Two people in construction clothing looking at a computer in a warehouse

How Siemens, Microsoft, and Manufacturers Are Transforming Themselves for the Internet of Things

The Industrial Internet of Things is more than just a technological change. Not only are large industrial players transforming themselves into software companies, they’re also transforming their workforces with new digital skills and data-driven mindsets. That’s a key takeaway from Bloomberg’s recent event “The Future of Manufacturing: The New Education Era” that I was invited to attend in Atlanta last month.

Software and services are changing huge industrial companies’ business planning, product design, and people strategy. To frame the scale of these changes, Bloomberg reporter Katia Dmitrieva noted in her opening remarks that twenty thousand US manufacturing jobs were added in October 2018 and that the manufacturing industry will account for one-third of the $1.1T spent on technology this year.

Below are some highlights from the event’s speakers and panels.

Fireside Chat: Siemens USA CEO on “the Internet of Really Big Things”

Barabara Humpton, CEO of Siemens USA

In the first talk of the event, Siemens USA CEO Barbara Humpton explained that the 171-year-old Bavarian-born company which “manufactures things that power the world” has fifty thousand employees in the US, which is also its biggest market.

She explained that the biggest change the business has seen in the past ten years has been technology from media, communications, and the Internet coming into the manufacturing industry. In response, Siemens has spent $40B in the US chiefly to transform into a software company and devotes $50M per year to training its own employees.

She went on to say that beyond IQ and EQ, today’s workers also need DQ–a ‘digital quotient,’ meaning an understanding of digital technologies and modern data science methods. Her work as chairman of the Siemens Foundation, which focuses on middle skills development for workers, is in direct response to that.

More Siemens Initiatives

  • Siemens’ Vision 2020+ strategy stresses the company’s impact on the places it does business in with its “Business to Society mantra and emboldens the company to disrupt itself.
  • Siemens currently has eight digital application centers across the country as part of their efforts to promote partnering with customers, suppliers, universities, and others to co-create the future of manufacturing.
  • Siemens also has an arm devoted to working with startups called Next47. Their catalyst program helps portfolio companies get access to Siemens’ giant customer base and address their problems—something that traditional VC firms that only offer funding can’t provide.

The Smart Industrial Era: Rethinking the Business of Manufacturing

manufacturing workers

In this panel, Accenture Digital Group CEO Mike Sutcliff spoke about the variety of technology applications impacting manufacturing and how they differ depending on use cases—“different horses for different courses.”

Sutcliff described a successful implementation of augmented reality in the aviation industry. A major bottleneck in building airplanes is the drilling of holes in the fuselage, which is still done manually. One client improved worker productivity by 500% by using Augmented Reality so that workers can quickly identify the exact drilling locations on the fuselage and see them grouped together by drill bit size. This means workers spend less time ‘measuring twice to cut once’ and switching out drill bits.

Another fascinating implementation of new technology in manufacturing came from one of Accenture’s automaker clients. Stitching leather onto car seats is still done manually and is notoriously tricky to get right. Any wrinkle or imperfection means wasted leather (the leather for an entire seat gets discarded if there’s a wrinkle anywhere) and increased costs. Now this client uses computer vision trained by Machine Learning techniques so that workers are alerted in real time if any wrinkles are forming while leather is being stitched onto the seat. This combination of technology and people is reducing waste in a step of the car-making process that hadn’t seen any improvements in a long time.

Later in the discussion, panelist Giuseppe Riva, CEO of SCM Group North America, a manufacturer of woodworking machines and systems, discussed the use of AR to narrow the distance with their customers. SCM, whose clients include aerospace companies and furniture chain Rooms to Go, offers its customers AR hardware (costing approximately $3,000) along with software services (costing $150-170 per month, varies depending on users) that enable them to have the experience of an on-site technician from SCM. This is much more efficient and less expensive than sending a technician on location.

Riva noted that the payback from developing SCM’s AR platform was quick and that their initial investment cost $250,000.

The third panelist was Arya Basu, Visual Information Specialist from Emory’s Digital Visualization Laboratory. He emphasized the importance of implementing technology so that skills from the digital world can be transferred and applied to the real world.

Basu also highlighted how design and user experience affect the success of different technologies. Virtual keyboards and 3D TV never took off because they required too much effort from users. When designing Augmented and Virtual Reality applications, the ‘social awkwardness component’ of using those technologies needs to be considered.

Manufacturing Revival: Closing the Skill Gap

Manufacturing Icons

“Why is there a skills shortage?” asked Jane Oates, President of Working Nation, before explaining that people still associate manufacturing with the three ‘D’s—dark, dirty, and dangerous.

According to Oates, the only way to meet the challenges and speed of change affecting the manufacturing workforce will be public and private partnerships between companies and education institutions.

She also encouraged big companies to promote their supply chains and the work of smaller companies and suppliers within them. People want to be part of something bigger, and if they realize that lesser-known manufacturers are creating critical components for known products and companies, they’re more likely to be interested in working for smaller manufacturers.

2.4M manufacturing jobs will go unfilled in the next ten years, predicted panelist Seema Pajula, Vice Chairman and US Industries and Insights Leader for Deloitte.

Pajula agreed with Oates that manufacturing has a perception problem, especially among younger workers. The industry’s workforce is also only 25% female.

To address these issues, she’s advising her clients to instill a sense of mission and purpose in their employees and invest heavily in talent development to attract and retain employees.

Donald Leo, Dean of the College of Engineering at the University of Georgia, noted the huge growth in student enrollment in engineering programs across the country, increasing from 450,000 to 700,000 in recent years.

He explained that increasingly employers want trained engineers who know digital technologies and some data science.

The Next Reality: Understanding the Possibilities of Augmented Intelligence

In this panel Ash Eldritch, CEO & Co-Founder of Vital Enterprises, which makes heads up AR displays for technicians, predicted that content creation tools for AR and VR will ultimately be commodified. Kyle Jackson, CEO & Co-Founder of Talespin, and Ben Reed, Director of Mixed Reality Business Applications at Microsoft, agreed.

Reed succinctly described how Microsoft’s customers are using the Hololens: to save time, to save money, or to enable something new.

Reed also provided use cases, such as using the Hololens to design the layout and placement of large manufacturing equipment within an existing facility. He also described how the energy industry is using Hololens so that their most experienced experts can go virtually on-site at remote field locations like oil wells. The ability for these experts to travel less and be with their families while remaining productive is improving employee retention.

Manufacturing Isn’t Dying—It’s Getting Smarter

Mouse McCoy, the CEO of Hackrod, predicted that engineering and manufacturing will become gamified like “Ready Player One.”

Dave Lavery, NASA Program Executive for Solar System Exploration, recounted how he begins each day virtually on Mars, using a headset to see the latest images from the Mars rover. Occasionally science teams at NASA even conduct meetings virtually on Mars!

Brian Anthony, Director of MIT’s Master of Engineering in Manufacturing Program, noted that while technologies are making manufacturing more accessible for more companies, the manufacturing of small components like computer chips remains out of reach for most companies. To that end, MIT recently launched a nano fabrication facility to give more companies access to this manufacturing capability.  

The Potential for IoT Transformation

Overall this event really showcased the transformative potential for IoT technologies in manufacturing and how it’s beginning to be implemented by major companies. But it also underlined the importance of the people and workers who will be most affected by these changes.

See how Temboo has been enabling our customers’ own IoT transformations on our case studies page  or sign up for our Kosmos System for Industrial IoT to start transforming your business.