drive real business results with iiot adoption · 2019. 10. 11. · drive real business results...

DRIVE REAL BUSINESS RESULTS WITH IIOT ADOPTIONWILLIAM LEET, SR. PRODUCT MARKETING SPECIALIST, THE CONNECTED DISTRIBUTION CENTERHONEYWELL INTELLIGRATED

October 11, 2019

Honeywell Confidential - ©2019 by Honeywell International Inc. All rights reserved.@IntelligratedThe Connected Distribution Center

PRESENTER

William LeetSr. Product Marketing Specialist — The Connected Distribution CenterHoneywell Intelligrated (since March 11, 2019)

Responsibilities: support customers with leveraging IIoT technologies for digital transformation for distribution center, material handling and warehouse industries

Experience: six years in the building automation and energy management industry working with smart buildings, and two years in the industrial automation industry helping design industry 4.0-enabled machines

Education: mechanical engineering,

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When I’m not working:road cycling/racing, backpacking,mountain biking, motorcycling

https://twitter.com/intelligrated


OBJECTIVES

1. Setting a strategic vision and actionable goals2. Strategy and process for successful adoption3. Best practices for IIoT adoption

• Recognizing and planning to overcome IIoT implementation barriers• Organizing and aligning a successful IIoT innovation team• Start small and “prove it” before scaling

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The Connected Distribution Center

UNDERSTANDING THE FINANCIAL IMPACTS OF IIOT

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BASIC IIOT ARCHITECTURE

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Location A

Asset 1 Asset 2 Asset 3

Location B


Analytics

Visualization

Improvements

Storage



ASSET HEALTH & PREDICTIVE MAINTENANCE

6

Performance



POLL #1

This statement best describes my level of IIoT adoption.

a) Currently, I don’t have an IIoT initiative.

b) I have an IIoT initiative, but no strategic plan or well-defined goals.

c) I have a clearly defined three- to five-year IIoT plan.

d) I have successfully executed against my IIoT plan and demonstrated positive measured results.

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WHAT ARE CEOS SAYING ABOUT DIGITAL TRANSFORMATION?BUSINESS SENIOR LEADERSHIP’S ADOPTION OF IIOT

A majority of business leaders say digital transformation is a priority, but few define any strategic vision or actionable goals.

% of respondents who “agreed” or “strongly agreed”53

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20

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STRATEGY – Digital is a leadership priority.

RESOURCES – We have sufficiently skilled resources.

EXECUTION – Digital strategy is translated to specific initiatives.

We have a strategy for how digital will enable competition.

% of respondents who “agreed” or “strongly agreed”



Source: McKinsey analysis 2016


Predictive analytics listed as #1 potential to create competitive advantage by 2019 MHI survey participants

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CUSTOMER BARRIERS, PER MHI 2019 STUDY

9The Connected Distribution Center



INNOVATION PROCESS

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Awareness Trial Works/Doesn’t Work ??? Profit!

Awareness Greater Awareness Evaluation Let Market

Mature Evaluation Further Evaluation ???

350 IoT services

No differentiation

Evolving offerings

Emerging vendors

Market buzz No success metricNo measurable progress

No clear visionNo achievable milestoneNot time-bound



POLL #2

I would best describe our IoT adoption as:a) Eager, but seeing limited results (hare)b) Slow to embrace change (tortoise) c) Balancedd) Nonexistent

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INNOVATION PROCESS — “HORTISE” APPROACH

Prove Value

Reinvest

AwarenessChoose a Team

Evaluation

Start Small

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INNOVATION PROCESS — AWARENESS

Prove Value

Reinvest


Evaluation

Start Small

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THE CONNECTED DISTRIBUTION CENTER TRIAL TIMELINE

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Mobilize and deployCloud connectivityKick-offTwo-hour trainingDefine user typesSend log-insSet alarming rules

Day 1Weekly consultationsCustomization of softwareEvaluation of user engagementActionable insights assigned

30 days30-day reviewEstablish baseline KPIsBi-weekly consultationsCustomization continuesEvaluation of user engagementReview corrective actionsNew actionable insights assigned

60 days30-day reviewBi-weekly consultations continueCustomization continuesEvaluation of user engagementReview corrective actionsNew actionable insights assigned

90 daysMeet with key stakeholdersReview findingsBenchmark resultsEvaluate gapsQuantify benefitsDecision

Review

Pay hardware costs Plan phased approach to scale

Action plan addresses shortcomings



INNOVATION PROCESS — TEAM

Prove Value

Reinvest


Evaluation

Start Small

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POLL #3

How many people are included in my IIoT team initiative?a) 1b) 2–3c) 4–6d) 7–10e) 10+

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Honeywell Confidential - ©2019 by Honeywell International Inc. All rights reserved.@Intelligrated

CHOOSE A TEAM

Members of an innovation team:

Visionary: someone with a clear direction on how and where to innovate

Motivator/Coach: someone with the capacity to engage others

Executor: someone with the ability and resources to actually affect change

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“66% include external vendors on their IoT planning team” — Forbes Insights




GENERATIONAL DIFFERENCES

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PROJECT TEAM

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Software Developers

Salesperson

IT SupportTech Support

Visionary

Data Scientists

Coach/Mentor

Executors

Adoption Coach

Customer Innovation Team

Customer

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The ConnectedDistribution

Center



INNOVATION PROCESS — EVALUATION

Prove Value

Reinvest


Evaluation

Start Small

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WHAT BUSINESS RESULTS CAN WE EXPECT?

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A properly functioning predictive maintenance program can provide a savings of 8% to 12% over a program utilizing preventive maintenance alone.

Depending on a facility’s reliance on reactive maintenance and material condition, it could easily recognize savings opportunities exceeding 30%to 40%.

Average savings from a functional predictive maintenance programReturn on investment 10 times Reduction in maintenance costs 25% to 30% Elimination of breakdowns 70% to 75% Reduction in downtime 35% to 45% Increase in production 20% to 25%

Source: US DOE - Operations & Maintenance Best Practices 2010



DEFINE HOW THE IOT WILL CREATE VALUELEADERS IN IOT ADOPTION WERE 75 PERCENT MORE LIKELY TO CITE THE PREPARATION OF A STRONG BUSINESS CASE AS A KEY SUCCESS FACTOR FOR THEIR IOT PROGRAMS.

WITHOUT SUCH A VISION OR VALUE METRICS, COMPANIES WILL FIND IT DIFFICULT TO TIE THEIR IOT PROGRAMS TO THEIR BUSINESS STRATEGIES, DISRUPT OBSOLETE PROCESSES, AND MEASURE PROGRESS TOWARD IMPLEMENTATION.

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EVALUATION

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Modeling impacts to the business

Total Benefits

Cost Avoidance (Risk)

Lost Productivity

Recovery Costs

Materials

Labor

Third Party Services

Downtime Labor Costs

Reduce Inventory

Inventory Carrying Cost

Inventory Spend

Total Inventory

Intangible Costs

Brand Loyalty(On-time Delivery)

Reporting and Manual Data

Collection

Lack of Innovation

Worker Stress

Continuous Improvement(Productivity)

Preventative Maintenance

Spend

Materials

Labor

Third Party Services

Increased Profit

Throughput

Operational Benefits

(Reduce Touches)

Bad GapReduction

No-readReduction

JamReduction

MistrackReduction




EVALUATION

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Align benefits with key stakeholders

Is there anyone missing from your team?

E,

F,

G,

H,

A,

B

C

D

Financial Outcomes




EVALUATE: PRELIMINARY FINANCIAL OUTCOMES

$(200,000)

$(150,000)

$(100,000)

$(50,000)

$-

$50,000

$100,000

$150,000

0 1 2 3 4 5 6 7 8 9 10 11 12

DO

LLAR

S

MONTHS

Cash Flow

Cost Avoidance

Productivity Improvement

Subsciption

Installation

$(400,000)

$(200,000)

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

0 1 2 3 4 5 6 7 8 9 10 11 12

DO

LLAR

S

MONTHS

Net Present Value

Bad Gap Reduction, $64,386.00 No-Read Reduction,

$71,540.00 Jam Reduction,

$2,384.67

Mistrack Reduction, $80,000.00

Lost Margin, $1,146,600.00

Lost Productivity, $97,240.00

Recovery Costs, $12,369.84

Intangible Costs, $4.00

Annual Inventory Costs, $1,500.00

Improvement Areas

Results After One YearInvestment $287,900.00 Net Benefit $1,163,353.76 IRR 33%NPV $875,453.76

Results After Three YearsInvestment $547,900.00 Net Benefit $3,955,402.77 IRR 34%NPV $3,407,502.77

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SMART GOALS

SpecificNeed to clearly set scope of your objective, what will be accomplished, who is involved, and why this is important

MeasurableNeed to be able to track progress, failure or success

AchievableNeed to be within reason and understand sensitivities

RelevantDo you have alignment?

Time-boundIdentify yearly, monthly and daily activities to set up long-term goal success

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INNOVATION PROCESS — START SMALL

Prove Value

Reinvest


Evaluation

Start Small

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START SMALL AND PROVE VALUE

• Start with an achievable project• Define return• Test technology• Organize and build out your team




PICK A “SMALL” THAT IS BIG ENOUGH TO SUCCEED

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SCOPE: SORTATION — CRITICAL PATH

Main Merge

InductionSorter

Recirculation

Critical Path EquipmentMerge motors Scanners/scales Ambient conditions

Includes any motors for the recirculation lane (attached with the monitored sortation system) and associated power transfer components such as: meter belts, staging belts, vertical transfer belts, spurs and merge main beds. Takeaway belts for the recirculation lane are attached with the monitored sortation system.

Includes any scanners, dimensioners and scales attached to the monitored sortation system.

Includes sensors on all monitored control panels described above and a single sensor to monitor conditions of the occupied space inside the building.

Monitoring: vibration, temperature, run status, product counts and I/O cycle counts

Monitoring: read and error rates Monitoring: temperature/humidity

Induction motors SortersIncludes any motors from the exit of monitored sortation system merge to the start of the monitored sortation system.

Includes any sorter motors. If the system has subsequent sorter systems, it will also include any motors interconnecting the sorters.

Monitoring: vibration, temperature, run status, product counts and I/O cycle counts

Monitoring: vibration, temperature, run status, product counts, I/O cycles, key performance indicators and power consumption

Recirculation motors Control panelsIncludes any conveyor motors along the recirculation loop from the exit of the sortation system along the path to the entrance of the same sortation system. Not all systems will have a recirculation loop.

Includes control panels but limited to any control panel associated with the sortation system control and the main sortation system merge.

Monitoring: vibration, temperature, run status Monitoring: power consumption



INNOVATION PROCESS — PROVE IT

Prove Value

Reinvest


Evaluation

Start Small

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Was it successful? Or did it just feel successful?

PROVE IT

Measurable results

Indirect results

Review challenges

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LESSONS FROM BUILDING ENERGY

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VIBRATION ANALYSIS USE CASE

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Increase in vibration detected Inspection requested Inspection uncovered a misaligned gearbox Issue corrected with no long-term damage

Gearbox realignment

Drive belt replaced

!Change detected

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VELOCITY ACCELERATION



EVALUATION

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Threshold for Project Success

Hidden Benefits

Traditional Project

New Technology

Visible Benefits



INNOVATION PROCESS — REINVEST

Prove Value

Reinvest


Evaluation

Start Small

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REINVESTOnce value is proven, the process can be iterated to scale the benefits or expand to additional features.

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

DO

LLAR

S

MONTHS

Net Present Value



REPEAT PROCESS TO SCALE BENEFITS

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Location A


Location C

Asset 1 Asset 2

Location B


Future Locations


Location D

Asset 1 Asset 2 New Asset



BEST PRACTICES FOR IOT ADOPTION

1. Solve a problem that someone cares about.

2. Plan conservatively.

3. Fix outdated processes and policies.

4. Partner for success.

5. Augment your capabilities with outside resources.

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6. Address resistance to change.

7. Define extended project success and goals.

8. Drive shared ownership and accountability.

9. Establish a learning culture.

10.Be flexible and adapt.

Source: Strategy of Things – Best Practices for IoT Projects


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QUESTIONS?

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drive real business results with iiot adoption · 2019. 10. 11. · drive real business results...

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