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Case Studies (223)

 

The rise of IoT is good because it has enabled humans to gather, process and understand vast sums of data. This understanding helps us observe the nature of Human existence in real time, both collectively and individually.

Supply chain management is an integral business process. It affects people in every industry from farmers in Food Supply Chain to manufacturers in Industrial Supply Chain. We are going to observe the up and coming technologies and how they are revolutionizing this fundamental business process.

How is IoT being used in today’s World?

The Understanding of Mass Human behavior at an individual level has enabled services and technologies to exist that cater to personalized needs.It is introducing a new genre of innovation in Mobile App Development.

Companies use this data to develop applications that can efficiently increase revenue by cutting liability costs because of Big Data Analytics and IoT prompting all investments.

Take for example the efficiency with which you can use GPS trackers and environment sensors to keep track of your inventory and the storing conditions of your goods. Asset Tracking has created transparency in the supply chain, providing manufacturers with scope for business customization.

The kind of granular data that can and is being generated using RFID tags and global SIMs can create efficient staffing practices. Also, addressing the availability of complementary resources at the right place and right time.

There is Beacon technology, which is Low Energy Bluetooth devices (BLE), capable of transmitting information over short distances. Bluetooth SIG (Bluetooth Special Interest Group) is pushing this wireless personal area network as a factory floor network.

BLE is being used to create an Internet of Things solution, for instance, take IoT Development companies that created apps that help in Airport Baggage Management all by using these BLE devices or Beacons.

Another great example can be that of Amazon Go. It uses computer vision, machine learning and AI to create a shopping experience where you can just walk in, pick up what you want and walk out.

You check into the store with your mobile Phone and through a technology they have developed called “Just Walk Out” you can shop and just leave. It is one of the best examples of an Internet of Things Company, using a variety of sensors and computer vision tracking working together over a secured shared network.  

How is IoT affecting the Supply Chain Processes (SCP)?

Gartner the leading research and advisory organization, recently released a study, showing a thirty-fold increase in Internet-connected physical devices by 2020. 

International Data Corporation (IDC) reports: Largest IoT segments in 2017: manufacturing operations: $105B

Just imagine the kind of data that will be generated when we could observe the real-time shopping habits of individuals, their waiting time in each aisle, their preference. And the rate at which products and services are sought will see an unprecedented rise.

We will be able to automate a system that will conduct targeted marketing and efficient manufacturing. Research shows three-quarters of all retail and manufacturing ventures beginning to transform their supply chain processes.

IoT is enabling a more bidirectional flow of communication. Now engineers can run efficient diagnostics using the most recent captured data enabling them to conduct remote repair, increasing machine uptime and better customer service.

Unlike previously available passive sensors, this generation of sensors can keep track of the state of products in shipment, such as external surrounding and execute actions. Also, it can monitor utilization of Machine and update cloud platforms that can, in turn, optimize performance and workflow.

IoT is playing an integral role in increasing the scope of digitizing the Supply Chain in the Agro-Industry. Modern farmers are now incorporating Cloud Platforms to keep track of their farm produce and fine-tuning storage conditions.

A much more inter communicative channel is being formed between the different talking heads of the Supply Chain. And the funny thing is IoT devices are guiding how the products reach the market and talking has nothing to do with it.

Industries are trying to create the process more transparent for the consumers, certifying quality checks and an invasive feedback process.

Fleet Management for industries that comprise of companies like FedEx and DHL. Driver headcount, maintenance, and fuel consumption can all be brought down using IoT cloud Platforms. These platforms take in enormous amounts of data about diverse variables like traffic models, weather reports etc. and chart out efficient routes and delivery itineraries.

Having a connecting channel among all the components of the supply chain enables vendors to form better relations amongst themselves and with the customers. This is done by linking the shipping companies to the on-ground delivery services to the shopkeeper, all in real time.

We generate a truly end to end offering by providing vendors with domain expertise in IP connectivity, cloud service, security, hardware, and positioning.

With the help of IoT, we can accurately forecast inventories; keep track of the expiry dates of products and restocking schedules. It can also be used for cutting on Downtime with smart sensors, which are assessing maintenance requirements around the clock, propagating positive revenue generation.

Fitting the factory floors and machinery with sensors helps the system to tail workflow efficiency and logistics short-comings and respective requirements.

The Industrial Internet of Things revolution is pushing entire businesses towards an approach of local connectivity. Many businesses are adopting tools like AT&T’s Low-Power Wide-Area Technology, which has smaller modules with extended battery life and capable connectivity even in underground environments.

This has also created a demand for developers who excel in creating IoT Applications. And lately, it seems IoT technology and software framework has become essential to the 21st-century consumer market at par with Big Data Analytics and Management.

IoT compatibility is the need of the hour for businesses that want to stay ahead of the curve.One should investigate functional ways to integrate IoT technology and Applications into their Business Back-End and generate new streams of revenue.

Also, existing Businesses need to acknowledge the potential of IoT to redesign existing SCP. Building strong bridges to support the convergence of physical and digital supply chain.

In today’s market, SCP isn’t just for tracking your product. It’s an opportunity to gain an edge over your competitors and even establish your own brand.

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Counterfeiting is a major concern for brands. Companies lose billions of dollars in revenue and consumers also suffer the consequences in situations where they are unable to verify themselves or their ownership over products.

“The Organisation for Economic Co-operation and Development (OECD) estimates the annual value of international trade in all counterfeit goods at $200 billion.”

Imports of counterfeit and pirated goods are worth nearly half a trillion dollars a year or around 2.5% of global imports, with US, Italian and French brands hit the hardest and many of the proceeds going to organised crime, according to a new report by the OECD and the EU’s Intellectual Property Office.

So How Did HP Use The Concept of the Internet of Things to Combat Counterfeiting?

HP’s Tamper Evident Label and Security Label initiatives are a step towards enhancing its brand protection that customers can rely on.

Let’s take a look at how HP introduced a four-step method to easily authenticate products such as ink and toners.

  • To authenticate whether a product is a genuine HP product, customers can use their smartphones and scan the QR code placed on the HP Security Label on the packaging.
  • The QR code redirects to an online verification site checking the authentication number on the label against its online database which maintains records of the product down to the serial level.
  • If the IDs match the user is informed they have purchased a genuine HP registered product or offered a way to report a counterfeit in case the authentication fails.

 By providing its customers with easy to use, online and mobile validation processes, HP can ensure the sale of authentic products. HP is continuously working towards providing secure business solutions to its customers. HP anti-counterfeit is a great example of how brands are employing technical innovations based on the concept of ‘Internet of Products’.

“Counterfeit HP cartridges are predominantly refilled or remanufactured print cartridges packed in unauthorized or fake reproductions of HP packaging, that can’t compare to genuine HP cartridges. At HP, we are constantly striving to protect you from counterfeiters with new security measures.”

Being able to maintain a digital record of a product on an individual serial level enables HP customers to scan the physical counterpart of the product, pick the authentication code off the label and use the internet to run a check against the digital record.

This creates an authentication method which is tougher for counterfeiters to replicate.  Easing the product verification process and enabling customers to authenticate products via mobile devices, HP has successfully managed to deter fake products in the market and further strengthen its brand security/image.  

These technology-led initiatives which are capable of connecting the digital counterparts of physical products with their real-time values and status are redefining retail and product surveillance. HP has successfully built an anti-counterfeiting process based the concept of “internet of things” and as a result, other brands are also eagerly moving towards implementing internet of products led initiatives.

Such Internet of products enabled solutions are helping brands explore the possibilities that lie beyond the status-quo of usual product management.

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I think so.  

If you run a manufacturing factory, you have just a handful of variables that let you cut costs. Chief among them is energy use. Energy conservation saves money obviously, but turning off one switch at a time compared to controlling thousands, that would be interesting.

A lot of efforts are taken to save energy historically, for instance, use of motion sensitive bulbs, limited time use of air conditioners, or cutting the number of shifts and functioning hours is another way to save energy costs. But those actions require productivity/OEE boosting focus of the facility rather than effect energy conservation. Energy conservation is a byproduct of those efforts.

Adding IoT on the other hand, can enable direct energy savings for the smart factory of today.

Many experts recommend IoT-based real time monitoring systems to bring optimum use of energy. But the issue is more nuanced than that. Sure, real time monitoring helps you track energy consumption, but that might not lead directly to energy conservation. For that, the realtime energy monitoring should lead to better predictions of energy usage and guide to implement right load level energy equipment.

The 2 components of electrical energy billing

Let us take an example of electrical energy. Usually, electrical energy billing has two components:  Demand charge and runtime/consumption related charges. Demand load is usually the peak load provided by the electricity service providers from the power grid. This usually has a hard and fast limit. Crossing it will prompt penalties of around 20 times the usual rates.

To avoid this, there are usually two options: Reduce the total load required by the machinery. Or ensure that the threshold limit is never reached.

The problem of motors

One of the major sources of electricity usage in the plant are the electrical motors and HVAC systems. They consume a large chunk of the power. A motor is considered under-loaded when it is in the range where efficiency drops significantly with the decreasing load. Most electric motors are designed to run at 50% to 100% of rated load. Maximum efficiency is usually near 75%. Below the 50% rated load, the efficiency tends to lower dramatically.

In many cases, operating motors are either overloaded resulting in overheating or under-loaded, working at most at 40% of their capacity. That causes huge spikes in energy consumption. Oversized motors have a higher initial cost and are very expensive to repair and maintain. Undersized motors don't perform well and prompt higher losses than properly sized electric motors. Same goes with air conditioners if their tonnage and room size or room dynamics aren’t suitable, it leads to higher energy consumption.

Addressing a Wide Range of Energy Consumers:
Apart from regular electrical consumption of motors and HVAC, IoT can address a wider energy sources and resources, including: 

  • Air compressors, the source of air across plant.
  • Boilers, serving as the main source of steam used across plants.
  • Backup generators - an alternative electricity source in case of failure of the primary.
  • Fuel, including diesel, coal, wood, solar, and batteries that are used to run above systems

How the Industrial IoT can help

In the pre-IoT era, the traditional energy management system would collect a sample of energy usage at an interval. The traditional EMS is good to get energy consumption data, but it does not help you with alerts in case of spikes, curating usage pattern, predicting the seasonal demand, or suggesting appropriate configuration. Pre-IoT era, the motor load test was a lengthy and cumbersome affair. Engineers used slip tests and electrical tests with a digital stroboscope. They had to spend hours with the equipment to obtain samples. Even then, the data collected was only a sample, and not real time. With the IoT in place, the analyses can occur on real time data from the motor. That makes the analysis quick, painless and more accurate. IoT brings realtime alerts, ability to predict energy demand, usage patterns and ways to optimize energy consumption.

With the right IoT platform, you can recommend the proper sizing needed for motors. That saves money on the original investment. IoT-based conditional monitoring ensures the motor never reaches its threshold limit. That means the motor lasts longer and suffers fewer failures.

The IoT-based monitoring system gives early warnings of electric motor vibration/temperature problems. Condition monitoring saves time from unplanned production outages. And the unnecessary stress of carrying out urgent repairs can be avoided.

Additionally, a properly designed IoT system can not only track the energy consumptions at distribution points throughout a smart factory, but with the help of smart meters, they can track energy consumption right from its source to all the way consumption point. Moreover it can help predict leakages or voltage drops at nodes if any.

The ultimate goal of the smart factory is a generating a real-time energy audit that traditional Energy Monitoring Systems (EMS) cannot provide.  IoT enabled energy monitoring can solve a lot of issues that are core to hindering a plant from real energy conservation efforts. That not only saves money but paves the way for true implementation of Industry 4.0. If you run a factory and are looking to cut energy costs, then IoT is worth a closer look.

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Farm to Fork IoT

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Consumers today are knowledge seekers who want to know exactly where their food comes from. Brands are going the distance to provide consumers with such traceable and transparent information. Let's look at how one such Italian brand uses the #internetofproducts to take customers on a #digital journey. #IOP #InternetofThings #ConsumerTransparency #SafetyforFood #Technology #Retail #Qliktag
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Trapped in the Groundhog Loop

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One of my LinkedIn contacts suggested me last year not to write more articles about MWC event. However, a couple of weeks ago talking with another contact that not attend this year told me he was expecting my article. So here it is, my fourth MWC article in a row since 2015. Am I a MWC addictYou can read previous articles here:

Unfortunately, the Powerful GSMA rejected my ticket request as Analyst / Press (LinkedIn please help me next year) and of course I did not pay the prohibitive prices of Silver Pass, Gold Pass and Platinum Pass. At the end, conference sessions content is very generic and I can read free the content. I cannot justify the ROI for pay these tickets. Can you?

Avoiding the politics issues between Catalonia and Spain, it was the first MWC where the snow was probably the biggest surprise of the show. The snow and the rain did not allowed visitors to spend some time outside.

A painI do not know the final numbers, but I notice this year less attendants than 2017. No doubt GSMA will try to find excuses eg, political issues, but the reality is that the cost of the show do not convince to many usual large / medium / small companies. It is a fact that some big companies did not attend or send less delegates and use less square meters

Again, visitors that attend 1 or 2 days do not have had time to move to other parallel events like 4YFN.  Running from meeting to meeting, bad lunch as usual. I'm sure I've lost weight these days

The MWC18 has been an evolution of what we saw last 2 years. Not revolution. We need to wait another 5 years to see some notorious technological advances although GSMA should continue helping to create a better future

Before #MWC18

I was angry with the Search exhibitor page of the web . Please GSMA you have 1 year to improve. None exhibitor has included any product in the category of Blockchain or Internet of Things. Duplicates filters, etc. I read some LinkedIn post and articles and talked with people to plan my visit and capture their feeling this year.

During the #MWC18

The euphoria of 5G has dropped – More info about 5G at MWC18 here “ Intel, Qualcomm Talk About Accelerating 5G Efforts at MWC 2018 

IoT - The word that describes my feeling is disappointment. Although expected, something sad because the word IoT begins to lose brightness and disappear from the stands. The Pavillion 8.0 dedicated to the IoT, was not star this year. Do you really deserve to be exhibitors at the MWC

At least it was good to pulse the evolution and transformation of the IoT / M2M market. A new impulse will be necessary before 2020

Unfortunately, I could not attend any of the Top 7 IoT Activities at Mobile World Congress. Please tell me if any of it was worth it.

It was funny to hear how Operators trying to explain the use cases of Blockchain in Telco sector.

Artificial Intelligence, Connected Vehicles and Robots the starts of MWC18.  It was interesting discuss with some Operators about the practical potential of Machine learning, Artificial Intelligence (AI), Robots in this sector.  The conclusion in this article “ You Can't Teach an AI to Run a Telecom Network—Yet.

MWC18 was in my opinion the year of the Connected Intelligent Vehicle. Operators, Technology Vendors and Car Manufacturers need to cooperate to avoid a technology nightmare for future drivers/passengers.   

After #MWC18

I cannot resist to compare this congress with the Groundhog Day festivities. I make no secret of my discomfort for the continuous decisions of GSMA to make this show useless for many. My unpleasantness for the prohibitive cost of the tickets, hotels in the town, and the arrogant executives who attend the event as movie stars and finally for the many parallel events that I have missed or meetings of 15 minutes because I had spent hours daily walking by the walk sides of Fira Halls and my frustration for not finding some companies in the labyrinth of  the pavilions

Like Bill Murray in the movie, I discover year after year that MWC's events repeating almost exactly. I feel I am trapped in a time loop that probably most of you are aware of

I am glad if you have spent these days indulging in night parties, looking for new jobs or cheering you for the work you have in your great company.  Luckily for me, I do not return depressed, but my mind do not escape for some days to the MWC loop. Am I a MWC addict?

See you next year at MWC19 Barcelona

 

Thanks for your Comments and Likes

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IIoT Use Cases, Puzzles and AI

 

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IoT Cyber-Security Puzzle

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I recently attended one of a significant [email protected] Internet of Things event which featured keynotes, speeches and presentations from CTOs/SVPs-Tech/VPs of major IT firms. Attending these presentations sometimes give you a feeling of being in literature or a rhetoric club where instead of hearing context oriented speeches you get to listen to a bunch of fairy tales with almost every sentence including overused adjectives like “trust”, “motivation”, “responsibility” and so on.  An SVP of a major IT player was asked about the measure (technical) her company takes to ensure data integrity and prevent cyber-attacks. Interestingly, her answer to this was the statement that “they maintain a culture of trust in and around the company”. To me, it is like standing in front of a hungry lion and telling him that you believe in non-violence. Today in the age of internet and IoT, we have to deal with thousands of cyber criminals (hungry lions) who are waiting to penetrate the system and make most out of it. To keep them out you need a lot more than just “trust”.  

On the same event, I had an opportunity to talk to many cybersecurity experts and companies, and I confronted them with a question of mentioning at least one relevant cybersecurity norm/standard/certificate pertinent for each major component in an IoT stack. Unfortunately, most of these discussions turned into some sales pitch. The question one can raise at this point is that is it so challenging to mention at least one “state of the art” cybersecurity measure for every IoT component? Or just that the topic is underestimated? 

This blog is just an attempt to name a relevant security standard/certificate or measure for every major element in IoT stack (see below) without going deep into the details of each and very standard/norm or certification. 

For this sake, we will assume a simple IoT stack as illustrated below :

 

Fig.1: IoT stack of a simple use case

In this use case, an industry sensor collects the physical parameters (temperature, pressure, humidity etc.) and transmit the values via Bluetooth/Wifi/wired connection to the gateway or edge device. The gateway device, depending on the type (simple or edge) perform a certain minimal calculation on the received data and push it into the cloud via a Wifi/4G connection. The cloud collects the data and uses this data to feed desired micro-services like analytics, anomaly detection etc. Cloud also offers an interface to the existing enterprise and resource planning (ERP) system to synchronize the running process with the current one as well to provide product /service related information over the IoT platform to the end user. What the user sees on his screen is then the dashboard of IoT use case which is a graphical representation of the micro-services running in the background. 

As we can see, there are four to five main stages and at least three interfaces (sensor-gateway, gateway-cloud, cloud-user) in a typical IoT use case. These stages and interfaces are on the target of cybercriminals who try to hack into the system with the intention of either manipulating or hi-jacking the system. Safeguarding just the components is not adequate. The underlying IoT communication layer (Bluetooth/Wifi/4G etc.) need to be secured as well.  Also, organisations running or involved in such IoT use cases must ensure safety and integrity of the process, technical as well as user data through a certain information security management system (ISMS) in place. 

To sum up, we need security measures at a component, communication-interface and organisational levels. Now if I have to write state of the art or “best in class” security measure (excluding cryptography) next to each stage, communication type and interfaces in the diagram above, then the resulting picture might look like the one below. 

 

Fig.2: IoT stack with relevant cyber-security measure

 

What, in your opinion, could be included/excluded or replaced in this diagram? Feel free to share your opinion.

 

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5 IIoT Use Cases from Global Leaders

“I talk to a dozen or more companies involved in IoT every week. One thing they all have in common is their desire for the projected IoT volumes and revenues to come to fruition...the sooner the better”.

Mike Krell

Analyst at Moor Insights & Strategy covering the Internet of Things, Forbes.

 

Internet of things has always been functioning in a context of business transformation.

If you’re in business, just read on, as we are to have several working IIoT solutions to consider right now.

 

To be successful today you need to:

  1. really love what you do;
  2. move with the times;
  3. make the IIoT technology a part of your business development plan;
  4. and find an Industrial IoT company for you to cooperate with.

Here I gathered 5 IIoT solutions implemented by global industry leaders and the key examples of their efficient cooperation with IoT developers:

 

#1 Predictive Maintenance for Wind Energy

 

The IIoT solution is projected to be implemented into the maintenance of wind energy. The smart wind turbines will be applied to reveal how employees can get additional insights by using ML about the equipment performance in different conditions. Thus, smart sensors are supposed to give the information in a real-life regime.

The system can give reliable statistics for the future planning and help to replace vital parts of the engines during the less windy periods:

Source: Schaeffler Group & IBM

 

#2 Health Detectors for Caterpillar Equipments

 

Recently, the American machinery and equipment giant, Caterpillar implemented a new IIoT solution to help its customers better understand the workability and health of the equipment. It should also be said that the company uses IoT solutions for tracking fuel efficiency, idle times, location, and many more. The new project lets clients directly address the company maintenance service and timely repair the sensitive spots by using the IoT platform.

The end-to-end platform for predictive diagnostics allows for better monitoring and timely replacement of the interchangeable parts. The Caterpillar CEO, Doug Oberhelman supposes the IIoT, which is primarily applied to the fleet and fuel monitoring, will take the clients offering to the next level.

 

#3 Airbus Smart Manufacturing

 

You know the biggest European aircraft manufacturer has already applied the IoT solutions to its products. Today Airbus is working at implementing the IIoT to the tools its workers use during the manufacturing process.

For this reason, Airbus opts to involve its employees and the factory floor. The workers will manage to use smart tablets or glasses to evaluate a task and then send the data to a robotic tool that will finish it.

Jean-Bernard Henz, the head of PLM R&T Innovation at Airbus ICT, says the IoT platform manufacturing will speed up the processes and improve the reliability of the production.

 

#4 Siemens -- a 75% automated plant

 

You know the Siemens AG plant is a part of a concerted effort by the German government to develop fully automated factories. Guess what? Siemens is claimed to be 75% automated with 1,150+ employees on board.

All the employees are mainly operating computers and monitoring the process of manufacturing by using the IIoT solutions. Sinalytics, which is a critical component of the IIoT Platform was implemented in 2015. Today Siemens continues developing the Web of System, which directly connects devices to the open Internet and with each other. Besides, Siemens launched a new company in 2016 that is named Innovations AG. The company is dedicated to the search and support of the emerging start-ups that can be a good technological investment for Siemens. This has influenced the factory efficiency, opened the new technological opportunities and reduced costs.

https://twitter.com/Siemens/status/935795639472021506

 

#5 ThyssenKrupp Elevates IIoT Implementation

 

The CGI global tech firm claims ‘that thing is an elevator’ for the company. Well, let’s see it. Having joined forces with Microsoft and CGI, the ThyssenKrupp Elevator company has now obtained a predictive maintenance for elevators manufacturing.

The IIoT solution securely connects tens of thousands of sensors and elevators systems across the plant. The technology allows for monitoring every stage of production starting from motor temperature and finishing with shaft alignment. The real-life IIoT gathered data lets the company identify vulnerabilities and repair them before an actual breakdown occurs:

https://twitter.com/thyssenkrupp_en/status/964787252629946368

 

What’s the bottom line?

IIoT solutions undoubtedly contribute to production efficiency. The predictive maintenance and pre-emptive repair, manufacturing automation and further spending cuts are just a tiny bit of what I recorded here.

I am almost done here...

Feel like you have something to tell about your IIoT use case?

Drop me a line below!

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Drones, Cloud and an Urban Future

 

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Keys to Success with Urban 4.0

 

In a recent guest post by Andrew Hamilton, he looked at the future of urbanization and what a holistic approach means in actual urban development. As a follow-up to the story, he offers these key to success.

1) Focus on the city’s main goal or identity

While cities and large developments share many concerns and challenges, each one has a unique mix of issues. Is it concerned about accommodating existing growth or attracting more growth? Is it looking mainly to improve livability, or to make it easier for businesses to operate? Would it like to double down on its existing strengths as a city, or shift the economy in new areas? Some cities and developers find it helpful to focus on a simple theme or vision. London, for example, is investing heavily in making it easier for residents to access, analyze, and exchange data. While any smart urbanization project should lay the foundations for future capabilities in many areas, it’s essential to focus actual investments in a few areas with the greatest consensus and payoff. Pursuing multiple areas will make timely delivery on these already complex projects nearly impossible.

2) Rethink your RFP relationships with vendors

Governments and developers have relied on the RFP-based vendor management process for good reasons, but this structure gets in the way of integrated developments. It’s especially important to start working early with a knowledgeable guide that can work with you for the long term. It’s time to create new negotiating processes that enable Urban 4.0 while still featuring accountability and protecting the public.

3) Focus on transformational improvements

Smart urbanization involves an array of sophisticated technologies that offer big benefits over the status quo. With political and budgetary pressures, it will be tempting to aim at a flashy, short-term gain rather than to invest in capabilities that will pay off much more in the long term. Avoid that fate by setting out a blueprint for the vision that will drive public plans and accountability, without constraining your ability to adjust with evolving technology and city or client needs. Quick wins can help build momentum and support, but should not divert you from achieving even more valuable results.

4) Reassess the citywide approach

With the rise of supercities, governments and developers will want to break the urbanization challenge into pockets of about five square kilometers. That’s large enough to deliver all the smart services—energy, education, micromobility, food, recreation, entertainment, and job creation—within a contained and sustainable ecosystem. In especially dense areas, a large single mixed-use development could serve as an urban pocket. These highly integrated neighborhoods, combining work and residence, can improve transportation and overall livability while reducing the cost of living. They are also commercially attractive to private developers.

 Photo credit: Roberto Saltori

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Preparing for Urban 4.0

 

Guest post by Andrew Hamilton

It’s time for a better paradigm of urbanization. Conventional models, while still solid, are no longer up to the heightened challenges of the present. Exponentially improving technologies for the Internet of Things (IoT) and artificial intelligence are enabling urban developments with much higher levels of efficiency and flexibility to conserve resources, promote security, and boost the quality of life.

            The key development is not the technologies themselves, but their integration around a holistic view of urbanization that enables a series of smart services. Instead of focusing on single services, or specific buildings or highways, leading organizations around the world are using IoT and analytics to optimize infrastructure generally and evolve with changing needs. While getting there will take a great deal of investment and expertise, the result will be places where residents thrive in unexpected ways in their personalized urban developments. 

The Future of Urbanization

To understand the business opportunity, it’s helpful to break urbanization down into three phases. Over most of history, Urban 1.0, this happened with little general direction or coordination. People gradually moved into towns and cities, and new and old residents adjusted largely on their own. Urban 2.0 started in the early 20th century, as reformers launched ambitious city plans to improve the cityscape and its governance.

            Urban 3.0 came at the beginning of the 21st century, as planners applied computers, automation, and systems thinking to improve efficiency and coordination. This smart urbanization brought many advances. But its focus on solutions for a specific area (a building, street, or factory), or sector (transportation, energy, waste), led to static efforts that failed to realize many potential gains. To take a simple example, buildings got sensors that turned off lights when not in use. But those sensors failed to learn from all the data they were seeing, and they didn’t connect to air-conditioning and other systems.

            It’s time to go to the next level—Urban 4.0. The Internet of Things enables residents and planners to monitor and adjust much of the urban infrastructure. These sensors generate a flood of data, but with machine learning, cloud communication, and advanced analytics, we can optimize planning and operations across multiple components. Buildings can have smart controls that adjust lighting and HVAC according to expected usage, and that predict and indicate when equipment needs to be repaired, replaced, upgraded, or modified altogether. We can also monitor energy usage across a portfolio of buildings, and share efficient practices such as overnight battery storage to reduce demand in peak daytime periods.

            Developers and officials can now “future-proof” their designs by calculating citywide dynamics over time. They can look on a city as a living organism, where all the components have to be healthy for residents to thrive.

            Urban 4.0 goes beyond the direct provision of municipal services. It helps companies take advantage of telecommunications to improve the quality of life. Residents can choose to provide data on their wants and needs, along with their geo-location. Businesses granted access to this information can serve urbanites more efficiently and boost their margins. While these offerings, at least in theory, will eventually be made available everywhere, they’ll initially concentrate in large, mixed-use urban developments to gain scale economies. That’s because many of the large developers are better funded than cities, and eager to distinguish themselves in the marketplace. Thanks to IoT and AI, their developments will make full use of ubiquitous connections.

            While technology is pulling the world to Urban 4.0, serious social and environmental challenges are pushing. Developing countries are in the midst of an urbanization wave the world has never seen, both in scale and rapidity. China alone expects 200 million new city residents in the next 10 years, or 15% of its population, and other Asian countries are similarly shifting. We’re seeing the emergence of supercities, such as the agglomeration around Shanghai, which could exceed 100 million residents by 2050. That’s when 70% of the world’s population is expected to be urban, up from 54% today. Such a massive concentration could overwhelm those societies.[1]

            Even developed countries, many of which have little absolute population growth, are still seeing a continual move to metropolitan areas. City centers are attracting residents, reversing decades of suburban sprawl. Despite early predictions that the internet would encourage people to live and work anywhere, they’re voting with their feet and concentrating in urban clusters. Those same cities, often suffering from decades of underinvestment, are now struggling to handle the newcomers and their high expectations for services.

            Besides the usual difficulties of serving people unaccustomed to urban ways, cities face heightened environmental constraints. Unchecked growth in previous decades has left many areas choking on traffic and smog. Managing water and waste is a challenge in many developing countries and even some developed ones. Climate change has added to the urgency to reduce emissions from vehicles and factories.

            Cities will increasingly compete with one another for high-value investment and trade. The winners will be those that combine efficient services with a good quality of life, enabled by integrated technology. 

Enabling the Transformation

Government officials, developers, and their suppliers around the world are increasingly interested in this integrated transformation. They’re eager for new approaches that take optimization to a new level. The trouble is, most cities are focused on short-term fixing and maintaining legacy infrastructure. They’re reluctant to commit to new systems, especially since those emerging IoT and AI technologies are still in flux. Rather than fancy technological solutions, they want to lay the foundation for new possibilities that can be built gradually and evolve with the changing city.

            Fortunately, the marketplace is similarly evolving to help make that possible. Instead of transactional relationships around one-off projects, some vendors are now willing to work and plan with cities and developers as long-term partners. Instead of the conventional vendor relationship, these providers are taking on some of the risk and responsibility for improvements. This is especially true for large mixed-use developments within cities.

            Rather than implement point solutions, they’re signing on for 10- to 15-year journeys with developers, suppliers, and officials.  They’re learning from one another and residents along the way. And because the vendor expects to be involved over the long haul, its teams can take the wider perspective to encompass multiple systems in a building or multiple components in a city. This long-term perspective is also essential for combating the inherent uncertainty of such complex developments.

            Another innovation is “smart infrastructure as a service,” where the client owns the asset but the vendor builds and operates it, and simply charges the city or private client for usage. Here, the vendor takes on most of the financing and risk, and works with the user to provide continued satisfaction and development. Both of these steps can go a long way to realizing ambitious city dreams.

            These partnership-oriented approaches, however, fit poorly with established vendor-management practices, which tend to focus on RFPs for projects limited to a single product or service. Developers will need to adjust their mindset, at least for the more ambitious integrated developments, for both financial and operational reasons.

            To fully realize these possibilities, it’s not enough for city governments and private developers to evolve toward this more integrated, partnership-based approach. Vendors must as well, and move beyond specific areas, such as design, IT, or mechanical. To make integration work, vendors must be able to speak the language of architects, construction contractors, and engineers. They have to make the business and the technical case for the project at the same time, with the help of an ecosystem of industry partners.

Integration in the Real World

What does this holistic approach mean in actual urban development? For example, the island city of Maui, Hawaii, is rethinking its energy infrastructure. Most electricity comes from expensive imported fossil fuels. Municipal officials wanted to build a few large solar power plants, to take advantage of the abundant sunshine. Then they expanded their view and considered transportation dynamics. They realized that most vehicles in the future would run on electricity, not oil. Instead of centralizing electrical production, it would be more efficient to locate it where people would likely charge their cars. With this holistic perspective, Maui officials are shifting their energy investments and licensing. They’re looking for help from sensors that can track evolving patterns of consumption. By preparing the island for charging stations, they’ll reduce not just oil imports but also air pollution.

Mixed-use urban projects are a major opportunity for businesses, especially in the burgeoning cities of Asia. These projects range from single buildings to clusters

of towers with millions of square meters of floor space. Despite those projects’ enormous scale, the owners are working to integrate smart services in energy, water, telecommunications, predictive maintenance, video analytics, security, traffic, and parking. Everything will run on a single IoT-driven platform and command center—even projects that include office, retail, hospitality, and residential areas. Embedded sensors and analytics capabilities will enable property managers to continually adjust and optimize building operations and the ongoing resident experience. Expected to open in 2021 and to serve 60,000 people daily, it will be a demonstration site for existing sites as well as greenfield applications. (Hitachi Consulting is assisting on the project.) The developers expect to deploy many of these smart services to existing properties throughout their international portfolio.

            Southeastern Australia is another case in point. Sydney and Melbourne are two of the most expensive cities in the world. In response, people are sprawling out to faraway suburbs, which damage both the environment and quality of life. To address these issues, private enterprise in partnership with government is considering the creation of eight new densely settled cities between these two metropolises, which are about nine hours apart by car. High-speed rail would connect the eight cities with the two endpoints, so each one would be no more than an hour’s ride from either Sydney or Melbourne. The satellite cities would have all of the amenities and efficiencies of urban life, while reducing energy use and aggravation and preserving the environment.

The worldwide pressures for urbanization are powerful, and the opportunities from smart, integrated infrastructure are compelling. Over time, we expect holistic urban development to become the norm, facilitated by cities, developers, and vendors taking the long view.  Companies that stay with the old approach to urbanization will lose out.

About Andrew Hamilton

  • Andrew Hamilton is a Global Client Partner for Hitachi Consulting. He is responsible for Key Clients focusing on social innovation projects, runs Social Innovation Business for APAC and provides on the ground project support and industry expertise.
  • He has run projects in Asia Pacific, Middle East and Europe in the infrastructure, telecom, media and power sectors.
  • Andrew has over 30 years of project experience with 23 years of experience with infrastructure projects, vendors and management consulting firms in SEA, India and China. Experience includes very large international infrastructure program management in Asia and the Middle East, healthcare, supply chain, pharma, national infrastructure recreation, national distribution networks, mobile phone company launch programs and contract negotiations, Sarbanes Oxley Act (SOX), manufacturing, large IT deployments, and international logistics programs with APEC.

[1] “Urbanization and the Mass Movement of Peoples to Cities,” by Bret Boyd, Grayline, Jan. 17, 2017. https://graylinegroup.com/urbanization-catalyst-overview/

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