manufacturing transformation and visibility change lessons learned iot key success factors it\ot...

$: Manufacturing Transformation and Visibility Change Lessons learned IoT Key Success Factors IT\OT Convergence What Now? Q&A \ Contact Information © 2015 Cisco and/or its affiliates$
February 2016 • Houston, TX

David Gutshall – Business Development Manager

Manufacturing Transformation and VisibilityLessons from the Trenches

© 2013 Cisco and/or its affiliates. All rights reserved. 2

• 20 years in IT, Manufacturing, and OT

• Key Cross-functional Leader in Harley-Davidson Factory Transformation Effort

• Led Joint OT\IT Practice on Factory Floor Designed to Facilitate OT\IT Convergence

• Network Designer and Architect for Restructured Harley-Davidson York Vehicle Operations Facility in Pennsylvania

• Extensive experience with Manufacturing Execution, Visual Factory, Factory Management, OPCUA, and troubleshooting high-velocity data-driven IoT plant networks

• B.S. in Electrical Engineering - Masters in Business

• Long list of former Technical Certifications

Dave Gutshall


Presentation Overview

§ Brief Cisco Digital Manufacturing Solution Overview§ History and Background of Harley-Davidson, York Plant§ Cisco-Enabled Business Outcomes of Transformation§ Transformational Change Lessons learned§ IoT Key Success Factors§ IT\OT Convergence§ What Now? § Q&A \ Contact Information

4© 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidentia l

Buyers Expect Real Business Outcomes

What business benefits do you expect to derive from Digital Manufacturing?

Reduced Downtime

48%Unplanned

downtime down from 11% to 5.8%

Reduction in Defects

49%Defect rate down from

4.9% to 2.5%

New Product Introduction

23%New product

introduction cycle time reduced from 15 to 11 months

OEE Improvement

16%Average OEE

improved from 74% to 86%

Improved Inventory

35%Inventory

turns increasedfrom 14 to 19

Reduction in Energy Use

18%Annual energy cost down from $8.4M to $6.9M

Source: SCM World/Cisco “Smart Manufacturing and the Internet of Things 2015” survey of 418 Manufacturing Business Line Executives and Plant Managers across 17 vertical industries.


Cisco Solutions Delivering This Value

Lower Downtime

Reduce Defects

Reduce Energy

Faster NPI

Maximize OEE

Lower Inventory

ReduceRisk

• Factory Network

• Analytics and Big Data

• Factory Wireless with LBS

• Factory Wireless

• Connected Machine

• FactoryNetwork

• Energywise

• Factory Network

• Plant Floor Virtualization

• Factory Wireless

• Factory Collaboration

• Factory Security

“Reduced labeling error rateby 16%”

“Achieving 20% energy reduction

with real time visibility.”

“Shaved10-20% off NPI cycle

time”

“Increased OEE mid 70s to high

80s”

“Reduced breaker

component tire loss by 20%.”

Multi-NationalBrewery

“$40 million downtime

reduction for customer”

Make Money Save Money Stay out of Trouble

“Significantly reduced factory vulnerabilities.”


Connected Factory Wireless

Connected Factory Network

Connected Factory Security

Ethernet

IoT-Readiness in Today’s Typical Factory

Managed Switches

Connected IT/OT Network

Management in OT Tools

SDN for Plug & Play Factory

Factory Wi-Fi (ad Hoc)

Unified Factory-Wide Wi-Fi

Wi-Fi Management Tools

LBS-Ready WiFi

Hyper Location

Industrial DMZ

Network Access Control

Central Identity and Policy

Secure Remote Access

Industrial Protocol DPI

1.

2.

3.

4.

5.

1.

2.

3.

4.

5.

1.

2.

3.

4.

5.


Off-LineFactory Network

Factory Security

Factory Wireless

Connected Factory

Analytics & Big Data

Virtualization & Compute

Connected Machines

Factory Collaboration

Location Services

Connected Enterprise

Supply Chain Collaboration (SXP)

Design Collaboration

Supply Chain Orchestration

Digital Manufacturing Journey+ 16%

OEE

- 35% Inventory

+ 23% NPI

- 49% Defects

- 48% Downtime

© 2013 Cisco and/or its affiliates. All rights reserved. 88© 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidentia l

Outcomes and Lessons from the Harley-Davidson York, PA Factory Transformation


Old-to-New Harley Factory Comparison

Old Harley Factory, York PA New Harley Factory, York PA1.5 million sq ft. 650,000 sq ft.

41 buildings 2 buildings • Bldg. 3 (with expansion)• Bldg. 70 (East campus storage)

Vertically integrated production (legacy parts) Focus on frame, tank, and fender fabrication; paint; and assembly


Background Summary

• Decades of legacy systems and vertically integrated production

• Operating inefficiencies and reduced flexibility• Work was spread out across two campuses (41 buildings)• Lack of standard processes• No clear help chain• No clear message owners


Change Formula

C = ChangeP = PressureV = VisionCR = Current

StateTP = Transition

PlanR = Resistance

C = (P x V x CR x TP)R


Flexible Manufacturing

Digital Dashboard to see entire value chain

1faster production

(TAKT time)

11%Faster Reconfiguration(2 Weeks è 4 Hours)

20x

Unified Network

HQ

Factory Workers

“What used to take hours or days to triage and troubleshoot problems now takes seconds.” - David Gutshall,

Harley-Davidson Motor Company

1200 possible BTO configurations

A new motorcycle produced every

79seconds

Factory Network at Harley

Watch Video


Harley-Davidson Digital Transformation Before\After

• Before• Work Culture very traditional manufacturing• Cost Per Unit too high• IT not a business enabler• Lack of manufacturing flexibility• Lack of alignment between IT and Manufacturing Operations• The Network was an afterthought• Issues with People, Culture, Costs, etc.

• After• Changed People, Processes, and Technology• Network Ubiquity and IoT enabled digital manufacturing flexibility• IT an integral part of Manufacturing Operations• Won Industry Week’s best plant award

What issues do you see on your accounts?


Cisco-Enabled Innovative Business Outcomes

• Any model, one line – every customer is a “custom” – Factory Network

• Unified Messaging and factory status dashboard – Factory Network

• Unplanned Downtime reduction – Factory Network

• Defect reduction - First Pass Yield improvement – Factory Network

• OEE improvement – Factory Network and Harley’s version of Connected Machine

• Inventory Turns - improved supply to line delivery accuracy, reduced materials line side – Factory Network


Cisco-Enabled Innovative Business Outcomes Continued

• Flexible, Modular Network – Factory Network

• Pre-configured connectivity lego blocks – Factory Network \ CPwE

• Reduced equipment spares

• On-site IT/OT network engineer headcount reduction – Factory Network \ CPwE

• Equipment stocked in tool crib for OT and IT - Factory Network \ CPwE

• Less Networks – Less Complexity, Simpler Architecture – Factory Network \ CPwE


• Culture change takes time

• People, Process, and Technology changes are required

• The Network is foundational - include in IT\OT convergence plan.

• Create an OT\IT convergence plan early

• Define business outcomes with success KPIs early

• Communicate and Celebrate Successes between plants

• Engage Operations Staff Early

• A robust Archiving framework and strategy is needed early

Change Lessons


Change Lessons Continued

• Behavior changes will be necessary to ensure success• Good technology will be trumped by bad processes

• Good technology will be trumped by bad data• Process experts should be engaged early, and kept through sustain + 3 months• Data Governance framework and teams must be in place before transformation

• PMO is necessary, and must ensure scope creep is limited• Provide runway and scheduling for Knowledge Transfer

• Define out-of-scope processes and applications and develop mitigation plan early


Forthcoming IoT Requirements

• Security Strategy and Approach that preserves operational agility

• Wireless ubiquity

• Data retention tiers and policies (machine, department, plant, region)

• Cross-functional skilled resources (Engineering, maintenance, IT)

• Vendor education and flexibility

• “Everything will have an interface”,

• Absorption of traditional IT skills into manufacturing operations

• Self-healing machines and systems

• Convergence of technologies will drive increased efficiencies, but will require organizational change


IT\OT Convergence Suggestions

§ Create a separate transformational project inside of any large initiatives and lead with it

§ Communicate your plans early§ Build a combined NOC for your factory – Place where both IT and OT resources

can work together, build relationships and trust§ Examine your organizational structure

• Does it make sense to align advanced manufacturing and network engineering?• Consider creating a separate IoT\Shop Floor SWAT team consisting of talented

individuals in IT and Operations. (dotted line or regular reporting relationships)• Matrix Factory Controls and IT• Don’t forget your Master Data and Data Scientists


Key Success Factors

The Network is the Key Platform

Everything will have an interface

BYOD Times 10Security, authentication,

administration, and support policies must be designed with

BYOD efficiency

Embrace IT/OT ConvergenceChange Takes Time – Start NowCelebrate efficiencies & benefits

IoT will drive bigger “Big Data”Will require well defined and easy

to follow policies to reap the benefit


• The Network is your key-enablement platform

• Begin transforming your culture now

• Create and foster spaces where IT and OT can work together

• Identify and nurture “change agents” at all levels of your organization

What now?


[email protected]+1.717.760.5265

Q&A http://global.sap.com/corporate-en/news.epx?pressid=5630

http://scn.sap.com/community/business-trends/blog/2013/05/14/turning-cold-steel-into-harley-davidson-motorcycles

http://www.forbes.com/sites/sap/2011/06/29/harley-davidson-goes-whole-hog-with-customer-insight/

https://www.constellationr.com/content/internet-things-what-happens-when-sense-needs-respond-come-existing-legacy-enterprise

http://blogs.cisco.com/zzfeatured/iot-in-manufacturing-insights-and-best-practices

http://blogs.cisco.com/video/not-your-mother%E2%80%99s-signage-dse-2012-recap

http://www.digitalsignageconnection.com/harley-davidsons-digital-signage-solution-enhances-brand-image-visitors-staff-and-stakeholders-835

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