"2021 will be the year of the Digital Twin"

**Sanjay Jacob**\ Senior Director,
Microsoft Corporation

Sanjay Jacob | Senior Director, Microsoft Corporation

Digital Twins Will accelerate a new wave of digital transformation in 2021

As a Senior Director at Microsoft, Sanjay has designed and executed digitization and cloud modernization for numerous organizations across industries around the world. He has deep visibility into what goes into building an effective cloud strategy. With 5 technology patents to his name, Sanjay brings credibility to any discussion. In this interview with us, Sanjay shares his viewpoints on Industry 4.0 trends, implementation challenges and best practices.

Please describe your role and responsibilities in the organization.I lead product management within the Azure (cloud) organization for Microsoft Corporation and am based in Seattle. We are focused on creating innovative, hyperscale platforms that accelerate digital transformation for organizations across the world; in particular, the Internet of Things (IoT) is ushering in a new era of connected environments that will help accelerate customer benefits around growth, resiliency, customer acquisition and superior serviceability.

What are the top trends in the manufacturing industry from a hyperscale cloud provider perspective?
Increased competition in the manufacturing industry and, more recently, the COVID-19 global outbreak has increased the urgency for manufacturers to modernize and digitally transform their businesses. We see manufacturers accelerating migration to the cloud. We also see them adopting technologies like the Internet of Things (IoT), digital twins, artificial intelligence (AI), edge computing, mixed reality, and 5G to increase agility and engage customers in new ways. Manufacturers continue to collaborate through industry partnerships and open initiatives such as the Open Manufacturing Platform, the OPC Foundation, and the Digital Twins Consortium.

The COVID-19 global outbreak has increased the urgency for manufacturers to modernize and digitally transform their businesses

How integrated are your cybersecurity initiatives to your Industry 4.0 strategy?

Initiatives running separately
Partial integration
Integral part

We see four trends emerging:

Trend 1: Manufacturers are digitizing production lines with technologies like IoT, digital twins, AI, ML, mixed reality, and 5G to build more agile factories and unlocking innovation to deliver new services. Kennametal, an American supplier of tooling and industrial materials with annual revenue of over 2 Billion USD, has moved 90% of its business applications—including SAP—to Azure. As a result, Kennametal has cut IT capital investments by nearly half, expedited disaster recovery scenarios, and increased productivity in its first IoT-enabled factory. IoT-enabled machines serve up a constant stream of data that operators can use to monitor, troubleshoot, and optimize performance.

Sources: Annual report Case study

Trend 2: Manufacturers are investing in supply chain resiliency—cloud, IoT, digital twins and AI—to improve productivity. This trend has accelerated with the Covid-19 global outbreak.

Majans, a consumer goods manufacturer with 30 million USD in annual revenue, adopted a Cloud-based ERP system, Dynamics 365 Supply Chain Management, and IoT in its production lines. With these technologies, the company has achieved an end-to-end data thread across its entire supply chain from farm to consumer, breaking down old siloes and bringing all its data together.

Sources: Company profile Case study

We see four trends emerging:

Trend 3: Manufacturers are turning to mixed reality, AI, and automation to transform their workforces. Airbus, an international pioneer in the Aerospace industry with annual revenues of 70 billion euros, is using mixed reality to train employees in an immersive virtual environment without the need for an actual physical aircraft or parts. Airbus also uses mixed reality to overlay instructions or diagrams on real pieces of machinery to aid in complex or hard-to-reach tasks. These kinds of mixed-reality solutions have allowed Airbus to cut manufacturing time by a third while improving quality.

Sources: Company profile Case study

Trend 4: Manufacturers are engaging customers in new ways.

Industry reference: To differentiate its offerings, GE Aviation is digitizing its view of the maintenance and performance records of each aircraft it builds using digital twins. When the aircraft are in use by customers, these insights will empower an analytics-based approach to maintenance rather than the current time cycle–based maintenance, reducing unnecessary spend and improving reliability.

Sources: Case study

These trends clearly highlight the adoption of Industry 4.0 as an imperative, what challenges do you see in implementing Industry 4.0?I see three main challenges in adoption/implementation of Industry 4.0 Initiatives.The first and the most important challenge is that of the data silos slowing production optimization and threatening business transformation opportunities. Heterogeneous IT/OT systems limit agility and erect barriers to transformation. This challenge can be addressed though the adoption of open standards like the OPC Unified Architecture (OPC UA) and with tools like digital twins. OPC UA is recognized as the key communication and data modelling technology for Industry 4.0. It works with many software platforms, is completely scalable, and has been widely adopted across several industries because of its flexibility. Digital twins can combine disparate information systems to build a “single pane of glass.”The second challenge is that of the skill gap. A workforce with limited delivery skills in software or Cloud may cause resistance to digitalization initiatives. Collaboration tools and training built using mixed reality and AI can improve workforce delivery skills and incentivize workers to embrace digitalization. The role of change-management and effective communication also is critical in mitigating this challenge.Last but not least, long cycles of technology and equipment renewal slow Industry 4.0 adoption. Connecting brownfield assets to the Cloud sidesteps the issue of long equipment lifecycles. Technology like Azure IoT Edge and Azure Sphere Guardian modules can safely and securely connect brownfield assets.
That’s a very good remedy for reducing the cycle times and brings us to another important question, what do you think are critical considerations, best practices, and approach for Cloudification of engineering/OT applications?

The first and the most important challenge is that of the data silos slowing production optimization and threatening business transformation opportunities.ConsiderationsFour areas critical for migrating engineering/OT applications to the Cloud are support for hybrid strategies, interoperability, security, and scalability.

A hybrid strategy supports performance and scalability of both brownfield manufacturing assets connected on-premises as well as newly installed manufacturing assets connected to the cloud at the edge or directly.

An interoperability plan ensures commitment to open ecosystems enabling system interoperability like the Open Platform Communications Unified Architecture (OPC UA).

A security strategy addresses IT, IoT, and OT requirements and is comprehensive and compliant. When plant floor control systems, hospital diagnostic and monitoring systems, water management, and other operational technologies (OT) are connected to the internet, they become targets for cyber criminals.

A scalability plan that spans supply chain, enterprise, and distribution channels to support enterprise growth.

Best Practices

A few of the best practices we recommend for selecting a Cloud platform include the following:

Select a cloud platform that is scalable, secure, modular, and interoperable.
o The cloud platform modules should provide your developers with options across the entire data treatment value chain: data collation/collection, storage, analysis, dissemination, and representation.
o The platform should provide low-code options for common tasks.

Prioritize a platform with a strong, vibrant partner ecosystem.

Ensure that the cloud provider and ecosystem are committed to open industrial interoperability standards like OPC UA.

ApproachA manufacturer should plan to migrate to the Cloud in two phases.In phase one, a manufacturer connects assets to gain insights that increase productivity, reduce costs, or enable new services. We see initial use cases being condition monitoring, overall equipment efficiency, and asset tracking and then connected products and facilities management.

In phase two, manufacturers begin to connect entire environments. In this phase, manufacturers may connect supply chains upstream, connect not only equipment but people and processes within factories, and connect distribution networks downstream.What are your views on shift in investment priorities and business strategies in the light of COVID-19?
The COVID-19 global outbreak has accelerated migration to the Cloud and adoption of new technologies. I see the following trends as a natural response to the pandemic and all these trends have digitalization as an underlying theme and primary requirement.

A significant need for remote collaboration and productivity across the organization and throughout the extended value chain.

A significant need for enhancing privacy and security to support remote work and collaborate anywhere anytime for critical infrastructure.

Accelerated deployment of intelligent robotic process automation and low code technologies to keep up with re-factory-ing and customer service demands.

AI-driven predictive and prescriptive analytics and digital twins used for data modelling, risk assessment, and execution of resilient supply chains.

Future product and process development and introduction will be accelerated by digital twins, mixed reality, specialized compute, and digital feedback loops.

Business Rapid FireEvolution or revolution?
By definition, Industry 4.0 is a revolution. We see manufacturers boosting productivity by integrating people with intelligent mixed-reality devices, industrial IoT-enabled machines, and AI-enhanced applications.Strategy or execution?
Both. First strategy and then disciplined, sustained execution.Biggest takeaway from the New Normal?
If manufacturers would not have invested in cloud computing over the last 10 years, then the remote work needed to continue business during the COVID-19 pandemic would not have been possible. Manufacturers’ adoption of the cloud is continuing to accelerate.One trend of the new normal that you think would continue in the future?
We see manufacturers continue to accelerate adoption of cloud, edge, IoT, and AI technology.2021 will be the year of the digital twin.
In Microsoft’s IoT Signals Report for 2020 (available as a download), we found that 82% of manufacturers use digital twins in an IoT solution. We now see manufacturers moving from connecting equipment to connecting entire environments. This includes equipment, people, and processes. Manufacturers are connecting not only factory environments but also supply chain environments and distribution network environments.