It’s All About Data - From Bits and Bytes to Business …...It’s All About Data - From Bits and...
Transcript of It’s All About Data - From Bits and Bytes to Business …...It’s All About Data - From Bits and...
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It’s All About Data - From Bits and Bytes to Business Value@masscustom (Frank T. Piller)
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Responsibilities
Head of RWTH Technology & Innovation Management Group and Professor of Management at TIME Research Area at RWTH Aachen University
Academic Director of RWTH Executive MBA
Co-Founder, MIT Smart Customization Group, Massachusetts Institute of Technology, Cambridge, MA
Research Interests and Expertise
Strategies for Customer-Centric Value Creation, like mass customization, innovation co-creation, additive manufacturing, managing the frontend of innovation
Open Innovation, i.e. technology transfer, R&D partnership models, crowdsourcing
Managing Disruptive Business Model Innovation and supporting organizational structures (facilitated by Industrie 4.0 and Digital Transformation)
Entrepreneurial Activities
Co-Founder, Investor, and/or Member of Board of Directors of several companies, includingThinkConsult (process management and concept testing), Competivation (innovation consultancy), Dialego AG (innovative online market research), Corpus-e AG (“best fit” solutions for eCommerce), Combeenation (product configurator as a service), and DOOB AG (3D printing and 3D modelling)
Real life achievements: Only German in “Top50 Profs on Twitter” list; Kloutscore >60; Google Scholar Citations ~10,050; H-index >44
Frank T. Piller
More info: frankpiller.comFollow me on Twitter: @masscustom
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Digitalization mandates faster decision making
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6Dexcom G4 CGM
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7Dana M Lewis
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#WeAreNotWaiting
„They told me as a child that there will
be a cure for diabetes, and I am still waiting.
But I will not wait for a better
Artificial Pancreas System (APS).“
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The manufacturer Dexcom, Inc.: “Great ! We will bring this to market (open innovation rules). But this will take 5+ years for FDA
approval.”
Dana: „???? We are using this already !!!!“
User communities organized and got FDA approval in less than 5 months!
#WeAreNotWaiting
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Why are user communities so much better organized than the world market leader
in a regulated industry?
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It is all about data
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Today, we create assets collecting this data purposefully:
Smart products & equipment
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Sense
Act
Think Connect
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How to create value for Adidas by data from smart products –
and what kind of challenges do you see?
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From smart shoes to smart manufacturing
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Integrate conventional silos of data into one manufacturing repository (digital
shadow), enabling data-driven operational excellence (OE and OEE)
Real-time simulation based on a “digital
shadow” and “digital twin” of plant,
equipment, and products
Source: Bechtold et al., 2015 / CapGemini
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The “digital shadow / twin” of a product, component, or asset is the core
enabler of the Factory of the Future
A metaphor for the digital shadow
Google Map (simulation of reality in form of a map = Digital Twin 1.0)
Google Map with live traffic information, including reactions of drivers (life data = Digital Shadow)
Google Map with predictive traffic information
Google Map with dynamic suggestions for alternative routingsGoogle Map including alternative means of transportation (railway instead of car)
Google Map with suggestion where to build new highway to continuously avoid bottlenecks
Digital Twin 2.0
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How can I produce product A44 in time when machine X24 is down?
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The Engineering Valleyaround RWTH Aachen University
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The Internet of Production is our joint vision of the next level of Industrie 4.0 by a large consortium of research institutions at RWTH Aachen University – the German center of production technologies
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
Production is often characterized by a multi-lemma of objectives: Balancing conflicting industrial targets
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
Production is often characterized by a multi-lemma of objectives: Balancing conflicting industrial targets requires a deep understanding of the entire system
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
Existing approaches build on virtualization of products and machinery (simulation) and achieving process transparency by connecting assets and processes …
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
… allowing us to create a learning cycle based on causal relationships.
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
But today, this simulation-based cycle learning is limited by real life (stochastic) influences
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
New approach to better learning in a production system: A learning cycle based on causal relationships (simulation) + live machine data + learning models based on the digital shadow
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Source: Brecher (2017), WZL RWTH Aachen / Fraunhofer IPT
The Infrastructure of the Internet of Production: the Smart Data layer connects existing data and application data on the shop floor with decision systems on the office floor
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But there are still open questions
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Source: Fraunhofer IPT, RWTH Aachen
Three core steps to digital production: Measure, Analyze, Optimize
cyber
physical
3
Make
measurable
& connect
Digitalization of
the production
Adaptive
optimization
Index GFG 250 II
VDF V 630
KH 35 CN Ravensburger
BöhringerVDF 250/315
Flachschleif-maschine
Index GFG 450 II
Index GFG 450 I
Index GFG 250 I
VDF V 630
VDF V 630
Kopfdreh-maschine
Reparatur
Ind
ex
GU
10
00
Traub
DigmaHSC 800
Mikron HSN 700
DigmaHSC 850
Huron MU4
Huron MU4
CNC Bettfräs-maschine UBF 2500/10 Kekelsen
SX B523 Huron
PFH 12-1400 Heller
CNC Bettfräs-maschine PFU 3 Heller
Ra-Bo-Ma
Kal.-Pr.
Optimization of
production based on
simulation and real
time data
3
Descri
pti
ve
3
Dia
gn
osti
c
3
Pre
dic
tive
3
Pre
scri
pti
ve
Analyze & Predict
Digital
image
Mirroring of
cyber- and physical world
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Source: Fraunhofer IPT, RWTH Aachen
Three core steps to digital production: Measure, Analyze, Optimize
cyber
physical
3
Make
measurable
& connect
Digitalization of
the production
Adaptive
optimization
Index GFG 250 II
VDF V 630
KH 35 CN Ravensburger
BöhringerVDF 250/315
Flachschleif-maschine
Index GFG 450 II
Index GFG 450 I
Index GFG 250 I
VDF V 630
VDF V 630
Kopfdreh-maschine
Reparatur
Ind
ex
GU
10
00
Traub
DigmaHSC 800
Mikron HSN 700
DigmaHSC 850
Huron MU4
Huron MU4
CNC Bettfräs-maschine UBF 2500/10 Kekelsen
SX B523 Huron
PFH 12-1400 Heller
CNC Bettfräs-maschine PFU 3 Heller
Ra-Bo-Ma
Kal.-Pr.
Optimization of
production based on
simulation and real
time data
3
Descri
pti
ve
3
Dia
gn
osti
c
3
Pre
dic
tive
3
Pre
scri
pti
ve
Analyze & Predict
Digital
image
Mirroring of
cyber- and physical world
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And this was just the perspective of one firm /
plant. What about networks and platforms?
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Development Cycle Production Cycle User Cycle
Smart Expert
Middleware+
Correlation
AnalysisCluster
Algorithms
Smart Data
Multi-Modal Information Access
Data IntegrationData
ModelData Storage
and Caching
Analytics
Management of data access to proprietary systems
Digital Shadow
Aggregation and Synchronization
Learning
AlgorithmsMeta
Heuristics
Context sensitive
processing
Application
Software
Raw Data Customer
Data
CRM
Machine
Data
MES
Product
Data
PLM
Test
Data
CAQ
Process
Data
ERP/
SCM
CAD
Data
CAD
Simulation
Data
FEM
Feedback
Data
BDE
Data Provision and Access
Decision Support
Agent Event-driven
Decisions A
Autonomous
Actions
Adaptive
Processes
From a business model perspective on manufacturing platforms (in terms of business ecosystems), this is just a “small” technical piece
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Stake-
holder
Stake-
holderPlatform
Contri-
butorUser
Platform
Govern-
ance
Governance Tools
Platform Sponsor Platform Manager
Contri-
butorUser
Platform
Value
Capture
Value Appropriation
How to charge? Whom to charge?
Value Interaction
Value Proposition Value Consumption
Platform
Value
Creation
Contri-
butorUser
Infrastructure ComponentsPlatform
Infra-
structure
Contri-
butorUser
Core Peripheral
Platform-based
Business Models
are two- or multi-
sided markets
where a platform
operator
orchestrates
different user and
contributor groups,
who share
common
resources and
exchange data, but
also physical goods.
Development Cycle Production Cycle User Cycle
Smart Expert
Middleware+
Correlation
AnalysisCluster
Algorithms
Smart Data
Multi-Modal Information Access
Data IntegrationData
ModelData Storage
and Caching
Analytics
Management of data access to proprietary systems
Digital Shadow
Aggregation and Synchronization
Learning
AlgorithmsMeta
Heuristics
Context sensitive
processing
Application
Software
Raw Data Customer
Data
CRM
Machine
Data
MES
Product
Data
PLM
Test
Data
CAQ
Process
Data
ERP/
SCM
CAD
Data
CAD
Simulation
Data
FEM
Feedback
Data
BDE
Data Provision and Access
Decision Support
Agent Event-driven
Decisions A
Autonomous
Actions
Adaptive
Processes
From a business model perspective on manufacturing platforms (in terms of business ecosystems), this is just a “small” technical piece
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Source: Based on: Porter et al: How Smart, Connected Products Are Transforming Competition, HBR 2014
The added value lies not so much in the smart product itself but in its connections
Potential Added Value | Added Management Complexity
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THE crucial question:
App or Plattform?
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THE STRATEGIC DECISION:
How to survive competition in a “platormed” industry: App or Platform?
For Platforms: How to manage (and build & nurture) the ecosystem?
For Apps: How to become a preferred partner in an ecosystem (in which one)?
How to set the right degree of openness?
48Ffwd: 60
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365FarmNet as a platform for agriculture: Facilitated by Claas as an open platform for complementors, but also competitors!
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Designing digital business modelsaround smart data
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A five day executive program. More information: bmi.rwth-aachen.de
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(1) Ecosystem Canvas & Platform Model- Design-thinking inspired approach to develop
business models alternatives by mapping all stakeholders of a business ecosystem
- Getting a holistic perspective of all partners and their contributions and expectations
- Canvas as a communication tool: Ability to map alternatives
- Can be complemented by the known Osterwalder canvas to go into more detail for one player
OUR APPROACH TO DESIGN DIGITAL, PLATFORM-BASED BUSINESS MODELS
* more information: bmi.rwth-aachen.de
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(1) The well known Business Model Canvas ...
Canvas = template to build a BM prototype
… to analyze the status quo … to overcome barriers (confusion and
complexity) and to discover alternative business models, …
… to run “experiments” considering alternate combinations of the processes.
...is complemented by new canvas model to represent digital ecosystems
Canvas cards map Platform Business Model with its ecosystem in a holistic stakeholder landscape
A Canvas Card is used to describe a stakeholder and its requirements
Interaction cards illustrate the relationships and exchanges between stakeholders
Working procedure is equal to known BM innovation approach
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(1) Ecosystem Canvas & Platform Model- Design-thinking inspired approach to develop
business models alternatives by mapping all stakeholders of a business ecosystem
- Getting a holistic perspective of all partners and their contributions and expectations
- Canvas as a communication tool: Ability to map alternatives
- Can be complemented by the known Osterwalder canvas to go into more detail for one player
(2) Platform design factors (PDF) representing patterns of digital BMs- Successful BM are based on recurring patterns- Derivation of specific digital BM patterns- Systematic problem solving based on TRIZ approach to
create new business models
OUR APPROACH TO DESIGN DIGITAL, PLATFORM-BASED BUSINESS MODELS
* more information: bmi.rwth-aachen.de
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(2) Platform Design Factors are patterns and proven elements of
digital platform-based business models
PDF Cards illustrate Platform Design Factors (recurring best practice configurations) and serve as a guideline to fill Canvas and/or Interaction Cards.
They are structured around an economic model of a business platform:
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Platform
Governance
Platform
Infrastructure
• API
• Digital Supply Chain
• Filter
• Peer-to-Peer
• Shop-in-Shop
• Software
Development Kit
• Algorithmic Control Mechanism
• Content Monitoring• Decision Rights
Partitioning• Democracy• Formal Control• Gate Keeping• Informal Control• Insurance• Integrator• Market Control• Open Business Modell• Open Source• Orchestrator• Rating System• Risk Pooling• Social Contract• Social Sustainability
Seal
Platform
Value Capture
• (Digital) Lock-In
• Condition monitoring
• Connection as a
service
• Gamification
• Go Offline
• Guaranteed
Availability
• Layer Player
• Leverage customer
data
• Make more of it
• Push to Pull
• Recommender
Engine
• Sensor as a service
• Social curation
• (Digital) Add-on
• (Digital) Subscription
• Auction
• Crowdfunding
• Flat-Rate
• Freemium
• Long Tail
• Merchandising
• Pay per use
• Razor and (digital)
blade
Platform
Value Creation
(2) Platform Design Factors are patterns and proven elements of digital platform-based business models
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(1) Ecosystem Canvas & Platform Model- Design-thinking inspired approach to develop
business models alternatives by mapping all stakeholders of a business ecosystem
- Getting a holistic perspective of all partners and their contributions and expectations
- Canvas as a communication tool: Ability to map alternatives
- Can be complemented by the known Osterwalder canvas to go into more detail for one player
(2) Platform design factors (PDF) representing patterns of digital BMs- Successful BM are based on recurring patterns- Derivation of specific digital BM patterns- Systematic problem solving based on TRIZ approach to
create new business models
(3) Rapid experimentation and validation in field- BMI means to develop alternatives – and to test
assumptions- Ability to generate quick and cheap experiments (e.g.,
5x5x5x5x5 logic by Schrage)- Experimentation template
OUR APPROACH TO DESIGN DIGITAL, PLATFORM-BASED BUSINESS MODELS
* more information: bmi.rwth-aachen.de
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(3) Rapid experimentation and validation of alternatives
BMI means to develop alternatives – and to test assumptions
This means to experiment and gather real validation data from real customers
Ability to generate quick and cheap experiments (e.g., 5x5x5x5x5 logic by Schrage, Pretendotypesby Google
Experimentation templates, Fast Business Case models
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(1) Ecosystem Canvas & Platform Model- Design-thinking inspired approach to develop
business models alternatives by mapping all stakeholders of a business ecosystem
- Getting a holistic perspective of all partners and their contributions and expectations
- Canvas as a communication tool: Ability to map alternatives
- Can be complemented by the known Osterwalder canvas to go into more detail for one player
(2) Platform design factors (PDF) representing patterns of digital BMs- Successful BM are based on recurring patterns- Derivation of specific digital BM patterns- Systematic problem solving based on TRIZ approach to
create new business models
(3) Rapid experimentation and validation in field- BMI means to develop alternatives – and to test
assumptions- Ability to generate quick and cheap experiments (e.g.,
5x5x5x5x5 logic by Schrage)- Experimentation template
OUR APPROACH TO DESIGN DIGITAL, PLATFORM-BASED BUSINESS MODELS
* more information: bmi.rwth-aachen.de
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Conclusions
There are many ways to create value with smart data …
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… but these ways to capture value from smart data and the digital shadow are
rather complex …
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Thankfully!
Otherwise is could not become a competitive advantage!
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Offers for further interaction
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Customization 4.0MCPC 2017: The 9th World Conference on
Mass Customization & PersonalizationHow smart products and digital manufacturing
enable a new level of customization & personalizationAachen, Germany, November 19-21, 2017
mcpc2017.com
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Become part of the RWTH Aachen Ecosystem by joining one of our consortia studies.
More information at www.kex-ag.com/en/our-products/consortium-studies/
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Dates and locations (BMW, Siemens, Festo …) for 2017:
theleadershipnetwork.com/courses/future-manufacturing
Exclusive Smart Factory Masterclasses & Factory Tours
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RWTH Zertifikatskurs fürFührungskräfte:Business Model Innovation
5 Tage in zwei Teilen, plusunternehmensbezogenes Projekt
Dieser Kurs ist auch als individueller Inhouse-Kurs zu flexiblen Terminen möglich!
RWTH Zertifikatskurs „Business Modell Innovation“
Termine unter bmi.rwth-aachen.de
Lernen Sie die Methode für systematische Geschäftsmodell-Innovation
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Berufsbegleitender EMBA Studiengang an der RWTH Aachen und Univ. St. Gallen mit Fokus auf Innovation, Technologie und Leadership
Start des 14. Durchgangs im Sept. 2017 | Studienleitung: Prof. Dr. Frank T. Pilleremba.rwth-aachen.de
The RWTH Executive MBA in Technology Management
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A unique blended-learning program in innovation for young professionals
www.academy.rwth-aachen.de/en/mme-time
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Our large platforms for cooperation on the RWTH campus
RWTH Aachen Invention Centerhttp://www.invention-center.de
RWTH Aachen Center Smart Services
http://center-smart-services.rwth-campus.com
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Frank T. Piller, Prof. Dr.
RWTH Aachen University
TIME Research Area Technology, Innovation, Marketing & Entrepreneurship
Kackertstrasse 7 | 52072 Aachen | Germany
[email protected] @masscustom (Skype, Twitter, Facebook)time.rwth-aachen.de/tim | frankpiller.com
Expertly assisted by Monika Heer+49 (0)241 809-3577 | [email protected]
Contact industry alliances: Christian Gülpen+49 (0)241 809-6660 | [email protected]
Open for interaction