In the industry of the future, software-based system and service platforms – such as the one supplied by Bosch Software Innovations – will play a large role. They will enable the real and virtual worlds to be connected and therefore enable communication between objects. Manufacturers have the potential to create predictable, seamless processes to reduce the costs associated with manufacturing operations. They have the possibility of adding new revenue streams and service opportunities. They can even soon craft entirely smart enterprises. It’s all promised by The Internet of Things, and Bosch hopes to be at the center. But how does Bosch hope to support the manufacturing space to leverage IT to the fullest and see the complete value behind connected manufacturing? We speak with Bosch Software Innovations’ Chief Technology Officer and Managing Director to find out.
Bosch Software Innovations hopes to be at the center of manufacturers’ push to create predictable, seamless processes to reduce operations costs as part of the Internet of Things revolution. Bosch SI’s Connected Manufacturing offering addresses some of the challenges facing manufacturers today, including higher commodity prices, onshoring and the need for additional data through the supply and demand chains.
Connected Manufacturing refers to a connected enterprise. Truly being connected means connecting to manufactured assets, tying in with your network and tying in end users. It all has a direct impact on warranty, procurement, parts distribution and other broader organizational facets.
Bosch SI’s goal then is to drive business value from the connected machines. Their Internet of Things product offering consists of three integrated platforms for providing machine-to-machine communication, business process and business rule functionalities. They describe it as an advanced, enterprise level concept around IoT rather than a point to point solution.
Bosch helps in several stages of a manufacturer’s journey with IoT by helping them determine what data they need to acquire, how to apply it to business and derive outcomes based on that data. And they’re banking on their background as one of the world’s largest manufacturers, their 15 years’ experience in the enterprise software market space and business process and rules management to provide a foundation for their end-to-end platforms and deliver in a way that’s distinctive from their competition.
And although Bosch promises that you can see ROI in as little as two months by applying IoT in your organization, it’s important to evaluate the soft ROI that comes from this paradigm shift. Their recommendation is ultimately to look for vendors that take a true platform approach to things you as a manufacturer know. Work with multiple partners who can handle the complexity of the solution, avoid creative pitfalls and limitations with vendors and focus on partners who can help drive and enable value on the business of manufacturing.
Bosch SI is working on becoming a go-to expert in IoT and Connected Manufacturing, and they’re investing in the evolution and innovation of this paradigm in the years to come.
Sanjog Aul: Welcome listeners, this is Sanjog Aul your host and topic for today’s conversation is, can Bosch deliver an “IoT Enabled Manufacturing Transformation?” And I have with me Troy Foster, who’s the Chief Technology Officer of Bosch Software Innovations for the Americas and Matthew Jennings, who is the Managing Director for Bosch Software Innovations for the Americas. So everyone is talking about the Internet of Things today and it’s an exciting new paradigm, and possibilities seem endless. A lot of that discussion is surrounding how it will impact the manufacturing industry. So we have both of you with us today to explore how Bosch Software Innovations claims to carry manufacturers through this transformation. So Matt I’d like to ask you, what are some of the challenges that are facing manufacturers today, and where is this going in terms of how they will leverage new technologies or paradigms?
Matthew Jennings: I think we see a number of issues facing manufacturers today. First of all you have a constant rise in commodity prices as they bring in products for the manufacturing process and within their plants, so there is additional pressure on cost. There is also been a trend more towards what’s called on-shoring from what was off-shoring a number of years ago. A lot of that’s being driven by labor expense, which is catching up to the labor expense they have here, but also its being driven by quality. And so as you look at these you know driving trends that are occurring in manufacturing, there is a need for additional data, through the process and through the supply chain and through the demand chain to help enhance communication, drive up better quality and also drive out a lot of the cost and looking for additional revenue streams, whether that will be from manufacturing of the service.
Sanjog: The Internet of Things is referred to as a revolution, but do you agree that this is indeed true? How will it truly make an impact on the manufacturing industry in terms of profits and growth?
Matthew: Well I do believe that it’s true, and it really is dependent on how it is implemented and also how you have evaluated the impact in a manufacturing organization. So I think there are only three areas of impact if you look at it. It’s really manufacturing on the line. Can you do pre-emptive maintenance, can you minimize and plan down time by monitoring those assets on the line that actually manufacture a good? That is one phase of the connection that you can make kind of an IoT type of connection. The other phases are really IT enabling or remotely monitoring that asset that is actually manufactured.
So if you think about the case of a HPAC Manufacturer as an example, they may add IT enablement or web server capabilities into the asset as it is manufactured, which allows them to cement the relationship and share that data with the dealer network and also with the service network, and maybe their end customers. What you’ve done by doing that is really integrated your demand chain to your supply chain and also added the opportunity for your dealer in service networks to provide additional services and extract costs of their environments as well.
Truly being a connected manufacturing facility or a connected manufacturing organization is truly connecting to the asset that’s also manufactured and tying in with your network and tying in the end users to impact broader things in your organization.
Sanjog: So what does connected manufacturing mean from your viewpoint?
Matthew: Well, I think what it means is really having a connected enterprise. So I think it goes beyond the plant. I think there is true value in the plant and operationalizing the business and driving up the appropriate processes to be efficient to extract cost, to enhance communication and to connect in suppliers and vendors. I think truly being a connected manufacturing facility or a connected manufacturing organization is truly connecting to the asset that’s also manufactured and tying in with your network and tying in the end users to impact broader things in your organization, for example, warranty, procurement, parts distribution, quality management, life cycle management, impacting the product road map et cetera.
Sanjog: When you look at Bosch Software Innovations’ areas of expertise and solution and services that you’re offering, how are they are going to help in transition, especially looking at the fact that people, even before this paradigm, have been trying this to some degree? What’s so special now, and what’s so different that Bosch Software Innovations would deliver?
Troy Foster: Really to enable connected manufacturing, we need to not only look at connecting the devices and the machines but also really to drive true business value from the data coming from those machines. Now to enable the concept then of this Connected Manufacturing, Bosch Software Innovations has an Internet of Things product offering, which consists of three integrated platforms for providing machine-to-machine, communication business process and business rule functionalities, which we’ll get into a little bit later I think.
In addition to this coproduct offering we are also creating solutions that address needs in the manufacturing space. This includes things such as the service portal that brings data together for multiple version and vintages of these heterogeneous machines that you find in a plant to back to the plant operator or the facility’s manager to really enable some of things that Matt was talking about. So really with a solution such as this we can provide more of a basis for enterprise type applications such as a pro-active maintenance, assets management or field service management. Rather than have these point-to-point solutions that were used in the past, we are looking at more advanced enterprise level concept around Internet of Things.
Really to enable connected manufacturing, we need to not only look at connecting the devices and the machines but also really to drive true business value from the data coming from those machines.
Sanjog: Since your competitors may be offering business solutions, how are you using your solution to actually solve business problems versus just deploying a number of software and service solutions?
Troy: It’s the combination of the functionalities of those solutions. I mentioned the business process management and the business rules management; those are really providing a solid foundation for our end-to-end platforms to really differentiate our offering in the market place from some of these other solutions.
Sanjog: And when you are claiming that it will be “seamlessly integrated,” is that a tall claim or is this something that has a very specific set of steps already well defined such that you have a crystal ball to know what is expected?
Troy: There is always a utopia of seamless integration, and of course it’s always an evolution to get there. But we are really approaching the market from an enterprise software perspective; our enterprise platform is really drawing upon its strengths and integration of these underlying components that I have been talking about. These components provide for a lot of the functionality that you would expect from a seamless integration, things such as integration with other enterprise systems, business process and the business rules management. Although the Internet of Things concept is relatively new in its latest incarnation, our products and team have been around for more than 15 years in the market place and enterprise software market space. And so a lot of that experience translates into creating this seamless experience within these different components.
Rather than have point-to-point solutions used in the past, we ‘re looking at a more advanced enterprise level concept around IoT.
Sanjog: Which specific competencies are your team banking on today that will actually help deliver results and solve problems that practitioners have?
Troy: As one of the world’s largest manufactures, we at Bosch really do have the experience in applying these technologies to our plants and systems. So as a result of this and additionally to providing these services to many external customers, we really feel we can help the practitioner deliver results.
Sanjog: To what degree can you solve an organizations problems based on the solutions, services and expertise you bring to the table?
Matthew: Well, we can take organizations from start to finish, and often times get involved with organizations who maybe are thinking about an IoT or a connected solution and don’t know where to begin, to other ones who have started an IoT solution or have recommended a partial solution and would like it to be finished. One of the things that we do based on what Troy had said, we have a lot of manufacturing expertise within the organization of Bosch, and we can leverage that expertise across enterprises within Bosch and bring that knowledge and best practices to the manufacturers, really relying on us to help them determine what data do they need to acquire, how do they apply that data to their business and then more importantly, how do they get business outcome and values based on that data that they generated. So we typically can get involved at various stages, but the best output can be getting us involved early in your organization.
Bosch can help them determine what data do they need to acquire, how do they apply that data to their business and then more importantly, how do they get business outcome and values based on that data that they generated.
Sanjog: What kind of questions or what kind of concerns or gaps that you find when you talk to various manufacturers and their respective practitioners in terms of, yes we have a problem, yes we have an interest in going this IoT method, but we don’t know where to start.
Matthew: Typically it’s either in one of two areas I think has been our experience. There is the connectivity to the asset and the complexities that the communication protocol level programming of a network type of gateway or hub, and then transmitting that data to a central data base to be processed. That tends to be somewhat complex based on the different communications protocols that exists at the asset level and being able to choose one of those if you want to implement that in the asset that you manufacture. The other component is a lot of organizations will say, “We have so much data today, we don’t know how to apply or utilize that data.”
Our platform allows the experts to really develop their own algorithms and apply this data in the most appropriate way.
Sanjog: How soon can these practitioners expect a hard ROI?
Troy: I would certainly say that some ROI can be received relatively quickly. If you are looking at a really hard ROI and maybe change in how you communicate with your dealer network or maybe if you are looking at additional revenue streams or extracting costs, once you implement that connectivity and are leveraging the data the right way and applying the right rules and maybe integrating it in the right way in your enterprise systems, you can realize that ROI relatively quickly. We are talking within 60 to 90 days.
So you really need to look at all the hard and soft costs of an ROI and if you do that and really get the buy in from the executives on what that constitutes, the ROI can occur relatively quickly.
Now, the more important part to think about is really those softer components on ROI that you need to calculate, and it might be reassignment of labor. May be someone is not spending as much time on inbound customer service calls as they could be spending time on outbound customer service calls, because they are able to see more into the demand chain. Those type of things need to be added into the ROI as well and really thought through to look at the broad impact on the business. We’ve seen impact on the business and different areas like legal, procurement, parts management, developing the road map, quality, warranty management, lowering that warranty cost and extending warranty agreements. So you really need to look at all the hard and soft costs of an ROI and if you do that and really get the buy in from the executives on what that constitutes, the ROI can occur relatively quickly.
Sanjog: What is Bosch Software Innovation doing to learn and innovate in this area of Connected Manufacturing and Internet of Things and using that to differentiate from the other providers? How is Bosch SI becoming a go-to expert?
Matthew: If you look at Bosch as a whole, I mean being a very large organization of about 300,000 associates, 70 being in revenue and I believe about 250 manufacturing plants around the world, we are a large manufacturing organization that’s focused in many different industries. And one of the things we are doing internally as well is we are practicing what we’re preaching on the whole idea of Connected Manufacturing. So we are connecting those assets and the plants; they’re helping us stay into the building and create efficiencies and change our processes. We’re also looking at connecting assets outside of that to bring in additional information from our supply chain and from our demand chain. So we’re really looking at transitioning the organization to be more focused to the connected manufacturer. And I think by doing that it allows us a lot of expertise to bring to other manufacturing type of clients to gain those similar types of capabilities.
Sanjog: You mentioned a tool set and something about process management and rules management that you have been including in your solution set to solve problems. How does that tie to solving Connected Manufacturing related challenges and innovation?
Troy: I think they definitely form an integral part of that. Basically our vision is the data generated from machines and devices is really used in a larger business context to drive value. And the concepts of process and rules can be used to achieve this goal. The BPM platform, or business process management platform, is a component of our Internet of Things offering that really provides the business context around the M2M functionality by enabling the use of them to M2M data within those business processes. So processes are really at the heart of most business operations and manufacturing is certainly no exception.
We can use roles to intelligently filter information coming from these devices so that only necessary information is sent to the back end for example or so that decisions are made on the spot on the edge itself for increased automation.
There are well-defined business processes that determine how things are done, there are exceptions to those processes, and within the M2M data or data coming from these machines, we can make these processes more intelligent and drive more automation in the manufacturing space. So for example we can do things more proactively to increase efficiency or to reduce cost regarding predictive maintenance and things like that. Also the business rules management platform provides for decisions to be made either on devices at the edge or between these process stops or inside a process stop within these business processes. So at the edge, maybe we can use roles to intelligently filter information coming from these devices so that only necessary information is sent to the back end for example or so that decisions are made on the spot on the edge itself for increased automation.
Sanjog: If you were to guide someone as a trusted advisor for how they select their vendor in Connected Manufacturing, what do you think they should do as part of their due diligence?
Troy: Well I would look at it more from I guess an enterprise software perspective. I think for a manufacturer looking to enable the concept of Connected Manufacturing, look for vendors that take a true platform approach to things you know. I kind of feared that point solutions may solve a particular problem today, but in the end they may not be robust enough to meet the needs of the Internet of Things next year or even next month. So I would recommend that potential manufacturers take that approach to look for such a robust platform that’s going to be open and provide the flexibility needed to address the use cases that will be eventually be coming up.
For a manufacturer looking to enable the concept of Connected Manufacturing, look for vendors that take a true platform approach to things you know.
Sanjog: Matt, if you were to look at the kind of problems that we have, and of course we have to use all your tool sets to essentially solve those problems, do you think its really a good idea for an organization to say go to one provider, have one deck to choke and try to work with them and make it a single point of failure or success, or should there be a complementary set of partners coming up with this extended solution and have an ecosystem so that the best of breed processes and systems and technologies are put in place?
Matthew: Yeah, that’s a good question and one which we could ask quite frequently. I think one of the things that organizations need to look at is these solutions tend to be complex and by complex I mean you might have some intelligence on an asset or you might have to instrument an asset with some sensors and a gateway to obtain that data onto the network. That by itself is somewhat of a complex solution to put together. Then you have to put it onto a network and if it’s an asset that’s remote for an example, it could be a cellular network or even a satellite network in some cases. And then you have to bring that back to an enterprise. The data needs to transition and be saved back to an enterprise, and with our business rules models as an example transitioned into something that has business value by finding the right algorithm. One of the things we often recommend that organizations want to avoid is what we call the finger pointing that may happen. If the data doesn’t arrive in the back end system, there could be multiple points of failure there. It could be a sensor, it could be the gateway, it could be the communications protocol, the networks, it could be the carrier, the cell provider, the satellite provider or it could be something happening in the enterprise. So that the more you can combine one level of responsibility out of one time of vendor the more robust your solution will be and the more that vendor will be accountable as opposed to the frustration that may come with having to chase each vendor around to determine where the real issue may reside.
Sanjog: In what all IoT areas can manufacturers take the lead, and where should they call upon vendors or invite the provider community to help out?
Troy: I think manufacturers are experts in their business, right? So in the business of manufacturing, the business processes behind that and the intelligence behind that as well, they should really focus on driving value from this perspective and plus look for partners to help with the software platforms to enable this.
They should really focus on driving value from this perspective and plus look for partners to help with the software platforms to enable this. Manufacturers should probably avoid getting into situations where they’re limited in terms of creativity from their side. Of course there are boundaries are on everything, but really enabling the business side is something that should be done, and getting into situations where that side is hampered is something that should be avoided.
I can give you a specific example: John Deere is our client, and they actually approached us to help them manage some of their warranty costs with an initiative that they had. They were interested in not necessarily coding the stuff into hard code or looking for a specific functionality and a platform to really do that specifically, but rather more for looking for a vendor that could provide a platform that would really enable the business side to create this initiative and really turn up on the business side itself. So Deere was very successful in doing that and using our toolset to really just drive that almost entirely from the business side.
So it was really kind of amazing to see a very good success story from that; having the program manager on the business side really drives this warranty, cost reduction program almost entirely from the business. So it really speaks to the power of the tooling that’s available and out there in platforms such as ours. And also to really letting the business of the manufacturer really take the lead from the business side and really drive value, because at the end of the day they’re the ones that own the these business processes and the parameters around the initiatives that they’re trying to do. I guess with regard to you know pitfalls, I think manufacturers should probably avoid getting into situations where they’re limited in terms of I guess creativity from their side. Of course there are boundaries are on everything, but really enabling the business side is something that should be done, and getting into situations where that side is hampered is something that should be avoided.
Sanjog: You mentioned that there are different business models people are considering with respect to manufacturing where you could even generate new revenue sources and better engage with the customers. So are there any specific examples you could cite whether the connected devices could help in that area?
Matthew: Absolutely. There have been some manufacturers that may have something to service their equipment, and as an example one manufacturer would approach the customers and offer on-site services. So for $10,000 a year, someone would come on site every quarter and do a top to bottom evaluation of the assets and the equipment that’s on site and provide them a full report. One of the challenges of that is that doesn’t fit for our organization for various reasons but mostly because of economics.
Once you instrument an asset and you’re able to retrieve the data from that asset, you can start to create things like virtual services, and now what used to be a $10,000 expense and sending someone on site, which includes the vehicle, the individual and the labor, now you don’t have to send anyone on site you can actually obtain the data from the assets. You can apply business rules to the asset and you can really determine what functions and what changes and how the asset is performing and what parts it may need to consume. So what you’ve been able to do and just create what’s called virtual service visits as opposed to real time tactical service visits and provide the end users a list of all the actions that need to be taken with their equipment and have it documented in real-time with real live data as opposed to someone being on site. So that would be an example of how someone’s been able to change their business model, create additional revenue streams from a smaller side of the market that traditionally was just unavailable to them.
Sanjog: And how would your solution support it or enable it?
Matthew: Our solution, if you think about pulling the data back to an enterprise, that data for example if you had 20 centers in an asset, that data would need to be evaluated. And what we would do is leverage our rules engine, our visual rules BRM solution and apply the appropriate algorithms to the data that’s coming in be able to process that so you have the appropriate actionable data and either re-present that to the end users in a report format or be able to integrate it into an asset management system to respond the appropriate actions coming from the enterprise.
Sanjog: What aspects of connected manufacturing do you think are still evolving? How is Bosch Software Innovations going to work within the innovation cycle such that in the future you can follow through?
If we identify some of the meaningful types of the use cases early and start to implement those, what happens 10 times out 10 times is that organizations start to see that data, the stakeholders start to consume that data and they start to think of other ways they can leverage that data.
We always work within organizations and mentioned that this seems to be an integrated process. If we try to answer all the question and try to deliver something, that’s going to be a very complex and maybe a difficult implementation. If we identify some of the meaningful types of the use cases early and start to implement those, what happens 10 times out 10 times is that organizations start to see that data, the stakeholders start to consume that data and they start to think of other ways they can leverage that data.
They start to suggest other data points that maybe they’d like to obtain, and once you start to get that feedback from the user community and the stakeholders within an organization, you can really start to evolve it. So a couple of areas where I see it still evolving is the protocol management piece. There’s likely 10,000 different protocols from a communication standpoint. So that is still evolving and continuing to evolve. I think we see it simplifying and how that data is communicated, but we often say, start small keep it iterative and be able to implement a broader enterprise solution in the long term.
Sanjog: What is the best way a manufacturer could benefit from this IoT related transition and best engage as a partner with Bosch Software Innovation?
Matthew: Well certainly the best way is to have a conversation with one of our solutions consultant. They’ll really bring the best practices from what they’ve seen in other manufacturing type of organizations, what they’ve seen in our organizations and our manufacturing facilities and really engage on what’s the art of the platform, what are the capabilities that we can accomplish in working together, leveraging our platform, leveraging their equipment and the data that’s generated from their assets, and we often tell people it’s really about being creative, not to be limited by a current existing processes. But really get engaged with our solutions consultants on what are their capabilities and what things can we accomplish together, where can we extract costs, where can we enhance communications, where’s the opportunity for product differentiation or maybe enhancing revenue streams, but really having a business focused discussion looking at outcomes and potential outcomes that could come from the data.
Sanjog: Are your solutions and your products the best for every type of manufacturer out there, or you would say you have a sweet spot at the type of organizations that you fit the best?
Matthew: Our platform is functional enough to receive the data and apply the business rules to that data. So whether it be an automotive manufacturer or a HPAC manufacturer, it’s really understanding the subject matter experts the manufacturer knows their business and their products the best. What our platform allows them to do is to visualize those rules and how they want to process that data and integrate that data into the backend system. So based on that it’s a very broad reaching platform that fits multiple industries for manufacturers.
Our platform allows them to visualize those rules, how they want to process that data and integrate that data into the backend system.
Troy: I would add that although we have expertise in certain areas of manufacturing and Bosch in general, the platform that we’re trying to provide is really intended to be as flexible and as open as possible, really to help manufacturers abstract the different types of machines and devices that they have coming from a perspective that’s rather broad rather than pigeonholed into a specific area of functionality or specific areas of manufacturing.