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'Digital Industrial' Firms Talk Pros And Cons Of Automation, AI At Detroit Summit

Elizabeth Balboa

With the emergence of 3-D holographic engine models and windshield-projected driving directions, industry as we know it is being upended. Technology is enabling technology that produces technology, yielding a new paradigm.

“We are moving from a place to a pace,” Howard Heppelmann, divisional vice president and general manager of connected operations solutions at PTC Inc (NASDAQ: PTC), said at Automation Alley’s Global Industry 4.0 Conference.

It’s a new world requiring constant adaptation, and those who can’t keep up and who don’t embrace the label “digital industrial" won’t survive, he said.

“You’re never going to be done,” Heppelmann said. “You’re going to be living in this world for the rest of your life.”

Hundreds of industry players gathered Thursday at the Integr8 Conference in Detroit to drill down on their competitive position in the fourth industrial revolution.

An Undeniable Tailwind

Augmented reality enhances preproduction modeling to optimize manufacturability. Predictive analytics detect early flaws to eliminate the need for later testing. Cloud-connected robots hasten precision manufacturing and heavy lifting to cut costs.

“We’re actually in the game because of automation,” Matt Tyler, president and CEO of Vickers Engineering, Inc., said during a panel. “For every million pieces we ship, we only have two rejections, and that’s because of automation.”

Tyler reported not only a reduction in injury incidents and safety issues at his company, but achievement in cost competitiveness and scaling that allowed the firm to double the average wage it pays.



Cost: An Unabated Headwind

But the process hasn’t been easy, and it’s weeding out the non-competitive, Tyler said.

“We recognize we need the data, we recognize we need the real-time reporting, we’re starting to find places with augmented reality where we think [it] could solve a problem, but we don’t have the million-dollar budgets to play around with in R&D that these guys have,” Tyler said. “We need to let the big guys play around with the technology, and then once we see something settle in and think, 'this looks like it’s going to stick,' then we can start to invest in it.”

Capital access is prohibitive for smaller firms, said the vice president of the robotics firm FANUC. 

“As far as our company is concerned, we almost become a bank in many cases to those integrators that are purchasing our products,” VFANUC Corp. America Vice President Kevin Ostby said on a panel. “They can’t get the financing they need to do what they need to do.”

The Role Of Cybersecurity

Another barrier with both financial and strategic implications is cybersecurity, which is critical not only for employee PCs but for consumer devices connected to the Internet of Things.

“Somebody is going to be taken to court because they released a product with a cyber vulnerability in it that got somebody killed,” Daimon Geopfert, national leader and principal of security and privacy consulting at RSM US, said during a panel.

Another takeaway from the Detroit conference: Intellectual property and consumer information theft is also of concern. And the liability of vulnerability may justify measures that ultimately counter companies' digitalization strategies and concentration of ecosystems.

The competitive need for connectivity and cloud sharing already compete with the recommendations of security experts for network segmentation and data isolation.

“We’re starting to see more cloud issues obviously,” FBI Section Chief C. Todd Ratcliffe said. “... My analogy of the cloud is when you live in a single family home you only have to worry about you and your family burning down your house. If you live in a cloud environment, it’s like living in an apartment. You have to worry about not only yourself but everyone else in the neighborhood burning down the house. That becomes much more difficult to manage, much more difficult to determine where the vector is in.”

Ratcliffe advised high selectivity on intellectual property access — which may limit a firm’s potential network of partners and suppliers.

When Digital Expansion Meets Regulation

Yet another concern for digital industrial companies is regulation. As the U.S. aims to dominate foreign rivals, policymakers are interfering in cross-border exchanges with tariffs, cyber policing and internet fragmentation.

“All of these could have major consequences across sectors looking to digitize manufacturing,” Ian Steff, deputy assistant secretary for manufacturing at the U.S. Department of Commerce, said during a keynote address. “ ... We need to know about barriers because barriers can cause market share distortions [through data and supply chain flow] in a matter of months.”

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