Manufacturing Global - April 2018

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www.manufacturingglobal.com

ATTRACTING THE INVESTORS

Tech in manufacturing

HENSOLDT

Carving out success through IT infrastructure

IFS: Manufacturing

and managing change

The

‘conscious’ factory

of the

future TOP 10 AUTOMOTIVE MANUFACTURERS

MOCG-A10012-00-7600

When intelligent infrastructures don’t just react but anticipate, that’s ingenuity for life.

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With innovative solutions driving us into the future, urban living becomes modern living.

siemens.com/mobility

FOREWORD WELCOME TO APRIL’S issue of Manufacturing Global!

This month’s magazine is packed with a variety of the latest news, insight and advice from industry leaders.

Anthony Bourne, Vice President of IFS, speaks to us about what it takes to drive transformational change.

Meanwhile Paul Teuten and Rory O’Sullivan, Managing Directors at global advisor Duff & Phelps, talk to us about why the manufacturing industry is no exception to the digital disruption sweeping businesses across the globe.

Moving on to our people and skills section, this month we have advice from Tim Butler, CEO of Tego, on what manufacturing companies can learn from aerospace digitisation. We’ve also taken a look at bottleneck analysis, and how it can enable manufacturers to achieve operational excellence.

Our Top 10 list this month outlines the biggest auto manufacturers in the world, so be sure to note who is set to move up the list! As always, we’ve also included your guide to the most important industry events taking place around the world.

Don’t miss our company profile on Nokia, in which we look at its groundbreaking ‘conscious factory’.

We hope you enjoy the issue, and as always welcome your feedback on Twitter. @ManufacturingGL

Enjoy the issue!

www.manufacturingglobal.com www.bizclikmedia.com

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F E AT U R E S

IFS Manufacturing and managing change

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M A N U FA C T U R I N G S T R AT E G I E S M A N U FA C T U R I N G 4 . 0

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ATTRACTING THE INVESTORS

TECH IN MANUFACTURING

PEOPLE & SKILLS

26 IoT

Pushing manufacturers to the edge

O P E R AT I O N A L EXCELLENCE

T O P 10

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BEATING THE BOTTLENECKS The power of analytics in manufacturing

TOP 10 AUTOMOTIVE

MANUFACTURERS

60 EVENTS 70 Nokia Asia

104 Hensoldt Europe

114 Nexans

Latin America

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IFS Manufacturing a

managing chang IFS Vice President of Global Industry Solutions Antony Bourne believes the future is bright for manufacturing and tells us why companies need to keep pace with change Writ ten by STUART HODGE

and ge

M A N U FA C T U R I N G S T R AT E G I E S

“The most successful change projects I’ve seen in companies – it’s all about the information flow, and allowing the employees to question you” – Antony Bourne, VP Global Industry Solutions, IFS

MANAGING CHANGE CAN be one of the biggest challenges for manufacturing companies and according to recent research, just accepting the need to change to keep pace with technological innovation and market changes, is the biggest factor for many businesses.

In fact, 42% of respondents quoted in a recent Digital Change Survey commissioned by global enterprise 8

April 2018

software vendor IFS admitted that ‘aversion to change’ was the biggest barrier to digital transformation.

“The people don’t want to change,” claims IFS’s VP Global Industry Solutions Antony Bourne.

“And the reason is because they feel threatened, and that’s the wrong approach to take.

“When people think digital change, they think robotics and they think,

‘okay, if I do this, I’m going to put myself out of a job.’ And that’s not the right approach to take, because you should be thinking ‘okay, if I do this digital change, I can then do more value-added tasks, or more things that actually add value to the product or the company’, rather than just thinking it’s going to put jobs at risk.

“People need to program robotics, they need to manage them, they need

to ensure that they’re doing what they’re meant to be doing, and that fills up jobs. So, if I was a manufacturer on the shop floor, I’d be thinking ‘what can I do? What skills can I learn and add to my CV to make myself more marketable and earn more money?’”

In fact, research released

by Gartner last year appears to demonstrate that any doom and gloom about technological 9

M A N U FA C T U R I N G S T R AT E G I E S advancements killing jobs is no more than scaremongering. The research showed in fact, that there will be a net increase in jobs in the long run, thanks to the proliferation of robotics. So, what is the key to managing change effectively for a manufacturing organisation?

“The most successful change projects I’ve seen in companies – where they’ve gone to the lengths of having round-hall meetings, where they’ve stapled newsletters to people’s pay slips – it’s all about the information flow, and allowing the employees to question you,” says Bourne.

“It shouldn’t be like a dictatorship, it should be about getting their input in it, because they’re the ones on the shop floor who see it day-in and day-out.

“I’ve also seen customers where they’ve gone at it more from an IT project perspective, and there has been resistance in there and therefore they haven’t got all of the benefits they thought they were going to get. That’s the key. It is about driving it through, but in a good way, with communication.

“And you have to have a top-down 10

April 2018

approach. Again, I’ve spoken to many customers where they’ve said their old boss did not accept that things were changing, and he or she’s no longer in the company. And when a new person comes in, who has appreciated that the world has changed and continues to change,

“You don’t want to be offering products for the market, you want to be offering capabilities for the market” – Antony Bourne, VP Global Industry Solutions, IFS

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“It’s that pay-as-yougo service mentality that people are adopting now. Many manufacturers are reacting to this and embracing it and using it to their advantage, but some aren’t” – Antony Bourne, VP Global Industry Solutions, IFS

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and how to adopt that, that’s when they’ve been successful as well.

“So, it is that top-down approach, with buy-in from the board, from the CEO, through the company, straight down into the people where it’s gonna impact the most.”

Perhaps the need for communication and understanding is one of the reasons we’ve seen such a move towards servitisation, with companies often keener to develop the capabilities they need to provide services and solutions that supplement their traditional product offerings in-house.

In fact, in the same IFS survey referenced earlier, 68% of respondents say servitisation is either “well-established and is already paying dividends”, or that it is “in progress and is receiving appropriate executive attention and support” within their company. As well as that, nearly four-fifths (79%) claim that servitisation “provides a competitive advantage” or “keeps their company abreast of competitors”.

The combination of these factors leads Bourne to conclude that it should be “of little surprise” then, that manufacturers are bracing

themselves for digital transformation.

One of the early examples of servitisation was launched by Rolls Royce back in the 1990s with its TotalCare programme, which bundled aircraft engines with optimisation and maintenance services in a pay-per-use type of offering where customers essentially paid by the hour for what they used.

Now, more and more companies are trying to adopt a similar approach within their own operational parameters, but how can that be properly defined?

“It comes back to not offering products,” says Bourne. “Why is it important now? You don’t want to be offering products for the market, you want to be offering capabilities for the market. What problems are you trying to solve for your customers?

“I put it into three different levels. On a base level most organisations sell spare parts and consumables. Tick that box.

“Then, from an intermediate level, is when you start saying ‘okay, we can now offer you scheduled maintenance, we can do repair, or we can do condition monitoring, or we can give you a help desk for the 13

M A N U FA C T U R I N G S T R AT E G I E S

products that we sell you as a service.’

“And the advanced level is when you start doing risk and revenue sharing.

That’s when you’re really getting under the skin and deep into your customer, because then you’re saying, ‘okay, what problem are you trying to solve?’

The customers say, ‘well, we need to increase this or reduce that.’” “‘Okay, we will help you reduce your costs, for example, by 10%, but if we do that with our products, we want 20% of those savings.’ So, think about it, if you were the customer – you’re getting the supplier coming up and saying, ‘I don’t want you to pay me for any of this equipment or service that I’m going to give you. You’ll only pay me if it saves you the money.’

“So, it’s a win-win situation. As a customer, I don’t care, I’m covered by the contract. And as a manufacturer, it’s my incentive to ensure that the equipment I put in place, the products and the services I use, do actually meet the customer’s requirements.”

The Welshman recognises though, that many companies, regardless of

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industry or specialism, have suffered at the hands of the major internet players eating into their customer base and profits. Moving with the times is paramount for any company to ensure a secure future, and that is doubly true in the manufacturing sector.

“When we think about manufacturing, you have to try and get some differentiation in the market,” says Bourne. “You can’t just be a warehouse on the high street and think ‘I can beat anybody on the internet’, it’s just not realistic.

“So, the world is changing. If you look at property, purely internetbased estate agents like Purple Bricks are coming on the market and some have been on the market a while now. In the automotive industry, you have Drive Now. “It’s that pay-as-you-go service mentality that people are adopting now. Many manufacturers are reacting to this and embracing it and using it to their advantage, but some aren’t. It is in that acceptance and that mentality that they have to do this to survive.”

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M A N U FA C T U R I N G 4 . 0

ATTRACTING THE INVESTORS

TECH IN MANUFACTURING Sweeping changes in technology are disrupting nearly all sectors of the global market. In the home, the shop floor, the factory and the hospital, and even our daily commute, technology is leading to huge changes in commercial business models.

Why should manufacturing be any different?

W r i t t e n b y P A U L T E U T E N A N D R O R Y O ’ S U L L I VA N , M A N A G I N G D I R E C T O R S AT D U F F & P H E L P S

M A N U FA C T U R I N G 4 . 0

Rory O’Sullivan Managing Director at Duff & Phelps

THIS IS THE new industrial revolution — Industry 4.0 — and as with any rapid change, new opportunities have arisen and new ways of thinking have emerged. However, there are also new hurdles to overcome for businesses large and small.

Naturally, much of the limelight goes to the products themselves, and the innovative manufacturing 18

April 2018

processes behind them are often overlooked. In the public sphere, news has predictably focused on the high street and the latest consumer gadgets. Concepts like driverless cars and personalised tech from wristwatches to fridges have grabbed headlines and the imagination of consumers and businesses alike.

Manufacturing is arguably

‘As the value of data has become apparent, factories and industrial plants have evolved. Companies have embedded a whole solution for data capture, connectivity, interpretation and analysis’ where we are seeing the biggest technological innovations, which have attracted investors’ attention.

‘Ransomware’ and ‘crowdfunding’ might be the most recent tech buzzwords for the public, but for manufacturing enterprises and investors, ‘cyber physical systems’, ‘cloud computing’ and ‘artificial intelligence’ are just as exciting.

It is hard to overstate the scalability of this market: growth in the enterprise and industrial software markets is set to continue, with the

lion’s share in Europe. In fact, by 2020, the Boston Consulting Group estimates that companies will be spending about €100bn ($123.74bn) a year on such software — more than a six-fold increase on 2015.

And which industry will be leading the way? Manufacturing, of course, with a 22% share of this investment spending, which exceeds both utilities and transport. The adoption of Industry 4.0 themes is incredibly diverse, with farreaching consequences. Predictive 19

M A N U FA C T U R I N G 4 . 0 manufacturing, self-optimising production, smart response and automated inventory management are just some of the niche areas that have exploded in recent years.

These developments make the manufacturing space ripe for M&A, with the physical and digital worlds converging rapidly in front of us. Each individual merger and acquisition has a straightforward objective: proximity to the key data, which is likely the real value add to the customer. The ultimate goal is a complete vertical that enhances the solution for the customer. That’s exactly what Industry 4.0 can tap into.

It is relatively early, but business strategies have already changed vastly to accommodate these aims.

First and foremost, data has become a central proposition for many companies. It’s no longer enough for firms to offer services or products — it’s the data that customers value.

As the value of data has become apparent, factories and industrial plants have evolved. Companies have embedded a whole solution for data capture, connectivity, interpretation and analysis — often 20

April 2018

‘A recent report from the UK think tank, Centre for Cities, indicated that a total of 3.6mn UK jobs could be replaced by machines’ using artificial intelligence to learn from data, pre-empt issues and future-proof business practices. For example, using data, factories across the globe can now ‘communicate’ through their machines — and if an issue occurs in one factory, the other plants can learn from it before the same thing occurs at their location.

Judging by recent trends, manufacturing firms that own and exploit data have set themselves up for success in an increasingly competitive marketplace. For this reason, they are also most likely to be targets of M&A activity. In addition, being technologically driven makes them more aligned by design. By seeking to streamline their processes and becoming more efficient and cost effective,

these companies have made themselves even more attractive from an M&A perspective.

Finding such companies can be challenging, but manufacturing investors have two vital acquisition criteria. First, they’re looking for businesses of scale — of which there are few within the technology area. Second, they’re looking for targets whose technology is proven to drive commercial sales.

Businesses have been willing to pay a premium to acquire companies

that meet these criteria.

The M&A process is not without its pitfalls. The constant evolution of the industry means that joining two companies together can be problematic. Today, very few businesses are simple. Complexity can delay or even derail M&A deals, especially given the overwhelming background of change in the manufacturing models.

Larger companies, by their very design, cannot react as quickly as smaller organisations; these nimble tech firms are not only able 21

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to hold their own against larger, more established groups, but are often winning over customers with their solutions. As a result, the larger groups need to address how they compete and whether an acquisition of a smaller tech firm would redress the balance with customers.

However, these smaller companies are often owner-managed startups and have a very different ethos and set of values than the acquirer.

But, importantly, they are also likely to have a different opinion on their valuation than established businesses, which can be a substantial hurdle to overcome. Typically, smaller, technology-rich targets expect to be valued in anticipation of the opportunity they represent. This is a hard sell for traditional conservative industrial groups, which are used to paying modest historical multiples of profit rather than future multiples of revenues. This is the area where an experienced financial advisor is most able to help.

Another key issue to contend with for M&A is the drive to automation as

a replacement for human workers.

A recent report from the UK think tank, Centre for Cities, indicated that a total of 3.6mn UK jobs could be replaced by machines. In fact, it predicted that jobs at the highest risk of replacement included retail sales, customer services, administration and warehouse work.

As key players seek to solidify their strategic positioning, span value chains and create growth opportunities for unique value propositions, the pace of investing and M&A activity is expected to accelerate. The sheer diversity of Industry 4.0 is opening up a myriad of opportunities. However, it also produces hurdles that must be overcome for M&A in manufacturing to be successful.

The ultimate Industry 4.0 takeaway is this: Companies across the manufacturing spectrum can’t afford to stand still. If you want to be at the forefront, you must embrace technological change and seek to integrate new technologies with your traditional practices.

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PEOPLE & SKILLS

IoT

Pushing manufacturers to the edge Tego CEO Tim Butler speaks about the company’s focus on the ‘T’ in IoT (Internet of Things) in order to make mobile assets smart, enabling embedded intelligence at source, ready to analyse and transform any manufacturing organisation’s value chain Written by DAN BRIGHTMORE

TEGO’S FOUNDER AND CEO Tim Butler describes himself as a “serial entrepreneur”, inspired to set up Tego (his third company) following three decades in the world of tech.

Butler witnessed the transition from mainframe computers to green screens and distributed computing, with systems across the globe changing the way the world was working.

“We saw a similar transition beginning to happen with ‘things’ in the same way it happened for people and processes,” says Butler. “One of the big challenges in that process was the ability to have information distributed, whether that’s on your phone, tablet or PC, wherever you may be. Today, that change for things is embodied by the Internet of Things (IoT). Our view was that for things to do that, it’s not enough to have a dumb green screen or a sensor throwing more information back at a cloud; you need to actually have smart assets so things have real data and information which people and systems can interact with, both at the edge and in the cloud, to make better decisions and be more efficient.”

Tego designed and built the first fully passive UHF RFID – a tagging device that can hold thousands-times more information and, asserts Butler, really enable an asset to be truly smart while continuing to grow information as people and systems read information from it and write information to it throughout its life. “We’ve started the revolution to enable the asset to tell its story,” he explains. “Some assets travel 28

April 2018

PEOPLE & SKILLS

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PEOPLE & SKILLS across the world every day, some stay in one place and have people come by on a regular basis. What we’re capturing is that information about the people, systems and environment that a traditional sensor or other operational data doesn’t.”

Tego’s biggest breakthrough was overcoming what many perceived as being a physics problem: How can you read, write and manage large amounts of data on a very small computer chip with extremely small amounts of power? “The analogy I use is that we’re putting together the PC for the thing versus the people,” answers Butler. “We’re enabling that distributed information to be securely shared and used for a range of applications and use cases particularly in the manufacturing sector.”

Tego began offering its solutions in the aviation industry to address major issues around maintenance, repair and overhaul (MRO) while managing the life cycle history of assets travelling around the world with different entities in different organisations. “These were virtually impossible tasks to have some back-end system to be able to monitor and manage,” Butler recalls. “However, if the asset can 30

April 2018

become a tool and synced with each of those organisations quickly with the model we have adopted and built out with our solution, which includes both the basic hardware of the chip and the OS with its basic application, it now enables you to use iOS or any android device to start to connect and read/write information on virtually any asset as it travels.”

Butler highlights the benefits to the aerospace industry of greatly reduced time and cost for being able to identify and manage the paperwork (which has been reduced by 30 times) around MRO. “This is significant because the actual maintenance work is 15-20% while the other 80-85% is paperwork – looking things up and tracking information – because you’re often dealing with assets that are several years old. By digitising we become more efficient and deliver information in minutes.”

Tego’s Asset Intelligence Platform (AIP) can transform value chains as it’s the first platform to allow the asset to become a repository for information, not just an endpoint.

This is also being applied across manufacturing in pharma where Butler notes it can enable clean room

“The value of building a large IoT system isn’t just about throwing more and more data up in the cloud. The value is in getting better analytics and understanding of the critical information at the edge” – Tim Butler, Founder and CEO, Tego

TEGO’S PROVIDES DATA ON THINGS FOR IOT

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PEOPLE & SKILLS capabilities and gamma sterilisation.

“As a result, you can start to tag and manage information in very robust environments,” he says. “You can also use it to validate for counterfeit and authentication purposes.”

Butler reckons the applications for its AIP are multiplying because virtually any industry can. “It’s all about the information we need to share,” he enthuses. “Guess what’s happening in the world today? You need to start considering digitising your assets because people are not going to walk around for the next 30 years with a pad of paper and a pen to do their job. So, you have to enable that digital capability and we are that foundational element.”

It’s a foundational element adopted by the likes of Airbus and Boeing (among the world’s top 10 OEMs) and Honeywell to address a major pain point companies have today – the workforce has a huge knowledge base of what’s going on but no ability to properly share that information. “If you’re at the edge and want to inform, educate and enable people to do a better, faster and more efficient job, how do you get them up to speed to share that vision and manage

assets, systems and processes?” asks Butler. “One way to do that is to digitise information,” he believes.

“Then you begin to incorporate their knowledge and expertise into your system and process. The reality today is that most of the data we collect is very time sensitive. If you can’t get that information to people the moment they need it, the value is lost. We need to deliver that information via the asset which is typically at the edge.”

Butler reveals the process starts on the manufacturing line where Tego’s software solution can be embedded, so as products come through, it automatically embeds thousands-times more information onto their asset than could have been done traditionally. “It allows Airbus and Boeing to better assemble their aircraft and provide that information to the airline,” says Butler. “We’re enabling them to create that initial birth record, which aids maintenance as the same software in the back-end allows the airline to do any updates and have the ability to read and write to manage information for the next 10, 20, 30 years. This enables more efficient basic MRO of products travelling on a daily basis – whether it’s seats, 33

PEOPLE & SKILLS oxygen generators, galley equipment, life vests, landing gear or cockpit controls, thousands of these assets on every aircraft are now being tagged.”

As car manufacturers embrace this approach with operational sensors, Butler recognises a huge opportunity for Tego with the rise of driverless cars and the AI being implemented.

“We are another piece to that puzzle to make sure information is safe and secure, but done much more cheaply so you don’t have to have an active sensor on every asset.”

IoT is developing exponentially as a whole new ecosystem is developed.

Butler maintains that what Tego is doing is not in competition with that, but a vital complementary component. “Partnerships are occurring because the major IoT companies are working to enable connections,” he says. “Whether it’s Amazon, AWS or Greengrass, it’s about understanding how to connect all the knowledge data out there in real time to deliver much deeper value. On the back-end we’re working with tag and chip manufacturers and software developers in a range of industries, from aviation to transport and life sciences, to develop applications 34

April 2018

that fit their manufacturing needs.

Right now, Tego is working off the iOS and Android platforms from a basic operating system perspective because we want people to use their phones and tablets to read/write this information, whether it’s a picture you need to upload, a spreadsheet to update or a process that needs checking to connect back to the database and the hub itself. At the front end we’re then working with the large IoT providers to integrate this critical information into a broader IoT environment in a more useful way.”

Butler highlights the growing realisation, across industries, that IoT will push more companies to the edge. “The value of building a large IoT system isn’t just about throwing more and more data up in the cloud. The value is in getting better analytics and understanding of the critical information at the edge,” he asserts. “As more information moves to the edge, people are starting to realise that the management of information is critical to the overall value proposition of IoT. Companies are asking us: What does that information look like for me? Our solution allows them to be able to work

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PEOPLE & SKILLS

“As more information moves to the edge, people are starting to realise that the management of information is critical to the overall value proposition of IoT” – Tim Butler, Founder and CEO, Tego

that out for their own organisation.”

Butler argues Tego is the only company that’s approached this problem from the ground up as a total system, taking 10 years to fully understand all factors and build out a system that works. “We actually have one of the largest intellectual property portfolios in the world around all of the elements in these systems, from the hardware side of the ASIC (Application Specified Integrated Circuit) to the software side of the OS which enables us to work within the larger systems that exist out there today.” He concludes: “We started by aiming to do what we’ve always done, just a little bit faster and all of a sudden, we start to make demands of new technologies as people’s brains explode to transform major industries.

That’s where the excitement exists.”

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HAVE YOU SEEN OUR OTHER TITLES?

BEATING THE BOTTLENECKS The power of analytics in manufacturing

O P E R AT I O N A L E X C E L L E N C E

Ruban Phukan, Co-founder and Chief Product and Analytics Officer at Progress DataRPM, discusses the age-old battle with bottlenecks and the role of predictive analytics in manufacturing Written by MARK SPENCE

O P E R AT I O N A L E X C E L L E N C E THE ISSUES SURROUNDING bottlenecks in manufacturing are well documented. From production delays, overstock, increased pressure from customers and beyond, the problems caused by a sudden, unforeseen limitation in capacity can be devastating for any business in the industry. With this in mind, Manufacturing Global speaks to former Yahoo data scientist and leading light at Progress DataRPM, Ruban Phukan, about the use of predictive maintenance models and how they can help establish a fail-proof environment.

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Getting to the heart of the problem As a former member of the Yahoo data analysis team, Phukan is well versed in the complications surrounding the use of big data. “I was part of the first data science team that was created at Yahoo many years back,” he says. “The big learning there was that data science is very hard to scale, manually, for large organisations. What we realised is that the only way to really solve the data science problem, in a manner that can add value to a business, is to automate the processes that go behind that data analysis.”

Moving on from Yahoo, Phukan started his own vertical search engine business, using machine learning to understand user behaviour, specifically dealing in predictive analytics. After selling it on he went into business with his current co-founders, which is where he picks up the story of ProgressDataRPM and how it is making strides towards, among many other things, tackling bottlenecks.

“When we first got together we realised there was a huge amount of digital data that was being generated,

Ruban Phukan 43

O P E R AT I O N A L E X C E L L E N C E

but the problem remained the same: it can’t be solved manually. There are just not enough data scientists.

Even with the huge amount of data out there, the kind of value businesses were getting out of it doesn’t justify the ROI,” he says.

“So, we started saying ‘can we create a platform that makes data science processes seamless and automated?’ We wanted businesses to be able to leverage best practice, apply it to their problems and solve it at scale.”

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Advances in machine learning With the advance in the technological capability of machine learning, Phukan and his co-founders were able to address the sheer volume of data and information available to their clients in a way that wasn’t possible before. Crucially, for manufacturing businesses, this meant they could also initiate a positive impact on things such as the production line.

“For example, with things like sensors being enabled, it helps us understand at a very detailed

“We need to be able to

EXAMINE WHY things

have happened in the past but, more importantly, we need to also PREDICT THINGS that haven’t happened” Ruban Phukan Co-founder and Chief Product and Analytics Officer, Progress DataRPM

level, the normal functioning of a machine under different operating and environmental conditions. We can then assess how this affects a machine’s health and consequently what this does to the production line, in terms of efficiency,” he tells us.

By deploying an automated plant farm that doesn’t require someone to be a data science expert, ProgressDataRPM essentially helps large asset-based industries to solve two problems: how to minimise unplanned downtime and how to

maximise the quality and efficiency of the output of their assets. This is all done via its cognitive anomaly prediction software. The moment it’s connected to sensor-based data it automatically baselines the normal operating conditions of the machine. It then looks for things that deviate from these conditions and creates an alert before predicting the potential issues that might occur.

It’s this ability to predict the unknown that Phukan believes represents a major departure from 45

O P E R AT I O N A L E X C E L L E N C E

“The key is not what is already known; domain experts can do a great job handling that, but

THE BIG CHALLENGE is the UNKNOWN

and what’s going to hit businesses next” Ruban Phukan Co-founder and Chief Product and Analytics Officer, Progress DataRPM

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previous traditional processes.

“We need to be able to examine why things have happened in the past but, more importantly, we need to also predict things that haven’t happened,” he explains.

Impacting the assembly line One of the key areas that manufacturing businesses need to examine are the processes that impact what happens on the production line, specifically the timing of quality control. “We’ve worked with a number of manufacturers in the automotive and healthcare industries, for example, and one of the biggest challenges they face is that the quality check happens at the end of the manufacturing process. So, once a whole batch of a product is made, the tests will be run to determine whether it’s OK. This can lead to scrap rates as high as 75%,” says Phukan.

As most test suite rules can only be written based on previous experience, when a new problem arises that hasn’t been accounted for, this can lead to serious issues like product recalls.

Using predictive analytics platforms will therefore, according to Phukan, become the norm. Indeed, this is 47

something he’s already identified increasingly in manufacturing.

“When manufacturers speak to us, they ask if they can use machine learning to determine, along the way, if a batch is defective. They know we can detect things much earlier, so they can stop the process to minimise cost and loss.”

Does he have any specific examples of this in action? “We work with a large telecom provider in France and they had a real challenge with their set top box, which is not something you would assume requires heavy predictive maintenance. The problem they had was that every time one

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failed they had to go and identify the issue and replace it. Obviously, this is costly in terms of time and money. There’s also a huge risk of losing customers,” he says.

“We proactively identified that one third of their boxes had a problem which meant customer service could call and tell the people to update their box or send a replacement before a failure occurs.”

The future of bottleneck analysis Manufacturers are clearly becoming more attuned to the benefits of machine first cognitive technology, which allows them to identify anomalies and potentially bring in a subject matter expert to help determine the ramifications of the machine’s findings.

Indeed, Phukan discusses how AR, IoT, warranties, hybrid cloud computing

and blockchain will all increasingly play their role too, however, it’s detecting the unknown that he feels will be key.

“The key is not what is already known; domain experts can do a great job handling that, but the big challenge is the unknown and what’s going to hit businesses next. That’s what we need to prevent and that’s the crux of what will change the manufacturing game,” Phukan concludes.

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Business process outsourcing and the digital revolution

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TOP 10 AUTOMOTIVE

MANUFACTURERS

In this article we look at the world’s top 10 automotive manufacturers ranked by revenue. All figures are according to the Forbes Global 2000 Writ ten by HARRY MENE AR

TOP 10

NISSAN

www.nissan-global.com

10 BMW

www.bmw.co.uk Based in Munich, Germany, BMW Group is responsible for the production of automobile brands BMW, Rolls Royce, and MINI. The company also oversees the manufacture and sale of motorcycles, spare automotive parts and the financial services associated transportation, sale, and financing of its fleet. BMW Group reported a net revenue of $104.16bn in 2017, while the company’s asset portfolio grew by over $12bn year to year, continuing a 10-year trend of continuous expansion. The company reported last month that January 2018 represented an all-time record in sales, with 169,538 completed transactions, a 3.8% increase over January 2017.

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Nissan Motor is based in Yokohama, Japan, and reported a net revenue of $105.94bn in 2017. This figure represents a more than $4bn increase over the previous financial year. In November 2017, Nissan was forced to recall 1.2mn vehicles from the domestic market due to an inspection scandal. As a result, the company downgraded group operating profit outlook for the fiscal year by $0.9bn.

However, due to Donald Trump’s tax bill, the company raised its group net profit outlook to a record $6.61bn from its earlier estimate of $5.01bn.

9

TOP 10

FIAT CHRYSLER www.fcagroup.com

8 SAIC

www.saicmotor.com The Shanghai-based SAIC Motor Corporation reported a net revenue of $112.72bn in 2017, representing a $10.8bn increase year over year.

The company’s annual revenue has grown consistently by over $99bn over the past 10-year period. In January 2018, SAIC opened its first factory in Thailand, estimated to have cost over $310mn and is predicted to have an annual output of 100,000 units, according to the Nikkei Asia Review.

SAIC has also partnered with Charoen Pokphand Group, “seeking to stake a claim in a Japanese-dominated market as well as export to other Southeast Asian countries”.

Formed in 2014 from the merger of automotive giants Fiat and Chrysler, Fiat Chrysler Automobiles is now based in London, and reported a net revenue of $122.81bn in 2017. The company has experienced erratic profits over the past four years, with net returns as low as $56.5mn. 2017 represents the largest profits achieved by the company after the merger, with a bottom line of $1.99bn. However, Chrysler sales fell 19%, Fiat brand sales were down 19%, and Jeep sales decreased 11%, with total Fiat Chrysler sales down 8% for 2017, according to 24/7 Wall Street.

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TOP 10

FORD

www.corporate.ford.com

HONDA

6

world.honda.com

Headquarted in Tokyo, Japanese auto manufacturer, the Honda Motor Company, reported a net revenue of $127.86bn in 2017. This represents a $9B increase year to year and is the highest revenue over a ten-year period of near-continuous growth. However, profits have decreased by $1.7bn over the past three years, down to a five-year low of $3.93bn in 2017. In January 2018, Honda was forced to recall 350,000 cars from the Chinese market after reports of engine issues, according to Eyewitness News.

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US auto manufacturer Ford Motor Company reported a net revenue of $151.8bn in 2017, an increase of over $2bn in comparison to the 2016 financial year. The company also reported a growth in its asset portfolio of over $13bn, continuing a seven-year growth trend in the wake of the 2009 recession. Looking to the future, the company ranked seventh on a list of electric vehicle sales in the US, “which says a lot about how far behind Ford is in appealing to this fast-growing niche market,�

Seeking Alpha asserts. In response, Ford committed in January 2018 to investing $11bn into the development of a wide range of electric vehicles by 2022.

5

4 GENERAL MOTORS www.gm.com Detroit auto manufacturer General Motors reported a net revenue of $166.38bn in 2017, a figure only surpassed in the past 10 years by prerecession sales. After posting $1.8bn in net losses between 2014 and 2016, General Motors Korea announced in February 2018 that it would close one of its four plants in South Korea. “The move is the latest in a series of steps the US automaker has taken to put profitability and innovation ahead of sales and volume. Since 2015 GM has exited unprofitable markets including Europe, Australia, South Africa and Russia,” CNBC reports.

DAIMLER www.daimler.com

Daimler, the Stuttgart-based German auto manufacturer, reported a net revenue of $169.54bn in 2017, representing an increase of almost $4bn over the previous financial year.

The company announced in February that it had a record year in sales, with over 3.3mn new vehicles delivered, representing a 9% increase over the previous year. Daimler’s board chairman, Dieter Zetsche, announced: “Our company stands for stable success in volatile times. But stability is no justification [to stand still]. That’s why we are pushing forward with the transformation in all areas at Daimler.”

3

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TOP 10

VOLKSWAGEN www.volkswagenag.com

Wolfsburg-based auto manufacturer, Volkswagen Group, reported a net revenue of $240.34bn in 2017, representing an increase of 4.3%, year over year, according to German news source De Local. This can be viewed as no small feat in of itself, given the company’s ongoing embroilment in the 2015 emissions scandal; this month, the Quebec courts approved another class action lawsuit against the

2

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automotive giant. The cost of recall, production overhauling, and financial reparations is estimated to have cost the company in excess of $30bn.

In the face of financial setbacks, Volkswagen has turned to the emerging markets of electrical and self-driving cars, acquiring Aurora Innovation at the beginning of 2018, financially backing the startup’s aim to have self-driving cars on the streets in two-to-five cities by 2021.

1 TOYOTA

www.toyota-global.com Japan’s premier auto manufacturer, Toyota Motor, achieved its longstanding goal in 2017, surpassing rival Volkswagen to become the largest automotive manufacturer globally, with a net revenue of $249.9bn. According to a report by the Economic Times, this state of affairs is likely to continue, with Toyota seeing a nearly doubling of profit for the fiscal third quarter, also lifting its annual profit projection through March to $22bn, a record high

for the automaker. Toyota is looking to the evolving auto market with intent to disrupt current auto-identity conventions. Head of design Simon Humphries said: “The boundaries between car makers, train makers, bicycle makers and whatever else are going to change. To suddenly think we might be moving into a future where we’re delivering cargo and mass transit at the same time, that’s a big mindset change for everybody.”

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E V E N T S & A S S O C I AT I O N S

Events Manufacturing Global takes a look at some of the key events and conferences to attend across the globe this year Writ te n by A N D R E W WOO DS

The American Manufacturing Summit Lombard, Illinois 27–28 March

The American Manufacturing Summit describes itself as ‘a leadership-focused meeting designed around improving plant floor operations and manufacturing strategy across the globe’.

The summit serves as an annual platform to exchange ideas around the impact of market dynamics and new technologies.

This year’s will focus on examining case studies of how workforce management, lean manufacturing, process improvement and automation are being rolled out in the world’s best facilities.

Speakers at this year’s event include Karl Weiss, VP, Material Handling and Underground Division, Caterpillar Inc; Gena Lovett, VP, Operations Boeing Defense, Space and Security, The Boeing Company; and Heather Remley, SVP, Petrochemicals North America, BASF Corp., amongst others. www.manusummit.com

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Mach UK

NEC Birmingham, UK 9-13 April With over 600 companies exhibiting, a staggering £150mn of business was attributed to MACH 2016 and 2018 promises to be bigger and better with new zones, innovative technologies and a vibrant seminar programme. Held every two years, this event from the Manufacturing Technologies Association (MTA) deals specifically with engineering-based manufacturing. It brings together new innovations and latest developments from the manufacturing technologies. 25,627 visitors attended the 2016 show.

The Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo Nairobi, Kenya 25–27 April

Now going into its fourth year, The Africa Food Manufacturing & Safety Summit (AFMASS) Conference & Expo provides the most important route to Eastern and sub-Saharan Africa’s food and beverage, milling and feed and hospitality and foodservice industries.

Even though the event targets the industry players from Eastern African countries, delegates and visitors at past editions of AFMASS Kenya edition have come from four continents and over 40 countries from around the World.

The conference sessions shall bring together 400-plus regional and international delegates and speakers daily in conference and panel discussion sessions. A parallel exhibition, open to trade visitors, and where over 2,000 visitors are expected over the three days, will provide exhibitors and partners the opportunity to trade and reach out to the industry. www.afmass.com 63

E V E N T S & A S S O C I AT I O N S

National Manufacturing Week – Australia Sydney Showground 9–11 May

This event is pretty much summed up by its slogan: ‘where Australia’s manufacturing value chain comes together’. National Manufacturing Week is an opportunity for exhibitors to network and do business, generate new sales leads, promote their company, products or services and launch new products and solutions.

Visitors to the event can experience Australia’s largest showcase of manufacturing innovation, information and inspiration, focused on things like safety and Industry 4.0. www.nationalmanufacturingweek.com.au

MTA 2018 (Manufacturing Technology Asia) conference Bangkok, Thailand 16–19 May

MTA 2018 is an international precision engineering, machine tool and metal-working exhibition and conference which is growing year-onyear. The event had nearly 8,500 attendees last year from a total 38 countries. Exhibits will include anything from 3D Printing Systems to cooling and lubrication for machines and organisers hope that, with such variety on offer, this year’s event can be even bigger and better. www.mta-asia.com

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2018 Canadian LEAN Conference RBC Convention Centre, Winnipeg 04–07 June

‘Embracing Excellence’ is the tagline for this event where 1,000 leaders, managers and LEAN practitioners will come together to explore LEAN thinking, share enterprise excellence and learn LEAN best practices.

Organisers say: “Our vision is to provide conference attendees with a first-rate learning experience that will show them how embracing excellence and engaging people in continuous improvement benefits customers, employees and stakeholders alike.”

This year’s conference will include seven keynotes from highly acclaimed industry leaders, lean gurus and motivational speakers; 15 highly-interactive, in-depth workshops, given by proven LEAN experts; 36 practitioner-to-practitioner presentations, divided into four value streams; and 18 tours where you see hands-on applications of LEAN thinking in action. www.embracingexcellence.ca

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E V E N T S & A S S O C I AT I O N S

Subcon UK

NEC Birmingham 5-7 June Now in its 42nd year, Subcon is a massive event for subcontract manufacturing professionals across all industry sectors, looking to source suppliers, benchmark capabilities and secure the right partners to help them remain competitive in a global market.

The best of British manufacturing will be on display alongside a wealth of market leading international suppliers all looking to help UK manufacturers optimise their supply chain strategy in 2018 and beyond. Taking place alongside a free to attend, three-day educational programme and brand-new sister event, The Engineer Expo, Subcon 2018 is set to be the biggest event to date.

14th Annual Manufacturing Leadership Summit Huntingdon Beach, California 11–13 June

Back to the United States now, for this summer’s Frost & Sullivan 14th Annual Manufacturing Leadership Summit, an event which embraces the constantly-evolving nature of the industry.

Organisers say: “The global manufacturing industry is entering an era of radical change. Driven by new, transformative cyber-physical technologies, manufacturing companies around the world are now envisioning a future state for the manufacturing industry that will change the rules of competition, how work will be performed, how companies will be organised, and how leadership must lead.” ww2.frost.com/event/calendar/manufacturing-leadership-summit 66

April 2018

2018 Global Automation & Manufacturing Summit McCormick Place, Chicago, Illinois 13 September

This time, rather than looking at the entire conference output, we’ve highlighted one event which is part of the International Manufacturing Technology Show 2018.

It’s the 32nd edition of what is described as ‘the premier manufacturing technology show in North America’ and will host the 2018 Global Automation & Manufacturing Summit, with this year’s themes described as ‘connecting the dots’.

Organisers say: “As implementation of Industrial Internet of Things (IIoT) strategy continues, manufacturers are looking for effective ways to measure and manage plant floor data and make it useful to improve their operations.

“The 2018 Global Automation and Manufacturing Summit will update manufacturing leaders on where the industry is at in the journey to operational IIoT systems and will explore issues such as cybersecurity and operational change management.”

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E V E N T S & A S S O C I AT I O N S

AME 2018 International Conference San Diego, California October 29–November 1

The theme for this event is ‘Create Waves of Excellence’, and organisers says the AME San Diego 2018 International Conference will explore ways for individuals and organisations to accelerate their journey toward excellence.

More than 2,000 attendees are expected at the event which will include speakers such as award-winning innovation expert Jeremy Gutsche, entrepreneur and former NFL quarterback Joe Theismann and Billy Taylor, Director of Manufacturing, Goodyear. www.ame.org/sandiego

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Future Manufacturing and Trade Summit

Venue TBC, but expected to be Dubai November 2018 (exact dates TBC) Formerly known as the GCC Manufacturing Excellence and Technology Summit, this event has now been renamed and is currently the GCC’s largest manufacturing and trade conference.

The Future Manufacturing and Trade Summit 2018 will explore the technological developments, address key issues and showcase innovative manufacturing strategies within all manufacturing disciplines.

Organisers says: “The summit is the only dedicated platform to discuss cutting-edge manufacturing technologies, future trends in manufacturing excellence and strategies to boost this sector’s role in economic development. The manufacturing industry has been identified as one of the key economic drivers for both the country and the region and it plays a pivotal role in promoting economic growth and trade in the country.”

Across two days over 500 delegates from the manufacturing industry will come together for what is described as ‘a truly interactive discussion on the technological developments and innovative manufacturing strategies being implemented within multiple disciplines in the region’.

Speakers and exact dates and locations have yet to be confirmed for next year’s event, but it is expected to be held in November, in Dubai, and promises to be one of the key manufacturing conferences of the year.

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Nokia’s ‘conscious’ factory of the futur

Written by Laura Mullan Produced by Charlotte Clarke

re

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NOKIA

Unveiling its groundbreaking ‘conscious factory,’ telecoms giant Nokia is truly ready for the fast-changing manufacturing needs of the future

S

everal years ago, Nokia set itself an ambitious objective: to envision and create the ‘factory of the future’. Fastforward to today and the telecoms giant has made this distant future a reality with its state-of-the-art concept – ‘the conscious factory’.

With every industrial revolution, factories have evolved to create something unlike anything that has come before. Now, in the midst of Industry 4.0, analytics, robotics, and 3D printing are just some of the emerging trends that are redefining the manufacturing space at large.

By harnessing the potential of these technological trends, Nokia’s

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Sanmina – Advanced Technology and Global Supply Chain Solutions for Nokia

Sanmina Corporation designs and produces the highest technology products we use everyday, including advanced optical and telecommunications products, cloud storage, smart and connected devices. Nokia and other Fortune 100 companies depend on Sanmina for end to end, global supply chain and manufacturing solutions.

NOKIA

“It’s a complete game changer” Johannes Giloth (left), Senior Vice President of Global Operations and Chief Procurement Officer at Nokia

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Conscious Supply Network is ushering in a new era of supply chain transformation and battening down the hatches for Supply Chain 4.0.

Nokia’s vision was a simple one: to transform its factories into ‘the conscious factory’ – an agile and intelligent manufacturing service that is fully-automated, green, self-learning, and able to predict and prevent supply flexibly.

To make this hi-tech network a reality, the Finnish giant zeroed in on four crucial areas: digitisation, analytics, robotics and transparency. It leveraged tools such as cloud computing, Internet of Things (IoT), analytics, machine learning, robotic process automation (RPA) as well as augmented and virtual reality. In doing so it has created an endto-end supply chain solution that is more visible, adaptable, and smarter than anything before.

A conscious supply network It has been a mammoth task for Nokia, but it is one which the team believes will revolutionise manufacturing forever.

“In former times, if you outsourced a factory it was like a black box,” explains Johannes Giloth, Senior Vice President of Global Operations and Chief Procurement Officer at Nokia. “You placed an order there and waited until the delivery arrived but, in between, you couldn’t see anything. With our conscious factory, I can see in real-time

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EMPOWERING NEXT GENERATION MOBILE COMMUNICATION Created in 2015, Ampleon is shaped by 50 years of RF power leadership and is set to exploit the full potential of data and energy transfer in RF. Ampleon has more than 1,350 employees worldwide, dedicated to creating optimal value for customers. Its innovative, yet consistent portfolio offers products and solutions for a wide range of applications, such as mobile broadband infrastructure, radio & TV broadcasting, CO2 lasers & plasma, MRI, particle accelerators, radar & air-traffic control, non-cellular communications, RF cooking & defrosting, RF heating and plasma lighting.

Amplify the future | www.ampleon.com

Taco Zwemstra, Senior Vice President

Arttu Ollinaho, Global Key Account

and Chief Operating Officer: “With

Director: “By closely collaborating

our balanced mix of in-house and

with Nokia, the flexibility of the entire

external manufacturing, supported

supply chain is being significantly

by state-of-the-art planning

improved. This increased flexibility

and execution tools, Ampleon is

and an overall lead-time reduction

prepared to embark on the next

are needed to meet the volatile

journey towards greater customer collaboration and support.”

TRANSFORMING THE SUPPLY CHAIN FOR BETTER CUSTOMER EXPERIENCES

market requirements and to speed up new technology developments.”

Nokia is a leading customer in the Mobile Broadband business, purchasing high volumes of Ampleon’s Radio Frequency Power Amplifiers (RFPA) for 4G and 4.5G base stations.

Examples for 4G RFPA high volume parts:

Ampleon, being a young company with a long history in RF Power, has had the ideal opportunity to transform its supply base and supply chain operations. Following the carve-out from a large company, the establishment of an independent company created many challenges, but also many

BLM7G1822S-40PBG

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opportunities which allowed us to improve the support for our customer base.

As Nokia’s business is moving towards 5G, many business opportunities are linked to the multitude of new 5G

First and foremost is the ability to transform our previous

frequency bands. These 5G products require complete new

in-house manufacturing to a balanced combination of in-

RFPA technologies for various power levels and frequency

house and external manufacturing. Partnering with leading companies, leveraging their strengths with our needs,

bands. At the same time, the speed of development and technology creation in the entire supply chain is challenged:

offered us to the chance to optimize our supply chain. Our

the even more complex new products must be available way

own in-house back-end manufacturing gives us the flexibility

faster than before. This requires high attention to the overall

and quality to launch key technologies which help to boost

lead- and cycle times within the global supply chain. The way

our business.

towards a massive MIMO (Multiple Input Multiple Output) type of Base Stations in 5G requires scalability in volume

Secondly, we have had the opportunity to redefine our

capacity and an adjustable supply chain more flexible than

IT landscape and advance our business processes and

ever before. This can only be achieved when supplier and

associated tooling. Choosing state-of-the-art business

customer are partnering for success.

planning and supply tooling will enable Ampleon to become even more flexible with the aim to further grow our business with our key customers. Ampleon has embraced “Partnering for Success” as one of the key business drivers towards future growth. Together with our customers, suppliers and R&D partners, and with a next step in supply chain excellence and system support, we are well on our way.

Follow us:

NOKIA

what happens in each factory and I can optimise the process.

“It’s a complete game changer.”

With over 30 factories worldwide, Nokia’s supply chain is a far-reaching one spanning several continents.

However, the Finnish company only owns three of these factories with the rest being outsourced. Instead of focusing on owning bricks-andmortar, Nokia is concentrating on owning the information, the data, and knowledge behind it. By understanding how the industry is connected together, the

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organisation is creating a conscious supply network, an end-to-end ecosystem built on end-to-end understanding and knowledge.

“Only three of our factories are owned by Nokia because we have not been focusing on manufacturing, we have been focusing on managing a manufacturing network,” observes Giloth. “I only can manage this network if I have data. I don’t care about owning the equipment, but I care about owning the data.

“We are putting thousands of sensors in our factories and

ASIA

Nokia has more than 30 factories around the world

connecting all our manufacturing and logistics assets together so that they can talk to each other,” he continues.

“With that, we are creating what we call a ‘conscious factory’, where all transactions are visible in real-time in a controlled centre. With that, you can optimise throughput, inventories, quality, and you can apply machine learning to it. It helps you automate the entire process, it helps you ensure quality, it helps you to reduce cost in inventories, and it helps you be more flexible in adapting your supply chain. But having one conscious

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Solutions for me.

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With its world-class inspection systems, Viscom is always the partner of choice when your electronic assemblies require optimal quality assurance. The complete range of optical and X-ray inspection guarantees extremely fast and unequaled inspection coverage: even concealed components, hidden solder joints, and material defects can be accurately tested.

Long-term experience as a premium developer and supplier of advanced technologies is the basis of Viscom’s solutions, which ensures continuous process optimization.

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The company also has numerous regional support and service centers in order to keep the systems at the peak of performance in actual use, even long after the purchase by update and upgrade offers.

micro-computed tomography. The offer also includes solutions for conformal coatings and wire bond inspection. Thus, all inspection gates are covered by a single source.

The portfolio comprises automatic optical inspection, solder paste inspection as well as automatic and manual X-ray systems with

For contact and detailed information write to info@viscom.com or visit www.viscom.com.

Suppliers to the automotive industry make up the largest customer group. Viscom also has well-known purchasers in other industrial branches such as consumer electronics, aviation and aerospace, medical technology and industrial electronics.

The quality of PCBs plays a crucial role in the implementation of functions and performance of electronic products. Thus, Viscom´s PCB inspection is an essential element in any electronics manufacturing process.

NOKIA

factory is just the start of it. We want to create an entire network.”

Presenting the ‘factory in a box’ This is just the beginning of Nokia’s vision for the future; it is also resigning the idea of large manufacturing locations to the past. Unveiling its ‘factory in a box’, Nokia is anticipating the fastchanging manufacturing needs of the future, by creating a conscious ‘Lego’ building block factory.

Offering unparalleled flexibility and agility, this factory in a box aims to revolutionise today’s factory floor. It can be transported to the location, build the necessary volume for ‘country of origin’ requirements and can be moved again as needed.

Agility is a factor which can make or break a company, especially in the telecoms industry, and so the factory in a box could be instrumental as it allows product prototypes to be quickly created, tested and fixed if necessary. What’s more, if a site is hit by a natural disaster, critical customer orders can still be achieved

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“Having one conscious factory is just the start of it. We want to create an entire network” Johannes Giloth, Senior Vice President of Global Operations and Chief Procurement Officer at Nokia

quickly with a portable factory.

“It is a step towards a modular supply chain factory,” says Giloth. “A big problem in the manufacturing space is that R&D and manufacturing should be close together because then you have an immediate feedback loop.

“Every time I have a factory request, whether it’s in Nigeria or elsewhere, I cannot create a factory there and demolish it after a year.

With the factory in a box, you can ship that modular container there, produce

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The future of intelligent productivity MY700 - The ultimate in high-speed jet printing and jet dispensing The future of electronics production belongs to those who can handle any solder paste or fluid deposit with absolute precision and unmatched speed. Part of the new MYPro series, the MY700 Jet Printer and Jet Dispenser combines solder paste jet printing with jet dispensing of adhesives, UV materials, epoxies and more – with micrometer precision and at speeds of more than one million dots per hour. Thanks to a combination of intelligent software and revolutionary jet-printing technology, you can accelerate your production with on the-spot revisions, 3D mounting, and perfect quality solder joints for both rigid and flexible boards. Simply put, it’s the smartest way to boost quality and utilization across a vast range of challenging applications.

Whatever your ambitions, the future is already here. In fact, it’s just in time.

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Number of employees at Nokia the product and when it’s ready for mass production, you go elsewhere.”

A global company with a local focus “This will not only transform the supply chain landscape at large, it will also create opportunities for unique regional players,” explains Bo Jensen, Head of Delivery Operations Asia Pacific & Japan at Nokia.

“If we look at it from a local perspective, it also allows us to adapt to local requirements, so this would be advantageous for regions such as Indonesia, for instance, where there’s a lot of discussion about local content and requirements. It creates a lot of flexibility and it also provokes our customers to take a bigger step,” he comments.

Sitting in Nokia’s gleaming regional office in Singapore, Giloth and Jensen passionately bounce back-and-forth as they talk about the latest exhibitions where they will showcase this ground-breaking concept. Sitting in the epicentre of the bustling business district, Nokia

has firmly cemented itself as a major player in the manufacturing space.

The ‘conscious’ factory may have seemed futuristic but it is possible - and Nokia made it happen.

However, this state-of-the-art concept didn’t come about in an instant. It is the result of over a decade’s work, and it is just one step in what has been a complete rootand-branch transformation of Nokia.

A high-level supply chain transformation On this journey, the organisation faced three successive challenges that created what Giloth called an ‘existential moment’ for Nokia – one which would bring about one of the biggest supply chain transformations in the industry. In the past two years, Nokia jumped from 101st to 15th in Gartner’s Top 25 Supply Chain ranking, an extraordinary turnaround that the research firm hailed as ‘triumphant.’ It has been a lengthy process for both the company and its people but Nokia is keen to keep up this momentum.

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NOKIA

“This supply chain transformation has been a journey of around eight years,” Giloth says.

“We were undergoing external shocks to a certain extent. The first challenge was the battle of profitability that was driven by major Chinese competitors, and because of this we needed to cut costs and drive efficiency in the supply chain, and therefore one of the solutions was to create an integrated supply chain.

“We applied a lot of lean, Six Sigma, Kaizen continuous improvement efforts – the bread and butter of a good supply chain,” he adds.

“We renovated our organisational setup. We introduced KPIs and that was just the first step.”

The next challenge confronting Nokia was the pressure to be agile and responsive in a volatile market.

“The need for an agile supply chain became more and more paramount,” Giloth reflects.

“We invested a lot of time and also money in making our supply chain and demand planning, reacting faster to the market changes while not compromising on the lean setup. Then that created an integrated and demand-driven supply network.”

Customer-focused The third and perhaps most pressing priority? Customer centricity.

In many organisations, supply chains are seen

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“We used to be in the trenches of the back office but now we’re more involved from the beginning of the opportunity in order to create the best possible customer experience” Johannes Giloth, Senior Vice President of Global Operations and Chief Procurement Officer at Nokia

as a back-end function, but at Nokia, that notion is being flipped on its head. Giloth and Jensen believe that ‘creating the technology to connect the world’ is more than just a tagline that people associate with the telecoms company – it is a core value that should be interwoven through all aspects of Nokia, including its supply chain.

“Our market is diversifying hugely,” observes Jensen. “We have new customers, new segments, and therefore it’s critical that we are more customer-specific and more consumer-driven. In all aspects, user experience is really influencing our behaviour.

“Interestingly, we’re also seeing that by making our supply chain more customer-centric, we can grow our top line,” he continues. “We are having more strategic engagement with our customers and more what we call ‘stickiness’. This is significant because the more we are in, the more we can help them, and the more likely it is that we can build on this.

“It’s also about building a company

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mentality in the organisation that shows we are an important part of what the customer is seeing in their daily life. We used to be in the trenches of the back office but now we’re more involved from the beginning of the opportunity in order to create the best possible customer experience.”

From top to bottom, customer needs are driving decisions at Nokia. But as each customer has their own unique demands, Giloth describes how the Finnish company has worked to understand and cluster its customers into segments so that it can deliver the things that really matter to them.

“Some customers want to have fast delivery, but they are not really price-sensitive,” Giloth says. “Others are looking at the price only, but the supply chain related KPIs are not that important. You need to really understand the different KPIs and what your customers want.

Our customers have completely different requirements in terms of throughput, reactiveness and on-time

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delivery so we need to understand the requests of the customer and segment our supply chain towards it.”

However, a customer segmented supply chain is just the start, Giloth says. “You also have to create customer intimacy, to really talk with your customers, and be exposed to the customers.

“Therefore, we have people like Bo in the regions being more and more connected with Nokia customers, rather than it being a very back-ended function. On top of that, you need to design your processes and your tools to make it easy for customers to use. Your product configuration can be cumbersome, or it can be Amazon-like. If the customer has a good feel of that user interface, that’s added value in itself.”

True digital transformation Often, ‘digitisation’ can seem like just another buzzword; a few syllables that have saturated business press releases worldwide. However, Nokia has proven it can be more than just on-trend lingo. Over the

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past several years, it has worked diligently to revamp its digital space but it doesn’t underestimate the challenges that lie ahead.

“Digitisation has become a buzzword because many global supply chains are far away from being truly digitalised,” says Giloth candidly. “The benefits and the potential have not been fully uncovered. At Nokia, we think that the next S-curve in achieving supply chain maturity is digitalisation.

“Nokia is a company of different legacies,” he continues. “It’s a combination of Nokia, Siemens, Alcatel-Lucent, Nortel, Motorola and Panasonic. All those companies we have merged with over the last few years have brought legacy systems and IT systems with it. It is unrealistic to have a monolithic IT system in a dynamic company like Nokia and so we are trying to bridge that by using technology like RPA and artificial intelligence, for example.”

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Sustaining supplier relationships Nokia is taking radical steps to accelerate its digital maturity and influence the shape of things to come, but it isn’t doing it alone.

Sustaining strong supplier relations has been key to unlocking Nokia’s supply chain transformation.

“We are working closely with companies to help us automate our processes on a daily basis,” Giloth says. “When it comes to that conscious factory environment, we have been working closely with a lot of sensor companies, small IoT startups, and cloud companies to

really get a deeper understanding.

When it comes to digitalising entire process chains, we have a lot of internal projects, but these are also supported by specialised consultants in those areas.

“As well as this, we have just consolidated our business process outsourcing and that strong focus has really helped us transform our auto management process,” adds Jensen. “We’re also using everyday tools like Office 365 and SharePoint Online to digitise the everyday life of the employee as much as possible.

We want to change the mindsets

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of our people and encourage them to utilise the opportunities that are at our fingertips every day.”

Open collaboration ‘No man is an island’, and the same can often be said about business.

In this ever-evolving industry, the right collaboration could set you miles ahead of a competitor and perhaps no one understands this better than Nokia. As a result, the Finnish company has turned to the Open Ecosystem Network. Built on the principle of data democracy,

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this innovative platform has shaken up traditional business models and proposed a new way of working with different ecosystems and industries.

By connecting developers, startups, business incubators, universities, subject experts and entrepreneurs, the platform allows groups to share ideas and find the right people to develop them.

“It revolves around co-ideation and co-creation with our suppliers, but also collaboration within the company,” Giloth explains. “It’s a digital platform where you can post

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“Getting that outsidein perspective was one of the key levers that helped us reach the next level�

Bo Jensen, Head of Delivery Operations Asia Pacific & Japan at Nokia.

ASIA

your ideas, where you can have private rooms and where you can also have protected information in there, in case of sensitive intellectual property rights (IPR) discussions, for example. In this way, you can just accelerate the way you are dealing with your suppliers and prepare for the future. In the creation environment, it’s all about speed.”

An outside-in approach This sense of open collaboration is largely a result of what Jensen describes as an “outside-in”

approach. “Getting that outside-in perspective was one of the key levers that helped us reach the next level rather than being satisfied with what we’ve always been doing,” he says.

“After a very long time of trying to optimise looking at ourselves, we managed to turn it around.

We are working with a lot of exciting external companies in order to get a perspective on what others are doing.

“Instead of just looking at ourselves and polishing the chrome it’s about really asking ‘okay, what

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“Customer segmentation is going to become more important with 5G, because today our major customers are the major telecoms operators of the world, the big internet players. In the future, it could be someone like BMW or Tencent.

It could be a bank or a hospital�

Johannes Giloth, Senior Vice President of Global Operations and Chief Procurement Officer at Nokia

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can we do substantially different?

How can we disrupt the sector?”

5G ready With the looming roll-out of 5G on the horizon, the telecoms industry is a thrilling yet unpredictable one to be in. Nokia has consistently been readying itself for 5G, chipping away at any obstacles in its path. Whilst Giloth and Jensen recognise the challenges it still poses, they feel that conscious supply network will propel the firm to new heights.

“The first generations of mobile phone technologies were incremental to each other, but 5G is changing everything,” notes Giloth. “It will open the communications sector to hundreds of other industries because it is vital for uses like autonomous driving and robotics.

“It’s a huge technology shift. We have invested heavily in R&D which has helped to set us apart, but you cannot do this just alone, you need to have partners. We have strategic partnerships that are helping us develop the necessary chips

and technologies. Without those industry ties it’s difficult, and so it takes a much more collaborative approach in many areas. You need to have long-lasting partnerships.

“The market is changing and our customers are changing, and so our supply chain needs to be changing too,” he continues. “Customer segmentation is going to become more important with 5G because today our major customers are the major telecoms operators of the world, the big internet players. In the future, it could be someone like BMW or Tencent. It could be a bank or a hospital. With that, you need to completely rethink your value chains.”

A true telecoms behemoth, Nokia has always left a lasting mark on the sector. The Finnish giant has come a long way since the humble, hardwearing phones it became infamous for and now, as Giloth and Jensen take the ‘conscious factory’ to the global stage, it seems that Nokia’s historic legacy is beginning a new chapter.

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HENSOLDT

FOLLOWING A SUCCESSFUL CARVE OUT FROM AIRBUS, HENSOLDT LOOKS TO CAPTURE THE EUROPEAN MARKET

Written by DALE BENTON | Produced by ANDY LLOYD

H ENS OLDT

“BUILDING UP AND DEVELOPING IT, WHICH IS OFTEN A SUPPORT FUNCTION IN THAT SITUATION, IS A CHALLENGE IN ITSELF. BUT IN A SITUATION LIKE THIS IT’S EVEN MORE SO. YOU’RE WORKING ON A LOT OF ASSUMPTIONS AND YOU CAN’T LOOK TO ANOTHER BUSINESS SUPPORT FUNCTION AND ASK FOR HELP, BECAUSE THEY ARE IN THE SAME SITUATION” – Steffen Schreck, CIO

N THIS MODE RN era of digitisation, carving out and establishing a provider of sensors and integrated solutions for the European security and defence market requires strategic leadership and an in depth understanding of IT, technology and this changing technological landscape.

Thankfully, for HENSOLDT, that leader comes in the form of Steffen Schreck as CIO. Following a long career in IT, one that has seen him work in all roles within the IT function, Schreck has overseen significant transformations and mergers and acquisitions.

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and build a future IT infrastructure.

“My first task was and remains the execution of the carve out and the ramping up of the IT department entirely to the creation of an independent company altogether in HENSOLDT”, he says.

“This means building up all the business functions and all the other support processes such as IT. The challenge here, was that this was happening all at once and not as part of a long-term strategy, or from a

baseline because everything was and is being created from scratch.”

HENSOLDT was formed from Airbus, specifically the company’s defence electronics activities. In 2017, under the name HENSOLDT, which comes from the German pioneer of optics and precision mechanics Moritz Carl Hensoldt, the company embarked on an ambitious carve out journey.

As CIO, Schreck is tasked with creating not only an IT infrastructure for an entire company, but one that will

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be capable in supporting the delivery of market leading, innovative data and sensor solutions.

“Building up and developing IT, which is often a support function in that situation, is a challenge in itself,” he says. “But in a situation like this it’s even more so. You’re working on a lot of assumptions and you can’t look to another business support function and ask for help, because they are in the same situation.

“This, in effect, creates a level of instability.”

No transformation of IT infrastructure is without it’s challenges and as Schreck points to, building that alongside the formation of the company itself only amplifies that challenge. The key challenge in this regard becomes one of prioritisation, or lack thereof in this case.

“Everything is operating parallel to one another and you simply cannot say that you’ll do it sequentially and start with this and prioritise that,” he says. “Of course, this applies to the business departments too, so you have the challenge of working with an entirely new approach model right from capturing requirements 108

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“AS WE WERE STARTING FROM SCRATCH WE ONLY HAD A VERY WEAK DEFINITION OF WHAT THE SEPARATION WOULD BE, AND I ALONE COULD NOT DEFINE WHAT WAS THE INTELLECTUAL DATA OF AIRBUS AND WHAT WAS THE INTELLECTUAL PROPERTY OF THE CARVE OUT. THIS WAS SOMETHING THAT HAD TO BE CLARIFIED FROM THE BEGINNING” – Steffen Schreck, CIO

EUROPE

to project execution.”

As with the forming of any company, this is a continuous process. When the decision was made to separate and carve out into a new independent organisation, the company set itself a timeframe of sixteen months.

Sixteen months to separate, build and set out into the market is no small feat, but HENSOLDT enters 2018 as a fully-fledged organisation with more than 4,300 employees worldwide, 1,000 patents and a turnover of more than €1bn ($1.24bn USD).

But despite this success, Schreck concedes that the journey took some time to get going in the first instance and this was a product of having to work with and ultimately convince various different stakeholders.

“Separation takes time,” he says.

“This meant we had to convince lawyers, convince the business managers and the shareholders that there is a clear business case here and one that will result in great success moving forward.”

The way in which Schreck overcame this and was effectively given the greenlight was simple – communication.

But as a technologist, someone who w w w. m a n u f a c t u r i n g g l o b a l . c o m

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has lived and breathed IT and technology throughout his entire life, he had to adapt.

Luckily in the beginning, Schreck was backed significantly by the board, but as he embarked on this new company, he had to make a decision as to what data and what property he would take with him to HENSOLDT. This is where the establishment of a solid base of communication proved key.

“It was very helpful to create a common understanding. Handling data and solutions like this, and of this scope, I needed to convince business

leaders to buy into what we were doing,” he says.

“It also proved very helpful in establishing a multi-functional team that would work with me on this. After all, as we were starting from scratch we only had a very weak definition of what the separation would be, and I alone could not define what was the intellectual data of Airbus and what was the intellectual property of the carve out. This was something that had to be clarified from the beginning.”

As the journey gathered steam, Schreck and his team had to migrate

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“ YOU HAVE A MUCH BIGGER INFLUENCE ON THE ORGANISATION AND WITH THAT, THE CIO HAS TO BE AN INTEGRATOR. IT’S NOT JUST ABOUT CREATING PLATFORMS AND SOLUTIONS, IT’S MUCH MORE” – Steffen Schreck, CIO

close to 4,000 workplaces across three main sites in German, with a large number of smaller size and remote sites all over the world. When Schreck begun to dig deeper, that migration included more than 600 applications.

But the challenge before Schreck here was not a typical one, in fact the technical separation and installation was comparatively straightforward.

For Schreck, the challenge was one of licencing.

“We found out pretty quickly that the major problem is the licencing.

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licence, but when you’re dealing with a transformation of this size those licence models are in no way ready to accommodate that,” he says.

This required substantial negotiation and overall effort from a multifunctional team of procurement and licence experts, which again was difficult due to the creative journey which saw the IT users defining which applications were needed and to what scope.

“It was very difficult as we work with a large number of vendors, but in the end, it was solved effectively,” Schreck says.

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HENSOLDT, through its very nature like Airbus before it, captures, processes and analyses data. As part of its market offering it offers sensor and data solutions and in doing so the company must ensure it has the capacity and the capabilities in place to do so.

This is where the company adopted a “cloud-first” strategy, which was born out of the concept of not wanting to migrate or merge “too much” from Airbus.

“We wanted to be quick in forming HENSOLDT, and so we realised that we could easily integrate too much from Airbus which would be both costly, and

time consuming,” says Schreck.

“And we looked at the handling of data, which is extremely confidential given our market, and we realised that we could utilise cloud software to store that data.

“It actually helps us further in the sense that we can push the separation and implement new solutions much quicker and more effectively.”

As HENSOLDT moves towards becoming a global blue chip brand, coming off the back of a transformational journey, Schreck feels that it is not only the company that has had to evolve and transform, but that the industry and the role of the CIO has changed alongside it.

“It’s no longer just business IT or being seen as just a support function,” says Schreck.

“You have a much bigger influence on the organisation and with that, the CIO has to be an integrator. It’s not just about creating platforms and solutions, it’s much more. Ultimately, it’s about supporting the business in a global process model, and that’s what we’ve achieved here with Hensoldt and will continue to do as we embrace the future.”

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WORLD CLASS QUALITY CABLES MANUFACTURED AND DISTRIBUTED IN COLOMBIA Colombia does an excellent job at sustaining its market share, making the most from opportunities arising from recent investments in the country

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Written by Mateo Rafael Tablado Produced by Lucy Verde Interviewee Luis Ernesto Silva, CEO for Nexans Colombia

NEXANS COLOMBIA

T

he Nexans Group, originally from France, has a presence in 40 countries through 100 production plants operated by 26,000 employees. Its Colombian affiliate contributes with a smooth operation, standing out in areas such as talent management, internal communication and employee satisfaction levels.

Nexans Colombia’s six-point gain in domestic market share is a result of a more than 40% increase in sales over the last three years.

“We have a very tight workforce and communication is quite clear. We share these practices with the rest of the affiliates globally,” says Luis Ernesto Silva, CEO for Nexans Colombia.

Silva, a mechanical engineer,

graduated in 1996 from the Francisco de Paula Santander University. He also took specialisation courses in maintenance and senior management at Santander Industrial University (in Colombia, as well as Francisco de Paula), and also took postgraduate studies in finance and international business from Universidad de la Sabana (Colombia).

“I do my best at keeping updated in strategy skills and improving my leadership abilities,” he adds.

Catering for every market segment Nexans Colombia is currently an important supplier performing a relevant job for four large market segments:

“We have a very tight workforce and communication is quite clear.

We share these practices with the rest of the affiliates globally” – Luis Ernesto Silva, CEO, Nexans Colombia

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Video Corporativo Nexans Colombia S A • DISTRIBUTION AND INSTALLATION. Nexans Colombia’s core business demands a highly competitive level to earn this channel’s end consumers’ trust.

• UTILITIES. This segment deserves special attention, mostly when copper is involved in any project. Nexans Colombia is constantly active in RFTs. During the last six years, work with the EPM group has been proactive, and the forecast is for this partnership to continue in coming years.

• OIL AND GAS. The fossil fuel sector is also an important part of Nexans’ operations in Colombia, where traits such as a timely delivery, technical support and cost competitiveness are key factors to success. Ups and downs in commodities prices affect this and other sectors. Nexans Colombia counteracts with possible downtime in this sector by making the most of opportunities in the emerging renewable energy sector.

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• INFRASTRUCTURE. The company is currently a minor player in this sector, but that will certainly change soon now that important investments are being made in the country, especially in urban transportation and highways.

Digitalisation at every level High on Nexans Colombia’s priorities list is digitalisation, both for manufacturing and serving

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clients, enabling the company to reduce the time it takes to carry out numerous processes.

Nexans’ own digital transformation connects its production plant and every matter related to supply chain, as well as finished products and the company’s sales force.

“Capex to increase capacity and tech updating is always present in Nexans as one of our business’ most important variables, along

L AT I N A M E R I C A

200+ Number of employees at Nexans Colombia

with talent development and innovation,” Silva points out.

Flexible suppliers The key word for companies taking part in Nexans Colombia’s supply chain is FLEXIBILITY, mostly when dealing with commodities, consumables and freights.

One of Nexans’ regular priorities is to maintain constant contact with suppliers no matter if there’s low

or high demand for the products and services they provide. This results in an appropriate work capital management, being always able to satisfy clients’ demands.

Workforce development, wellbeing and recognition Management of human resources at Nexans Colombia follows three key pillars:

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• PERSONAL AND PROFESSIONAL DEVELOPMENT. Training for every employee, even abroad in other Nexans affiliates, is standard, with English lessons and permanent contact with the Nexans global network an important feature.

• WELLBEING. An essential part of the Nexans environment, guaranteeing every worker feels secure in his/her position, being comfortable while off-duty with his/

her family, and with certainty that healthcare necessities are covered.

• RECOGNITION. Nexans Colombia acknowledges its workforce’s achievements through incentives such as the “employee of the month” award (voted by fellow co-workers) and also other giveaways when workers earn academic degrees.

“People are the strongest pillar supporting strategy execution,” Silva adds.

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2008 Relationships with community and colleges The company, through the Nexans Foundation, has benefitted small towns and villages by deploying electric power to 200 households, and has also worked with NGOs to increase the wellbeing of children in their operational areas.

Nexans Colombia is host to students and graduates from local colleges, strengthening relations between businesses and colleges.

Projections Along with other important players in the sector, Nexans Colombia took part in the Feria Internacional del Sector ElÊctrico (international fair for the electricity sector), which takes place in Medellin every two years. The event experienced more visitors and exhibitors than expected during the 2017 edition – feedback obtained from the fair demonstrates how highly competitive the sector has become in Colombia, which

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“People are the strongest pillar supporting strategy execution” – Luis Ernesto Silva, CEO, Nexans Colombia

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now represents an attractive market for companies from China, Italy, and the US, among others.

The fair was also the ideal backdrop for Nexans Colombia to launch new products, such as the Easyfil cable, designed to ease installation. Other highlights include products for solar energy, along with the company’s tech support.

“The fair is a very positive experience to share with clients and suppliers. It’s also very interesting to witness first-hand what the competition is working on for their business development,” Silva says.

Last year was not plain sailing for the economy in Colombia, after pace decreased in the construction and

oil and gas sectors. Nevertheless, Nexans Colombia has sustained its market share, which had already increased in previous years.

In 2018 the company is introducing a new strategy by consolidating its traditional markets, but also becoming more active in biddings for infrastructure projects and investing to increase production capacity, with aim to build a larger export operation.

The LAN cable business (which it markets in Colombia) will also shift gears starting in 2018, though growth is projected to be achieved in the long run. The digital transformation for Nexans Colombia keeps moving forward steadily both within the company and toward its clientele.

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