wild: Automation’s New Image

By Stephanie Neil | Published: November 30, 2009

Somewhere between the dot-com meltdown and the recession, technology lost a little bit of its appeal. Of course, the new Internet age — headlined by such sites as Twitter, Skype, and YouTube — is attracting the next generation of techies. Yet, despite huge advancements, automation technology still struggles with the “coolness” factor.

But two automation/engineering companies are taking the road less traveled in an attempt to rev up some excitement around technology that can change the world. They are helping big manufacturing names like Proctor & Gamble and Ford, to name just a few, but what better way to turn heads than to team up with the baddest of the bad, the coolest of the cool: Orange County Choppers (OCC).

The Siemens Smart Chopper, for one, is poetry in motion. Quick (up to 100 mph), quiet (runs on six batteries), and clever (the front wheel is designed to resemble a wind turbine, the back, a gas turbine). The bike has been featured on TLC’s American Chopper, as well as Late Night with Conan O’Brien. Siemens execs said, “We wanted to build this unique chopper to raise environmental awareness and reflect what the 69,000 employees of Siemens USA are doing to help America stay on the cutting edge of tomorrow’s green economy.” I say, okay, but what great PR, no?

Yes, because not too long ago, Schneider Electric said it, too, would get its motor runnin’ and head out on the highway (looking for adventure) with OCC. It’s all very formal in the press release:

“Schneider Electric is challenging Orange County Choppers to build a custom motorcycle that will support our company mission of helping people make the most of their energy,” said Amelia Huntington, president of Schneider Electric U.S. “This hybrid motorcycle will employ a built-in intelligent energy management system that will allow it to be more efficient and productive by considering multiple variables to select the best energy source available. Schneider Electric employs the same management methodology to help our customers do more while using less energy in buildings, data centers, industry and residential markets.”

A very professional way of saying, “Are we cool, or what?”

No need to explain it to me. I think it’s all very cool, and could be the beginning of a whole new image for Siemens, Schneider, and the manufacturing customers they serve, as well.

See the full episode of the American Chopper TLC show here. Or check out Siemens’ site for a short clip of the bike’s unveiling in New York City.

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Does Your Reality Need Augmenting?

By Chris Chiappinelli | Published: November 20, 2009

Since we’ve all had enough of the sad economic reality created by credit default swaps and overleveraged financial titans, it seems like high time someone augmented our reality.

Fortunately, that field is growing by the day. Purveyors of “augmented reality” are out in force, promising to give users information that they can use in a real-time, real-world context. In the consumer world, this revolution relies heavily on smart phones. Standing in the middle of Chicago, for instance, someone can hold his phone out and see icons on the screen that actually point him to a nearby restaurant recommended by friends and tell him how far away it is.

The technology has all kinds of possible applications for the world around you. Rob Pegoraro of the Washington Post offers a good rundown of some of the consumer apps available. Esquire magazine devoted its December issue to augmented reality, allowing readers to point their computer webcams at modified bar codes on the printed page to see additional information in the form of 3D videos, etc.

But as a manufacturer, you’re looking for more than a good restaurant or a video of Robert Downey, Jr.

Turns out that people inside manufacturing have been thinking about the implications of augmented reality for a while now. Back in 2004, researchers A.Y.C. Nee and S.K. Ong published the book, Virtual and Augmented Reality Applications in Manufacturing, which detailed technologies “that have the potential to revolutionize manufacturing processes over the next few years,” according to its synopsis.

A year before that, a workshop on virtual environments produced a white paper that noted, “Using AR-techniques, [a] physically existing production environment can be superimposed with virtual planning objects.”

It won’t be long before we learn that Al Gore invented augmented reality in 1979. But, in the meantime, brace yourself for a new paradigm in the factory or plant, the warehouse, and field service.

From my limited research, SAP appears to be in the best position to garner first-mover status in applying augmented reality to manufacturing work. In the video below, a picker on the manufacturing floor at Daimler in Germany wears a space-age monocle that superimposes picking instructions on his field of vision, freeing him from printed work instructions and improving his accuracy. It’s a great first look at a practical use of augmented reality:

Where else could you see this technology in manufacturing?

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Keeping Innovation Alive When Downsizing Factories

By David R. Brousell | Published: November 17, 2009

During a recession, and particularly during a severe recession like the one industry is in today, cost cutting by downsizing factories or closing some altogether is often a natural reaction.

Yet, a company must continue to innovate. In fact, innovation may be even more important in bad times than in good times. But a recent report from management consultant McKinsey & Co. suggests that global manufacturers have much to learn about how to optimize innovation across their “factory networks” when the pressure for cost-cutting is on.

“A better understanding of the way factories interact to create and transmit knowledge can help senior executives not only to spark innovation by balancing portfolios of plants but also to maximize efficiency by locating production resources appropriately,” write Arnoud De Meyer and Ann Vereecke, authors of the report. “Moreover, our research suggests that the importance of actively participating in the creation of knowledge is increasing for individual factories. Those that actively develop and share it offer their companies greater strategic flexibility and seem to have a more stable future.”

McKinsey’s research resulted in the identification of four types of factories when it comes to knowledge sharing. The first, called isolated factories, get few innovations from other factories in a corporate network and transfer few if any themselves, McKinsey says. The second, called receiver factories, get many “innovation injections” from other factories but generally don’t transfer.

Hosting network factories, the third type identified by McKinsey, are defined as having strong network relationships and actively communicate and exchange innovations with other factories. Lastly, active network factories demonstrate a greater intensity for sharing innovations than hosting network factories.

McKinsey suggests that the key to managing a portfolio of factories is that magic word, “balance.” A manufacturer may need to incorporate several types of factories to achieve its objectives. But a company can’t lose focus on how knowledge is created and disseminated throughout the factory network.

“Innovativeness in itself appears insufficient for survival; the willingness to share its fruits with the other players in the network is crucial,” say the authors.

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Fanning the Flames of Support Discontent

By Jeff Moad | Published: November 12, 2009

Seems that Oracle Corp. ran into some embarrassing problems this week with its attempted migration of customers from the MetaLink support website to a new site called Oracle Support. Enterprise application and middleware customers for several days experienced log-in and performance problems, prompting a blog fire storm and belated apologies from Oracle officials.

Oracle support people only made matters worse by responding online in a fashion that some angered customers called unprofessional. Oracle Senior Customer Support Manager Chris Warticki, for example, wrote in his blog, “If you’ve been off the grid, or totally out of the loop and completely clueless, Classic MetaLink retired on November 6th.” Warticki urged customers to “get in front of this one … seriously.”

Warticki later apologized “for any misinterpretation I may have caused in that blog entry,” writing, “I do accept responsibility and accountability for my actions.”

The whole experience, however, compelled several customers to speak up online with some obvious points:

  • Enterprise customers consider online support sites like Oracle’s a critical production system that they rely for downloads, patches, and other tools needed to keep their own systems running and their own users happy and productive.
  • Many of these enterprise customers pay millions of dollars each year for software maintenance and support. They don’t expect support sites to be inaccessible for days at a time. And they certainly don’t expect attitude from support providers.

Now that the Oracle Support sites seems to be back in operation, it would be easy to write off the whole episode as an example of the kind of overblown incident that so often animates the blogosphere. The whole experience, however, is yet another indication that, as enterprise software vendors continue to raise enterprise support and maintenance prices, increasing numbers of their customers are becoming frustrated, and some are questioning the value they get from those contracts.

The last thing any vendor should want to do is pour gasoline on that smoldering fire.

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SaaS: Ready for Prime Time?

By Jeff Moad | Published: November 6, 2009

Recently I attended a conference where I met an IT executive from a large manufacturing company who told me, “We are only looking at SaaS-based applications now.”

This executive, who requested anonymity, explained that his company had determined that using enterprise applications delivered as services over the Internet would enable quicker deployments, lower IT costs, and more seamless collaboration both inside and outside the enterprise. While this company didn’t plan to scrap existing applications in favor of SaaS-based systems, it planned to consider only SaaS for net new applications, he said.

Soon Managing Automation will publish the results of our annual Outlook poll, which, among other things, asks manufacturers which emerging technologies — including SaaS — they plan to investigate in 2009. But even before those poll results are in, it seems clear that the notion of SaaS, or cloud computing, has reached a tipping point. I hear from more and more manufacturing executives who have put away whatever security, reliability, and other questions they may once have had about SaaS and now seem ready to embrace the model more than ever. They see SaaS as a way not just to save money on IT infrastructure and speed deployments but also to deliver a richer Web-based user experience and enhance collaboration.

And even big enterprise software vendors that have tended to take a wait-and-see approach to SaaS are beginning to move more aggressively in this direction. SAP says it will accelerate the roll-out of its Business ByDesign SaaS platform for small and medium-size businesses next year. And, at Open World recently, Oracle said its promised Fusion Applications will be deployable via SaaS as well as on-premise and as a hosted product.

But, before getting on the SaaS train, manufacturers need to understand that selecting, buying, deploying, and operating software as a service is different from working with the on-premise applications with which they are more familiar. Manufacturers should understand those differences and plan for them. In some cases, that will mean making sure the contracts they sign with SaaS vendors adequately protect users of cloud-based systems.

Last month, Altimeter Group analyst Ray Wang posted what he calls a “Customer Bill of Rights” for companies considering SaaS products. All manufacturers contemplating SaaS — and even those with some SaaS experience already under their belts — should review this report and factor its recommendations into their SaaS procurement and management processes.

Among other things, Wang suggests that SaaS customers consider:

  • How to protect themselves against the possibility of their SaaS vendor going out of business. Already some SaaS vendors have started to turn off the lights. In June, for example, SaaS business intelligence provider LucidEra pulled the plug. First, Wang says, contracts must clearly state that customers own all data, and vendors should provide tools for accessing data. Although SaaS customers usually rent access to the software and don’t purchase a license, they should seek access to the application’s data model and logical model in case they need to reproduce them at a later date. And, he says, SaaS vendors should give customers the option to identify an alternative vendor to act as a custodian for application source code, user data, application executables, and documentation, in case a SaaS vendor goes under.
  • Holding SaaS vendors accountable for online performance. Vendors should contractually agree to notify customers of known or potential defects or quality problems, and agree to specific service levels. Contracts should include service interruption penalties that reflect the impact of the failure on the customer’s business.
  • Monitoring your SaaS vendor’s financial health. Customers of critical SaaS applications should receive regular reports on the vendor’s long-term financial viability.
  • Insisting on clear storage cost policy information. Often, Wang notes, initial storage requirement estimates prove inadequate, and additional storage ends up costing much more than expected.
  • Obtaining indemnification against intellectual property liability. If SaaS vendors are successfully sued, customers should not be liable and should have subscription costs refunded.
  • Obtaining up-front information on how vendors would support customers that want to transition from, say, SaaS to on-premise deployment. At no time, Wang says, should customers be locked into a single deployment mode by vendors offering more than one option.

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An Innovation Action Plan

By Stephanie Neil | Published: November 2, 2009

Bureaucracy is the biggest barrier to innovation. Manufacturers are banging the drum about the need to get new ideas to market faster, but they are still constrained by the organizational layers that block their ability to build a process around idea generation.

In Managing Automation’s annual Innovation Reader Poll, 38% of the respondents said their companies have a clear vision of innovation that is consistently communicated across the company. And, although 55% of the manufacturers indicated that management is actively involved in setting innovation strategy, only 35% have turned that activity into an action plan that includes roles, responsibilities, and accountability.

That means that while innovation remains a top priority, it is not receiving enough attention.

Of course, new software tools can help. Magnet Product Design & Development, last year’s Progressive Manufacturing high achiever in the innovation category, tapped Invention Machine’s Goldfire to monitor designs already in the marketplace — in this case, for a toilet flapper — and test new versions to get the product out the door quickly.

Technology is a good enabler of innovation, but it alone can’t do the trick, as Randy Schiestl, vice president of research and development at Boston Scientific recently made clear. At Invention Machine’s user conference in Boston last month, Schiestl described how the life sciences company is using Goldfire to bring new products to market faster. But the transition to the application required a cultural transformation to accompany, he said.

To do that, Boston Scientific initiated innovation training to encourage knowledge sharing across business functions, plants, and divisions. The company identified individuals by category: knowledge owners, knowledge holders, and knowledge workers.  Understanding that knowledge is intellectual property, the company rewarded individuals for what they shared (typically with praise and credit, not cash).

This is interesting, especially considering that according to the innovation poll, 46% of a company’s innovative ideas come from only a handful of individuals rather than groups collaborating across the company.

Basically, Boston Scientific achieved what other manufacturers are striving for: a consistent structure and strategy for idea sharing. That means incorporating people, processes, and technology, and making sure everyone has an eye on the business opportunity.

“Innovation is only innovation if there is value attached to it,” said Schiestl during a presentation at the conference. “We have to make sure people understand that, and leverage it to turn [value] into revenue.”

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The Shadowy World of Cyber-espionage

By Chris Chiappinelli | Published: October 23, 2009

The story reads like a Tom Clancy novel. Representatives of the Chinese government targeted and stalked a U.S.-based high-tech company, identifying and exploiting porous areas in its perimeter in order to steal valuable, highly classified data on defense technology. They succeeded wildly. And they didn’t set foot in the U.S. to do it.

Someday soon, we will wax nostalgic about the security guards who policed our corporate offices and manufacturing facilities. We’ll pine for the reassuring sight of a slightly overweight, somnolent guard scanning a bank of scratchy video screens and fighting off sleep to keep our facilities secure.

Physical-intrusion prevention is so last century. And so easy, looking back.

The Clancy-esque story above comes from a Wall Street Journal account of a U.S.-China Economic and Security Review Commission report. Here’s how it differs from its paperback counterpart: There was no Jack Ryan in this real-world tale, no cyber-hero to foil the plan. The alleged Chinese saboteurs waltzed away with reams of precious data, and we still don’t know exactly who they are or what they did with their prize.

One big, scary truth: This is automation. This is what we asked for. But nobody said it would be easy (if they did, they only wanted your money). And just as you wouldn’t leave a manufacturing facility unguarded, you shouldn’t leave your data center exposed. The Chinese cyber-espionage story proves that antivirus software and malware checks aren’t enough. What we need is a Jack Ryan for the data center. Someone trained in IT-based counterinsurgency, ever alert, and deathly afraid of the consequences of failure.

Digital security is still an afterthought for too many manufacturers. But consider: This is not fiction, and we are not mere observers. It’s time to accept that this is one spy thriller in which we are all title characters. It’s time to choose your role.

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