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T HE M ANUFACTURING L EADERSHIP C OUNCIL www.mlsummit.com June 11 - 13, 2018 | Hyatt Regency Huntington Beach Resort and Spa | Huntington Beach, CA 14th Annual Manufacturing Leadership Summit Featuring the 2018 Manufacturing Leadership Awards Gala Accelerating the Transformation to Manufacturing 4.0 2018 EXECUTIVE CHRONICLES

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Page 1: Accelerating the Transformation to Manufacturing 4.0 2018 ...€¦ · 1 14th Annual Manufacturing Leadership Summit Accelerating the Transformation to Manufacturing 4.0 . Dear Colleague:

T H E M A N U F A C T U R I N G L E A D E R S H I P C O U N C I L

www.mlsummit.com

June 11 - 13, 2018 | Hyatt Regency Huntington Beach Resort and Spa | Huntington Beach, CA

14th Annual

M a n u f a c t u r i n g L e a d e r s h i p S umm i tF e a t u r i n g t h e 2 0 1 8 M a n u f a c t u r i n g L e a d e r s h i p A w a r d s G a l a

Accelerating the Transformation to Manufacturing 4.0

2018 EXECUTIVE CHRONICLES

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14th Annual Manufacturing Leadership Summit Accelerating the Transformation to Manufacturing 4.0

Dear Colleague:

At the 14th Annual Manufacturing Leadership Summit, Frost and Sullivan convened top

industry leaders to discuss the ideas and technologies that are shaping the future of

manufacturing today. In particular, participants explored the need to accelerate their

organization’s transformation to Manufacturing 4.0, or M4.0. Throughout, we noted key

ideas and best practices discussed in the sessions to create the Manufacturing

Leadership Summit Chronicles. This e-book collection includes the most valuable

insights and take-aways from the event.

Readers will learn from Brynn Watson, Vice President, Future Enterprise Program,

Corporate Engineering and Program Operations, Lockheed Martin Corporation, who

discussed Manufacturing 4.0 Transformation in Action; Stephen Engel, Senior Vice

President, Strategic Solutions Leader, Americas Hitachi Consulting, who examined

Leadership in the Digital Age; and Caralynn Nowinski Collens, Chief Executive Officer,

UI Labs, and Member, Manufacturing Leadership Council, who explored The Future of

Work in the Manufacturing 4.0 Era.

Why not harness the latest thinking shared at the 14th Annual Frost & Sullivan

Manufacturing Leadership Summit to create and sustain a competitive advantage at

your organization? These Manufacturing Leadership Summit Chronicles were

compiled to help you identify and address the tactical and strategic issues facing the

manufacturing community today.

Thank you for your participation in this Frost & Sullivan event. I look forward to our

continued partnership and welcome any feedback you may have on the Manufacturing

Leadership Chronicles.

Sincerely,

David Brousell

Co-Founder, Global Vice President and Editorial Director

Manufacturing Leadership | Frost & Sullivan

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TABLE OF CONTENTS Tuesday, June 12, 2018 OPENING ADDRESS Picking Up the Pace Of Manufacturing 4.0 ......................................................................... 4

KEYNOTE-with video link Manufacturing 4.0 Transformation in Action ..................................................................... 7

CASE STUDY Cyber in the Age of Digital Manufacturing ........................................................................10

MANUFACTURING LEADERSHIP AWARDS SPOTLIGHT Selected Winners of the 2018 Manufacturing Leadership Awards ................................13

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 1. Manufacturing 4.0: Where do I Begin? ...............................................................16

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 2. Applying Artificial Intelligence and Machine Learning for Competitive Advantage ...............................................................................................................................20

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 3. Building Your Digital Enterprise ..........................................................................27

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 4. A Manufacturing 4.0 Roadmap for Legacy Assets ............................................30

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 5. Using the IoT to Elevate Supply Chain Visibility ...............................................35

CASE STUDY Embarking on the Manufacturing 4.0 Journey .................................................................38

EXECUTIVE INSIGHTS-with video link An SMB’s M4.0 Cultural Transformation ............................................................................41

KEYNOTE-with video link Leadership in the Digital Age ..............................................................................................45

PANEL DISCUSSION SMB Perspectives on Manufacturing 4.0 ...........................................................................49

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Wednesday, June 13, 2018 KEYNOTE The Future of Work in the Manufacturing 4.0 Era ...........................................................53

EXECUTIVE INSIGHTS New Insights into the Leader’s Role in Driving Safety Excellence ................................56

MANUFACTURING LEADERSHIP AWARDS SPOTLIGHT Selected Winners of the 2018 Manufacturing Leadership Awards ................................59

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 1. Digital Twin Deployment – You Aren’t Alone .....................................................63

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 2. Edge Computing in Manufacturing 4.0 ...............................................................67

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 3. A Renaissance in Product Design and Manufacturing: The New Role of Generative Design .................................................................................................................70

CONCURRENT COLLABORATION ZONES – THINKTANKS Zone 4. Optimizing Assets through Predictive Maintenance ..........................................73

CONCURRENT COLLABORATION ZONES – THINKTANKS Zone 5. Will Blockchain Transform Your Supply Network? ............................................76

EXECUTIVE INSIGHTS Blueprint for Disrupting Your Culture and Turning Employees into Innovators .........80

BOARD OF GOVERNORS PANEL DISCUSSION Factories of the Future .........................................................................................................84

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______________________________________________________________________

OPENING ADDRESS Picking Up the Pace of Manufacturing 4.0

PRESENTER

David Brousell, Co-Founder, Global Vice President and Editorial Director

Manufacturing Leadership Council, Frost & Sullivan

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 8:10 am

______________________________________________________________________

SESSION ABSTRACT

In the last few years, the manufacturing industry has come to realize that the journey to

Manufacturing 4.0 is a complex undertaking, with technological change only one part of

the transition. The more difficult parts, it turns out, are at the leadership, cultural, and

organizational levels. The key question facing manufacturing executives is: how to deal

with the multi-dimensional challenge of M4.0 and accelerate the embrace of the new

paradigm?

KEY TAKE-AWAYS

Insight on what it means to be a “digital” leader

Examples of the most important elements of a digital culture

Key factors to best organize around the M4.0 opportunity

INTRODUCTION

The Manufacturing Leadership Council Mission: To enable manufacturing leaders to

imagine a better future and to make it a reality. Other guiding principles: Connect,

participate, learn, network, benchmark, teach, engage, and inspire!

Speaker David Brousell: This is the 14th time I have presided over this event. Fourteen

years ago, the theme was progressive manufacturing. Since then, we’ve seen economic

upturns and downtowns, disruptive business transformations, war, globalization of

markets, price reductions, new technologies, IT and OT challenges, the need for greater

agility, leadership challenges and much more.

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KEY INSIGHT

Today, manufacturing is positioned to be the driver of economic and social prosperity.

Our goal is not to make things, but to make life better for all people.

We seek to drive innovation through three key dimensions of Manufacturing 4.0:

1. Technology to create information intensive factories and plants

2. The organization of flatter, more collaborative structures where decision making

is pushed down the line

3. Leadership challenges of creating and driving a digital business

The above requires us to think differently about ourselves, our organizations, and our

industry: “The greatest danger in times of turbulence is not the turbulence; it is to act

with yesterday’s logic.” – Peter Drucker

The pattern of change of M4.0 is not necessarily linear, but momentum is always

accelerating. More realistically, the pattern of change can resemble a two steps forward

one step backward scenario including testing, failing, learning and continuing. Clearly,

manufacturing has gone through transformation before. What is different this time is the

SPEED of change. All is faster than ever before. We write this new era in real time.

The idea of digital reinvention is taking place in corporate boardrooms all around the

world:

M4.0 is an opportunity to reinvent your company for the future. For example:

Voss in France - took up M4.0 technologies, now it is a benchmark plant for

transformation

M4.0 is now an international competitiveness issue of the highest order. M4.0

initiatives and projects are underway around the world. Greater efforts and

roadmaps are being made

The countries whose companies are most successful with M4.0/digital

economies will be the dominant powers of the 21st century and beyond

We have entered a new phase of M4.0. Leadership in this ever-changing digital arena

requires new approaches including being open to using data analytics and constant

connectivity. There is a high degree of emphasis on technical competencies such as

computer based analytics for data driven decisions, simulation and modeling.

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But the most fundamental challenges are around changing corporate cultures to align

with the new realities of the digital era and change processes for the new digital

paradigm.

Most manufacturers have moved beyond the ‘awareness’ stage of M4.0 to the active phase.

TAKE-AWAY

The biggest need is to MIGRATE BUSINESS to M4.0:

1. Think big about M4.0 go for breakthroughs in products and delighting customers

2. Develop an M4.0 based business strategy

3. Explore new business models that can make you a market disrupter

4. Create a culture of M4.0 innovation and success; cultivate risk-taking

5. Embrace insights from M4.0 technologies esp. data analytics

6. Create collaborative cross-functional teams employees, customers

7. Diversify workforce and leadership, bring in more women! Bring in veterans

8. Develop digital acumen in your leadership team talk the talk walk the walk-then

run

9. Be careful about applying conventional ROI metrics too fast. Try to learn first

ACTION ITEM

Leadership in the digital era:

Rely on data analysis more than intuition/experience

Create a fact-driven culture of decision making

Be ready for change-70% of participants indicated their teams are ready for the

change

FINAL THOUGHT

A leader’s job is to look into the future and see the organization not as it is, but as it

should be. Remember, as an industry, we (manufacturers) play a major role in people’s

lives. It is in our power to create a better world. It all starts with imagination.

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______________________________________________________________________

KEYNOTE Manufacturing 4.0 Transformation in Action

PRESENTER

Brynn Watson, Vice President, Future Enterprise Program

Digital Transformation Office, Lockheed Martin Corporation

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 8:30am

______________________________________________________________________

View video here: https://vimeo.com/frostsullivan/review/273734686/8dd58cd358

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INTRODUCTION

Lockheed Martin takes a holistic approach to digital transformation examining the entire

manufacturing life cycle. As a global security and aerospace company, they have

100,000 employees -- 49,000 are scientists and engineers. To transform incredibly

innovative technologies to scale requires big scope of work.

OVERVIEW

Brynn emphasized that the era we’re now entering requires an investment in the “what”

more than the “how” – the boundaries push the journey. This demands that you look at

the entire cycle of manufacturing in order to transform products. Furthermore, you must

empower small teams to come together to initiate solutions.

At Lockheed Martin, the company whole-heartedly embraces digital technologies such

as robotics and data analytics as key technologies of a new production era. This

mandates an attack plan for rescaling and exploring how digital technologies impact the

human machine.

TAKE AWAY

Lockheed Martin uses robotics automation with non-manufacturing processes,

too. But now virtual reality (VR) improves performance of manufacturing process. So,

they ask, how can this technology be maximized? How to take these technologies to

scale? They are partnering with customers to make these changes happen and

leveraging internet and microprocessor technologies. Lockheed Martin is also well

equipped to come up with solutions fast because of generative design.

Brynn noted that one of the greatest assets fueling advanced technology is the

people. The competition for talent is fierce, because there’s a shortage of skilled or

experienced workers. Currently, millennials are 30% of the population and will soon be

70% of the workforce. This generation’s point of view is unique when it comes to the

workplace. They want transparency, meaningful work, and they want to be heard. They

also want to know what’s going on elsewhere in the corporation.

We must celebrate diversity in the workforce, utilize every brain. At the same time,

training and recruiting need to be re-imagined. There needs to be a new mindset about

recruiting practices and we must look at different partners besides universities. The

millennial generation wants to learn through immersion training and reverse mentoring

relationships. In this scenario, new employees mentor experienced ones.

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But what’s more important is transforming leadership. Some leaders are stuck in

old school ways of thinking and doing. In an increasingly connected world, they must

become comfortable with the rapid exchange of data and get rid of outdated, hierarchal

structures of operating. Even more importantly, they must engage.

BEST PRACTICE

Lockheed Martin is creating a transformational strategy. “Not an easy task! Not an

email with a newsletter!” They are creating an industry playbook - bringing diverse

experiences together. The challenge is daunting. But it is exciting. For example, how to

bring 100,000 employees along on this journey? It can be achieved by communicating

across all platforms. How do you know when you are on the path to success? Answer:

the adoption rate.

It’s important to recognize that the “digital thread” and inter-office thread facilitate much

easier communication.

Today’s manufacturing environment makes it imperative that leadership no

longer be defined by one single person. Leaders need to collaborate and motivate

within a connected workforce. We cannot rest on what’s been done in the past, we need

to explore the art of the possible, collaborate, and focus on the entire life cycle of

products to enable manufacturing capabilities.

TAKE-AWAY

Leadership has to change in the new era of manufacturing 4.0

The new workforce demands a new model and way of behaving and leadership

must adapt accordingly

KEY INSIGHT

Leadership is no longer about one single leader, it’s about empowering groups to

innovate and lead on their own

FINAL THOUGHT

Manufacturing 4.0 is changing the game of manufacturing. Robotics, virtual reality, and

artificial intelligence all require new ways of looking at the entire business apparatus.

Yet, the most important aspect of making the shift is to understand the changing

workforce. To be an effective business, you’ll need to embrace and adapt to change

and new ways of working.

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______________________________________________________________________

CASE STUDY Cyber in the Age of Digital Manufacturing

PRESENTER

Michele D'Alessandro, Vice President and Chief Information Officer, Manufacturing IT

Merck and Company, Incorporated

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 9:10am

______________________________________________________________________

SESSION ABSTRACT

While the Industrial Internet of Things opens up worlds of opportunity, it also opens up

worlds of threat. The integration of cyber and physical, and the hyper connected world

of intelligent devices underpinning Manufacturing 4.0 require that digital security is a top

priority. Are you doing enough to understand and manage your risks?

KEY TAKE-AWAYS

Insight on complexities of the current and evolving threat landscape

Critical factors for Operational Technology (OT) and Industrial Controls

Key learnings and strategies needed

OVERVIEW

The threat of cyber incidents is growing. Global security is a huge responsibility. In

manufacturing, the risk and threat is acute because of the fast pace of transformation

and the technical connectedness.

Agenda

Threat landscape

Critical factors

Lessons learned

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Threat Landscape

Cybersecurity is critical today. Many barometers show that the threat has grown; cyber

thereat is the #1 risk for mid-sized and large companies and the #2 risk for small

companies after supply chain security.

Considerations of cybersecurity risk include:

Data integrity

Regulatory compliance

Risk management controls

Human safety

Confidentiality

Intellectual property

Trade secrets

Business-sensitive information being breached

A specific area of concern for this threat is with industrial control systems as they often

do not use central authentication, nor do they use central change management tools.

Issues might include being maintained in a centralized territory, no antivirus software,

limited logging and auditing capabilities, outdated and obsolete software applications,

and software engines that have limited security knowledge.

Addressing manufacturing technology risk means:

Limiting broad internet access

Using firewalls to control traffic

Implementing strong authentication and access control

Developing a dedicated and secure system/vendor support admin network

Where possible, disabling or filtering USB ports

Consider advanced monitoring solutions tailored to these environments

TAKE-AWAY

Cybersecurity is a leading business threat

Manage the life-cycle of hardware and software equipment

Don’t ignore that you need a life-cycle approach, so that the footprint of aged

assets does not become a risk

Dual vision for the manufacturing plant: Digital plant, resilient plant

Digital means agile manufacturing systems, connectivity, secure info flow, smart

analytics

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KEY INSIGHTS

Case Study

Merck was implicated in an event globally. The need for response was multifaceted.

The organization needed to be prompt, put in recovery efforts, and find out what

happened. Some divisions had good crisis continuity. Others did not, so it was not

consistent across the company. They no longer defer strategies against business

convenience.

Insights derived from Merck experience:

Security profile can only be maintained through deep learning/machine

algorithms

They couldn’t protect any other way

Increased need to protect assets seen as digital, not just physical

Plants need to be online 24/7

Aged asset debt- modernizing our asset debt

Look at the shelf life of all assets

The trick is not to get in that situation. Implement strategies that are as modern as

possible. Take care to look at the shelf life of all assets. For example: Laptops can last

from 6 months to 3 years. After that, they should be replaced.

IMPLEMENTATION GUIDELINES

Strong commitment to a new normal requires:

o Risk management and governance

o Asset management

o Advanced endpoint protection

o Strong security resources

o Segmentation

o Modernization

FINAL THOUGHT

The bottom line is that the transformation to M4.0 is exciting and can be huge for

business. But taking this path does have risks, and it demands better cyber planning

and first-rate execution of the plan.

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______________________________________________________________________

MANUFACTURING LEADERSHIP AWARDS SPOTLIGHT Selected Winners of the 2018 Manufacturing Leadership Awards

PRESENTERS

Various

TIME

Tuesday, June 12, 2018 at 10:10am

______________________________________________________________________

SESSION ABSTRACT

Selected Winners of the 2018 Manufacturing Leadership Awards will give a short

synopsis of their winning projects: what was accomplished for their companies and

lessons learned.

Winner: Bosch

Category: Industrial Internet of Things Leadership

Project: The Factory of the Future

Bosch brought in their first robots In the 90’s, and manual soldering became automated.

Today, their plant in France is a benchmark, with on-time deliveries above 99.5%.

Recent challenges include disruption, and an aging workforce. Supply chains needed to

be shortened, and they needed to diversify and reinvent new technologies to become

innovative and remain competitive. They had to teach their workforce (average age 48)

new skills like scanning.

Outcome: They came up with Manufacturing as a Service, providing a service, repair,

etc. It took some time, but they found new markets, and now they have an engaged

workforce.

Winner: Dow Chemical Company

Category: Operational Excellence Leadership

Project: Unmanned Aerial Vehicle (UAV) and Robotic Platform Initiative

The UAV and Robotics Platform Initiative (Robotics Program) is a new paradigm in

safety; significantly reducing the amount of time personnel are in a potentially

hazardous environment through the use of robotic technology. The Robotics Program

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addressed work that is performed in confined spaces, from elevated surfaces and with

industrial cleaning applications. In addition, Dow was shown as an industry leader in

this space. They were the first in their industry to be granted FAA approval for UAV use

inside their facilities.

Outcome: Dow has an established Robotics Program that is presently using robotic

technology to remove employees from harm’s way. They continue to expand the use of

validated robotic technologies and are setting aggressive targets in safety, such as

eliminating human entry into confined space entries by 2025. Future plans to help

accelerate the development of new robotic applications to meet their needs are to be

accomplished through the expansion of their Robotics Program, the active participation

in industry collaborations and expanding their presence in external industry and

academic partnerships.

Winner: Ford Motor Company

Category: Engineering and Production Technology Leadership

Project: Scalable Powertrain Assembly Lines Enabled by Flexible Robotic Assembly

Technology

Challenge: To go from traditional high volume systems to cost competitive medium and

low volume systems by simultaneously reducing Volume, Investment and Labor by 50

or 75%.

After an initial struggle to find a cost competitive solution the following quote from Henry

Ford really applied: “Failure is simply the opportunity to begin again; this time more

intelligently.” Beginning again, the team employed a “contrarian thought exercise” to

think completely differently about the scalability problem which led to their breakthrough,

a standardized flexible assembly station to do any assembly task.

Result insights: Doing more work in fewer steps is required to be competitive. Automatic

station flexibility is needed to perform multiple work tasks.

Outcome: Ford scaled a High Volume system with 36 stations and 1 task to a Medium

Volume System with 18 stations and 2 tasks to a Low Volume System with 9 stations

and 4 tasks and achieved the required scalability for Volume, Investment and Labor.

Winner: HP Incorporated

Category: Collaborative Innovation Leadership

Project: Open Materials Platform

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Open Materials Platform – instrumental in 3D printing and digital manufacturing.

IBM created the world’s first materials lab. They brought an ecosystem together --

materials scientists and chemists.

HP Open Materials Platform:

They have a number of companies working in their lab

They created branded materials, documented design

Collaboration with healthcare

3D Materials Certification Process:

When a company has a feasible product developed, the HP labs can develop

and pre-commercialize the product

Winner: IBM Corporation

Category: Engineering and Production Technology Leadership Project: Singapore

Advanced Manufacturing Initiative

IBM’s Advanced Manufacturing Technology Initiative encompasses M4.0, machine

learning, augmented reality, system, integration, and IoT. Their journey started with a

vision to be the most smart, efficient, automated company. They looked externally to

determine what the industry and clients needed. They focused on showcasing,

consulting and delivery POC (Proof Of Concept) and solutions like cognitive visual

inspection, Dynamic Supply Chain Dashboard , AR glasses, cognitive AGV, and robot

guided green energy.

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 1. Manufacturing 4.0: Where do I Begin?

FACILITATOR

David Stonehouse, Global Director of Connected Enterprise, Rockwell Automation

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Expected benefits and returns associated with Manufacturing 4.0 are clear, but the

journey to realize them can be murky. This interactive session outlined the steps

required to successfully orchestrate people, processes and technology across a

transformation roadmap that aligns strategic vision with tangible business outcomes.

KEY TAKE-AWAYS

Insight into finding the value of Manufacturing 4.0 for your business, including a

case history of where Rockwell Automation found value

A framework for aligning business outcome with strategic vision across business,

technology and organization

A step-by step approach to planning your transformation from strategy review

through roadmap

INTRODUCTION

David Stonehouse, the session facilitator, works with companies to determine the value

of digitization. He has been a general and multi-site manager of supply chains. He is a

chemical engineer. He opened the session with an informal poll of participants:

Question: Where is your organization in terms of implementing M4.0? How many are at this stage: “My firm has started, we are early in the M4.0 transition?” Most participants raised their hands

How many are at this stage: “We are just starting out?”

A few participants raised their hands

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David works with people in various stages. His research showed that the following were

the major barriers to getting started with M4.0:

1. Creating a business case

2. Leadership

3. Skills

4. Cyber security

He then delved deeper into how to address these barriers:

1. Business case

Opportunity. What is possible, how can I improve?

Cost - these are new ideas, how much will they cost?

Plan - putting together a plan is hard when you aren’t entirely

knowledgeable

2. Leadership

Interacts with business

Is there a leader? What is their level and function? Supporting team?

Who drives this forward?

3. Skills

Types

Number needed

Have/ rent/consult/contract out for the skills

4. Cyber Security

“Basic computer hygiene” - (i.e. antivirus programs)

Advanced security

Intrusion protection

What do you think should be added to the list? Readiness

Change Management

Resources

Governance

Organization

Education

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Who has put together a successful business case for M4.0? Participant: The business case is very important. We asked questions - intensive

listening [to stakeholders].

We mapped out our value strengths. We looked at constraints and where we had high

labor content and the complexity of the work. We could put a dollar value on the output.

“I’m struggling to understand - What 4.0 is… How can I say I will spend that much money on new technology when I’m already spending money solving these issues?” M4.0 is using different technology to solve problems in new ways. For example, it can

be tracked differently. But the hard part is going through your plant and seeing it in a

new way from the view of M4.0 capability technology, i.e. “The art of the possible”

How do you know how much to spend? Net Present Value (NPV)

Inflows outflows

Outflows - cost

Compliance – justifies the cost

Cost of not doing it

Proof of Value (POV)

Almost like risk management. Will make management a little more open

Minimal viable product

Ask: What am I trying to do? Modernization efforts without a reason are hard to get funded. For example, I go to a

plant and there’s a 30 year old piece of equipment. Since its running, there isn’t a

reason to spend money to fix it. Getting stakeholder involvement is very important

Participant: We have been on the journey for a number of years. We have experienced

good returns, but also unexpected consequences. When it goes wrong, we need to

adapt and change. This has made it successful. And the savings did end up getting

better. There was synergy in having multiple plants do it together.

TAKE-AWAY

From the audience’s response, business case was a leading barrier to

implementing M4.0

M4.0 isn’t about technology for technology’s sake. It’s about key issues, labor,

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list of high value targets that tech can solve, so it’s in line with the business

KEY INSIGHTS

The business case of M4.0 needs to be cross functional

Stakeholder involvement and feedback are necessary

Some of the M4.0 initiatives will make new sales and tap new revenue streams

The groups who are most successful at M4.0 have a budget and resources for it;

it is planned

FINAL THOUGHT

The many factors that go into M4.0 require a cross-functional approach to outline its

uses and long-term planning profitability. It’s not just modernization for the sake of

updating; it will require multiple stakeholder involvement and openness to change and

re-thinking operations and strategy.

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____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 2. Applying Artificial Intelligence and Machine Learning for Competitive Advantage

FACILITATOR

Doug Reeder, Innovation Leader, Office of the CTO, NTT DATA

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Artificial intelligence (AI) is gaining prevalence in manufacturing as the technologies

advance, data management and algorithms improve, and as organizations discover how

AI can be applied to solve some of their most challenging issues. Participants in this

informative and interactive discussion learned how AI is being used in manufacturing to

improve production yields, reduce waste, optimize supply chains and gain predictive

insights that deliver more value and provide a competitive advantage.

KEY TAKE-AWAYS

Examples of where AI is being applied in manufacturing

Considerations for planning your AI strategy

Perspectives on identifying areas where AI can help you gain competitive

advantage

INTRODUCTION

An informal assessment at the start of this session reflected that most participants had a

basic, but not advanced understanding of AI. Most were starting to use AI, though few

had an AI or Machine Learning (ML) roadmap.

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Artificial Intelligence (AI) and Machine Learning (ML) Definitions:

TAKE AWAY

Systems of Record and Systems of Engagement now enable Systems of Insight

through the application of AI and ML, which enables innovation:

o Systems of Record – Historically the focus of information and operational

technology organizations, included systems that recorded operational logs,

performance, time-series data, production output, inventory, financial

accounting, customer interactions, sales, human resource, and other data

o Systems of Engagement – Evolutionary from Systems of Record, systems

facilitated by the internet, wireless technologies, sensor systems and social

media that produce vast amounts of data from interactions, collaborations,

dialogs, videos, texts, tweets, and blogs. This shift began with commercial

use of the internet in the mid-1990s and accelerated with the broad adoption

of social media (Facebook, Twitter, etc.) and mobility

o Systems of Insight – Historically, statistical analysis and data mining, now

enabled by Artificial Intelligence systems, enabled organizations to derive

more meaningful insights from historical and real-time data from Systems of

Record and Systems of Engagement data to achieve their objectives and

mission. Today’s machine learning and deep learning technologies are

providing better insights than ever before

o Systems of Innovation – Using actionable insights from Systems of Insights,

the promises of innovating from “Big Data” analysis are being realized.

Organizations can incrementally innovate through new operational controls,

advanced automation that reduce cycle times, dramatically improve quality

and increased first-pass yield and do completely new things including

development of new disruptive business models.

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DEEP LEARNING DEFINITION

Deep learning refers to the use of artificial neural networks with many layers to perform

complex functions with massive amounts of data. Each layer transforms the data into

something more abstract. The final output layer then combines all those features to

make a prediction.

MACHINE LEARNING DEFINITION

Machine Learning – Gives “computers the ability to learn without being explicitly

programmed” (Arthur Samuel, 1959)

Machine learning (ML) is a type of artificial intelligence in which a machine is trained to

learn from past experiences and make decisions when exposed to new information

without being explicitly programmed to do so. A software program learns from input-

output examples and recognizes trends in the data. When presented with new data, it

makes a prediction based on past examples. Machine learning tasks can be classified

in several categories. The primary types of machine learning are:

Supervised learning

Unsupervised learning

Reinforcement learning

o Supervised Machine Learning - With supervised machine learning, the

program is trained on a set of examples (training dataset) in which we already

know what the desired output should be based on the input. (Think of it like a

set of questions and answers.) Following this logic, the program can make an

accurate decision when given new data. Essentially, we label or classify the

data and teach the machine the patterns in the data, than the machine

applies those learning to new data to make decisions.

o Unsupervised Machine Learning - In unsupervised learning, the program

must find hidden patterns and relationships in the data without any guidance.

The machine teaches itself by finding patterns, making mistakes, and self-

correcting

o Reinforcement Learning - With reinforcement learning, a machine learns by

trial and error and the consequences of its actions. If the machine gets the

right answer, it gets a reward. If it gets the wrong answer, it gets a

punishment. In this way, we teach the machine to act in a specific way to

maximize its performance

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APPLIED ANALYTICS

Descriptive Analytics: Provide hindsight. Tells you what happened from

historical data with reporting, scorecards, clustering etc.

Diagnostic Analytics: Provides insight. Tells you why it happened from

historical data

Predictive Analytics: Provides foresight, what may occur. Analysis of current

and historical data to detect potential risks, identify opportunities and make

predictions about behaviors and future or otherwise unknown events

Prescriptive Analytics: Provides optimal recommendations using optimization,

simulation, etc. for decision making. Unlike predictive analytics, prescriptive

analytics seeks to determine ways in which processes or operational conditions

should be modified. Answers the question, “What should we do about it?”

SAMPLE MACHINE LEARNING FUNCTIONS

Numerical – Pattern discovery, rankings, correlations, associations

Image Recognition - Classification of images

Image Detection - Locate and classify objects in images

Speech Recognition - Convert speech to text

Text-to-Speech – Convert text to speech

Natural Language Processing (NLP) – Extract context and meaning from text

Generative Models - generating objects that can be rendered digitally (graphics,

photos, audio, text, code, and even manufactured items)

Examples of where AI is being applied in manufacturing:

1. Quality

A. Higher First-Pass Yield with ML

i. Improving semiconductor manufacturing yields up to 30%

B. Increased efficiency with ML

i. Reducing scrap rates

ii. Optimizing fab operations is achievable

C. Automating quality testing using ML

D. Increasing defect detection rates up to 90%

E. Increased predictability of production outcomes – in some manufacturing

processes, particularly in processes manufacturing, unpredictable outcomes

of complex and specialized processes can be better understood.

F. Increasing production yield and scalability – selecting the best possible staff,

suppliers, and machines

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2. Speed

A. Increased efficiency with ML

i. Optimizing JIT manufacturing by reducing supply chain forecasting errors

by 50% - resulting in fewer lost sales by 65% with better product

availability is achievable

ii. Improve Maintenance, Repair and Operating supply (MRO) Spare

optimization (and obsolescence costs)

iii. Increase production yield and scalability – selecting the best possible staff,

suppliers, and machines

APPLICATIONS IN MANUFACTURING

Predictive Maintenance

o Cylinder replacements

o AT&T’s example: AI for network and U-verse service on the residential

gateways. Monitoring the service to ensure business continuity. Looks at

worldwide traffic patterns for cyber security and predicting network

performance. Saves the company money

o NTT sound anomaly detection

Listen to normal

React to what’s not normal

o Power supply company – listens to sound on the power grid. Listens for

anomalies to predict outages, failures and react

Supply Chain

o Supply Chain Risk Assessment –Where you map supply chain

tendencies, look at weather, listen, look at social media, then assess risk

for the entire supply chain

o Disaster Recovery –Short term demand analysis

o Discussion of use of social listening as an input to decision making and

understanding product defects

o Some companies use data to understand how to work with regulators

o IBM – Using 6 years of data. Very complex model. Demand sensing with

lots of historical data

Machine Learning

o Seasonality and event driven demand

o http://tylervigen.com and his “spurious-correlations”

o Machine learning concerns

o Erroneous causality

o Bias

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o Be careful with the data – validation and re-validation. There are lots of

best practices available

o Possible pitfall - If bias shows up and harms someone who is responsible

Input from audience member (SAS) – running ML on top of neural network

to explain why the machine is interpreting what it is. The challenge is the

output

o Supply efficiency (reducing waste aka: waste management)

Who owns AI/ML? Is it “just another IT project”? If you think so, you will fail

miserably

KEY INSIGHTS Three perspectives on identifying areas where AI can help you gain competitive

advantage.

1. Be realistic – Amara's Law states that “We tend to overestimate the effect of a

technology in the short run and underestimate the effect in the long run.” AI is a

set of tools that can help, but exercise caution on expectations

2. AI is getting good at classifying things, tagging pictures, identifying normal and

anomalies

3. Set up your hypothesis – Be specific. Look to solve a well-defined problem(s)

IMPLEMENTATION GUIDELINES

Five considerations for planning your AI strategy:

1. Understand that AI products are data products

2. Training AI requires data – lots of data. Data that has been prepared. Metadata

additions, error correction, deduplication, filtering, categorization, classification

3. Be data literate – have data to train AI

4. Look at your strengths – Where do you have data that can be used to reveal

hidden patterns to gain insights?

5. Identify critical areas that require consistent precision and continual performance

BEST PRACTICE

Consider employing data scientist(s) – they are critical to this process. There are

generally three separate roles:

Data engineer to organize the data

Data scientist who investigates the data

Software engineer who implements the applications

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This will change in the coming years as AI tools become simpler to use and the “Citizen

Scientist” community rises, putting powerful AI tools into the hands of average workers

who work with and can prepare data to gain insights.

FINAL THOUGHT

More data = Better results

Data: Validate. Revalidate. Cleanse

Start with a well-defined problem statement

Start small. Be realistic

It’s not an IT project. Context is EVERYTHING

Understand who owns the data. Where it’s coming from

Train on the cloud. Execute on the edge

Learning curves matter

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 3. Building Your Digital Enterprise

FACILITATOR

Tom Tengan, Director Digital Enterprise, Siemens PLM

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Do you have a digital strategy for your enterprise? Digitalization is changing our daily

lives as well as transforming existing business models from product-centric

development and manufacturing to creating opportunities for extended value throughout

the lifecycle. This increases pressure on product development but opens up new

business opportunities at the same time. Successful companies are seizing the

opportunities offered by digitalization to increase their competitiveness in the digital

world. According to C-Suite execs, digital disruption will wipe out 40 percent of Fortune

500 firms in the next 10 years.

KEY TAKE-AWAYS

A better understanding of the technology trends transforming industry and

shaping the Digital Enterprise

An understanding of the key components that comprise a digital enterprise

A guide to develop a framework for your own digital innovation strategy

OVERVIEW

This break-out session underscored that in the M4.0 era nothing is off limits. You can

use data for everything, including having golf clubs collect information about your swing.

It’s that comprehensive. Digitalization, trends in digitalization, implications, possibilities,

and solutions were all examined.

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Trends

The most glaring trend is that transformation is happening everywhere. And with it,

speed, flexibility, quality and efficiency are getting better. This has produced a new

business model with speed or time to market highly important. Flexibility must come into

play because people demand combinations of products. For instance, Adidas has a

store where you can go and customize your shoe and walk out of the store with that

shoe.

Other trends include efficiency or how green your business is. Cyber security is also a

huge trend as well as quality.

Implications

Beyond trends, the group looked at implications which encompass the three big

domains of manufacturing:

1. Ideation or development

2. Realization - how do you make the product

3. Utilization - what happens when the product goes out the door

Five value streams of manufacturing

1. Product design

2. Production

3. Planning

4. Engineering

5. Execution and servicing

Today’s industry trends are putting great strain on the manufacturing stream or chain.

For instance, it’s now necessary to look at software to supply solutions. It’s safe to say

that people who are going to be leaders in vertical in the future are in software.

When we think about trends and implications, we start to think about possibilities: The

digital revolution, data driven manufacturing and revolutionizing production and the

manufacturing process with data.

Virtual testing

Going forward, you’ll want to virtually verify and test, with an expectation of shortening

the time to market. By verifying and testing virtually, the only cost is time. You can gain

foresight from the virtual world into how products will be used and in the process, you

can learn new uses for products.

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The struggle with M4.0 is getting past well-established processes. The key is to start

small but think big. Nobody wants to change an existing, large scale system. You need

a collaboration platform. Information has to flow from one value stream to another.

Challenges

But challenges remain… organizational issues such as leaders not wanting to upset the

status quo and change processes. There is also the issue of the overwhelming amount

of data available. It’s hard to define a big picture approach in the face of it, let alone

scale it. But the key is to look for an opportunity to deploy new technology as separate

from the rest of the company, see how it works and go from there, i.e., apply it on a

larger scale.

FINAL THOUGHT

Start small but think big.

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 4. A Manufacturing 4.0 Roadmap for Legacy Assets

FACILITATOR

David Meek, Partner, IBM

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Legacy equipment is one of the biggest obstacles to Industry 4.0 adoption.

Manufacturers struggle with a scalable and cost-effective way to connect them to a

single platform and collect information from them. In this interactive session, Meek

provided a digitization roadmap that will take you from silos of information to an

integrated, smart factory. Participants also learned how to prioritize projects to achieve

less downtime, increase productivity, and lower costs

KEY TAKE-AWAYS

Key success factors for adopting Industry 4.0 with legacy equipment

Best practices to prioritize projects

Sample digitization roadmap for your legacy equipment

INTRODUCTION

Background of speaker David Meek:

Engineer by training

27 years deploying systems to manufacturing floors and supply chains

Spent the last 3-4 years adding artificial intelligence to the shop floor to improve

throughput and efficiency for plants

What people wanted to learn about, based on survey results prior to the session:

Vision/Roadmap/Plan – 11

Business and use cases – 7

Data and information – 3

Connectivity – 5

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Top challenges from participants (on site):

How to prioritize assets - Do I use sensors for everything?

Long term maintainability - Program versus specific

Pitfalls - Legacy assets and instrumentation

What does M4.0 mean for a legacy asset versus a new asset? Is there a

minimum level?

TAKE-AWAY

Start with the use case, not the data

Go where the biggest cost is

Find a quick win

Have a plan to deploy in similar processes across the business

KEY QUESTIONS

Most manufacturers are asking IBM:

How do we hook up, automate and sensor our old assets? (The cost to update

equipment is exorbitant)

Start with the value and the use case. You don’t need to sensor everything. Less than

1% of all data is useful. Also, don’t overlook replacing or upgrading legacy assets

through the original equipment manufacturer, or OEM. Many OEMs have

update/upgrade programs to swap out your legacy assets with new, instrumented

equipment.

Should I wire everything or deploy wireless to the shop floor? It depends on the application but the trend is more and more companies are deploying

wireless to the shop floor to support IoT and mobile applications Examples of

companies bringing wireless to the shop floor include Cisco, Intel and AT&T.

Is there a cheat sheet of what sensors to put on what? No – it’s use case and equipment specific. Due to the rapid pace that sensors are

improving at, the new capabilities that are being added to old sensors, and the

decreasing cost of custom sensors, it’s impossible to create a one size fits all cheat

sheet .

How much should I spend per project? Average cost for a pilot should be in the $150k to $400k range. If you spend less,

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you’re not going to see the value. If you’re spending more, you’re scope is too big -

scale back.

How long should it take to see results? It depends on the size of the company and the capital available. Average time is 3

months to 2 years. Most want payback within the year. Most projects show value after

the 3 month pilot, further deployment is needed to realize the full value.

IMPLEMENTATION GUIDELINES

1. Start with a use case

2. Once you have your use case, you can identify the data, the assets, and the

components of the process you need to focus on

3. Build the business case, what is the dollar value you expect to get?

4. Invest in an IoT platform

o Downside of an IoT platform: you’ll need to train your staff, you’re bringing

new technology into the ecosystem

o Upside of an IoT platform: They are good at managing devices, and pushing

analytics down to the edge devices. It’s easy to build logic so only relevant

information is sent to the cloud.

o Security: You can shut it down if someone is trying to connect to it. You can

connect new APIs as well – example Watson APIs

Use case areas:

Assets – Leverage data from assets to maximize uptime

Production – Optimize processes/avoid quality issues before they happen

Inventory/working capital – Focus here when there is a high value asset

Logistics/supply chain – Seeing a lot of examples here from consumer goods

space, new consortiums being formed around Blockchain

Customer interaction/consumerization – Monetize your data and create new

streams of revenue

BEST PRACTICE

Don’t start with data

A lot of companies spend years fixing all the data

Taking a use case approach is much more pragmatic

Less than 1% of the data is useful

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Don’t just focus on the big stoppages

It’s better to focus on repetitive stoppages that add up over time – they end up

being more than the biggest stoppages

Best practices for prioritizing projects:

Focus on the value – such as increasing throughput/quality, that will dictate the

sensors you need

If you have old and new assets in same asset class, start with new assets first

o Example: We helped a client optimize a steel blast furnace that creates

4500 data elements every 100 milliseconds, but determined they only

needed to collect 125 data points every 15 minutes to optimize that

process

Use soft sensors to predict reading. People will try to sell you sensors that are

either not necessary, or not optimized for the environment. Often, sensors can be

interpolated using analytics to get the values needed

Best practice for building a business case:

Look at more than one option – compare connectivity needs, level of effort, and ease

of sharing across the business

Biggest pitfalls from human side:

Starting an IoT project in IT. We (IBM) have seen IoT projects die because they

started and ended in IT

Never engaging the plant manager. We (IBM) have seen projects championed

by management fail because they did not involve the plant manager from the

beginning

Focusing on the worst performing plant. We (IBM) have seen better success

focusing on the plant with a plant manager who will champion the project

Best practices for human side of M4.0:

Create new competencies and skills (Data science is one)

Get backing of overall roadmap from corporate

Look for plant with plant manager that champions M4.0 – rather than the worst

performing plant

Get feedback from operators – untapped natural resource

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Best practice for implementation:

Start small –Don’t do everything, start with one, learn a lot, prove to management

Have a plan - lots of companies are doing things piecemeal and/or have pockets

of self-education. The sweet spot for M4.0 is in the OT department

Pilot should be production ready after completion

Deploy to same process in other plants or to similar processes in the same plant

ACTION ITEM

Recommendation for the Manufacturing Leadership Council: Build a capability maturity

index comparison for members

FINAL THOUGHT

It bears repeating: Don’t start with the data - start with the use case!

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINK TANKS Zone 5. Using the IoT to Elevate Supply Chain Visibility

CO-FACILITATORS

James Hilton, Director, Vertical Marketing Strategy, Manufacturing, Zebra Technologies

LinkedIn Profile

Mark Wheeler, Director, Supply Chain Solutions, Zebra Technologies

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Technology can provide unprecedented visibility to the location and state of goods,

assets and people throughout the manufacturing enterprise. While legacy systems of

record and even control systems may not be poised to leverage this data, this visibility

is increasingly both achievable and affordable. What could you accomplish with

complete visibility to goods, assets and people? Could you improve plant or line

utilization? Improve quality? Gain the insights needed for continuous improvement?

Improve safety? Improve your ability to adapt and respond to the unplanned and

unforeseen?

KEY TAKE-AWAYS

An understanding of how IoT technologies can significantly boost visibility

Insights from real-life case studies on ROI

Examples of how an agile project approach can ascertain feasibility and benefits

quickly

Participants offered these use cases or IoT applications:

Rack tracking for providing customer RTL of orders

RFID for Personnel Tracking

Frictionless Transactions - manual scanning reduction

Digital Performance management

Warehouse Movement

Goods in Route

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KEY INSIGHTS

1. The concept of where to provide IoT in the supply chain is confusing to many

A. Many participants were interested in determining the best place to start

with IoT implantation as well as achieving a short term ROI

i. Solutions that can be tied to safety initiatives are easier to sell to

management

ii. Solutions that can be used for safety initiatives and supply chain

functions provide value to management

iii. Solutions that provide next best action are also desirable

iv. Line replenishment

v. Worker Proximity

B. Participants seemed to focus on specific technologies versus identifying

the problem and quantifying ROI if the problem is resolved. This is an

industry trend, not specific to the group

2. Consensus of the participants was that the adoption of IoT will force an IT and

OT convergence

A. One participant noted that they use the Continuous Improvement group as

the connection between the two groups

3. Advancement in mechanization in the supply chain

A. Over half of the participants are using more mechanization in their supply

chain now.

i. AGVs were being used in some capacity by 60% of the room. This

technology is being deployed in lieu of Tugs

ii. Drone technology was being used by one attendee for inspections

BEST PRACTICE

Questions asked related to best practices:

1. One participant asked about technologies available to track metal stock,

specifically using passive RFID

A. Zebra provides a SilverLine solution that is designed to be applied and

read by UHF readers on metal substrates

2. How can tracking the location move beyond the four-wall supply chain?

A. Discussions around having 3PL’s tag and read customer inventory at their

sites, prior to shipping (advanced notice)

i. Pallets and Returnable Totes

3. Are their solutions available to make the reading of labels coming from suppliers

more consistent and faster to receive?

A. Standards like GS1 are available that make label information “standard”

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B. If the data on the label adheres to these standards, it can be parsed out

quickly to improve a number of processes (speed and accuracy)

C. One participant reinforced the fact that you need to mandate that your

suppliers adhere to whatever standard you designate. Most suppliers will

not go the extra mile if not made to

FINAL THOUGHT

Collectively, the Think Tank participants agreed with the moderators that actionable

visibility is critical across the operation. Supporting findings below come from a Zebra

Vision Study:

Manufacturers will continue to adopt Industry 4.0 and the smart factory, in

which workers use a combination of radio frequency identification (RFID),

wearables, automated systems and other emerging technologies to monitor the

physical processes of the plant and enable companies to make decentralized

decisions. By 2022, 64 percent of manufacturers expect to be fully connected

(sharing data across production, supply chain and workers) compared to just 43

percent today

Manual processes are expected to dramatically decline. Today, 62 percent of

those surveyed use pen and paper to track vital manufacturing steps and this is

expected to drop to only one in five by 2022. The use of pen and paper to track

work in progress (WIP) is highly inefficient and makes the process susceptible to

human error

Executives across all regions cited achieving quality assurance as their top

priority over the next five years. Forward-looking manufacturers are embracing

a quality-minded philosophy to drive growth and profitability By 2021. Only 34

percent expect to rate this as a top concern – signaling that improvements made

by both suppliers and manufacturers will ultimately improve the quality of finished

goods

Fifty-one percent of companies are planning to expand the use of voice

technology in the next five years. The most dramatic growth for voice

technology will be in the largest companies (>$1 Billion) with a reported use

growing to 55 percent by 2022

One-half of manufacturers plan to adopt wearable technologies by 2022 and

55 percent of current wearable users expect to expand their level of usage in the

next five years

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_____________________________________________________________________

CASE STUDY Embarking on the Manufacturing 4.0 Journey

PRESENTER

Praveen Jonnala, Vice President, Global Business Solutions, CommScope

Member, Manufacturing Leadership Council

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 1:50pm

______________________________________________________________________

SESSION ABSTRACT

Manufacturing 4.0 is not just about manufacturing. It is a key capability to enhance

Customer Experience. Embarking on Manufacturing 4.0 is not a discrete process just to

focus on automating factories and supply chain, it is a continuous journey to enhance

customer experience and deliver compelling capabilities to drive customer obsession.

This session focused on how to start the journey, foundational aspects of the roadmap,

and ultimately how to make it an integral part of your digital customer experience.

KEY TAKE-AWAYS

Insight on how to approach the M4.0 journey, developing a roadmap and

prioritizing the execution based on customer expectations

An understanding why technology is not a magic button and but a key enabler to

accelerate the execution and enhance the value

Key success factors – Enterprise wide engagement, process simplification and a

GREAT TEAM!!

INTRODUCTION

CommScope is in the process of transforming digital communication. They’re also in the

middle of Manufacturing 4.0 which to them consists of 3D-printing, automation,

manufacturing execution systems (MES) and IoT. It’s a new world order of disrupters

and enablers. But, like all businesses, for them it’s about the customer.

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TAKE AWAY

In order to build a strategy around the customer experience, CommScope needed to

forge a new vision. This new vision was built around concepts like agility, data,

simplification and being customer-led. To accomplish this, they would be mindful of AI,

the need for good data, and the fact that speed is a minimum requirement for

customers.

CommScope also needed to implement a factory functional framework. This would

include ideas related to customer experience and agility. It also incorporated

foundational initiatives like Enterprise Resource Planning and simplifying data

governance. They also put in place a Road Map Execution Priority list dedicated to

improving the customer experience and driving innovation and growth.

CommScope key beliefs:

Customer experience is the goal; every business requires it!

Customer is focus, if you do not provide the BEST customer experience, you

won’t stay in business

Everything they do is for the customer

Customer obsession - customer led, simplify, data, agility

Build the customer experience or journey, then make Manufacturing 4.0

the 4th pillar

Factory functional framework:

Identify top 3-5 impacts to customer

Take a look at failure rates, look at the journey, vision systems

Look to the future. For example, robots and 3D printing

How could they use their training cycle but make it more effective?

Change management:

Not about ROI. No- it is about keeping your customers

Tips for change management:

o Challenge the status quo

o Develop urgency to create business

o Ask why and what is in it for your customers

Lessons learned

Focus on value creation, not on technology and automation

Customer focus versus internal improvements

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There is no easy button. Invest in the core foundation including IT infrastructure,

data, core processes etc.

Manufacturing 4.0 is not about just manufacturing! It is about enterprise-wide

engagement

Do not just look at it as a single silo

CommScope realized the need to strive for a balance between customer focus and

internal improvements. They learned to simplify, offer continuous delivery, build the

momentum, build a great team and collaborate and collaborate.

KEY INSIGHT

Collaboration is the name of the game, and you can’t lose making the customer

the centerpiece of your business strategy

FINAL THOUGHT

For CommScope, it’s all about collaboration and customer engagement. Their notions

on Manufacturing 4.0 are built out from that centerpiece.

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_____________________________________________________________________

EXECUTIVE INSIGHTS An SMB’s M4.0 Cultural Transformation

PRESENTER

Daniel Dwight, President and Chief Executive Officer, Cooley Group

Member, Manufacturing Leadership Council

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 3:55pm

______________________________________________________________________

View video here: https://vimeo.com/frostsullivan/review/273734760/10c377d55b

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SESSION ABSTRACT

Achieving Sustainable Growth at Cooley has required a cultural transformation.

Motivated to transform from being a 90-year-old asset-oriented manufacturer to a

people and process-oriented, highly diversified solutions provider, Cooley is

successfully driving sustainable growth, using M4.0 as a rallying cry. They are part way

to the M4.0 summit, but the air is getting thinner and the climbing more technically

difficult.

KEY TAKE-AWAYS

Insight on implementing collaboration as a business culture and an

understanding of the critical role it plays in company growth

Best practices for developing strategies to get the right people in the right

positions managing the right processes collaborating with the right partners

Key findings for why manufacturing capacity and product performance are the

most relevant KPIs

Examples of why highly flexible mass production is the new operating norm

OVERVIEW

The session opened with an isolated, imposing image of K2. The daunting prospect of

summiting the mountain’s peak is a recurring metaphor throughout Dan Dwight’s

presentation. The mountain represents the overwhelming prospect of revolutionizing the

90-year-old textile company, Cooley Group, in the dawn of M4.0. But, like any good

Arctic explorer, Dan Dwight, Cooley President and Chief Executive Officer, had a plan

and a vision to get to the top of the mountain.

Cooley Group designs and manufactures high-performance, flexible geomembranes

used worldwide for diverse applications including environmental liners; water, fuel, and

chemical containment; billboards and more.

Lessons in Leadership: Summiting K2 and M4.0

There were numerous attempts to summit K2, but most resulted in injuries,

fatalities and disappointment. It wasn’t until climbers recognized the mutual

importance of vision, execution and collaboration that a team finally reached the

summit of K2

Lesson to apply: You need a collaborative team with common priorities to

successfully summit Manufacturing 4.0

Cooley Group applied the same principles as successful mountaineers as they

transformed their organization to meet modern business demands

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Why Cooley Group is pursuing M4.0:

Sustainable Growth Model: Think beyond “economic prosperity” and appreciate

what it means to be truly “environmentally sustainable” and “socially responsible.”

Consider the positive impacts these goals have on your business overall

Rethinking the Approach: Transition production from being asset-driven to

service-oriented

Reinforce the Right Objective: Sell solutions not products to better meet your

customers’ needs in the market

Customize Solutions: Establish reputation for customization while operating

under conditions of mass production

Cooley Group set the following execution objectives:

M4.0 isn’t an end-goal; it’s a necessary process tool if you have any hope of

achieving sustainable growth in 2018 and beyond

Reinforce collaboration as a non-negotiable in the workplace

Regardless of our implementation of the latest technology, the ongoing

collaboration of people, processes and partners is foundational to Cooley’s

business success

Embrace Cognitive Manufacturing: Gather data that can predict when a machine

component is going to fail. Use the information to proactively replace the

component before it fails

Implement hardware for M4.0 that incorporates safety, energy independence,

automation and predictive maintenance

Results of Manufacturing 4.0:

Product performance: Customer product returns were 2.0% in 2014. By 2017,

customer returns are less than 0.1%

Production capacity: Production capacity was 87,000 yards in 2014. By 2018

capacity had increased to 250,000 yards

Additional examples of M4.0 changes:

o In 2014, if a motor went down, the system went down for five weeks. Since

Cooley’s implementation of cognitive manufacturing, when a motor goes

down in 2018, the system is up again the same day

o Cooley utilizes autonomous self-correction to conduct quality control

electronically rather than manually

TAKE-AWAYS

Company culture begins, thrives, or dies with leadership

Collaboration at Cooley is non-negotiable:

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o Collaboration is more than a corporate buzzword. Engage directly with

partners, open-up feedback loops across corporate hierarchies, and establish

Cross Functional Projects (CFPs) to get everyone at all levels and functions

of the business working together to solve material business problems

Cooley Group completely transformed the company to achieve a record-high

revenue increase by embracing collaboration, cognitive manufacturing and the

latest technologies provided by Manufacturing 4.0

FINAL THOUGHT

To be effective in the Manufacturing 4.0 era is to understand how to collaborate as a

team. No mountain will be scaled without teamwork, whether the teamwork is person to

person or man to machine.

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_____________________________________________________________________

KEYNOTE Leadership in the Digital Age

PRESENTER

Stephen Engel, Senior Vice President, Strategic Solutions Leader, Americas,

Hitachi Consulting

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 4:25pm

______________________________________________________________________

View video here: https://vimeo.com/frostsullivan/review/277494736/6e4b143d3d

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SESSION ABSTRACT

What is the profile of a manufacturing leader in the digital age? Participants learned

about the behaviors, skills, and acumen a leader needs to enable their company to

successfully embrace Digital Manufacturing. No matter where you are on the journey of

digital transformation – these six steps can help you lead in the digital age and connect

your systems to drive new levels of productivity, profitability and value across your

business.

KEY TAKE-AWAYS

Insight on how to connect your physical and digital value streams to drive

innovation

Key steps to identify areas of variation across the physical value stream that can

be supported by better data and real-time analytics

Key findings for why manufacturing capacity and product performance are the

most relevant KPIs

Examples of why highly flexible mass production is the new operating norm

OVERVIEW

Let’s talk about how leadership can embrace M4.0. Digital is evolving you to move:

From selling products to outcomes

From batch to real time

From reactive to predictive

From on premise to cloud

From closed to open source

From individual optimization to overall optimization

What’s your strategy? Where’s your roadmap? How do you talk to your teams? Most

companies don’t have an answer. Digital should be seen less as a thing and more as a

way of doing things.

Digital “laggards” versus digital leaders:

Digital leaders make smarter IT investments

Digital Supply chain and manufacturing journey:

Leverage Iot. Whether you are starting the journey or further along, ask: Can I

see my data, and analyze it?

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Journey to digital transformation:

Six steps for success in every project

1. Set clear goals

2. Identify areas of variation

3. Select point of view use cases

4. Create an Executive Advisory Board

5. Focus on Results

6. Seek advice from the outside

Digital Leaders focus on results and behavior change. They:

Improve the process

Align the organization

Enable technology

Track performance

Communicate

About Hitachi:

The company has been around for 100 years. They’ve accumulated Operational

Technology for 107 years and IT for 58 years. Improvement is in the DNA of the

company. After all, they have the highest number of patents in the world. For them the

key to accelerate digital transformation resides in 5 factors:

1. Remove the lenses you have used to view your role – be a strategic enabler

2. Follow up on a relationship you started here in another industry

3. Set priorities based on business need not technology readiness

4. Embrace for radical change

5. Engage the C suite at a richer level

These tenets will start you on your journey to digital transformation. But you’ve got to

engage with other leaders. You also need to connect with other industries, go to new

plants, and mix it up.

Align yourselves with partners who can supply what you lack. This is helpful in getting

on the digital fast track. Remember too that digital leaders focus on results and behavior

change. This means improving processes, aligning the organization, enabling

technology, and tracking performance. For most companies, the number one failure is

communication.

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Ask: How do we connect physical and digital value streams? And how do we go from

physical value to digital value stream to new unlocked value stream?

TAKE-AWAY

Don’t think in antiquated ways as it relates to your role, be a strategic enabler. It’s very

important to foster relationships to people in other industries. Somewhere there may be

the solution to a problem you have. It’s key to establish a path based on a business

need, not a technology you possess.

FINAL THOUGHT

Embrace for radical change, it is coming whether you like it or not.

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______________________________________________________________________

PANEL DISCUSSION

SMB Perspectives on Manufacturing 4.0

MODERATOR

David R. Brousell, Co-Founder, Manufacturing Leadership Council

LinkedIn Profile

PANELISTS INCLUDE

Daniel Dwight, President and Chief Executive Officer, Cooley Group Member,

Manufacturing Leadership Council

LinkedIn Profile

Vicki Holt, President and Chief Executive Officer, Proto Labs, Incorporated,

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

Ryan Lanham, Information Technology Manager, Dynomax Incorporated

LinkedIn Profile

Richard Sade, Vice President and Chief Operating Officer, S&S Hinge

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

TIME

Tuesday, June 12, 2018 at 4:55pm

______________________________________________________________________

SESSION ABSTRACT

Manufacturing 4.0 isn’t just for large, multi-billion dollar companies. Small- and medium-

size manufacturing companies have the opportunity to level the playing field by adopting

advanced IT and automation technologies. Nevertheless, SMB companies do face an

array of unique M4.0-related challenges in technology evaluation, financial wherewithal,

and business model transformation.

KEY TAKE-AWAYS

Examples of how SMB manufacturers assess the M4.0 opportunity

Insight on the technology priorities for SMB manufacturers

Key factors for how SMB companies deal with value chain requirements

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OVERVIEW

96 to 97% of manufacturing companies in the U.S. are small and medium sized

businesses, also, also known as SMBs. Is there a digital divide between small and large

companies seeking to implement Manufacturing 4.0? Is M 4.0 just for big companies?

Or is it “all aboard” for the 4th industrial revolution? David Brousell sought answers to

these questions and others with a quartet of diverse SMB panelists.

Question: Do you – representing SMB companies – feel you have the same opportunities as larger companies in implementing and leveraging M4.0? As our company (Proto Labs) accelerates innovation and creates prototypes, we have

always had an eye on automating processes for manufacturing. Regarding the M4.0

journey, smaller companies can have an advantage as there are smaller groups of

employees that you can more easily engage personally and “wrap your arms around.”

It’s easier to create a cultural change in a smaller organization and you can usually do it

much more quickly.

Disadvantages in smaller companies can include resource and skill set challenges as

there may be less of them. Smaller organizations may need to connect with larger

ecosystems; events like these are helpful as they foster idea sharing and access to

talent, too.

As a small manufacturing company with automated processes, one disadvantage is

limited resources from a financial standpoint. But an advantage is there is no corporate

hierarchy, just a partnership. We have also learned to partner with other companies for

talent and resources and to connect with a larger ecosystem. We work at sustaining

long range thinking. Overall, we recognize that there are two main aspects to M4.0: the

“hard” meaning machines and technology and the “soft” meaning the people. You need

to address both.

A participant from an industrial solutions manufacturer stated that they began leveraging

M4.0 about a year ago to improve communications and productivity on the shop floor,

and to enhance business overall. He described the process as akin to taking IT right to

the C-Suite.

Another manufacturing leader explained that the three different divisions of his company

had very different competitors, including a huge conglomerate with lots of resources,

other SMBs trying to move ahead and China.

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As more and more companies embrace M4.0, is it going to be harder to find a competitive advantage? Participant: we have already created a competitive advantage; it’s a selling point. This

has created a situation where other companies seek out doing business with us. It also

shows their common customer base that other companies are not (yet) doing what they

are doing.

Another participant stated that M4.0 is used to solve key business problems by bringing

products from idea to commercialization. She believes that by responding to trends and

market needs and customizing solutions for clients, they are achieving a competitive

advantage already. They create multi-year roadmaps to accelerate innovation and solve

problems continuously. They collect data and customer metrics to inform the road map.

So, they are essentially using the data to optimally serve customers and achieve a

competitive advantage.

How do you keep up? Another participant echoed the answer above—they listen to their customers and he is

almost constantly out in the field with customers, literally sometimes on roofs of

buildings. He never stops listening…the day he does, it will be over.

Another organization gets information in real time and uses this customer data on the

shop floor. They have customers on the floor providing feedback. The team also

engages with IT multiple times a day to leverage data. Teamwork helps them to keep

up.

Get your people to understand where you as an organization are going with M4.0, so

they too can talk about M4.0 with customers and colleagues. Educate them. The key is

to look at your operation and decide where the M4.0 baseline is. Where to inject it in

supply chain? Their first goal was to electronically monitor tooling. This saved them a

quarter of a million dollars over five years.

Manufacturing Leadership Council research indicates that technology is the “easier” part of M4.0. Survey respondents say it is relatively easier than the organizational and cultural aspects of embracing M4.0. Are the workforce issues easier or harder for your (SMB) company? HR decisions are tough. Personnel changes were necessary at my company. We had

issues with some staff -- including a star performer who was resistant to collaborating.

As we believe that collaboration is a cornerstone of M4.0, this was a problem. This

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person did eventually collaborate and help others and we moved forward, but it was

definitely challenging.

The people and cultural issues are not easier or harder in a small versus big company.

However, the ability to collaborate and change will impact the ability to succeed with the

rapid pace of change in manufacturing today.

What techniques did you use [improving processes and transitioning to M4.0]? There is definitely a communication dimension. Our journey began with watching machine productivity. This threatened some

employees but we explained to them that we were only trying to help and empower

them to be more productive.

One organization struggled with going paperless. Resistant employees were skeptical

until they heard from customers about how happy they were. This underscored the

value of positive feedback from the customer base and the importance of getting

ongoing feedback.

Provide basic examples of how M4.0 change and improvements can make the company

more successful and share these with your employees.

What about future requirements, such as understanding and defining new digital roles in your organizations going forward? SMBs will be competing for digital talent against larger companies and companies from other sectors. We need to market manufacturing as an exciting, growing industry! Make potential

employees understand that manufacturing is a high-technology place to be. Millennials

want meaningful roles in organizations, so create a purpose for them and cultivate a

culture of continuous learning to attract talent.

It’s true we have an aging workforce. We are looking for Millennials as they are tech

savvy. We need to give them responsibility. We gave a Millennial employee ownership

of a cross functional project – the boss works for the Millennial.

It’s also important to record the tribal knowledge every organization has. Get that data

into a system – make it part of cultural change.

Show the talent that at your company they can make an impact. Make clear they can

grow and engage.

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______________________________________________________________________

KEYNOTE The Future of Work in the Manufacturing 4.0 Era

PRESENTER

Caralynn Nowinski Collens, Chief Executive Officer, UI Labs

Member, Manufacturing Leadership Council

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 8:30am

______________________________________________________________________

SESSION ABSTRACT

As industry leaders, it is critical to understand the implications that manufacturing’s

digital transformation is having and will have on our existing and emerging workforce.

Participants discovered what skills and capabilities are needed to enhance productivity

across the manufacturing value chain.

KEY TAKE-AWAYS

Insights into the technical and soft skills necessary for digitalization in

manufacturing

Examples of emerging roles and corresponding use cases

Tools that your company can use now to prepare your workforce

INTRODUCTION

The conversation about a changing workforce isn’t new. The first and second industrial

revolutions changed the workforce too. Today we have the digital revolution and

automation. We talk a lot about technology, but the workforce is critical. People are the

most important thing.

OVERVIEW

The digital revolution is changing things faster than ever before. We are learning how to

use the tools of the future. And…if we are connecting everything, how do we secure it

all? Will there be people in our future factories and what will they be doing?

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Recently, the world chess champ was beat by IBM’s computer. The human was

disappointed, but realized there were options for computers and humans to work

together. Lesson: you need to be able to bridge the gap between humans and machines

and explore- cross functional and cross cultural learning.

KEY QUESTIONS

What will we do about all the coming changes in manufacturing?

Within the manufacturing process, where are the skills needed?

TAKE AWAY

There are many new digital products and processes: Digital management, cross-

capabilities, product life cycle in the digital thread, digital design, digital manufacturing,

digital products, and the digital enterprise

New futures, new roles:

Examples of new jobs - Chief Digital Officer, Digital Engineer, Model based

system engineer (MBSE), Predictive Supply Network Analytics Engineer

Examples of collaboration - Collaborative Robotics Specialist- how do you debug

these systems, how do you train people on these systems ex) AR/VR systems

specialist-

Example of new or transitioning role: Automating the creation of work instructions

for AR in manufacturing

We have 10 million manufacturing roles today, we need to make sure these roles

can be transitioned into the future

Most new roles do not need more than two years of training

o Example: Maintenance technician becoming a predictive maintenance

technician

Generation Z, going into college now:

65% of the jobs that they will take don’t exist today!

How to attract this new generation into M4.0?

Look for workers who are adaptable as there will be constantly changing

opportunities

Provide incentives to change and adapt, enroll in new programs

Executives say that only 14% of the workforce is adaptable

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KEY INSIGHTS

Understand the challenges and opportunities that M4.0 brings to the workforce

Realize what’s at stake - the future of your company, profit, jobs, wage growth

Even though we think of jobs as being taken away by digitalization, there are new

jobs coming and there is a skills gap for these jobs

o M4.0 will create 3.5 million new jobs and 45 billion dollars in new jobs

o New jobs created will be cross functional and require constant learning.

Therefore, the workforce demands will stress adaptability and encourage

learning

o Our workforce is retiring - how are we going to get their knowledge once they

are going

The gap between digital leaders and non-leaders is increasing…and digital

leaders are gaining more market share

Obviously, technical skills are essential. Robots will be used but somebody has

to program the robot

There will be a need for people with ‘soft skills.’ People who can cross

boundaries and understand the entire manufacturing life cycle

Think humans plus computers plus strong processes. This equals success in

Manufacturing 4.0

ACTION ITEM

Think about how to attract the millennial generation into these jobs

There is not much awareness of M4.0 in the public. Bridge the gap through

creating online classes and partnerships

Recruit people who are adaptable, as that is not a natural trait for most people

Encourage adaptability and learning through incentives or programs

Work in partnerships with universities or other resources

FINAL THOUGHT

In order to maximize the power of M4.0, it’s imperative that your company has a

workforce that understands this revolution and has the necessary skillset. What’s at

stake is the future of your company as well as profits.

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____________________________________________________________________

EXECUTIVE INSIGHTS New Insights into the Leader’s Role in Driving Safety Excellence

PRESENTER

David Crouch , Director of Research and Development, Caterpillar Solutions

LinkedIn Profile

Evan Sinar , Chief Scientist and Vice President, Center for Analytics and Behavioral

Research, DDI

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 9:00am

______________________________________________________________________

SESSION ABSTRACT

We’ve always known intuitively that leaders have an impact on employee performance,

but until recently we didn’t have a way to measure the critical few skills required for

effective safety leadership. Visibility to how individual leaders perform across four key

performance drivers can reveal specific opportunities to transform your culture. This

presentation provided a practical framework and research-based approach for

diagnosing and developing the leader capabilities that create safer workplaces.

KEY TAKE-AWAYS

An understanding of what is required from leadership to create a culture of

safety excellence

An explanation of the 4 critical leadership skills and the 14 elements within them

that build and sustain a culture of safety excellence

Learn how companies are utilizing safety leadership assessment data to

improve performance

OVERVIEW

David’s presentation examined the importance of a leader’s role in establishing the

overall safety environment at a company. He emphasized that leadership behavior is

massively impactful to the overall company culture. David believes, “As the leader goes,

so goes the team.” This should go without saying, but having this as an emphasis point

is not a given at all companies.

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TAKE AWAY

At Caterpillar, they did some analysis and learned that on a yearly basis 6% of their

workforce was getting injured on the job. That ended up costing them roughly ten

thousand dollars per injured person. That’s significant. This was brought to the attention

of the CEO in 2003 and ever since there’s been dramatic improvement. The safety

culture has been transformed and subsequently so has their bottom line.

But this seismic shift didn’t happen automatically. It took five years of research and

development. For Caterpillar to achieve Level 6 Safety culture, they had to begin by

examining how leaders behave on a daily basis. The company concluded that leaders

reacting, observing, believing, engaging, committing and then doing the safety leading

was a crucial trajectory.

Caterpillar arrived at Four Domains that leaders need to develop in order to foster

a safe work ecosystem:

Domain #1 - Drive accountability so that all workers know what is expected. This

required high quality training, appropriate feedback and the availability of the necessary

resources needed to work safely

Domain #2 - Centers on the concept of connectivity. If everyone understands safety is

integrated and information is shared, then an atmosphere of connectivity is established

Domain #3 - Built around the idea of demonstrating credible consciousness. Bottom

line, if the CEO is wearing a seatbelt, he makes sure that everyone else around him is

as well

Domain #4 - Is about building trust. This is simple; show care and concern for your

workers

ACTION ITEM

Leaders should make a point to be knowledgeable about the safety processes of

the team, including gathering all the necessary information to make smart

decisions

Armed with this, leaders are then able to effectively appraise risk as well as

internalize safety concepts and apply them personally

Accountability is a strong driver of a safer workplace

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It’s important to have defined safety expectations, to integrate all the safety

practices and finally, to share all the available information

BEST PRACTICE

Leadership has to have daily behaviors of safety to guide their team to a safety

culture

They need to display knowledge of what their employees are dealing with and

develop credibility and trust

Give clear, well-communicated safety instructions, and get the employee’s verbal

recognition of protocols

Work with consultants to drive team safety culture

TAKE-AWAY

CEOs or leaders who strive for a safe workplace will be rewarded with a more

robust bottom line

Money will be saved in dealing with workplace injuries and production will likely

go up

But, it’s crucial for leadership to practice what they preach and be knowledgeable

in all ways about the safety practices required of the team

FINAL THOUGHT

By fostering an atmosphere of rigorous workplace safety, companies can enhance their

bottom line while also creating a healthy relationship with their employees. Key to this is

having leaders who demonstrate real concern, are apprised of the safety standards, and

make information easily available to their staff.

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______________________________________________________________________

MANUFACTURING LEADERSHIP AWARDS SPOTLIGHT Selected Winners of the 2018 Manufacturing Leadership Awards

VARIOUS PRESENTERS

TIME

Wednesday, June 13, 2018 at 10:00am

______________________________________________________________________

SESSION ABSTRACT

Selected Winners of the 2018 Manufacturing Leadership Awards will give a short

synopsis of their winning projects: what was accomplished for their companies and

lessons learned.

Winner: Cisco Systems, Incorporated Category: Data and Analytics Leadership Project: Software Failure Analysis

Software issues are perceived as hardware defects in the field creating unnecessarily

RMAs and impacting customer’s satisfactions. Digital diagnostic signatures and RMA

rules as used to improve field awareness for the misperceived issues.

For open software bugs the journey was as follows… engage SW engineering – create

new defect, accelerate resolution for open defect, and perform test escape analysis.

Results:

1. A 40% reduction on software related RMAs

2. Warranty cost avoidance

3. Improvement in quality perception

TAKE AWAY

Hardware and software can’t be decoupled

Supply chain can provide a unique insight to software quality

New capabilities get enabled everyday as IT technology advances

If you are not feeling uncomfortable, you are not innovating

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Winner: LAI International Category: Enterprise Integration and Technology Leadership

Project: Factory of the Future

LAI has a nationwide footprint with four manufacturing facilities around the U.S. Their

company motto is “Accept No Defect, Make No Defect, and Pass-On No Defect.” LAI

needed a framework for their business as it applies to manufacturing 4.0. Many of their

production technology machine tools were of the legacy variety – always a problem for

integration and data extraction.

The question was: how to get old information to apply to business today? How to

connect all the technologies, and then what do we do with it? How does it translate into

an improvement? The goal was manufacturing and ubiquitous access. This required

integrating all information in order to come up with a commonality.

They worked on Data Integration Flow. This entailed getting information to the operator

of the machine. They leveraged a roadmap from Merck: Roadmap to Factory of the

Future (FOF) and M4.0.

Phase 1: Format and collect data. Focus on results Phase 2: Learning cycles. Adjust the company culture

M4.0 helped them deliver perfect parts at the right value

Winner: Lockheed Martin Corporation

Category: Smart Products and Services Leadership

Project: Fiber Optic Quality System

Most networks use fiber optics. This is a tremendous amount of data to contend with,

plus hundreds of thousands of cords.

Contaminants or defects can disturb data transmission. For example, airborne particles,

body oil, dust, scratches, chips. Maintenance of fiber optics requires inspection and

cleaning.

Challenges:

Detecting changes as small as 3 microns

The end phase of 5.8 to 50 microns

Pass or fail criteria

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Multiple connector interfaces

When cleaning, if you leave a defect, you will have loss of data. This required

new solutions from cleaning products. They collaborated to design and implement these

products.

Achievements

Reduced labor hours by 50%

In the past, labor would take 30 minutes or 4 hours for a full network

Now, down to 12 minutes

Reduced hardware rejections

Winner: Merck & Company, Incorporated

Category: Supply Chain Leadership

Project: Product/SKU Optimization

Merck’s award was for an SKU optimization project. At Merck, they don’t manage a

huge inventory of SKU’s. But it was the mix of the portfolio that was a challenge.

80% of revenue was coming from less than 2% of their SKU’s. Any SKU required

resources from manufacturing to packaging. They wanted to take better advantage of

their SKU’s:

Rationalization: get rid of what you don’t need

Harmonization: like for like products; reduce similar products

Governance: new approach

They approached the problem with an agile methodology that consisted of a

collaborative IT and business team executive approach. They had very quick results

with IT solutions that automated a consolidated view of data. But it would drift back.

To enable sustainment, they added accountability and visibility to the owner community.

They integrated business information and automated the workflow when decisions were

made, and enabled ongoing visibility in real time. The team had to continually adapt.

Results:

Saved $130 million, on a base investment of $3-4 million

Savings model in place to manage their SKU’s going forward

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Winner: Unity Scientific

Category: Engineering and Production Technology Leadership

Project: Reduced Complexity Assembly, Calibration, and Testing

Dr. Jerry Workman Jr. from Unity Scientific spoke and accepted this award that

pertained to food products chemical analyzation.

Product: SpectraStar. High Performance Low cost with DLP technology

Project goal: Make the highly complex easy. Necessity was the mother of invention.

They combined 3D printing and AI to make a machine.

Results:

Print on demand

Part count reduced by 50%

Inventory part reduced by 50%

o (Fasteners/pins/ in a classic Chassis) vs (3-D printed chassis)

Total assembly time reduced by 400%

TAKE-AWAY

Complex assemblies can be made easy

3D is the future of complex structures

Devices can be replicated perfectly

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______________________________________________________________________

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 1. Digital Twin Deployment – You Aren’t Alone

FACILITATOR

Fred Thomas, Director, Discrete Manufacturing Industries, Dassault Systèmes

Member, Manufacturing Leadership Council

MLC Profile

TIME

Wednesday, June 13, 2018 at 1:45pm

______________________________________________________________________

SESSION ABSTRACT

The Digital Twin concept of a virtual model that is the digital equivalent of a physical

product was first introduced 15 years ago by Dr. Michael Grieves in his work with

NASA. Over the intervening years, the concept has grown in its manufacturing impact

potential (and myth) as technology advancements have exploded. While there have

been some high-profile successes reported in industry media outlets, what is the reality

of Digital Twin deployments on the manufacturing floor? Is my organization the only one

that seems to be doing nothing on establishing a Digital Twin in manufacturing?

This interactive session identified the value of the Digital Twin as part of a successful

Manufacturing Operations Management strategy, examined the challenges associated

with successfully deploying a Digital Twin model across the manufacturing enterprise

and outlined a roadmap for starting a Digital Twin journey.

KEY TAKE-AWAYS

Key factors for establishing the value of the Digital Twin concept within my

enterprise manufacturing strategy

Examples of the underlying technologies that are important in creating a Digital

Twin-enabled environment

A framework for beginning the journey – what are the critical steps that are

needed now

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OVERVIEW

Moving forward, the concept of the Digital Twin and its usage in manufacturing is going

to be critical. The presenter referenced a book by Dr. Michael Grieves, Virtually Perfect,

which was described as “a deep discussion of not only Digital Twin but Digital Continuity

in the entire product lifecycle, emphasizing the importance of continuity from virtual to

physical space.”

What is Digital Twin?

“Virtual information constructs that fully describe a potential or actual physical

manufactured product from the micro-atomic level to the macro-geometric level.”

–Dr. Michael Grieves

Components of the Digital Twin:

Virtual model of real. Virtual representation of a physical object

When addressing the manufacturing of project:

o “It is cheaper to fail when you move bits around than atoms”

o The key is to be able to address the manufacturing of a product where it

costs the least, in the manipulation of that virtual model

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KEY INSIGHTS

By mirroring the digital model and the physical process on the shop floor, then updating

that model with the results of manufacturing, digital twin can radically transform the

business.

The Honda customer case story is an example of digital twin being an enabler of

business transformation and how they are handling the challenges in the automotive

industry: Honda Story for Manufacturing Simulation Expansion

Participant comment: “Digital twin is a visual representation, then sending telemetry

to make a product.” The clearest representation of digital twin is the “as built”

representation, but once they become cars with VIN numbers they become two different

models – different drivers, different maintenance, different tires etc. These products

become different once produced from the visual representation.

The simulation is the validation. Use your tools to simulate the process or process

execution. You can take the operational data from manufacturing and feed it back into

the virtual model and update it to the physical creation. With a digital twin product,

artificial intelligence provides a feedback loop to get you where you want to be. You are

introducing artificial intelligence into a feedback loop.

Why is Digital Twin of Value?

Digital Twin drives reduced costs. For example, additive manufacturing looks at the

weak points such as identifying areas/parts that can be corrected. There is a point of

diminishing value and digital twin will be there to self-correct the process.

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Where do we see the value? Essentially, in being able to shorten the time to bring new

products into production. Speed, agility, lowers the cost. Validating in a virtual space is

less expensive than working with physical prototypes.

There will never be a fixed point when you are done. This is a journey that never ends

Due to technologies always advancing, it is ever evolving. This is not about technology

it’s about your business.

Doing nothing puts you at risk in the long term. Digital Twin is an enabler from a

strategic planning perspective and a policy deployment perspective. In our competitive

world, we need to bring products to market faster, this is critical to success.

IMPLEMENTATION GUIDELINES

How Do I Get Started?

Avoid the “shiny ball approach.” A strategy is needed, start with a business assessment

first. It is not recommended to do all the assets, but to identify the key parts that need to

be monitored and create the digital twin for them.

A recurring theme of connectivity and continuity is required in your environment. There

are ways to look at legacy equipment if you have a digital strategy, you can do this if

you go back to basics. The same discipline can be applied to products, to systems and

to processes. You need a realistic assessment and benchmark.

Talent is also a part of the equation. The next generation of manufacturing personnel

is already familiar with configuring avatars and high end gaming capabilities. There is

an expectation there. There will be lessons on concept configurability so that the

environment can be visualized, played with, configured, and experience failures.

Many companies have additive manufacturing initiatives, to look beyond just one piece.

In one organization, additive is being used in rebuilding and where a rebuilt part is being

put back on the road for another several hundred thousand miles.

FINAL THOUGHT

Digital Continuity is no longer an academic exercise, companies need to embrace the

technology and determine their strategy for their business to optimize operations and be

cost effective. Digital Twin is an enabler. It is a journey and with evolving technology, it

will never end. This is about business, not technology. Better to be business driven

than technology driven.

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______________________________________________________________________

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 2. Edge Computing in Manufacturing 4.0

FACILITATOR

Hugh Arif, Director, Industry Solutions, Manufacturing Practice AT&T

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 1:45pm

______________________________________________________________________

SESSION ABSTRACT

Manufacturers can create 2 times as much data as other industries. As companies enter

the dawn of the age of Manufacturing 4.0, the proliferation of connected devices can

add complexity to protected, digital transformation strategies. This Think Tank session

discussed edge computing in the manufacturing environment and explored the

technology implications of virtualization and the cloud, the Internet of Things, and multi-

network communications.

OVERVIEW

Cloud Computing has been around for a while, but now AT&T and other organizations

are focusing on edge computing. Edge computing devices are becoming more powerful

so it requires bringing more storage to where users are versus it all being transmitted

into the cloud.

Let’s answer the question… what is edge computing? Essentially, we are now pushing

the frontier of data applications away from the cloud and bringing it to the ‘edge,’ near

the place the computing is actually happening. In other words, the computing

infrastructure lives close to the source of data. It brings the data closer to the

manufacturer.

Why should you be interested in edge computing? Well, now manufacturers are

collecting massive amounts of data and indexing all of it. There’s too much to push out

to the cloud. Consequently, there has to be some kind of filter so, essentially, we’re

trying to reduce data.

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TAKE-AWAYS

AT&T has established a new manufacturing practice and is looking to extend

relevance to their services and products

Demand Driven Manufacturing is driven by EDGE computing. Bringing the Data

closer to where the users are is the new practice versus storing data within the

cloud only

Domain 2.0 is the shift from hardware to software. A good example is loading

applications OTA to your iPhone and then deleting as needed using iTunes

SDN / NFVs are being replicated in the cloud verses being executed in a router

or switch

Moore’s law is the theoretical law behind the shift from hardware based

computing to virtual computing

KEY QUESTIONS

Why EDGE? Questions and comments from the audience:

When collecting massive amounts of data for learning - how can we filter the data

and prioritize?

Sensors and data, how do they interact? Where is the convergence happening in

the network?

Is there a demand to move data lakes to the EDGE?

SaaS is starting to take hold in manufacturing and is it fully functional

There are clearly learning gaps in managing EDGE devices. Tapping into remote

mentoring solutions helps educate junior techs on managing legacy PLC

applications

o Use Case - Corning Glass using EDGE cloud for supplier access

IMPLEMENTATION GUIDELINES

Ask: Do all devices really need to touch the Internet?

If EDGE is the inroad to additional services, than security is paramount

M4.0 prototyping is huge – crawl before you run and fail fast practices are

prevalent

Site typing practices are happening in order to determine the correct connectivity

Data traffic priority is a huge concern and should be a component of site typing

The repurposing of hardware people into software-defined networking (SDN)

people is happening

Additional training services are needed to transform the workforce to support

SDN

o Some companies are using local schools curriculum to target recruiting efforts

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FINAL THOUGHT

The pervasive thought with edge computing is how to maintain security when you’re not

relying on the cloud but instead keeping the data out there ‘on the edge’, near to the

manufacturer. There’s also the notion of software handling data versus hardware

handling it. What does this all mean for the future?

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES - THINKTANKS Zone 3. A Renaissance in Product Design and Manufacturing: The New Role of Generative Design

FACILITATOR

Mark Davis, Head of Design Research, Autodesk Incorporated

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 1:45pm

______________________________________________________________________

SESSION ABSTRACT

For decades, the process of product development has been painfully repetitive and

rigid. Designers and engineers would take the customers’ requirements, create a few

design concepts, experiment with possible forms and materials, test designs virtually

and physically to determine how they held up in various conditions, and iterate until they

ran out of time or money. That’s all about to change. In this interactive discussion, new

technologies were presented and shifts in mindset were examined. New processes that

will be required for companies to take advantage of generative design were discussed

and participants learned why now is the time for those in manufacturing to begin laying

the groundwork for this future of intelligent design automation

KEY TAKE-AWAYS

Discover how generative design will disrupt traditional design methods

Learn how professionals in industries such as automotive and aerospace are

already using generative design tools to compete more effectively

An understanding of the progress and rate of change with generative design for

manufacturing

OVERVIEW

Generative design is an iterative design process that includes a program that will

generate a certain number of outputs that meet certain parameters and a designer that

will fine tune it by changing values and variables. This can be done on a machine like

a digital computer, or it can be conducted by a human with pen and paper.

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TAKE AWAY

Generative design is becoming more important, largely due to new programming

environments

Only a few of the participants had heard about generative design

Goals = Feasibility versus Technology versus Viability versus Desirability

Artificial Intelligence is at an inflection point for design and manufacturing

KEY QUESTIONS

1. What is the process and rate of change in AI for design and manufacturing?

2. How will Generative Design disrupt traditional methods?

3. How might we leverage this change to compete?

KEY INSIGHTS

Invest in the problem definition

Problem definition gets richer over time

Generative design is not topology optimization

Generative design is a feature of design and not a product

BEST PRACTICE

1. Define

2. Generate

3. Explore

4. Make

ACTION ITEM

Where to start

1. Change in mindset

a. Retrain toward problem definition

2. Start with a small team

a. Focus on collaboration between disciplines

i. Conceptual designer gets clues on cost at the conceptual design

phase

ii. MFG engineer can see backup streams from the conceptual design

phase

3. Explore manufacturability of different solutions early

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FINAL THOUGHT

Problem definition is important from the design point-of-view. The convergence of

design and manufacturing is when the computer ‘gives’ you the solution with creative

artificial intelligence giving you a competitive advantage. Human + machine = better

then human alone.

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____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINKTANKS Zone 4. Optimizing Assets through Predictive Maintenance

FACILITATOR

Lubor Ptacek, Vice President, Product Marketing, ServiceMax

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 1:45pm

______________________________________________________________________

SESSION ABSTRACT

Predictive analytics and service delivery can help manufacturers increase equipment

uptime and ultimately increase customer satisfaction. Analyzing sensor data to predict

when maintenance is required enables service organizations to transition from reactive

to proactive service. The data gathered during the service delivery can be used to

further optimize the asset data model, leading to more reliable equipment and ultimately

to happier customers. In this interactive session, Lubor presented ideas, experiences,

and challenges and let participants in a discussion about where they were on their path

of digitization through predictive maintenance and how to get to the next level.

KEY TAKE-AWAYS

Insights about the key strategies for transitioning from reactive service to

predictive maintenance

Examples of the challenges in leveraging IoT to deliver predictive maintenance

Best practices for dealing with the data ownership issues in the IoT world

OVERVIEW

Reactive service/break fix is not a good situation and something we need to avoid at all

costs. The customer experience and primary customer mission suffers. Satisfaction,

money and sometimes people’s lives are on the line in this situation. Ultimately

everyone wants and needs a more proactive approach. You need to do it in a proactive

way (service).

The question becomes: How do we get from reactive service to proactive service?

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Reactive Service

Break -- fix

Dissatisfaction

Money spent

Want to avoid

Proactive Service

Do it at a time / way that is convenient

Proactive service/maintenance:

o Preventive (planned)

o Condition based

o Predictive

Where to start?

1. Identify key problems in your line- lost function/lost time

2. Find key parameters

3. Analyze those problems

4. Predict the how’s

Failure frequency and cost

Identify a cost level which will impact operations

Graph of cost on x axis, frequency on y axis

Manufacturing, field services

Things you don’t know, or ‘invisibles’

Bad/broken/bankrupt

Need correct details

Example: Data collected from a wind turbine is wrong if it’s not noted that ice is

on it

In order for all of this to happen, the Internet of Things must be utilized.

There are thousands of sensors in every piece of equipment- we need a way to

send this info /get data from it

o What do we do with this data? This is where analytics come in, and these

analytics are a necessity

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TAKE-AWAY

In terms of analytics:

Do you want to monitor everything?

How do you identify the most critical thing to do? What method do you use

today?

How to prioritize?

Customers are overwhelmed in the beginning because they have so many items

You do things in parallel

Focus on the high value equipment

Many participants at the session suggested they prioritize their top three issues, but

what about issues you are not aware of?

How do you know your asset is working in the way you want it to be?

You need to be able to optimize:

o The quality of the parts

o The output a part is producing

o Uptime

You must create your own assessment chart on how good your assets/production line

is. From there, you can decide next steps to take.

KEY INSIGHTS

It’s easy to get overwhelmed with the quantity of alerts from IoT…not all of them

are important

Need data analytics to filter the data

IMPLEMENTATION GUIDELINES

Prioritize your problems

Focus on the high-value items

Identify your position on a failure frequency and cost chart

FINAL THOUGHT

Predictive maintenance – the machine will tell you when it needs to be fixed

Predictive model – optimizing the service

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_____________________________________________________________________

CONCURRENT COLLABORATION ZONES – THINKTANKS Zone 5. Will Blockchain Transform Your Supply Network?

FACILITATOR

Irene Petrick, Director of Business Strategy, Intel Corporation

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 1:45pm

______________________________________________________________________

SESSION ABSTRACT

We tend to think of supply chains as linear and unidirectional. It could take weeks to

trace a product back to its origin, if possible at all. Today, with the introduction of

distributed ledger technology—blockchain— industry can realize the benefits of near-

instant proof of origin, tracking and tracing, order status, and quality assurance. The last

18 months have been pivotal in supply chain management as industry experiments with

the benefits of blockchain in creating irreversible, distributed records. This session

explained blockchain and focused on new applications for managing dynamic, non-

linear supply chains.

KEY TAKE-AWAYS

An understanding of how blockchains help ensure status of goods in transit and

will ultimately be relied upon to certify quality

Insight on unique data and contract privacy requirements for enterprises

Best practices for identifying the attributes of your supply network that could be

supported by blockchain solutions

OVERVIEW

Any blockchain network is simply a community that makes transactions transparent to

all members of that community, and is governed by all. Every participant has an

updated and identical copy of every transaction that was ever recorded to the ledger,

making it virtually impossible for a single participant to alter data behind the scenes, and

eliminating any single point of failure in the network.

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At its essence, blockchain offers tamper proof asset tracking and logistics among

multiple mutually distrusting participants. This will undoubtedly contribute to dynamic

supply chains, new exchanges, reduction of reconciliation time and expenses, and

potentially new revenue streams.

Because the technology and the ecosystem are in development—particularly beyond

cryptocurrency into the supply chain space – it is critical to pay attention to your own

requirements, partners, and context, and ensure the solution that you select for a pilot

or proof of concept (POC) can improve supply chain transparency and will result in a

positive ROI.

KEY QUESTIONS

How mature is blockchain beyond cryptocurrency?

What kinds of use cases are common?

What do we need to watch out for as we embark on POCs?

TAKE-AWAY

Blockchain, though not a new technology, is relatively new in supply chain

applications, and the ROI has yet to be clearly established

The most common use cases are around provenance, traceability, and the

emerging quality assurance and compliance

It is anticipated that blockchain will help save cost when it comes to disputes and

reconciliations among supply chain partners

New revenue streams could come from increased visibility throughout the supply

chain and quality assurance guarantees; however these may initially be limited to

high value assets or IP

POC’s should be carefully planned to consider: scale deployment costs, data

stewardship, data assurance, IP ownership, and permissioned/enterprise

networks

KEY INSIGHTS

Blockchains hold tremendous potential, but are still nascent in supply chain

applications. We should not consider them a panacea, but rather as a tool that enables

the formation of communities that can exchange information and coordinate action—

and track all of that data in a tamper-proof record—enabling mutually distrusting parties

to interact without an intermediary.

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It is our job now to determine whether converting portions or entireties of our supply

chains to run on blockchain will result in sufficient cost savings or incremental revenue

generation to warrant their deployment.

SOME USE CASES SHARED BY PARTICIPANTS

Provenance, QA, Process Improvement: Tracing product or component origin,

including which process or inputs affect my product, e.g. foods the cow eats

affect the consistency of the cheese—tracking down to cow and farm level—so

they can optimize product mix. Still exploring value add versus cost to implement

Accountability and Traceability: Track something like temperature in the food

chain from farm/factory, to 3PL, to shop, to table. If degradation can occur, I can

more quickly resolve liability or billing disputes

Minimize Billing Disputes and Time to Reconciliation: Track freight as parts

move sub tier to sub tier throughout supply chains. 1) Ensure we only pay for our

own freight. 2) track parts we sell to customers that get refurbished so we

optimize re-use without over-use

Country Regulation Compliance: Mandatory certifications that blockchain can

prove your product is in compliance with country regulations as you import.

Forecasting based on End Customer Demand/Use: Data coming back would

add value to the initial manufacturer

IMPLEMENTATION GUIDELINES

Who owns the Blockchain? Everyone who uses it. We’re used to supply chains

where someone is in charge. Who owns the data? Sensor maker? SI who installs

sensor? Company on whose equipment the sensor is installed? End consumer?

You need to determine what data matters and who’s supplying it

Who owns the IP? If we can’t solve this problem we’ll see lagging adoption

Blockchain Generally Presupposes Connectivity to Update the Chain. How do I

Transmit Data from a Remote Location? You have to think about communication

channels you’ll use, what bandwidth is available to get data uploaded

Where are my points of failure? This is where you should put your effort in the

POC to determine whether the investment in blockchain is worth it

How can I qualify high value parts? Jet components, and 3D printer outputted

parts will require functional parts and a pedigree associated with that since they

are low volume parts, generally with expensive materials, where we don’t want to

do destructive testing

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FINAL THOUGHT

Blockchain is still early in supply chain applications. Likely tracking and tracing within

agriculture will be the tipping point beyond cryptocurrency. We’re not expecting prices to

rise because we expect blockchain will help reduce disputes and speed up

reconciliation.

Now is the time to set up POCs and understand whether the reduction in dispute and

reconciliation costs outweighs the transition to a new process methodology, or if you

can in fact generate new revenue models or entire paradigm shifts in how you deliver

value to customers.

Keep in mind:

Privacy: How will you protect IP, identity, during and after an engagement?

Scalability: Do you have a path to deployment once the POC is complete that

can take advantage of existing compute resources that are easy to scale up?

ROI: Focus on the hardest parts first, to determine whether there is incremental

value. Are you saving cost or considering new revenue streams or business

models?

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_____________________________________________________________________

EXECUTIVE INSIGHTS Blueprint for Disrupting Your Culture and Turning Employees into Innovators

FACILITATOR

Alex Goryachev, Senior Director, Corporate Strategy and Innovation Group,

Cisco Systems

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 3:10pm

______________________________________________________________________

SESSION ABSTRACT

To keep pace with rapid changes in today’s digital age, every company must reinvent

itself, disrupt its entire workforce and transform into a companywide culture of

innovation. Innovation can come from anyone anywhere, and the most brilliant game-

changers often bubble up from diverse employees with passionate ideas. Participants

learned how to ignite a grassroots movement across all functions in organizations of

any size or type to enable employees to think and act like entrepreneurs in a startup.

KEY TAKE-AWAYS

Proven success factors to jumpstart an innovation revolution that drives an

entrepreneurial mindset companywide

Award-winning, best practices that engage and inspire all employees to tap into

their purposes, and bring winning ideas to life like collaborative entrepreneurs in

a startup

Barriers to success, metrics, and lessons learned to sustain continuously

improving innovation programs

INTRODUCTION

Prior to Cisco, Alex Goryachev worked at IBM, Pfizer, and Napster. Alex spoke about

the business case for innovation, how Cisco innovates, and how to help employees

connect with their passion and drive innovation.

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OVERVIEW

Today, if you don’t operate under the principle of ‘disrupt or be disrupted’ you are most

likely setting your company up to fail. Forty percent of today’s Fortune 500 companies

won’t exist in 10 or 20 years. Recent examples of once prospering but now defunct

companies include Blockbuster, Circuit City, Lehman Brothers, Bear Stearns, and

Kodak. All are no longer here. How did this happen? Big companies get comfortable

because they are ‘old and wise,’ but develop tunnel vision.

Remember when there were taxis everywhere. And we couldn’t envision a world without

them? Then Uber and Lyft came along and now they are practically gone. Now it’s an

oddity to see one around town. The same principal applies to the phone, television and

media. Now there’s Hulu, Nextflix, Skype, Facebook, Whatsapp. Retail stores have

largely gone the way of Amazon. You have to ask, “Who’s going to own our space in

the business tomorrow?”

…Disruption wins.

ACTION ITEM

Think about how all these factors feed into each other:

Market disruptors

Hyper connectivity

Speed of innovation

The lower cost of innovation

Access to funding

TAKE AWAY

Cisco innovates using a 5 Pillar Approach:

1. Build

2. Buy

3. Partner

4. Invest

5. Co-develop

A key component of this 5 Pillar Approach is developing talent, which is vital. Also

crucial is figuring out how to leverage the ideas of CEO’s from companies acquired. It is

about getting employees involved, which means co-developing. Cisco does this by

providing access to tools at Cisco Innovation centers and/or encouraging employees to

partner with universities.

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It’s important for companies to think like start-ups but scale like enterprises. At Cisco,

the goal is to empower all employees to innovate. This mandate is supported by human

resources as well as corporate strategy. The philosophy is, let’s get everybody at the

company to share ideas. When this happens, it stimulates a network of people who are

passionate about something.

Cisco uses a Rapid Innovation Process:

Meet online

Employees call each other and talk about priorities

Ask for employee ideas

A 200 person team and 30 ideas move forward

If you are a part of those 30 ideas, you can see any executive at the company

Then they validate ideas with customers

Other Cisco take-aways:

They acquire a few companies every quarter

They partner with universities and start-ups

They invest in companies and accelerators

They develop innovation centers

They drive revenue through non-traditional means

They give structure and guidance to employees to innovate

They utilize practical trading - pair trades with customers on real problems

They foster non-traditional member relationships

KEY INSIGHTS

Drive innovation

Innovation is survival…constant changes can be the norm

Ask everyone to play a role: founders, ‘angels’

IMPLEMENTATION GUIDELINES

Create:

Innovation Programs

Mentoring Programs

Rewards

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FINAL THOUGHT

The reality is you can’t mandate innovation, but you can create an environment where

employees can feel passionate about something. At Cisco, the trick to fostering an

inclusive, creative atmosphere is to provide everybody with a role, a stake. At Cisco,

you are a teacher or a mentor or a creative, designer…. This produces a culture where

innovation is on everybody’s mind and everyone is invested and engaged.

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____________________________________________________________________

BOARD OF GOVERNORS PANEL DISCUSSION Factories of the Future

MODERATOR

Paul Tate, Co-Founding Executive Editor and Research Director

Manufacturing Leadership Council

LinkedIn Profile

PANELISTS

Dr. Dean Bartles, Director, John Olson Advanced Manufacturing Center, University of

New Hampshire

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

Dr. Jay Lee, Professor of Advanced Manufacturing, Ohio Eminent Scholar, and L.W.

Scott Alter Chair Professor, University of Cincinnati

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

Dr. Jim Davis, Information Technology and Chief Academic Technology Officer, UCLA

CIO Advisor/Governance Board, Clean Energy Smart Manufacturing Innovation Institute

LinkedIn Profile

Dr. Detlef Zuehlke, Chairman, SmartFactoryKL Technology Initiative and Scientific

Director, Innovative Factory Systems German Research Center, Artificial Intelligence

(DFKI)

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

Dr. Larry Lapide, Research Affiliate, MIT Center for Transportation and Logistics

Member, Manufacturing Leadership Council Board of Governors

LinkedIn Profile

TIME

Wednesday, June 13, 2018 at 3:40pm

______________________________________________________________________

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SESSION ABSTRACT

How will Factories of the Future be organized and managed in the Manufacturing 4.0

era? What are the implications for the way data will be used, production networks

operated, new business models created, and manufacturing enterprises structured over

the next decade? An expert panel of leading Manufacturing Leadership Board members

shared their insights and predictions on the ways that increasingly digitally automated

factories and data-driven manufacturing enterprises will be transformed over the next 10

years.

KEY TAKE-AWAYS

Expert insights into the new data-rich production models that will drive the

Factories of the Future

Examples of the key Manufacturing 4.0 technologies that promise to have the

most transformational impact on both plant floors and supply networks

An understanding of enterprise-wide implications for manufacturing industry

leadership, structures, and cultures

Moderator: How does the future of the factory look? What is likely to impact the future factory? In the past, whenever there was potential for conflict, a customer would call and ask, “If

we needed production ramped up, what would happen?” Then we’d call the suppliers

and then they’d call their supplier… Imagine the manual chaos of this…What if we could

do all this in real time? We’d know who could ramp up fast within minutes. That’s my

vision for the future of manufacturing. Total transparency in real time; how fast and who

can accommodate. Manufacturing 4.0 should let us all have that capability, now only a

few companies can do this.

We occasionally have something called drift. Wouldn’t it be great if the next machine

new about the drift and could compensate! That kind of capability is what I envision for

the future.

Let’s look at any point -- next year, five years, ten years out?

We came up with a roadmap for this… A key barrier is the increasing complexity of

having to interconnect more and more systems together. Get data in the right format to

the right people across the enterprise. We need to get out of so much effort with

stitching data together and into a mode of innovation with data. We also need workforce

skills to work with all the data.

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In the future, there will be no distinction between IT and OT. As per the business

practice side of things, they’ll learn how to work together so there’s a win-win. They are

not usually aligned that way now. We hope to re-use data sets and information systems.

The bottom line is a data driven environment for manufacturing.

What about the Factory of the Future, in supply chain economics? I am not a manufacturing expert but I am a supply chain expert. Unfortunately, we still

have the Henry Ford mentality today: Build a big plant and serve the world until you

build another big plant. This is great for western civilization, but not for the developing

world. It’s not sustainable. Bottom line, we’ll run out of resources.

U.S. citizens use five times more resources than the rest of world. One solution is small

plants and production in the future. The earth can’t support the population boom,

especially the way the U.S. consumes resources. The aging of the world shows that

developing countries are getting older, and undeveloped ones are getting younger.

Undeveloped countries have the labor we need. We have to build it where they are, and

they have to be small plants. We need a network of manufacturing plants that’s close to

consumption.

What about the Factory of the Future, in data analytics? My vision is to move from experienced-based to evidence-based management. To shift

focus from the visible to the invisible issues. To move from a traditional practice-

oriented, lean manufacturing approach (with problems, end-goal) to a worry–free

(avoidance) approach. The machine tells me how it is behaving. In the future, we need

to become more predictive and resilient.

This has become a transformational trend on a global basis- what is your view? Have a vision -- identify levels, build technologies -- make use of these technologies.

Manufacturing 4.0 is just part of the transformation of our lives. Data is fueling

everything. We must take care of data and learn how to handle it.

We’ve been talking about transformation. What is the payoff for companies?

Data.

Cost, productivity, efficiency. Moving from problem solving to problem avoidance.

Eventually we’ll be talking about a software platform. Stop managing problems, create

value now because of the data we have.

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We have information in milliseconds, but need to compete with companies wherever

they are in the world. Enable companies to play the right role on global stage.

Manufacturing 4.0 is the enabling vision we need. But, at the end of the day, earn

money and avoid somebody disrupting your business.

There’s a digital representation that takes place. We now have supply networks that

never touch the manufacturing products.

The payoff, the overall productivity will increase – that’s the payoff. Sensors to monitor

manufacturing = data to improve performance and improve productivity. You want to

stay in business; otherwise the customer will go somewhere else. So productivity is the

ultimate payoff.

Find the weakness of operation in terms of where you want to go. Then prioritize to fix

that weakness.

3D printing is its own supply chain and the future.

Make data a key asset. Think about good data and small data. Think about small data

growing into big data. Think of data as key asset.

What’s better about the products you are producing and the cost? Normally, we are looking at the bottom line level. Manage these issues - value creation

- don’t just manage problems - find value in why your issues are happening.

So, how do you measure that? Inward: savings. Outward: sell machines that give more value.

We’ve all got to make money out of this… New business models? We are competing in worldwide markets. Digitalization means immediate information

that people can compare. This new situation is the need. If you don’t do it, you’ll lose

business. Keep up and be prepared for the new world.

How to distribute? Look to Amazon, for example, the virtual retailer. Physical flow is getting disconnected

from the virtual world, because virtual suppliers, manufacturers, distributors, and

retailers are major players in the new supply chain.

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Business case to do that? There’s nothing you can do to plan for that. But scenario planning… technology should

be an enabler. What capabilities do I need and will M.4.0 enable that to happen?

If you were going to pass on advice to the audience about getting started, what would you recommend? Start with the low hanging fruit - network, information, Manufacturing Leadership

Summit, think long-term about your vision; not just first stages.

Find your current weakness; goal is to be worry free, prioritize first.

3D printing is the Holy Grail because we need a distributed global manufacturing model

with lots of small plants close to points of consumption.

This event is unique… 95% have NOT heard of M4.0 … where to start? Just start. Pick

a good problem and start using data and treating it as a key asset. And think about

small data growing into big data not starting with big data. Think about good data.

Experience what it’s like to work with data.

I hear from SMB’s about data being unaffordable. Hang in there. Open source data is in

the future.

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ABOUT THE MANUFACTURING LEADERSHIP COUNCIL

The Manufacturing Leadership Council, part of Frost & Sullivan, offers an integrated

portfolio of leadership networking, information and professional development products,

programs, and services for industrial executives worldwide. Our mission is to help

senior executives define and shape a better future for themselves, their organizations

and the industry at large. MLC’s portfolio consists of the Manufacturing Leadership

Council, an invitation-only executive organization; the annual Manufacturing Leadership

Summit; the Manufacturing Leadership Awards program; and the Manufacturing

Leadership Journal. For more information, visit us at www.gilcommunity.com/about-us

ABOUT FROST & SULLIVAN

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation and leadership. The

company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team

with disciplined research and best-practice models to drive the generation, evaluation,

and implementation of powerful growth strategies. Frost & Sullivan leverages over 50

years of experience in partnering with Global 1000 companies, emerging businesses

and the investment community from more than 40 offices on six continents. To join our

Growth Partnership, please visit www.frost.com.

DISCLAIMER

These Chronicles discuss key insights and take-aways from the 14th Annual

Manufacturing Leadership Summit: Accelerating the Transformation to Manufacturing

4.0, held June 11 - 13, 2018, Hyatt Regency Huntington Beach Resort and Spa,

Huntington Beach, CA. Frost & Sullivan makes every effort to ensure the quality of

individual session Chronicles; however, the summaries presented in the articles are the

expert opinion of the writers, and inclusion/exclusion of specific material is at the

discretion of each speaker. For more details, visit www.frost.com/ml. Frost & Sullivan is

not responsible for the loss of original context or the accuracy of the information

presented by the participating companies.

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MANUFACTURINGLEADERSHIP S U M M I T

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