041. Idea – Future of Asset Identification and Management
Welcome to EECO Asks Why. Today, we have a fun idea episode where we’re going to be talking about the future of digital asset optimization and to help us walk through this conversation, we have Andrew Hastert, who is the director of channel partnerships at Rockwell Automation. So welcome Andrew.
Okay, thanks, Chris. I’m excited to be on your show.
Excited to have you. I really appreciate you taking the time with us today. Looking forward to this conversation. When you hear the term digital asset optimization, for our listener that may be new to this topic, can you break that down for them?
Sure. You know, a manufacturing facility is a collection of assets that in goes raw material and out goes the finished goods. I think we all know that. What’s changing and why this is so important right now is that machine on its own is not very valuable to a plant. The machine requires humans to go and operate those machines and optimize how they operate and what comes out of the machine.
So there’s a digital aspect of that and the human aspect of that. And what’s changing is the human piece. Pandemic has only accelerated the challenges that industrial facilities have had relative to generational workforce gap and workforce turnover. And out is walking a generation of knowledge from the plant that knows how to make those machines run and how to optimize them.
And that’s where digital comes in. Right? We’re seeing companies more and more invested in digitizing their assets so that they understand what they are, how they work, how to optimize them, so that as three people retire and one step in that one stepping in can on day one, get to know how to run that equipment and optimize it.
There’s more to it than that, but I’d say generally asset optimization is all about digitizing the assets, such that new people can step in and make it work and make it Excel.
Right. And I know Andrew, we’ve heard a lot through our episodes and recordings, we’re hearing just what you’re saying, that retiring workforce and that that knowledge is leaving these plants.
And then that ramp up time to get the new employees up to speed is getting longer and longer sometimes. But with this approach, you’re taking it back Delta direction, right?
That’s right. And I think it’s a direction that we’ve been headed in for a long time. The pandemic has taken that trendline and ripped it and fast-forwarded in 10 years and pasted it back together.
So we’ve seen this step change of companies having to digitize their assets to get new types of value out of it. Because there’s frankly less people we’re able to go work in the plants. And unfortunately, it’s a more dynamic workforce. You know, you’ve got people that get sick and infect others, and suddenly you need to quickly get new workers into the environment, or you need to space them out more.
The nature of manufacturing has shifted pretty rapidly and that trend towards digitalization of assets has accelerated very quickly.
No doubt. Absolutely. I mean, it’s challenging all of us to think differently and you know, there’s some technology out there, Android it’s you’re seeing companies jump on or, or try to learn more about right now immediately to make the biggest impact. What would those be?
Well, it starts with the assets themselves. Once upon a time, you’d go into a manufacturing facility and the asset was a machine or a line or a small skid, and those machines are more and more getting connected to themselves with the devices on those machines. There’s input devices, there’s logic, there’s output.
The devices themselves now have a digital capability. They have an IP address. They can connect to each other. They can connect to a central system in the plant. They can connect to the business system. So the first stage of technology is this digitizing the assets themselves with the devices on the equipment.
The next stage is applying some sort of software environment such that you can capture those assets and monitor them. You can characterize them, and you can support them long-term. And then there’s of course the cloud, which is getting the data out of the plant and based on your contextualization of those aspects.
And if you get it into the cloud, you can get a whole lot of data into the cloud and you can then apply things like AI and ML and remote managed services to get more value out of that data, once you contextualize it and pulled it out. And, you’ve got a couple of things compounding this neat opportunity.
One there’s more connected devices than ever before. We believe there’s somewhere over 3 billion devices in the industrial sector that have the ability to get connected. And then you’ve got those devices creating more data than ever before. You remember old computers had megabytes or 80 gigabytes of storage space.
The cloud is terabytes and petabytes of storage capacity. And these devices suddenly are creating terabytes a day of data. So now that you’ve got more devices and more data. There’s that middle piece of contextualizing data that becomes critical to getting value out of it.
Right. Absolutely. Great points here. I like that the three points that you put out just to recap for our listeners. So basically, you have a lot of these digital type of devices now that you need to apply the software to, so that you can actually capture and monitor what’s going on at the device level.
But then you mentioned AI and ML. Can you explain that for our listeners? What you’re talking about there?
Yeah. So, AI and ML are really just mathematical means of taking data and coming up with new conclusions and AI and ML happened to use, you know, advanced algorithms and new types of math to come to those conclusions.
They also happened to be good at parsing large sets of data, and either making context where there is none or based on past events, finding what future events are going to occur. And so now, if we were to talk about some of the types of value companies are getting out of their data from their digital assets, an example is predictive maintenance, right?
If you can notice when a machine failed in the past, And, you’ve got a bunch of inputs and terabytes of data associated with a past failure event. Machine learning’s really good at watching those same inputs and predicting before it happens when it’s going to happen again. And, you know, some examples included like vibration monitoring on a, on a motor.
Just by seeing a certain vibration profile you can with ML, see when a motor or maybe the mechanical system that’s attached to is it going to fail in the future. Another example, and this is probably more of a new trend than a existing ones today. Using data to detect anomalies well before they occur and a new use cases, cyber security. Just imagine seeing all the data sets in a plant floor and the business system it connects to, identify anomalies that suggest somebody intruded the plants or gotten a unique access from the data from plant.
You could detect that as the cyber security anomaly and challenge the IT folks and hone in on that issue. We are actually helping companies today solve that what we call anomaly detection problem so that we can stop a cybersecurity incident well before it proliferates across an enterprise.
Right. I mean, that’s such a big key right now because everything is connected. Right? And so you’re increasing that risk potentially into plant. So taking a proactive approach for cyber security is, is critical. And, and I love the machine learning example that you gave from a predictive services standpoint for that vibe monitoring. That’s a service I used to be heavily involved with here at EECO and that technology has really evolved.
Hasn’t it over time, just going from the handheld, data collectors that still have their purpose, but the continuous monitoring that the technology offers today has really grown leaps and bounds. And to add that machine learning into it, the plants, it just, it’s making them that much more reliable and safe and efficient and all these things, you know. Great, great examples there. Are there any other services that you’re aware of that manufacturers should start considering if they want to get ahead of the curve?
Yeah, two other things to think about. So one would be cybersecurity and then another would be predictive maintenance, you know, a third would be maintenance optimization.
And what that looks like is once you’ve identified all the assets in the plant. And you’ve compared that to your storeroom. You’ll notice that you’ve got some gaps in critical inventory. You also usually have some excess, critical inventory. You know, you’ve got those stash items that have stuck in the storeroom or stuck in your closet for years and that you don’t need anymore.
And then you’ll find that you also have recurring reliability challenges with certain devices or certain machines. And if you can map those things together, what’s installed what’s in the storeroom where there’s gaps, where there’s excess inventory and where you have recurring reliability issues.
You will have an opportunity to optimize what’s in store in the facility. And that could be, you know, to the tune of millions of dollars stored. And just taking that down by 10%, you could reduce carrying costs by a lot of cash in the given year. Similarly, if you can reduce some of those recurrent reliability issues, just by understanding what’s installed and where you’re cycling products through the storeroom, there’s again, a major uptime improvement opportunity.
The fourth is around performance optimization. If you could imagine capturing all the assets and understanding how they’re impacting productivity. A 1% improvement from a performance standpoint suddenly becomes a really big number as you look at an enterprise. And we look at the 1% problem. If you’re looking at a billion-dollar manufacturing company and just for comparison, Rockwell’s an almost $7 billion manufacturing company. So, you know, we’re not that large relative to some of these bigger firms and the consumer-packaged goods in the life sciences space. A 1% improvement for a billion-dollar company and things like cost of goods sold yield a $5.8 million dollar cost improvement.
Or if you improve asset utilization by 1%, a $1.7 million cost improvement. So you can see how that scales to a very large industrial company. These are very large impacts just by improving performance by again, understanding your assets and applying some information to improve on things like asset utilization and cost a good sold.
Very good. Well, thank you for that. Now I like to walk back to the maintenance optimization piece there. Cause when you’re talking about gaps versus, you know, the critical inventory. And how to do that. I’d like to break this down for our industrial listeners that are out there. Okay. That sounds great.
But where do I start? So is this starting with like an installed base evaluation where you’re understanding what’s on the plant floor versus what’s in the storeroom and doing a gap analysis. Is it that simple to get started?
I think that’s a great idea. And I know EECO offers those services. Just going into the facility, evaluating what you have installed versus the storeroom and figuring out where you’ve got min and max gaps or inventory gaps. Having EECO come in and do that as an amazing step one. It’s going to reveal a roadmap where you can find other ways to get value out of the plant.
Right, now say that’s been done. And let’s just say that the industrial manufacturer out there they’ve done that IBE and they want to take it to that next step of, you know, performance optimization that you’re talking about. So can you give us a little more, from a map standpoint, where should they go next?
They got the IBE. They got the data there. They know where their gaps are. Is there any low hanging fruit that they should look at from a performance optimization standpoint to really jump forward?
You know, I think at that point when a company is thinking about how do I scale the value I’m delivering or scale the results I’m achieving. I think it’s important to pull together a diverse set of people to the table. They ask what our biggest challenges are and what our biggest opportunities for performance improvement are. Because if you look at any given company and you look at the potential objectives they want to achieve around throughput improvement, ProfEx, cost reduction, asset valuation reduction, asset optimization.
I think they may have goals around one, two or three of those at any given time and challenges related to any of those at the time at any given time. I think it’s important to get, you know, folks like operations, IT, EH and S, maintenance, engineering, and others to the table to ask what are our biggest challenges and what are the biggest opportunities for improvement?
There’s a lot of, A lot of ways to attack that problem. I think it’s smart to get a consulting firm in to help pull that team together and ask those critical questions. Because when you reveal your biggest opportunity for improvement, you can focus on it.
Right, now from the manufacturer standpoint, I have somewhat of a related question here. Who would be the typical owner or the champion of, of a project like this or, or looking at that, or is there a certain group within the plant that typically, you know, would be in charge of “Hey, we need to understand maintenance optimization, performance optimization. We want to get better.” Is it a cross mix or is there typically one select group of people that, that typically lead these efforts?
Most successful pursuits we see, or when a company is trying to tackle problems like this is when they get a multifunctional cross-discipline team, because usually the investments required to address the challenges as well as the rewards associated with those challenges, impact or involve a lot of different people. A lot of different groups.
Generally speaking, and maybe historically speaking, we see operations, plant operations leading these sorts of pursuits, but more and more we’re seeing that shift to these new digital and IT functions because it’s the digitization of the assets of the plant infrastructure and even connecting people across the enterprise, into the carpet and space of the company, into the plant’s operations is what’s yielding all this new value.
Especially right now, given we’re in a pandemic, people really can’t be on site. In the plant, and not all people, right? You, you may have some critical, essential workers in the plant, but you’re going to have a bunch of folks that are outside the plant that want to plug in and provide value and access the information. Digitization has become a lot more important recently, and it’s afforded an opportunity for that multidisciplinary approach, but IT and digital teams seem to have a heavier hand in these projects than operations has in the past.
No doubt. And I guess it’s still, so there’s a gap there. We’ve talked about this in the past too, about there’s a language barrier sometimes between digital IT and Operations. So, how have you seen the best practices to bridge that barrier, or help operations explain to IT what the process, if you will, and vice versa?
IT and OT has long been challenged to align and find common objectives and common language and common tools to solve problems. You know, Rockwell actually has a consulting practice and a partnership with other consultants. This is the number one reason we’re pulled in is to bridge that gap between IT and OT and help the two teams come together with common objectives.
So I think a consulting engagement is a good way to get alignment within the organization, but whether you have the consultants or your own internal team, ultimately, it’s mostly important to align the organization on some common objectives. And then you can get a common approach to attacking those objectives.
But I think there’s often things lost in translation between IT and OT. And there’s also that struggle around budget. You know, who’s going to get the money to spend, to address these issues, but I think alignment around objectives and alignment around the approach to attack them is the best way to get a conflict reduced and maximize the opportunity for improvement.
Yeah, no doubt. I mean, that alignment is key. You know, we have to all be working well, if we all understand the goals where we’re trying to achieve, you know, and bring everybody together and also listen, let everyone be heard, let their points be made. So I kind of want to go back a little bit to where we started the conversation about there’s a lot of challenges, right?
In the industry right now, that’s leading towards the importance of digital asset optimization because you know, quite frankly, people are retiring the reaching that age, a lot of knowledge is leaving the plants. So, how do you think, this could be addressed from a talent and a culture standpoint?
Well, talent is such a big issue, especially since the pandemic started. Talent is a massive issue. And I think it’s interesting. We’ve talked for a long time about how people and process and technology come together to deliver results for a company. You know, people can’t be removed from that equation.
And I think the pandemic has proven that out tenfold, right? Without people, companies are really struggling, unless they’re digitally connecting people into the process. But I’d say talent is the biggest challenge. Every company is I think, going to shift into becoming a human capital company where the amount of talent it has in the organization, the level of engagement and the level of development in their company’s ability to retain that talent is going to become it’s differentiator versus traditionally it’s IP and technology that, that causes companies to be valued the way they are. I think talent and human capital is going to be more and more what guides companies’ evaluation and sustainability.
There’s not only the challenge around keeping people engaged in business right now. I think that’s compounded by, at least in the industrial sector, there’s challenge around there not being a lot of women and people of color that are able to get recruited and retained in the sector. And this is not just an industrial issue. This is true for all segments. If you look at North America, despite there being 51% of the population, female, only 10% of the top management positions of S and P 500 or a fortune 500 companies have women in top management positions. 10% of top management positions are held by women. Only 5% of CEO roles are held by women. People of color statistics aren’t good either.
And I think this issue has been compounded during this pandemic. I saw a study recently that said 88% of working moms were significantly more stress then before the pandemic, which is a bit of a surprise. Well, one might say it’s, it should be a hundred given what we’re all going through right now. And there’s also a challenge around the ability for women and people of color to work remotely.
There seems to be some disparate challenges for those groups. 20% of black employees and 16% of Latinex employees have the ability to work remotely, which means, you know, a significant number of them are either out of work or are very challenged to be able to stay employed, given the large percentage of jobs that can’t be worked remotely.
That big challenge I think we have is relative to including and engaging women and people of color in our sector. I think it’s a challenge as a sector, every company, and it has to agree to overcome.
Yeah, I agree. I mean, are there any steps? We we’ve talked a lot about this topic, particularly we just had finished a Women in Engineering series and that that’s out for our listeners. Hopefully, if they haven’t heard that yet. They can go back and check that out because Andrew, many of the women we spoke to address this directly and head on. You know, a lot of the statistics that you covered, they went through as well. And then one lady mentioned how, you know, she went to a major manufacturers event and just how out of place somewhat she felt because the low number of women there.
Right. So, I mean , having these conversations definitely helps, but you know, any ideas, what are you seeing from maybe some of the best companies out there that are they’re opening up their minds and changing some of the, the way their strategy to, to be more accepting with their culture and trying to, to shift their culture rather. Are you seeing any types of behaviors or activities that you like?
Absolutely. And I I’d say first hats off to you. For in your Ask Why series having a, a series dedicated to women and industry. I think that on its own is helping elevate, women and, and the elevate, the issue associated with underrepresentation of women and people of color in industry.
So, so hats off to you. I think you’ve got an awesome start at that. I would offer, you know, maybe that introspect with Rockwell, you used the word culture. We saw that this issue could not be solved with metrics and data alone. We couldn’t compliance our way or policy or way, or our train our way into this solution.
We needed to address the culture head on. And I think what we acknowledged is frankly, we had a, a white male culture, because we have like a lot of companies, white male in the dominant group from a representation standpoint, especially in the leadership ranks. And it was about 10 years ago, our senior leadership agreed.
We were going to go on a culture of inclusion journey and we were going to get very intentional and making sure that the dominant group is these white men, leaders would personally take it on themselves to make sure that they build a culture and change the culture to be not only accepting, but celebrating people that are different. People that not only are different with race and sex, but different in general. We needed a culture that celebrated people for the differences and also fostered an environment where women and people of color to get ahead, to get opportunities could get into leadership roles. And we’ve, we’ve made progress in that front. I think we still have a long way to go, but we’ve, we’ve been making progress. We were awarded a few years ago by the catalyst organization for not the, the end state of our journey, but rather our progress and our commitment to making more advancements, especially for women in the workplace, but I think we still have a long way to go.
Absolutely. I mean, well hats off, I mean, you’re a leader. You recognize the importance Rockwell does of making that a priority. And through that behavior, I mean, you’re going to impact other companies.
I mean, that’s great. And I mean, just, we had a couple of guests, through the women’s series. They, they mentioned small things like, you know, company, social events, you know, not have them so custom tailored to, quite frankly, just male type events. Right? So, I mean, a lot of people think about from a sales standpoint, you, you go golfing or, you know, there may be, you know, ball games and things like that.
Not everything like that is conducive for women. And it doesn’t really align well. And particularly if you have post-work thing, sometimes it’s hard to get childcare lined up and things like that. So they were, they were encouraging companies to think, you know, think outside the box, think differently.
What can you do for that inclusion? To, to really bring everyone together. So I mean, it hats off to it, to you and, and Rockwell and for, you know, taking a lead here. Cause this is a definitely an important topic.
Thanks, Chris. I agree. I think there’s a couple of areas we’re concerned about right now. And one would be working moms or, or working parents caring for somebody with disability. The pandemic has introduced unique challenges for those folks.
I think society and, and sometimes culturally, you know, people placed childcare on the mom and the family unit and it’s causing a disproportionate disadvantage in the workplace right now. So that’s something we’re worried about. Some things we’ve done to maybe address the challenges women face a couple years ago, some of our leaders started what was called a Women in the Field Employee Resource Group.
And, we’ve had a couple of large employee resource groups. This one in particular address, the unique challenges of women working close to our customers have the travel, you know, having to, if you could imagine that nurse while visiting customer facilities, it’s it’s a big challenge that on its own.
And, we also created what was called a Women in the Field Allies Group. So this is for men who wanted to ally and advocate and support this Women in the Field Employee Resource Group. You’d be surprised by the number of men that raised their hand and said they wanted to get involved and, and the progress that we’ve made since it’s pretty neat.
So we have a long way to go, and then there’s still a journey ahead, but I’m excited about the progress we’ve made.
I am too. I mean, I think this is important sidebar to our topic to address head on and talking. I appreciate you Andrew being so truthful and honest for our listeners. I think it definitely resonates with many of them and, you know, tying it back to digital asset optimization.
You know, we’re trying to create a space where we can open these channels for people, of any origin to come and work inside industry. And it feels, you know, feel needed to feel a part of a team. You know? So if somebody is that they’re listening to Andrew and they want to really invest in themselves and learning and education, where would you point them if they wanted to enter this industry around and get better at digital asset optimization?
Yeah. If you’re wanting to get started on this digital asset optimization topic, I think you want to start with somebody you trust helping you identify the assets since you have installed. And somebody like EECO certainly can help with this. You know, either through an installed base evaluation or similar. If you’re worried about cyber security, I know EECO has services around threat detection and risk assessments for cyber security.
I think that’d be an important first step too. You’d be blown away by the number of old XP machines that are out of support and very vulnerable to cyber security threats. On that topic, by the way, I think your listeners have heard about NotPetya. You may have even brought it up in a past episode, that large cyber security event that took down a bunch of industrial facilities a few years ago. They estimate there was a $10 billion impact with the NotPetya event. It all started with the corner of one company’s operations and one little computer in Ukraine that got infected and it’s spread across the entire enterprise for a bunch of large companies that knocked them out from production for months or so some cases weeks, but many cases, months.
I think identifying the assets so that you can understand the risk associated with them is step one. And I would start with calling EECO, to get you started getting the journey.
Very good. Andrew, this has been a fun conversation full of, insight and wisdom for our listeners. And we always try to wrap the EECO Ask Why up with the why. We get to that, to that purpose, that passion.
So if you’re an industrial end user out there, and you’re listening to this, and you want to understand the reason why, what would you say? Why should they embrace some of these technologies so they can grow in the future?
Well, I think there’s an extrinsic and an intrinsic why. I think intrinsically we all want to make and leave an impact on this world. And I think there’s no better way to do that. Then help our respective organizations advance and progress and evolve and perform and grow. And sustain for a long period of time, right? So I think there’s that intrinsic value of personally making an impact and raising the bar.
And then there’s the extrinsic value of reducing your company’s risk so that, you know, you’re not part of the problem when the next cyber security event happens, as well as increasing your performance. So you can meet objectives and you don’t get bonuses and all that stuff. I think that’s the why.
The intrinsic piece around leaving a lasting impact, I think that’s something you can feel proud of for the rest of your career. That’s certainly what motivates me less than the less the bonus and the, the financial impact piece.
Yeah. I mean, those are nice, but you’re right. Making that impact. Understanding the greater purpose is so important. So, Andrew, this is. This has been phenomenal. Thank you for taking the time with us on eco S why today and for all the information you unpack for our listeners.
Hey, thanks for having me.