Get More Value From Operational Assets With Predictive Analytics

Pierre Leroux

Sharpening operational focus and squeezing more efficiencies out of production assets – these are just two objectives that have COOs and operations managers turning to new technologies. One of the best of these technologies is predictive analytics. Predictive analytics isn’t new, but a growing number of companies are using it in predictive maintenance, quality control, demand forecasting, and other manufacturing functions to deliver efficiencies and make improvements in real time. So what is it?

Predictive analytics is a blend of mathematics and technology learning from experience (the data companies are already collecting) to predict a future behavior or outcome within an acceptable level of reliability.

Predictive analytics can play a substantial role in redefining your operations. Today, let’s explore three additional cases of predictive analytics in action:

  • Predictive maintenance
  • Smart grids
  • Manufacturing

Predictive maintenance

Predictive maintenance assesses equipment condition on a continuous basis and determines if and when maintenance should be performed. Instead of relying on routine or time-based scheduling, like having your oil changed every 3,000 miles, it promises to save money by calling for maintenance only when needed or to avoid imminent equipment failure.

While equipment is in use, sensors measure vibrations, temperature, high-frequency sound, air pressure, and more. In the case of predictive maintenance, predictive models allow you to make sense of the streaming data and score it on the likelihood of failure occurring. Coupled with in-memory technologies, it can detect a machine failure hours in advance of it occurring and avoid unplanned downtime by scheduling maintenance sooner than planned.

This all means less downtime, decreased time to resolution, and optimal longevity and performance for equipment operators. For manufacturers, predictive maintenance can streamline inventory of spare parts, and the ongoing monitoring services can become a source of new revenue. And as predictive maintenance becomes part of the equipment, it also has the potential to become a competitive advantage.

Smart grids

Sensors and predictive analytics are also changing the way utilities manage highly distributed assets like electrical grids. From reliance on unconventional energy sources like solar and wind to the introduction of electric cars, the energy landscape is evolving. One of the biggest challenges facing energy companies today is keeping up with these rapid changes.

Smart grids emerge when sensor data is combined with other data sources such as temperature, humidity, and consumption forecasts at the meter level to predict demand and load. For example, combined with powerful in-memory technologies, predictive analytics can be used by electricity providers to improve load forecasting. That leads to frequent, less expensive adjustments that optimize the grid and maintain delivery of consistent and dependable power.

As more houses are equipped with smart meters, data scientists using predictive analytics can build advanced models and apply forecasting to groups of customers with similar load profiles. They can also present those customers with some ideas to reduce their energy bill.

Manufacturing

The manufacturing industry continues its relentless drive for customization and “lot sizes of 1” with innovations such as the connected factory, the Internet of Things, next shoring, and 3D printing. It’s also hard at work making sure it extracts the maximum productivity from existing facilities, which traditionally has been accomplished by using automation and IT resources. According to Aberdeen, the need to reduce the cost of manufacturing operations is now the top reason companies seek more insight from data.

Quality control has always been an area where statistical methods have played a key role in whether to accept or reject a lot. Now manufacturers are expanding predictive analytics to the testing phase as well. For example, tests on components like high-end car engines can be stopped long before the end of the actual procedure thanks to predictive analytics. By analyzing test data from the component’s ongoing testing against the data from other engines, engineers can identify potential issues faster. That, in turn, maximizes the capacity available for testing and reduces unproductive time. That is only one of the many applications manufacturers find for predictive analytics.

Innovations on the shop floor

Predictive analytics provides an excellent opportunity for COOs and operations managers to extract additional value from production assets. It can also be an opportunity to create critical differentiators in the way products are created and delivered to customers – by providing it as a paid service (predictive maintenance) or as insight (predicting future electricity consumption).

However a company chooses to use it, predictive analytics can be the key to beating the competition.

Gather more insights from MIT experts on how to differentiate your organization in The Digital Economy: Disruption, Transformation, Opportunity.

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Pierre Leroux

About Pierre Leroux

Pierre Leroux is the Director of Predictive Analytics Product Marketing at SAP. His areas of specialty include Data Discovery, Business Intelligence, Cloud applications, Customer Relationship Management (CRM), and ERP.

Swiss Coalition Plans Green, IoT-Powered Cargo System

Robin Meyerhoff

“Switzerland is not famous for its big cities,” said Daniel Wiener, a board member of Cargo Sous Terrain, an organization that is developing an underground transportation and logistics system for Switzerland, “but if you look at the northern part, it’s estimated that there will be 10 million inhabitants in the next 15 years—a similar population to Los Angeles.”

He continues, “We have traffic and logistics problems similar to big cities. And while Switzerland has great infrastructure, the quality of logistics is not at the same level.”

Cargo Sous Terrain aims to change that and create a “world-class infrastructure for logistics” by 2040. Cargo Sous Terrain is a coalition of private companies that plans to create a network of underground tunnels that will connect major cities throughout Northern Switzerland. The goal is to build central logistics hubs in cities for goods that will allow companies to easily deliver them across the country.

Speaking at SAP Leonardo Live in Frankfurt earlier this month, Daniel explained that besides the increasing population, Switzerland expects a 37 percent increase in freight transport over the next 20 years. Cargo Sous Terrain believes that its 24×7 delivery system will reduce road congestion by as much as 40 percent.

Cargo Sous Terrain’s plan for the tunnels reads like something out of a science fiction novel: Driverless wagons will move goods from one urban hub to another. Then the items will be loaded onto vehicles powered by electricity, to reduce the carbon footprint, and bring them directly to people’s houses. Eventually, Cargo Sous Terrain hopes that driverless cars will take over this last stage of package delivery. Even better, the entire operation will be powered by renewable energy and hopes to reduce carbon emissions by 80 percent.

To manage this vast transportation network servicing millions of citizens, Cargo Sous Terrain digitized its operations. Because the wagons—and much of the underground system—will be unmanned, it’s critical to have a technology solution in place that can monitor for any technical or scheduling issues. With the technology, Cargo Sous Terrain is building a solution that harnesses Internet of Things and machine-learning technologies to help ensure operations run smoothly and deliveries arrive on time.

Daniel, who also heads up the organization’s communications, investor relations, and corporate social responsibility, said “People now expect to get things on demand. We need to guarantee an exact arrival time. For example, if they order tennis shoes to be delivered by 3 pm tomorrow, we can only guarantee that if we have automated processes from end to end.”

The automated system will integrate sensor data from pallets and wagons into the overall logistics and delivery mechanisms Cargo Sous Terrain is building. A digital innovation system will help operations managers do intelligent, real-time route planning and predictive maintenance to make sure packages arrive on time.

As the project matures, Daniel expects that machine learning will help logistics managers better anticipate how factors like weather or item weight will impact delivery and autocorrect issues before there is a problem.

Dr. Uwe Kubach, chief evangelist of IoT at SAP, has been working closely with Cargo Sous Terrain. He explained, “In urban IT projects we often see IoT information in siloed applications. For example, information from street light sensors is only in street light management applications. The same is true with traffic information. It makes it difficult to bring it together with data from other sources and then apply machine-learning algorithms against them.”

He explains, “Cloud computing can connect all these sources so you can use analytics to find patterns, and machine learning to take corrective action.” Cargo Sous Terrain aims to create an IT foundation and the applications required for integrated city logistics that will address the challenges of urbanization and congestion in Northern Switzerland. For example, cities like Beijing and Buenos Aires are using IoT solutions and a cloud platform to address problems like traffic management and flooding.

Currently, the Cargo Sous Terrain project is in the planning and “get shovel-ready” stage. Construction is expected to start in 2024 through 2030; and the network is expected to expand across Switzerland.

For more on how IoT could drive future innovation, see How Thought Leaders Envision The Future Of IoT.

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Robin Meyerhoff

About Robin Meyerhoff

Robin Meyerhoff is the Senior Director, Content Team, Global Corporate Affairs, at SAP, responsible for telling key corporate stories via multiple formats: cartoons, video, infographics, opinion pieces. Lead integrated internal-external approach to rolling out content, including comprehensive editorial calendar, regional coordination and alignment with key business objective.

Are Wholesale Distributors Really Technology Laggards?

Judy Cubiss and Ginger Shimp

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) Technology podcast, caught up with Karen Lynch, vice president, global wholesale distribution industry business unit, SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.

Until recently the industry has been a self-proclaimed tech laggard. But …

we live in a society exquisitely dependent on science and technology

Digital transformation is becoming incredibly important in the wholesale distribution industry.

they want to become more innovative

The Amazon standard

Companies like Alibaba and Amazon are significantly changing the game for wholesale distribution. They are delivering immediate innovation in response to consumer demand. So how do wholesale distributors address these challenges?  Listen to a sound byte from the podcast.

SMAC Podcast

The first step that up-and-coming distributors are taking is to lay a foundation for technology and customer interaction. Many of their existing systems are homegrown and the people who can maintain them are retiring. So getting core business processes that are standardized and stable is critical to having a stable digital core on which they can build.

Their new hires mirror the type of technology they are trying to implement; in short, they are employing people who are younger than ever. The hope is that these young people will understand forward-thinking technologies more readily. Lynch explains, “What wholesale distributors are working towards are customer-facing solutions, because as their employees are going to be getting younger, you can imagine their customers are as well.”

The average age of a Sam’s Club member is likely much higher than the average age of the Amazon shopper. The overall objective of employing these new technologies is the change of the normally business-to-business (B2B) world of wholesale distribution into one that more resembles a business-to-consumer (B2C) experience.

Looking at industry leaders like Amazon, we can see that the experience of the platform is just as important as the products that are being marketed there. People expect the same sort of experience at work that they have at home, and until recently most distributors have not been able to provide this kind of experience to their customers. However, new e-commerce and omnichannel technologies are beginning to gain prominence in wholesale distribution. The implementation of these technologies will move the customer experience forward in this industry.

Walk before you run

The widespread nature of distribution lends itself to any technology that improves the ability to do remote business.

the ability for their sales reps to access in the moment data on a mobile device is critical

Mobile is currently a high priority for wholesale distributors, as they have hundreds of sales reps out working with their customers. But the need is not limited to just sales. Lynch explains, “What we’re finding is that their workers want to be able to have very simple, easy-to-use solutions, and they want to be able to execute transactions on an iPad.”

A distributor that can access and organize data through a branded lens will have a leg up on its competitors. For example, suppose a distributor receives social media feedback from a franchise product within its retail structure. That distributor immediately forwards this information to its network of sales representatives around the world. All these reps, regardless of location, are able to update their talking points when in conversations with customers. This is the same advantage that a cloud-based security package with automated updates gives to a retail company with multiple servers.

The Internet of Things in wholesale distribution

Distributors also are beginning to investigate the possibilities within the Internet of Things, but it is still early days. Applications in which wholesale distribution companies can use data collected from sensors and provide insight to their customers, who in turn can be more proactive and then profitable, could be game-changing. Currently, however, there is more focus on mobility and the customer experience.

Branding and wholesale distribution

Wholesale distributors have never worried about a brand in the same way that consumer product companies have. Wholesale distributors are often some of the largest companies that people have never heard of. But that is changing. More distributors are bringing on marketing executives, a move that would have been completely unheard of a few years ago. They understand that distribution platforms now need to market themselves, not only to attract the best customers in their industry, but also to get the word out to help with recruiting and retaining the best employees.

Fortunately, social media makes branding easier now than in any previous business generation. As Lynch points out, it’s as simple as “… getting blogs out on LinkedIn, getting Facebook posts out there so that people can understand them, and so that they can be top of mind to people who are scrolling through the Internet.”

Don’t be a technology laggard

The biggest and best wholesale distributors are forward-thinking in terms of technology. Distributors in this B2B industry are really acting more like a B2C industry, because their customer expectations have changed tremendously over the past few years.

To listen to this episode of Digital Industries for the wholesale distribution industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the wholesale distribution industry, visit us online.

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Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!

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