Sandvik Coromant Joins Forces With Microsoft To Shape The Future Of Manufacturing
Sandvik Coromant has embarked on a unique venture with Microsoft to drive forward the development and digitalisation of the manufacturing industry. Combining Sandvik Coromant’s expertise in machining with technical solutions from Microsoft, the collaboration will seek to link up parts of the production chain to create solutions for the next generation of manufacturing. The contract also includes an acceleration of the internal digitalisation network for Sandvik Coromant.
Sandvik Coromant’s CoroPlus offering, developed in part with Microsoft, is based on Azure IoT Suite, Cortana Intelligence Suite and Dynamics 365 for Field Service. Among other things, the offering connects people, machines, tools and data on a single platform to offer Sandvik Coromant’s customers a better basis for decision making, and provides an overview of the various developments in the manufacturing process. This can enable savings, for example, by reducing machine downtimes.
“We see this collaboration with Microsoft as key to the success of our digital strategy. We have a historic relationship with them and look forward to continuing our journey, creating value by working together to develop and implement solutions for the manufacturing industry to guarantee efficiency, sustainability and growth. This unique partnership represents a new way for our companies to work together more closely to develop our competence,” explained Nadine Crauwels, President of Sandvik Coromant.
One unique aspect of Sandvik Coromant’s CoroPlus offering is that data is not only gathered at machine level to adjust equipment, notify technicians about maintenance requirements and warn managers about potential problems. Data is also gathered at tool level, which means that the customer’s industrial tool becomes “smart” and can be adapted and adjusted at any time for efficient use and to prevent production stoppages.
The partnership with Microsoft adopts an integrated approach to digitising the data, expertise and experience used on a daily basis by Sandvik Coromant to guide their customers, and will serve as an additional tool to facilitate streamlining of production.
The new joint venture between Sandvik Coromant and Microsoft gets under way in the first quarter of 2020 and will involve operations both in Sweden and abroad.
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Siemens MindSphere on Microsoft Azure Stack Goes Live in Singapore MindSphere Application Center
Siemens is bringing MindSphere, the cloud-based, open Internet of Things (IoT) operating system, to Microsoft Azure Stack for customers in Singapore. Azure Stack extends Azure so customers can consistently build and run hybrid applications across cloud and on-premises. Azure Stack enables organizations to build modern apps across different environments with the flexibility and control they need. In Singapore, MindSphere is now available on Microsoft’s cloud platform, Azure, as well as Azure Stack.
MindSphere connects products, systems, machines, and whole factories, enabling customers to harness the wealth of IoT data with advanced analytics. MindSphere on Azure offers the best of both worlds —Siemens’ leadership in Industry 4.0 combined with Microsoft’s cloud platform computing expertise. Now, Siemens is bringing this offering to Singapore, to help customers optimize efficiency, availability, performance effectiveness of their assets and processes.
Microsoft and Siemens have built a strong partnership over the years to bring leading innovations to customers that support digitalization and Industrial Internet of Things.
Steffen D. Endler, Head of Siemens IoT Digital Consulting in ASEAN, noted, “We’re seeing high interest and adoption of private cloud across a number of sectors including manufacturing, utilities, critical infrastructure and healthcare. This makes perfect sense, as these sectors have some of the most stringent regulatory requirements and typically also some legacy systems. These customers, whose data cannot leave the borders of the country or even of the premises, but who nevertheless want to benefit from a proven IoT platform and want to utilize existing cloud-based IOT applications can deploy this with such an innovative solution.”
Çağlayan Arkan, Vice President, Manufacturing Industry at Microsoft, added, “Bringing MindSphere to Microsoft Azure Stack empowers manufacturers to seize new IoT business opportunities while meeting their compliance and regulatory requirements.”
Siemens IoT Digital Consulting offers customers a one-stop contact for getting help with their digital transformation. From getting the IoT strategy right, to designing and developing the right prototypes that are able to scale all the way to an effective roll-out and transformation strategy, the newly established Singapore-based consulting unit supports its clients in Asia-Pacific to drive concrete business outcomes from the implementation of IoT in Cloud and on-premise or on the Edge across geographies.
Customers are invited to work with the Siemens’ MindSphere Application Center in Singapore to sharpen and validate their IoT ideas with the help of the private cloud MindSphere solution.
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Open Manufacturing Platform Accelerates IIoT Developments
Microsoft Corporation and the BMW Group has announced a new community initiative to enable faster, more cost-effective innovation in the manufacturing sector. In manufacturing today, production and profitability can be hindered by complex, proprietary systems that create data silos and slow productivity. The Open Manufacturing Platform (OMP) is designed to break down these barriers through the creation of an open technology framework and cross-industry community. The initiative is expected to support the development of smart factory solutions that will be shared by OMP participants across the automotive and broader manufacturing sectors. The goal is to significantly accelerate future industrial IoT developments, shorten time to value and drive production efficiencies while addressing common industrial challenges.
Built on the Microsoft Azure industrial IoT cloud platform, the OMP is intended to provide community members with a reference architecture with open source components based on open industrial standards and an open data model. In addition to facilitating collaboration, this platform approach is designed to unlock and standardise data models that enable analytics and machine learning scenarios — data that has traditionally been managed in proprietary systems. Utilising industrial use cases and sample code, community members and other partners will have the capability to develop their own services and solutions while maintaining control over their data.
“Microsoft is joining forces with the BMW Group to transform digital production efficiency across the industry,” said Scott Guthrie, Executive Vice President, Microsoft Cloud + AI Group. “Our commitment to building an open community will create new opportunities for collaboration across the entire manufacturing value chain.”
With currently over 3,000 machines, robots and autonomous transport systems connected with the BMW Group IoT platform, which is built on Microsoft Azure’s cloud, IoT and AI capabilities, the BMW Group plans to contribute relevant initial use cases to the OMP community. In the future, use cases—such as digital feedback loops, digital supply chain management and predictive maintenance—will be made available and, in fact, developed further within the OMP community.
“Mastering the complex task of producing individualised premium products requires innovative IT and software solutions,” said Oliver Zipse, member of the Board of Management of BMW AG, Production. “The interconnection of production sites and systems as well as the secure integration of partners and suppliers are particularly important. We have been relying on the cloud since 2016 and are consistently developing new approaches. With the Open Manufacturing Platform as the next step, we want to make our solutions available to other companies and jointly leverage potential in order to secure our strong position in the market in the long term.”
Graphic showing various components involved with the Open Manufacturing Platform The OMP is the next evolution in the BMW Group’s and Microsoft’s long-standing technology partnership and mutual commitment to innovation and creating industry-wide opportunities for collective success. Through the OMP, community members will have greater opportunities to unlock the potential of their data, allowing them to build and integrate industrial solutions more quickly and securely and, in turn, benefit from contributing to and learning from other organisations.
The OMP will be designed to address common industrial challenges such as machine connectivity and on-premises systems integration. This will facilitate the reuse of software solutions among OEMs, suppliers and other partners, significantly reducing implementation costs. For example, an ROS-based robotics standard for autonomous transport systems for production and logistics will be contributed to the OMP for everyone to use. The OMP will be compatible with the existing Industry 4.0 reference architecture, leveraging the industrial interoperability standard OPC UA.
“This is very good news for the manufacturing industry,” said Stefan Hoppe, president and CEO of the OPC Foundation. “The use of open international industry standards such as OPC UA in the OMP community enables manufacturers, machine builders and suppliers to integrate their existing equipment and systems efficiently and securely. For a long time, companies have promoted proprietary, closed ecosystems — the OMP commitment to open development will shape tomorrow’s manufacturing.”
The underlying platform will continue to evolve over time, along with manufacturing requirements, to incorporate new innovations including areas of analytics, artificial intelligence and digital feedback loops.
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Large Manufacturing Companies In Asia Pacific Could Lose US$10.7 million Due To A Cyberattack
A Frost & Sullivan study commissioned by Microsoft found that a cyberattack can cost a large manufacturing organisation in Asia Pacific an average of US$10.7 million in economic loss with customer churn being the largest economic consequence of a cyber breach, resulting in US$8.1 million of indirect cost. For mid-sized manufacturing organisation, the average economic loss was US$38,000. Furthermore, cybersecurity incidents have also led to job losses across different functions in more than three out of five (63 percent) manufacturing organisations.
While the impact of data vulnerabilities and breaches can be costly and damaging to the manufacturing organisations, its supply chain and consumers, the study uncovered that half (51 percent) of the manufacturing organisations in Asia Pacific had either experienced a security incident or were not sure if they had had a security incident as they had not performed proper forensics or data breach assessment.
The study further revealed that instead of accelerating digital transformation to bolster their cybersecurity strategy to defend against future cyberattacks, almost three in five (59 percent) manufacturing organisations across Asia Pacific had delayed the progress of digital transformation projects due to the fear of cyberattacks. Delaying digital transformation not only limits the capabilities of manufacturing organisations to defend against increasingly sophisticated cyberthreats but also prevents them from leveraging advanced technologies, such as artificial intelligence (AI), cloud, and the Internet of Things (IoT), to dramatically increase productivity, empower their workforce and deliver new service lines.
These findings are part of “Understanding the Cybersecurity Threat Landscape in Asia Pacific: Securing the Modern Enterprise in a Digital World” study launched in May 2018. The findings aim to provide business and IT decision makers in the manufacturing sector with insights on the economic cost of cyberattacks and to help to identify any gaps in their cybersecurity strategies.
The initial study surveyed a total of 1,300 business and IT decision makers ranging from mid-sized organisations (250 to 499 employees) to large-sized organisations (>than 500 employees), of which 18 percent belong to the manufacturing industry.
In calculating the cost of cyberattacks, Frost & Sullivan created an economic loss model based on the insights shared by the respondents. This model factors in two kinds of losses which could result from a cybersecurity breach:
- Direct: Financial losses associated with a cybersecurity incident including loss of productivity, fines, remediation cost, etc; and
- Indirect: The opportunity cost to the organisation such as customer churn due to reputational damage.
“The frequency and severity of cyberattacks targeting manufacturing organisations have increased significantly in recent years, underscoring the need to protect the ever-growing volume of data generated by and made available to manufacturing organisations,” said Kenny Yeo, Industry Principal, Cyber Security, Frost & Sullivan. “By integrating security into every digital process and physical devices, manufacturing organisations can not only mitigate the loss of intellectual property (IP) and customer data but also minimise downtime as well as remediation cost resulting from cyberattacks.”
Key Cyberthreats And Gaps In Manufacturing Organisations’ Cybersecurity Approaches
For manufacturing organisations that have encountered a security incident, data exfiltration, ransomware and remote code execution are the biggest concern as these threats have the highest impact and often result in the slowest recovery time:
- Remote code execution is a unique threat that manufacturing organisations face, and it poses a grave threat to these companies as cybercriminals can remotely access and control their operations. This allows malicious actors to disrupt production and sabotage the business.
- As manufacturing organisations need to adhere to tight schedules and strict deadlines, a ransomware attack – where cybercriminals encrypt files to restrict users’ access until a ransom is paid – can lead to production downtime and loss of customer confidence. Manufacturing organisations not only lose time and resources in dealing with the aftermath of the attack, but the entire supply chain will also be disrupted too.
Aside from external threats, the study also uncovered several key cybersecurity gaps in manufacturing organisations:
- Complex security environment impeding recovery time: Contrary to the common notion that more security solutions will lead to greater efficiency, a large portfolio of cybersecurity solutions may not be a good approach to bolster cybersecurity. The complexity of managing a large portfolio of cybersecurity solutions may lead to longer recovery time from cyberattacks.
The study showed that nearly three in five (57 percent) manufacturing organisations with 26 to 50 cybersecurity solutions took more than a day to recover from cyberattacks. Conversely, only 26 percent of organisations with less than 10 solutions took more than a day to recover. In fact, 35 percent of them managed to recover from a security incident within an hour.
- Traditional tactical viewpoint towards cybersecurity: Despite the growing sophistication and impact of cyberattacks, the study revealed that majority of the respondents (41 percent) hold a tactical view of cybersecurity – “only” to safeguard the organisation against cyberattacks. While only one in five (19 percent) viewed cybersecurity as a business differentiator and an enabler for digital transformation.
- Security as an afterthought: If cybersecurity is not seen as an enabler for digital transformation, it will undermine manufacturing organisations’ ability to build a “secure-by-design” digital project, leading to increased vulnerabilities and risks.
The study revealed that only 26 percent of manufacturing organisations who had encountered cyberthreats considered a cybersecurity strategy prior to initiating a digital transformation project. The remaining respondents either thought about cybersecurity only after the commencement of their digital transformation projects or did not think about cybersecurity at all.
“Technology advances and innovations in intelligent manufacturing are delivering game-changing breakthroughs for leading businesses in every sector,” said Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia. “As manufacturing organisations focus on increasing data-driven products and services to differentiate themselves in the global economy, building and maintaining trust within their ecosystem of partners and customers becomes an even bigger priority.”
“Cyber attackers are constantly looking for opportunities, so the more businesses know about their techniques and tradecraft, the better prepared they will be to build defenses and respond quickly. Building organisational resilience and reducing risk by adopting a security approach that includes prevention, detection and response can make a huge difference in the overall cybersecurity health of a manufacturing organisation,” he added.
Bolstering Cybersecurity Using Artifical Intelligence
AI plays a critical role in manufacturing organisations as they increasingly rely on machine learning automation to increase their efficiency and output by scale while reducing cost and downtime through predictive maintenance. AI is also a powerful tool that can enable manufacturing organisations to defend themselves against increasingly sophisticated cyberattacks. The study revealed that 67 percent of manufacturing organisations in Asia Pacific have either adopted or are considering an AI-based approach to improve their security posture.
Cybersecurity solutions that are augmented with AI and machine learning capabilities can autonomously learn what is normal behavior for connected devices on the organisation’s network, and swiftly identify cyberthreats at scale through the detection of behavioral anomalies. Cybersecurity teams can also put in place rules that block or quarantine devices that are not behaving as expected before they can potentially damage the environment. These AI-powered cybersecurity engines enable manufacturing organisations to address one of their largest and most complex security challenges as they integrate thousands or even millions of IoT devices into their information technology (IT) and operational technology (OT) environments.
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Manufacturers With Artificial Intelligence To Nearly Double Competitiveness
Microsoft Asia and IDC Asia Pacific released findings specific to the manufacturing sector for the study, Future Ready Business: Assessing Asia Pacific’s Growth with AI.
The manufacturing sector, which contributes to a significant proportion of Asia Pacific’s GDP, continues to face rising competitive pressure due to growing costs and lower margins. Manufacturers are increasingly turning to emerging technologies to stay ahead of the competition. Those organisations that have started to adopt Artificial Intelligence (AI) believe it will nearly double their competitiveness (1.8 times) in the next three years.
“Manufacturers in Asia Pacific are slowly, but surely, seeing the importance of adopting a digital strategy and latest technologies. The study found that 76 percent of manufacturing business leaders agree that AI is instrumental to their organisation’s competitiveness in the next three years,” said Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia. “To achieve supply chain excellence, and even develop new business models to address changing customers’ needs, integrating AI for their business is a must. Organisations which fail to adopt an AI-first strategy risk being left behind in today’s competitive market landscape.”
“However, 59 percent of manufacturers have not adopted AI as part of their business today. This is a worrying sign for the industry that needs to thrive on innovation,” added Hunter.
For manufacturers that have started their AI journeys, the top three business drivers to adopt AI include higher margins, higher competitiveness and business agility, as well as better customer relationships and outcomes.
They are already seeing business improvements in the range of 17 percent to 24 percent today, and further improvements are anticipated in three years by at least 1.7 times. The biggest jumps are expected in driving accelerate innovation (2.0 times), and higher margins (1.9 times).
One example is Piramal Glass, a leading glass packaging manufacturer in India, which has turned to AI, Internet of Things and advanced data analytics on the cloud to drive operational efficiency, enhance customer experience and generate new revenue models. Their in-house solution, RTMI, offers advanced insights in real-time that led to five percent reduction in defects, 40 percent reduction in manual data gathering and 25 percent improvement in employee productivity.
“The identified business drivers are a clear sign of how technology such as AI can create improved value by helping organisations gain insights, and better manage their operations in a highly complex environment,” said Stephanie Krishan, Research Director, IDC Manufacturing Insights. “In fact, according to IDC FutureScape for Manufacturing and Implications for Asia Pacific (excluding Japan), half of the top 10 predictions are driven by data and AI-centric solutions or use cases, such as creating new ecosystems for automation, or even to put data at the center of their processes to drive speed, agility and efficiencies. This only points towards the fact that the future of manufacturing will be built upon data in order to deliver scalable and accelerate growth for the industry.”
Asia Pacific’s Manufacturers Need To Focus On Its Culture, Strategy And Data Readiness
The Study also evaluated six dimensions contributing to the sector’s AI readiness. “The manufacturing sector is lagging behind in Culture, Data and Strategy, compared to Asia Pacific’s overall readiness. Business leaders must focus on those areas to stay competitive,” said Krishan.
- Strategy: Manufacturers need to have an AI strategy in place, and support a more distributed workforce
“By adopting AI industry players will accelerate their transformation and enjoy higher benefits. To succeed in an increasingly digital environment, Manufacturers need to have an AI- strategy in place, including workforce transformation,” said Hunter. Close to half of business leaders polled see a shift towards a more distributed and flexible workforce due to AI in the next three years.
- Data: Manufacturers need to work on availability, quality and governance of existing data
There is no surprise that manufacturers need to have a more robust data strategy in place in order to train task-based AI solutions. Today, manufacturers in the region are still dealing with a data structure where it can only be accessed by a centralised analytics team. The quality and timeliness of data are still major issues that are being addressed on an ad-hoc basis. There is also no extensive enterprise data governance program in place.
- Culture: Traits required for AI adoption lacking in manufacturing organisations
More than half of the manufacturing workers, and nearly half of the business leaders polled believe that cultural traits and behaviors are not pervasive in their organisation today. For example, 63 percent of workers and 57 percent of business leaders do not agree that employees are empowered to take risks, and act with speed and agility within the organisation.
“Manufacturers in the region must work on better integration of AI into their existing operations, including how data is used and processed. They need to build an AI-ready workforce that is agile and empowered to innovate,” said Krishan. “Only when manufacturers nail down its strategy and skill capabilities, they can fully harness the full power of AI for their organisation.”
Dairy enterprise ACM’s newly opened high-tech milk processing and manufacturing facility in Victoria, Australia is leveraging state-of-the-art intelligent technology to better manage costs via a rich data approach. By introducing machine learning capabilities, ACM is able to reduce human errors from contaminating organic milk with conventional milk, which also minimises wastage. In addition, by introducing automation for production planning, logging and quality assurance; as well as factory maintenance with the help of CRM and AI solutions, ACM has been able to rein in weekend overtime costs of AU$100,000 annually.
Skills For An AI-Ready Workforce
The good news is that majority of business leaders and workers in the sector believe that AI will have a positive impact on their jobs. 62 percent of business leaders and 77 percent of workers believing that AI will either help do their existing jobs better or reduce repetitive tasks.
However, according to business leaders, the skills required for an AI future are in shortage. Communication and negotiation skills, entrepreneurship and initiative-taking as well as adaptability and continuous learning are the top three skills identified in which demand will outstrip supply in the next three years. At the same time, business leaders believe that the demand for basic data processing, literacy & numeracy and general equipment operations and mechanical skills will decrease in three years. Those skills are broadly available today, and already now the supply is higher than the demand.
The disconnect comes with employers’ perception of their workers’ willingness to reskill. “Business leaders are aware of the massive reskilling efforts required to build an AI ready workforce. However, 22 percent of business leaders felt that workers have no interest to reskill, but only eight percent of workers feel the same. In addition, 48 percent of business leaders feel that workers do not have enough time to reskill, but only 34 percent feel the same way,” shared Hunter. “Business leaders in this space must prioritise reskilling and upskilling, dedicating employee’s time for this to address skills shortage. Even as it may result in short term productivity impact as building an AI-ready workforce will result in greater gains in the future.”
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Microsoft Announces Cloud And IoT Updates For Manufacturing Industry
Microsoft announced a series of updates to help bring the promise of intelligent manufacturing closer to its customers and partners. Product updates include:
- New enhancements to Azure Security Center, Azure Sentinel and Azure IoT Hub – Provides advanced threat protection to help Azure become the first major public cloud with end-to-end security for IoT for devices, hubs and cloud resources.
- New digital twin capabilities for Azure IoT Connected Factory solution – Enhances security and certification management, providing manufacturers a digital twin of their OPC UA-enabled machines.
- An expansion of Azure IP Advantage to IoT – Extends Azure IP advantage benefits to Azure customers with IoT devices connected to Azure.
In addition, Microsoft is announcing new solutions with industry-leading customers and partners. More than 25 innovative companies will join Microsoft including:
- Electrolux, the Swedish home appliance manufacturer, launched a new Azure IoT smart connected air purifier and app. The Pure A9 removes ultra-fine dust particles, pollutants, bacteria, allergens and bad odors from indoor rooms.
- Siemens Gamesa, the leader in renewable energy, is streamlining how technicians inspect industrial wind turbines and announced it is migrating its autonomous drone process to Microsoft Azure and Azure AI.
- Bühler, one of the world’s largest provider of food processing solutions, is leveraging Microsoft blockchain technology to improve global food safety standards and reduce food poisoning rates, while increasing production efficiencies.
- Intel is working with Microsoft on a new modern industrial PC reference design for factories and industrial applications. Using the reference design, device partners can build fully provisioned and customised industrial PCs that can be connected to a range of devices to discover, manage and analyse data in real time, using AI on the machine or in the Azure cloud.
Additional business updates include the newest book to our Future Computed book series: The Future Computed: AI and Manufacturing. The book will explore how manufacturers around the world are embracing AI in its businesses, sharing insights from Microsoft customers.
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