The IIoT interview (pt3) “We’re selling innovations, not solutions,” says Hitachi
In the final instalment in our industrial IoT trilogy with Hitachi, Greg Kinsey, in charge of the company’s digital transformation business, says innovation is not available to pre-order and take-away, and the Japanese firm has set up like a Michelin-starred industrial consultancy to transform manufacturing.
Within Hitachi’s black-book of industrial transformation, listing the partners it has impacted, Toyota is arguably its most glamorous entry. “Everyone knows the Toyota production system is the gold standard for lean manufacturing,” comments Greg Kinsey, vice president of Hitachi Vantara, the firm’s digital change unit.
The agreement with Toyota designates certain ‘bragging rights’ (“the world’s leading manufacturer selected Hitachi,” as Kinsey says), but it does not permit much else, outside of the Toyota production line itself. In interview, Kinsey has plenty of case studies to pick from, but plenty more are locked down, and obscured for competitive advantage.
Toyota’s profile is too high, its industry too competitive, for it to easily reveal its new digital processes. Everything that can be said was in the original press statement, he says. Nevertheless, the detail contained in there is telling, describing a “collaborative creation to build a high-efficiency production model using an IoT platform.”
This concept of “collaborative creation” comes up repeatedly in a winding conversation that has already covered the regional differences and commercial returns of digital transformation. As an aside, Kinsey does not much care for the language in the release. “IoT is not a product; it’s an architecture,” he says. “And I wouldn’t call it ‘IoT’, either – I would call it ‘digital’.”
For Kinsey, and most progressive industrialists, ’digital’ describes the approach as well as the technology, at once defining the process of innovation as ‘collaborative’, and distinguishing the technical architecture as integrated and different from what has gone before. “The most important part is about co-creation and innovation,” comments Kinsey.
Classical IT architecture is obsolete, he says, designed for a different era, to solve more localised problems; its systems are inflexible, its data is inaccessible, and its applications are monolithic. “It is Industry 3.0. There’s nothing in there in the way of advanced analytics to make your factory perform better.”
He explains: “In terms of innovation, your grandfather’s IT companies are stuck in an old business model – just like the old mainframe companies were 30 or 40 years ago. Very few of the companies that were leading IT in the 1990s will make the transition. It’s the Kodak story again. ‘You’re good at film, but how do you make the jump to digital?’
“It means cannibalising your own business. ‘Will your shareholders let you to do that, or will they squeeze the last drops of juice out of the existing model?’ Unfortunately, capitalism prescribes, in most cases, that they will do the former.”
Hitachi has made the jump, and extended its reach, through its own manufacturing operations. It has already run the same techniques of collaboration, verification, and optimisation through its own production lines, notably for rail, feet management and asset management, long before transformation work with Toyota started in October last year.
It is well placed, he says, mixing hardware and software; but the learning process never really stops. “People have a woolly vision of what digital means,” he remarks. :Even within Hitachi, a lot of my colleagues are still getting their heads around it. But Hitachi is fairly unique in manufacturing because it is an industrial company, and yet it is also the twelfth largest software company in the world.”
Industrial metamorphosis is not a one-way street; the kaleidoscope has been shaken for the tech sector, just as it has been for the manufacturing market, which comes at the tail end of a long line of altered states. Hitachi cannot be sure how the pieces will settle, even if it suspects most of the old IT behemoths are ‘past it’.
“We don’t know who our competitors will be,” says Kinsey. Some of its old familiars will make it, he says, but there are newer faces in the crowd, with creditable experience and good digital habits, which are innate, rather than learned. Kinsey was at a trade event in Paris some weeks back; the floor was filled with startups. “They had big stands, and 30 or 40 bluechip Fortune 500 customers on their books.”
The market dynamic has changed, he says; the technology is open, and the solutions are organic. “Many have built innovation teams, with their own scrum masters, digital scientists, data engineers, and IoT wizards. They’re building this stuff on their own. It is how the computer industry started, with roll-your-own apps in the 1970s. Maybe that’s where we are now, just with a different architecture.”
At the heart of the new Toyota architecture, defined in close collaboration with its subject, is a new digital platform based on Hitachi’s Lumada system, which acquires and integrates production-line data from multiple sites, starting with the car-maker’s plant in the Aichi Prefecture in Japan. Lumada is the other key-note in the Toyota announcement last October.
“The facilities, devices, and related systems at various manufacturing sites will be connected to the platform so data from them can be consolidated and analysed,” the statement says; it goes on to describe the company’s three-way mantra on smart manufacturing, where a digital framework is deployed to “prevent unexpected facility failures, … improve the efficiency of maintenance work, … and further stabilise quality.”
Lumada, leveraging a combination of Hitachi technologies and analytics and data management capabilities from its former Pentaho business unit, ranks among the very top industrial IoT platforms, according to a new review by Gartner. But Kinsey bristles at such easy definitions; Lumada cannot be so easily defined, he says.
“Lumada is two things: it’s a brand, about illuminating your data, and it’s an architecture, which is modular and agnostic.” In other words, it is not a platform, or at least not a singular, pre-specified platform. Kinsey likens it to a loose-knit digital framework, instead, which morphs with customers’ requirements.
“Three years ago, there was this idea of IoT platforms, and there were 300 or 400 platforms out there. And maybe our marketing got us into that. But we quickly pivoted, and we’re now building an architecture we can use to co-create with our customers. Because every case looks different,” he says.
It comes down to semantics, in the end. “The customer needs to build a platform; that’s what we do.” The difference is digital platforms should not be picked off shelves, but constructed from scratch, and made to measure. Most customers are building their own platforms these days, he reckons.
“Pentaho is a robust, proven tool, and we have others things in the kitbag as well. But we are not trying to sell you a platform. We respect you have to build your own, and we want to help with that.”
Industrial transformation, with platform-building at its heart, is highly personal, as well as case specific; legacy and loyalty are twin realities in digital design. “Customers have preferences,” he says. “They may want to use certain vendors or modules, or be committed to a certain database or types of processing.”
Hitachi trusts its open-ended consultancy will deliver a return on investment for its customers, and a sticky dosage of good-will for itself, which repeats as incremental business. “The first problem should be expensable. If we do a good job solving that, hopefully we will be invited back to solve the second,” says Kinsey.
“It is a very flexible model. We are very open. We’re not trying to sell a product or solution, but a process of innovation, which will help you to be successful. We are selling outcomes.”
This is an excerpt from a wide-ranging interview with Hitachi Vantara vice president Greg Kinsey. For more from the interview, check out the links below.