Are You a Leader or a Follower: Driving Toward Operational Excellence

Looking Over Your Shoulder

We’ve all had it. That feeling of getting ahead in your business strategy just far enough only to stop and think – what’s everybody else doing?

It’s not a great place to be in. We’re taught to innovate and keep our eyes straight-ahead, focusing on our own work. But imagine how invaluable it would be to know what all the other food and beverage manufacturers are thinking, specifically how the best of the best operate.

How Leaders Get it Done

A recent study from The Aberdeen Group gives an inside look into what true leaders in the food and beverage industry focus on to achieve operational excellence. It’s centered on three key areas to achieve business success – production efficiency, product quality and safety and sustainability costs. Among the 170 food and beverage manufacturers surveyed, there were multiple key findings:

  • Leaders in the food and beverage industry reported a 20% higher Overall Equipment Effectiveness (OEE), 47% fewer delayed shipments as a result of quality issues, and 5% reduction in waste to landfill.
  • Followers experienced an increase in energy consumption and zero change to wastewater costs, while leaders saw double digit improvements.

The gaps between the leaders and followers are pretty impressive—creating an opportunity to learn what the leaders are doing to stay ahead. What are the key factors that drive operational excellence? Download the full report here to discover more examples of the four key performance criteria to distinguish leaders from followers.

Download the Report

How They Do It

Executives in the food and beverage industry are generally managing enterprises that are asset-intensive, at the mercy of global commodity market and face both low margins and high demand visibility. Given these industry characteristics, companies must find new ways to achieve operational excellence.

A key finding in the study distinguishing leaders from followers has to do with decision making.

The Aberdeen Group found that not only are followers less efficient and less likely to meet delivery targets, but they also take almost a full day to respond to shipments with quality issues. This greatly limits their ability to minimize disruption and identify a root cause. Without the ability to track and trace shipments quickly, the risk and impact of recalls can be substantial.

According to the study, leaders are also 48% more likely to use analysis to improve operator productivity. By monitoring the data they can assign operators to complete tasks in real time as changes occur within their operations. This has a real impact on production efficiency.

Become a Leader

The report concludes with seven strategies to execute on your quest to leadership. The first step is to improve the flow of manufacturing data across the enterprise to increase visibility and optimize performance.

The bottom line is that the leaders surveyed are employing operational excellence initiatives with modern technology solutions. They’re digitizing their production processes to turn information into actionable insight—combining people, process and technology to move the operational excellence needle in the right direction.

In order to get there, however, it takes time and discussion. At our solution-focused annual user group, PIB 2016, we spotlight challenges and host breakout sessions to inspire conversation. The event includes success stories and presentations from a wide array of industries including manufacturing, food and beverage and many more.

Check out our operational excellence track of the PIB 2016 agenda today.

Learn More about PIB 2016

What We Can Learn About the Internet of Things from CES 2016

The Consumer Electronics Show (CES), held every January in Las Vegas, has been an integral part of the technology industry since 1967. The event is famed for introducing many ground-breaking technologies to the world– from the VCR in 1970, to Blu-Ray in 2003.

But this year, the Internet of Things (IoT) took center-stage.

According to Fortune, there were “thousands of square feet devoted to connected gadgets like Wi-Fi enabled TVs and lightbulbs you can control from your phone.” And amid the hyper-connected conversations, some IoT trends for the coming years were highlighted.

In fact,  of Fortune said that one trend spotted at CES was the IoT being viewed as a service instead of solely devices.

“This year, there was a subtle shift from building the device to designing services,” said Higginbotham. “A number of larger companies showed off connected products including Procter & Gamble with its Internet-connected air freshener that ties in to connected Nest Thermostat to spray air freshener to the optimal time to take advantage of your AC fans blowing air around your home.”

And Agence France-Presse of Industry Week  said that — after smartphone and browser wars– the war is now to be the “hub that connects the millions of connected objects” in our home or our lives. France-Presse dubbed it a “battle for digital life” and said it was ever-present at this year’s CES.

Interestingly enough, Higgenbotham also said that very few IoT demonstrations even mentioned obsolescence.

“Between the Samsung refrigerator with what looked like a giant Android phone in the door and a demonstration of a concept car with 3D street view delivered on-demand while driving, I realized that few people were talking about how to swap out or fix the techno-heavy innards of these connected devices without having to replace the entire product,” said Higgenbotham.

Another trend at CES? Internet-connected vehicles. According to Industry Week, numerous carmakers unveiled systems that connect not only to mobile devices, but to home networks– “enabling users to tap smart appliances or garage door openers, for example.”

And here are a few other notable stories from this week.

The Cloud and the Internet of Things are Inseparable

Speaking of CES 2016, Information Week said that like many of the Internet-connected devices shown off at the show, the Cloud is an inseparable part of IoT devices.

“Indeed, most new devices, from refrigerators to cars, have a massive cloud-based back end. The cloud components of these technologies are becoming more systemic. Indeed, the cloud is assumed,” said David Linthicum of Info World.

As time goes on, people expect more things to be connected. And Linthicum said that no matter what it is –a house appliance, a car — it will communicate with cloud servers.

Read more about the link between the Cloud and the IoT.

Star Wars Reveals a Dark Side to Cyber SecurityStarWars

If you haven’t been living under a rock for the past couple of months, you’ve probably heard that a new Star Wars movie was released — “Star Wars: The Force Awakens” to be specific.

And while millions of people flocked to the theaters to enjoy the seventh movie in the saga, Raj Patel pointed out a deeper takeaway in a recent article. After watching all seven films, Patel noticed that cyber security is an issue we should pay attention to– whether in this galaxy or one far, far away.

Patel said that lack of encryption, unsecured ports, and more are just some of the similarities. Read more here.

Media We Link To:

“The evolution of the Consumer Electronics Show” – Mashable 

“The 6 Things CES Taught Us About The Internet of Things” – Fortune 

“CES: Battle for Digital Life Grabs Center Stage” – Industry Week 

“The cloud and the Internet of things are inseparable” – Info World

“‘Star Wars’ reveals dark side of cybersecurity” – Crain’s Detroit Business 

How’s the Weather: A Test-Bed for Technology

Let’s talk weather. It might be one of the most basic exchanges of small talk, but recently it’s become even more.

According to Jamie Carter of TechRadar, it’s becoming a test-bed for modern technology such as big data, the Internet of Things (IoT), and even cloud storage.

The data mostly comes from “weather stations, observation systems at airports, meteorological satellites, ocean buoys, ships, aircraft and – most recently – personal weather stations in people’s homes that are connected to the internet.”

Carter said  that if crowd-sourcing weather data is on the rise, (as are sensor-packed smartphones) this can help meet the demand for hyper-local weather data.

With mobile devices and other IoT devices, even the average smartphone owner might be able to give the weather industry more real-time data that can be used to create more sophisticated weather prediction models.Weather-Data

Who doesn’t want a more accurate look into the weather? You can’t predict the nastiest of extreme weather patterns, but we might be getting closer.

The IoT even offers different, cheaper ways to collect weather observations.

“Existing observation networks are limited in number but highly calibrated, because they’re expensive to run and operate,” said Charles Ewen, chief information officer at the Met Office in the TechRadar article. “However, the IoT offers a high density of observations of an unknown quality.”

And analyzing weather data isn’t just convenient for knowing when to wear raincoat. Per Nyberg of InformationWeek said that “early, granular, and accurate” weather reports could benefit everyone from healthcare providers to retailers.

“Granular and early forecasts can create business opportunities — for example, alerting a brewery to supply distributors and points-of-sale greater inventory in anticipation of an unusually warm spring weekend in the Northeast,” said Nyberg. “Or suppose a blizzard is due to hit Atlanta on Black Friday — with enough notice, retailers could adjust their plans.” 

Per Nyberg, InformationWeek

Of course, Carter notes that while predicting weather has always been about clouds, it’s now also about the cloud. He said the cable TV company, The Weather Channel, used about 13 data centers and generated a whopping four terabytes of data an hour. But by using the cloud, The Weather Channel is now processing a predictions “in milliseconds, and every 15 minutes rather than once per hour.”

Here’s a few other stories from this week worth noting. 

Should Banks Prepare for the IoT?

A recent report from Deloitte has shown some major potential for the IoT in both the retail banking and capital markets. According to Christopher O. Hernaes of TechCrunch, because banks rely on data for risk management and credit analysis.

“In addition to adding new data sources to credit scores, sensor technology could revolutionize loan collateral tracking and balance sheet reporting for both SMEs and corporate clients,” said Hernaes. “Imagine the possibilities for real-time monitoring of inventory or livestock for manufacturing and agriculture segments. This would potentially enable banks to perform automated and near real-time balance sheet reporting.” 

In addition to banking, we’re already seeing “smart” payments like with Apple Pay. MasterCard is apparently even allowing payments through the fitness wearable, Jawbone.

Continue reading this post from TechCrunch.

4 Network Requirements for the IoT

According to Ben Rossi of Information Age, the hype over the Internet of Things is full-speed and not going to slow down any time soon.

Rossi said there are four important network requirements for enabling the IoT before taking advantage of the transformations it has to offer:

  • Broadening the horizons of the network’s visibility
  • Determining your IoT fit
  • Smarter feedback for smarter decisions
  • Defending “dumb devices”

Read more about these here.

Know Thy Enemy

A recent article by Edward Jones of Entrepreneur suggested a new kind of cyber security strategy– hire a hacker.

If this sounds unconventional, you’re not alone. If hackers cause so much damage, why would anyone want to hire them?

Jones said there are multiple reasons, however, to consider hiring ethical hackers:

  • Everyone’s under cyber-attack
  • Ethical hackers spot vulnerabilities
  • Can be worth the money in the end

Read more about ethical hackers.

Media We Link To:

“Cloud on Clouds: How Weather Data is a Test-Bed For New Tech” – TechRadar

“3 Ways Big Data Supercomputing Change Weather Forecasting” – InformationWeek

“Banks Should Prepare For the Internet of Things” – TechCrunch 

“4 network requirements to enable the Internet of Things” – Information Age

“Know Thy Enemy, Hire a Hacker” – Entrepreneur

ICYMI: An Algorithmic Economy, Cyber Security Research, and More

Welcome to the Algorithmic Economy

According to analysts at Gartner, global IT spending is expected to surpass $3.6 trillion in 2016, a 1.5 percent increase from 2015.

The IT industry is being driven by digital business– after all, in just five years, 1 million new devices will come on every hour. But it’s also being driven by data and algorithms.

“Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it,” said Peter Sondergaard, senior vice president at Gartner and global head of Research in the report, “Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

For example, Amazon’s recommendation algorithm that keeps users buying, or even Netflix’s that keeps people watching, according to Sondergaard.

And these algorithms are helping companies build their digital business savvy. According to Gartner, CEOs have ascertained that their digital revenue will increase by more than 80 percent by 2020. While 125,000 organizations are launching digital business initiatives now.

Read more about the Gartner report here.

Building the Industrial Internetjeffimmelt

As we mentioned in last week’s ICYMI, Minds + Machines 2015 was a celebration of the Industrial Internet, and host to about 1,000 developers, thought leaders, partners, and media.

In a recent article, Matt LaWell of Industry Week discussed how GE CEO Jeff Immelt’s leadership and vision, displayed during his keynote at the conference, will lead the company to the future of software.

He has lived through the refocusing of the company and its core industrial base,” said Stephen Pavlovsky in the article, an equipment insight leader at GE Intelligent Platforms, “With the shedding of the financial arms, and even the appliance business, we’re really a company built now around infrastructure OEMs, water, oil and gas, transportation, medical.

He’s led that transformation.

LaWell said that in the 30 minutes that Immelt took to the stage at Minds + Machines, he reported a “flurry of numbers” about the future of GE as a $15 billion software company and a major industrial app provider (powered by Predix, an industrial cloud platform).

Immelt also stressed the utmost importance of productivity in industries, or the ability to make decisions, take opportunities and move fast.

“This is just a vision for the future, because I think increasingly in a lot of our businesses where we talk about knowledge of the asset, knowledge of the analytics, building software, putting it in the cloud: When you put them all together, you’re going to have a new business models,” said Immelt in the Industry Week article.

‘Digital Thread’ Unifies Discrete Manufacturing

Speaking of Minds + Machines, Mark Tudor, vice president of information technology at Eaton presented at the conference in San Francisco.

Tudor spoke about how he turned to GE’s Proficy software platform to solve some complex problems– specifically, document management, according to a recent article in Control Magazine.

Since it was once being done in their ERP system where engineering information was being stored, change management was next to impossible.

“Before this software upgrade, if we built something wrong, it was difficult to know; training costs were huge, as were the problems,” Tudor said in the article. “Compliance relied on paper-based traceability methods and analytics were not seeing root causes. We had to store data manually and there was a huge amount we needed to keep for as long as the plane was flying, 30 years or more.”

When data is able to flow between systems easily, better production decisions are made. Thus, the image of a “digital thread” stretching from engineering, to operations, and to shipping. Tudor said that GE Proficy now connects the data to the right people, machines and processes.

To read more from Tudor’s presentation at Minds + Machines 2015, click here.

Cyber Security Survey Reveals New ChallengesFrustration over SCADA Upgrade

A new survey administered by Aspen Institute and Intel Security has shed some light on an interesting perspective of many leaders in organizations.

The report showed that while 86% of information technology (IT) executives see the need for “public-private threat intelligence sharing partnerships” and 76% also said a national defense strategy should be employed after inevitable cyber attacks, the majority of respondents are confident in their existing security.

So while respondents might be pleased with their cyber security efforts, almost half still said that an cyber attack on critical infrastructure could result in loss of life in the next three years.

“This data raises new and vital questions about how public and private interests can best join forces to mitigate and defend against cyberattacks,” said Clark Kent Ervin, Director, Homeland Security Program, Aspen Institute. “This issue must be addressed by policymakers and corporate leaders alike.”

The report suggests a disconnect between IT executives, the respondents, and the current threat landscape. Whether it’s perceived improvements, government involvement encouraged, or that user error is still the number one issue, respondents illustrated this disconnect.

To learn more about the survey, the methodology behind the survey, or its implications, read more here.

Media We Link To:

“‘Digital thread’ unifies discrete manufacturing” – Control 

“Building the Industrial Internet With GE” – Industry Week

“Gartner Says It’s Not Just About Big Data; It’s What You Do With It: Welcome to the Algorithmic Economy” – Gartner

 “New Survey Reveals Critical Infrastructure Cybersecurity Challenges” – Business Wire

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