Learnings from PTC's LiveWorx and musings on the revolution in products.
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One week before attending LiveWorx I happened to visit a town called Warminster, PA. I had never heard of this place, but once there I was amazed at the amount of history emanating from this once early colonial town, the site of many revolutionary actions as well as educational and scientific innovations, right up to the present time. John Fitch, inventor of the steamboat,1 has a tiny tiny museum and various placards around town to mark his time in Warminster.
Figure 1: John Fitch - Warminster Town Park
To note, Fitch actually showed his invention to some of the most important ‘thought leaders’ in the country, but initially these ideas just did not develop enough steam to create a commercially viable industry.
The parallel with modern technology I hope is obvious. Ideas like Artificial Intelligence, Virtual Reality, or RFID and the Internet of Things, and so many more technology ideas had some rocky starts. But today at LiveWorx there is definitely the recognition that smart connected things is having its day—or century.
In Jim Heppelmann’s keynote he brought up this ‘missing the mark’ with emerging technologies. RFID, AI, IoT, Big Data, Virtual and Augmented Reality and so on, enter the market place of ideas and get heralded as the next big thing with a million conferences and web pages barking at us. Yet the original inventors and early entrepreneurs often struggle, often to lose everything. Later they may see in their life time (unlike poor Fitch) the dramatic rising to profound heights of their ideas.
A cornucopia of buzz words has spilled forth in the IoT world.2 Putting all that aside, the real issues are more about IoT and its impact on everything in our world, our life style, our products and our business models. On display and talked about by a range of companies from mega venerable organizations like Caterpillar, TRANE, FlowServe, Analog Devices, and LEGO, to startups like Aridea, who are transforming their products, organizations and customer experience through smart connected products.
IoT and the Service World
Unto itself, just loading a product with lots of location and sensor devices doesn’t mean a lot unless it informs. Retaining asset value and enabling field service are key areas where smart products will have a profound impact. Credit goes to PTC that they saw—earlier than many tech companies—the impact that IoT would have on service.
The end-to-end visibility of product information shared between engineers, manufacturing, sales and marketing and service is a vision with actualization taking decades. Engineers and service folks hooked up to share new innovations that field service technicians would see and need to repair, and then technicians providing feedback to the engineers on how things really work out in use. Back in the mid- nineties these types of IT systems were being developed sporadically, requiring lots of manual data entry, and tons of integration code.
Figure 2: PTC - Creo Screen - Modern visual CAD system
Although quite useful when all the work came together, creating and maintaining the initial CAD system and keeping all the product data up to date was a real challenge unto itself. Added to that was field service’s effort to collect, in a timely way, performance data from the products—not just manually written-up field reports from technicians. Both sides had tremendous mountains of data and tasks to climb in order to get a useful system working for themselves, what to say sharable working systems for the enterprise.
Service organizations like Digital Equipment Corp. and GE built remote monitoring centers (some of the first). There they could connect to customer installations over the net or dial-up to remotely diagnose issues. Initially these call centers housed product experts who had huge ring binders of technical notes they referred to in order to troubleshoot problems.
Along came sales who got into the act with automation of configurations and customizations of products. The initial configuration systems were clunky and expensive to maintain. The internet—ecommerce sales—catalyzed a wakeup call to many that the automation of product data was essential, since customers—that’s right—real live customers—would be accessing product data online—in real-time.
Digitalization of Engineering
Of course, parallel engineering and design were getting more virtualized, and multiple organizations were collaborating on product design. This also helped catalyze the digitalization of the design and engineering function as CAD/CAM systems got re-designed and easier to use. This spurred more automation, not just in the most complex product sectors, but also in consumer products like sunglasses and even tooth brushes. Design automation helped enable the outsourcing of manufacturing, and brand companies could then share CAD product plans and specs with their contract and collaborative partner manufacturers.
Today, the automation of the product data still continues, and it is a foundation for today’s product, brand and manufacturing companies.
IoT’s Organizational Impact for Service and Engineering
So, what are the implications now for IoT and the product/service enterprise? There are a lot of aspects to these technology opportunities for sure. We can’t cover them all here, but a few leaped out at me while at LiveWorx.
1. Real-time organization
In a connected world, there is an assumption of an immediate—and accurate—response to customers and product issues. With smart connected products and processing, data will be constantly broadcast, and analytics will need to determine—in real-time—if there is a problem and its criticality. Then the whole supply chain may need to respond: parts ordered, service logistics on the move, or even possibly, engineering changes, supplier notification and changes, or even product recalls. This connected world is smart, real-time, and it is calling your supply chain—your whole organization, in fact.
2. Transformation across the business
Product and process design often called Design for Manufacturing or Design for Serviceability will require more rigorous senior management attention. This is not yesterday’s process/quality or lean teams. The implications here are a rethinking of the overall business model and how companies gain revenues.
The new generation product/service/sales—who we are as a company team—will rethink the landscape, rather than engineers designing new products and then working with service as an afterthought. Rather, today’s design team will be building smart products together. Considerations of where and how to use sensors, GPS and RFID: who will use what kind of data; what back end systems will collect the data; do we share this data with customers, partners; can we charge for this data? These and other questions will drive the collaborative design team to think across the whole life-cycle—lifetime—of the product.
3. New reality for the field
Of course field service will still be there out on the road or remotely monitoring customer installations. But they will confront and ultimately embrace new ways of looking at and servicing products. CAT and FlowServe are two examples of how the new services systems and operations may work. Here in (figures 3 and 4) are shown the new interface enabled by augmented reality using a smart phone, tablet or glass device that can view the thing physically and digitally. These systems would be used by the field technician to pinpoint faulty parts, provide instructions on how to repair them, as well as ‘do the paperwork’ required to report on the work done or required at the customer site.
Figure 3: Caterpillar - View from Tablet of Service system
Figure 4: Caterpillar - Blending of Physical and Digital worlds
In a world of augmented reality, the blending of the physical and digital worlds allows for technicians to see into things in a deeper way. Data from the things—sensor data as well as CAD—and corporate data about the customer—can all be made available on site to execute whatever task needs to be done.
Flowserve discussed issues of managing remotely. A company may have tens of thousands of pumps under their management with the worksite miles away. With location-aware/thing-aware data the equipment can be monitored and service requisitions scheduled based on criticality of requirements.
Figure 5: FLOWSERVE view of Remote Analytics System monitoring Remote Pump System
Visualization of the installation and systems with real-time sensors and analytics can help provide that real-time alerting and analytics required for optimized decision making. To note, for the enterprise having such capabilities is a culmination of steady investment in modernization of technology and an obsession with data.
4. New Financial Models
The platforms—a product or thing system in the cloud—also changes the revenue model. Rather than buying things, customers will be buying outcome. This means that customers may opt for subscription or performance-based contracts. In this model, the manufacturer may still own the product or it might be owned by a third-party leasing firm. And since manufacturers will be responsible for the performance of the product over time, they need to be concerned about the overall management of the product—in use; therefore, they will have to monitor events that impact operations as well as perform the required maintenance and upgrades. They also need to consider the impact of a growing market of aftermarket sales to ensure that innovative new offerings are not cannibalized.
This does not mean there is not more product to sell, though, over time. Rather than having a one and done fixed price, products as digital platforms permit a longer-term array of new upgrades, products, and content to be sold to the customer. Customers may pay for upgrades during the initial purchase or at a later date as new offerings become available.
In the 1990s it became in vogue to orient our thinking in business around processes. Some enterprise technology systems companies in fact became very grandiose in their thinking in process concepts like ‘order to cash’ and ‘procure to pay.’ These were dominating themes for corporate improvement and of course unending enterprise systems implementations. All the business talking heads were talking about processes. As important as it is to have good processes, the fact is we were losing our prowess on how to make things. There was a popular cartoon that was circulating in the mid-nineties3 where a professor is addressing the class, “Today, we are going to discuss the making of things.” And it is obvious this causes a reaction from the class. “That’s right,’ he continues, “real things.” We were forgetting how to make products, and pundits were pontificating on process alone. As you readers know, it has been hard to attract a new generation of young people to pick a career in manufacturing or engineering.
The exciting thing that struck me at LiveWorx and the whole environment around IoT is the return to product innovation. With today’s enabling technologies4 we are again talking about things—designing a new generation of things. In fact, Jim Heppelmann stated that ‘these are systems that are centered on things—not processes.’ How refreshing! We are, he pointed out, blending the physical and digital into a ‘single reality,’ a new operating platform. (Note my colleague Bill McBeath’s article in this issue about the platform.)
That surely is a smarter reality. We can all envision across the landscape—from consumer, healthcare, our food and environments—a smarter, cleaner world. That is surely a vision that is driving today’s entrepreneurs. It is a future worth investing in.