Digital Transformation with IoT

Digitization Trends Across Major Industries

ENABLE NEW BUSINESS MODELS

Create recurring revenue models with increased customer intimacy

TRANSFORM BUSINESS PROCESSES

Higher productivity by predictive maintenance and better asset utilization

Smart Manufacturing Grid Modernization Shopper Insights

IoT Enabling Transformation

Smart Cities Connected Transit Smart Space

Where is the value

Connect the

Unconnected 50Billion

Smart Connected Devices by 2020

Hyper-connectivity, IT and OT convergence

Interoperability across silo’ed systems

required to capture 40% of IOT value

<1% of data currently used, more can be

used for optimization and prediction

Over 60% of the IOT value will be

generated in Enterprise deployments

Source - McKinsey: The Internet of Things: Mapping The Value Beyond The Hype

Where Are You on the Digital Journey?

Smart

energy

consump-

tion Real-time

yield

optimization

Routing

flexibility

Machine

flexibility

Remote

monitoring and

control

Predictive

maintenance

Augmented

reality for MRO1

Human-robot

collabo-

ration

Remote monitoring

and control

Automa-

tion of

knowledg

e work

In situ

3D

printing

Real-

time SC

optimization

Batch

size 1

Statistical

process

control

(SPC)

Advanced process

control (APC)

Data driven

demand

prediction

Data-driven

design to

value

Customer

co-creation/ open

innovation

Concurrent

engineering

Rapid experimen- tation and simulation

Predictive

mainte-

nance

Remote

mainte-

nance

Virtually

guided

self-

service

Intelligent

lots

Digital

performance

manage-

ment

Digital quality

management

Supply/

demand

match

Time

to

market

Resource/

process

effective-

ness

Asset

utilization

Labor

efficiency

Inventories

Quality

Service/

after-sales

Asset visibility

Asset utilization

Employee productivity

Automation

Digitization Is the Key to Leapfrogging the Industry

Supply/

demand

match

Time

to

market

Resource/

process

effective-

ness

Asset

utilization

Labor

efficiency

Inventories

Quality

Service/

after-sales

Asset visibility

Asset utilization

Employee productivity

Automation

Faster time

to market

Lower

operational costs productivity increase

lower

downtime

Faster time to

completion

Lower inventory costs

Higher quality

Savings with

accurate

forecasts

Common Phases of IoT Journey

Asset Management

Predictive Maintenance

Field operations

Supply Chain Optimization

Safety & Compliance

Common IoT capabilities

Complexity Stands in the Way

Connectivity & Security

Data Aggregation

Real Time Visibility

Automation & Management

Value Monetization

Ecosystem Interoperation

We Can Solve These Problems By

New Innovations

in Connectivity

Cloud-Based

Infrastructure

Management

Analytics &

Actuation

Infr

astr

uctu

re

Ou

tco

me

s

Ca

pa

bili

tie

s

Analytics

and Applications

Unified Connectivity

End-to-End Security

Manage Data from Edge to Cloud

Integrated

Business Processes

Open Standards Network

Network as an Enforcer

Fog Compute

Analytics & Automation

+ Industry-Leading

Partner Ecosystem

Vertical-Specific

Digital Solutions

Tra

nsfo

rmation

Sources: Cisco IoT Purchase Process Global Study January 2015,

Forrester Research study commissioned by Cisco November 2014,

IDC Futurescape: Worldwide IoT Predictions Dec 3, 2014

IoT Made Simple -- Cisco Solution Framework for the Digital Journey

Vertical Solution -- Manufacturing

Immense Business Benefits Expected

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

Reduced

Downtime

48%

Unplanned

downtime down from

11% to 5.8%

Reduction in

Defects

49%

Defect rate

down from

4.9% to 2.5%

New Product

Introduction

23%

New product

introduction cycle

time reduced from

15 to 11 months

OEE

Improvement

16%

Average OEE

improved

from 74% to 86%

Improved

Inventory

35%

Inventory

turns increased

from 14 to 19

Reduction in

Energy Use

18%

Annual energy

cost down from

$8.4M to $6.9M

Source: SCM World/Cisco “Smart Manufacturing and the Internet of Things 2015” survey of 418 Manufacturing Business Line

Executives and Plant Managers across 17 vertical industries.

Solutions Driving Manufacturing Value

Process

Optimization Supply

Chain Factory

Security Control

Network

Cisco Security

ZDT Service Center Portal Alert Monitoring, Schedule Parts and Maintenance, Enhanced Customer Service Tools

ZDT Customer Portal Track alerts, View ZDT network status, Access ZDT reports, Authorize users, etc.

Web Services

Business Intelligence/

Reporting Area

Plant 1 Plant 2 Plant X Data

Receive

FANUC CLOUD

Persistent, Secure Encrypted

ZDT D/C Customer

Cisco Customer Security

Data Analytics

Machine Learning

Data Visualization

ZD

T D

ata

C

olle

ctor

@

Challenge

Solution

Business Outcomes

Save estimated $40M in machine downtime Provide visibility on machines are utilized and increased the overall equipment efficiency (OEE)

No visibility on how machines are utilized Machine downtime cost millions Data collection and edge compute Cloud managed service across plants

ZDT data collector with UCS on-prem Streaming machine data to Cisco Cloud service and perform data analytic with Cloudera cluster

Process

Optimization

Process Optimization

at FANUC

Challenge

Solution

Business Outcomes

300% Internal Rate of Return (IRR) increased production and overall equipment efficiency (OEE) by 10%

Enable connectivity Mazak machines for predictive maintenance and MaaS business model

Cisco-enabled iSmart Machines with imbedded network switch, security and MTConnect Agent

Process

Optimization

Process Optimization

at Mazak

Solutions Driving Manufacturing Value

Process

Optimization Supply

Chain Factory

Security Control

Network

Supply Chain Use Cases Supply

Chain

• Engineered to order

• Customer commitments – schedule adherence

• Pallet tracking factory to customer for end to end

traceability

• Inbound inventory visibility

• Freight verification and real time visibility

• Asset management

• Increased margins

• Lean manufacturing

• eKanban & Kaisan principles Material Flow

Manufacturing

Flexibility

Supply Chain

Visibility

Production

Optimization

Cisco Supply Chain Organization Transformation for Improved Resiliency and Agility

Business agility constrained by

highly customized supply chain

system and multiple ERP

instances

Country enablement and ability

to introduce new business

models hampered

Few industry-standard

processes and automation

efficiencies in the supply chain

Simplified operations using

out-of- the box Oracle

functionality

Incorporated build-to-stock

model into supply chain;

integrated industry-standard

business practices

Time to add new node (factory)

shrunk from 18 to 6 months

30-50% reduction in time to market

Up to 73 percent reduction in order

cycle times

About 25 percent reduction in

product touches

Eliminated redundancies and

duplicate transactions

Results Challenge Solution

“For seven consecutive years, Cisco has placed in the Top 10 of Gartner’s prestigious

ranking! Led by Cisco Senior VP John Kern, the supply chain operations team here at

Cisco has undergone an extensive transformation and continues to be recognized globally

as a best-in-class practitioner.”

Chet Namboodri in Cisco Manufacturing Blog

Sub-Zero Wolf

Meet launch schedule for 60 new

products

Adhere to stringent quality

requirements and manage issues

from new supply-chain partners

Increase staff productivity time and

collaboration while reducing travel

and costs (engineering was not in

same location as manufacturing

Integrated manufacturing mobile

video capabilities into daily

workflows and processes

Upgraded wireless networks to

support mobile devices and video

streaming and conferencing within

manufacturing facilities

Integrated solution into existing

video infrastructure and tools

Results Challenge Solution:

“With this solution, we found a way to see and discuss very detailed video and images

from afar in a highly secure manner. We are now using video collaboration on a daily

basis to finalize designs, correct production line issues, work with suppliers, and train

installers and servicers.”

-Paul Sikir

VP of Engineering

Premium Appliance Manufacturer Innovates with IoE

Shaved 10-20% off new product

introduction cycle time

Estimated internal savings in

downtime costs of $2,500 per

production line per hour through

faster resolution of design or

manufacturing issues.

For one project, Sub-Zero

estimates an annual travel savings

of more than $40,000.

Over $100,000 savings in field

testing costs.

Solutions Driving Manufacturing Value

Process

Optimization Supply

Chain Factory

Security Control

Network

Factory Security Challenge

Plant

Physical

Remote Access

Open Port

Malware

Proximal

• Today’s control’s

environments have “soft

middles”

• Today’s solutions not geared

to protect against threats

like APTs

Factory

Security

Factory Security Solution

Let’s do some

maintenance!

Enterprise Network

VPN

DMZ

Supervisory Network

Control System Network

Remote Facility

IEDs, PLCs, Sensors,

Actuators

Historian

SCADA/DCS Historian

Cloud Systems

App Server Web Server

Enterprise Network

DMZ

Supervisory Network

Control System Network

Web Server App Server

Historian

Database

Historian

IEDs, PLCs

Sensors,

Actuators

Remote Facility

VPN

Field Network

Sensors

Cloud Systems

Internet

Actuators

SCADA/DCS

Remote Services

VPN

Enterprise Network

DMZ

Supervisory Network

Control System Network

Web Server App Server

Historian

Database

Historian

IEDs, PLCs

Sensors,

Actuators

Remote Facility

VPN

Field Network

Sensors

Cloud Systems

Internet

Actuators

SCADA/DCS

Remote Services

VPN

Enterprise Network

DMZ

Supervisory Network

Control System Network

Web Server App Server

Historian

Database

Historian

IEDs, PLCs

Sensors,

Actuators

Remote Facility

VPN

Field Network

Sensors

Cloud Systems

Internet

Actuators

SCADA/DCS

Remote Services

VPN

Remote Services

VPN

Field Network

Actuators Sensors

Internet

Application Visibility, IPS/IDS

Identity Services Engine

Switching

Video Surveillance Manager

Routers

Firewalls Access Points

Network and Security Mgmt.

Layers

Secure Zones

Cells Zones Plants

Segmented Access

(Role-Based) Security Policy, AAA and Identity Services

Industrial Cyber Security

Security Monitoring, Threat Detection, Incident

and Event Monitoring

Physical Security Smart, Programmable Cameras

Factory

Security

Solutions Driving Manufacturing Value

Process

Optimization Supply

Chain Factory

Security Control

Network

Control Network Use Case Control

Network

Networking

the Factory

of the Future

Reduced

Network IT TCO

by 18%

Increase

Line

Uptime

Flexibly

Meeting

Demand Shifts

Sugar Creek Packaging

Get better transparency of real-time

production to schedule

Expand into a new product portfolio

that needs sensors everywhere

(Sous-Vide) for ideal production

Need to understand effects of

emergency issues and help first

responders in case of issues

Gain better visibility to real-time OEE

for all users in all locations

Leverage Cisco Connected Factory

Architecture in the plant

Combine with AeroScout RFID tags,

Cisco Wireless

Integrate machine data to digital

signage and mobility applications

Results Challenge Solution:

“With the help of the Cisco and Cisco Services, we have been able to expand our

product portfolio by adding a new plant. This has also allowed us to add additional

insight into our operations that was not possible before.”

-Rob Daley

CEO Sugar Creek

Food Manufacturer expands product portfolio

Met new factory schedule for

implementation

Reduced labeling error rate by

45%

Improved labor utilization from

65% to 88%

Improved visibility of workers on

job at hand to speed product

introductions

New sensor visibility

Nestle Reduces Downtime Wireless Network Increases Visibility to Production Processes

Reduced business risk of

downtime with network visibility

Reduced requirement for SLA-

based service, thereby saving on

operational costs

Allows for mobile workforce in new

head office building and

manfufacturing facilities

Results Challenge Solution

““IT now truly supports Nestlé’s business-critical production processes, because we have full

visibility of connectivity to networks across all our manufacturing facilities.”

-Kavi Garrib,

senior systems engineer Nestlé Southern Africa Region

Cisco Prime Network

Control System provides full

visibility of connectivity

across sites

Cisco solution allows for

remote monitoring and

management

IT team had to physically

travel to support 10

geographically dispersed

manufacturing facilities

Needed to improve uptime

of the network for the

tracking of business-critical

production processes

Can you support

the growing

number of devices

in different

environments?

Can you provide the

secure connectivity

for IT & OT

convergence and

support standard

protocols for

interoperability

and scale?

Can you efficiently

analyze and manage

data from the edge

to the cloud?

Can you provide

the infrastructure and

tools necessary to

combine IoT

analytics with

business analytics?

Can you assist in the

creation of highly

sophisticated

applications needed

for your business?

Can you enable

convergence of OT

and IT networks to

create and enforce

a consistent policy

across the entire

Enterprise?

Connectivity Security Fog Computing Data Analytics Management &

Automation Application Enablement

Is Your Digitization/IoT Strategy Ready?