The intersection of the Internet of Things and manufacturing

Recently, I had the opportunity to talk with James Haight of Blue Hill Research regarding the Internet of Things and how it is and will impact manufacturers. We also dipped our toes into other topics, including text analytics and the interesting combination of all these trends. The conversation was captured as Episode 16 of James' podcast channel, The Emerging Tech Roundup. Read More »

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Getting started with equipment monitoring!

IoTBy now, we have all heard about the Internet of Things (IoT), or the Industrial Internet.  Across industries, organizations are attempting to instrument and measure all critical business systems and assets in an effort to drive improved production and service delivery.  It is estimated that by 2020, companies will spend $500 billion on the Internet of Things.  That growth in connected devices and increased data volumes will certainly create new value opportunities … won’t it?

The answer is yes, but the real value will only be realized when organizations make the connections within these new data streams to drive improved decision making and actions.  It is surprising to me how many organizations are investing in improved sensing technology, without clear line of sight to how they plan to use it within their organization … or those that have visions of what this data could do for them, but struggle with how to get started.

During a recent customer engagement, we were discussing how to transform the customer's business model by optimizing their overall maintenance and reliability strategies, which would drive immediate impacts to bottom line profitability and give them a competitive advantage in the market. While the customer saw the value, they weren't sure how they could implement such a system in a greenfield facility. “We are just finishing the build out of the new facility, so we don’t have enough production machine data to get started," explained the customer. "In addition, since we haven’t been running in this location, we don’t have any failure events to leverage while building predictive models.”

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VirtualOil shuts in but retains forward value

Is Iran right that oil is heading for $25? Are OPEC and the International Energy Agency (IEA) right that prices will rebound later this year? The headlines suggest that, whatever the case, oil isn’t ready to recover the enormous value it has lost in recent months. With upwards of a million barrel-per-day global oversupply, traders are closely monitoring US rig count. Total SA this week joined other majors in cutting American shale oil production spending, but analysts warn that it will take time for production cuts to sop up the glut. The outlook has not been helped by the IMF’s dour global demand forecast this week.

What does that mean for VirtualOil’s fictitious energy production portfolio? Our charts capture how dramatically price declines spiked volatility late last year, but also that a correction today has less impact at the much lower base values. With oil prices simmering below $50, the actual price volatility delivered by the market has stabilized. Our Value-at-Risk backtesting vividly illustrates that the price came off hard but things are leveling out. Mark-to-Market has stabilized due to both the spot price movement and the value in our portfolio.

Chart: VirtualOil VaR Backtesting

Value-at-Risk Backtesting

Value-at-Risk Backtesting

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Defining and Measuring Analytics Value

notepadBig Data is dead. Long live big data.

Of course that’s not true. Finding good, relevant data IS important. Having a wide range of analytic techniques and approaches DOES provide competitive advantage. But when data outgrows our ability to simply process it, only analytics give us the ability to extract organizational and market insights.

So, an even more important question than, "How BIG is our data?" is, “How much VALUE is our data analysis bringing?” In his a recent post about "not so big data," James M. Connolly points out succinctly that valuable insights can be found in relatively small data with properly evaluated, operational analyses.

I propose that the next big focus needs to be on evaluating derived analytic value. This means comparing analytically driven decisions and campaigns. These comparisons, when done systematically, provide "meta analytics" to answer the key questions about which models are best in which contexts.

Without such evaluations, we might as well go back to writing business information down on notepads.

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Event stream processing: give life to your IoT data

506935383In my previous post, I talked about how the Internet of Things promises new ways to use sensor and machine data by creating a highly efficient world that demands constant analysis and evaluation of the state of events across everything that surrounds us.

I have also explained why it is important for real-time decision making on streaming data, to have a technology that is able to process data at a very high speed and this is done using an event stream processing engine (ESP), which is sometimes also referred to as complex event processing.

An Event Stream Processing engine allows processing of the data stream, before the data is stored in the cloud or in any high-performance repository, and through the use of analytics it can decipher streaming data as close to the device as possible creating new knowledge for many industries and reducing the latency of the information being analyzed for decision-making.

As the data is continuously processed and analyzed in real time in memory, it can be streamed to other analytic applications for deeper analysis or perform, for example, pattern or behavior analysis over a rolling period of time or use more information for correlations.

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From the top floor to the shop floor

Quality has highest near-term positive business impact

IDC Futurescape - 2015 Manufacturing Top 10 Decision Imperatives

Following a year that saw record levels of recalls, it’s no surprise that analysts are predicting product quality will be a top priority for manufacturers in 2015. In December, the IDC Manufacturing Insights team presented the IDC FutureScape: Worldwide Manufacturing 2015 Predictions. At the top of their list, they predict quality improvement related investments will drive two-thirds of IT spending in the manufacturing industry in 2015.

While the automotive industry dominated the headlines last year, quality is not just a challenge in automotive. It cuts across all manufacturing sectors, every geography and every domain – engineering, supply chain and manufacturing. As manufacturers scale to serve more markets, they face growing product complexity, product proliferation and increasingly complex supply chain networks.

IDC’s Heather Ashton concludes, “There is no way around the fact that product quality is hard to guarantee.”

Quality is hard

Practitioners have searched for decades for a silver bullet. Following advice from gurus such as Deming, Juran and others, the industry has made tremendous strides toward higher quality. In absolute terms, experts agree that product quality, even automobile quality, safety and reliability is better than ever. But with the reasons already stated and the rise of social media, the bar is being raised faster than manufacturers can keep up.

Last year, I wrote about the need for a shift in the quality paradigm. Shift to one of looking at quality from the outside in. A view that incorporates the voice of the process, the voice of the product and the voice of the customer. And one that employs quality analytics to take an enterprise view of quality and achieve quality excellence.

Quality is rewarding

Companies like Sub-Zero recognized the opportunity with analytics over a decade ago. Not only did they significantly reduce their time to detection and overall warranty costs, they’ve risen to the top of the JD Power rankings.

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2014 media coverage explores who uses SAS and how

Newspapers in foreground with laptop It’s that time of year again when we look back and consider how accurately and extensively the SAS story was covered in the media over the past year. It’s not always a simple or predictable story, but it is usually interesting. Consider some of these threads:

  • How did companies or other enterprises begin their analytic efforts and what were the challenges along the way?
  • Sure, analytics are used by many large banks, retailers and manufacturers use analytics to help them become more successful, but what can be learned from those whose analytics use might be surprising? Small companies? Sports teams? Nonprofits?
  • What data frontiers are customers now exploring with analytics? Text? New energy sources? Others?
  • How does such important software used at 93 of the top companies come to be? Is it the unique SAS corporate culture?

I’ve collected below some of the more notable and illustrative media coverage about SAS in the media. Is shows the surprising diversity of how analytics are employed.  In no particular order, the stories are: Read More »

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Internet of Things : It's a Jetsons world, even for the bad guys

The Mercedes-Benz F 015

The Mercedes-Benz F 015 (Promotional image from Daimler Chrysler)

For me, 2015 started with fireworks in Las Vegas at the Consumer Electronics Show. That old faithful trade event started this year on a high with a fantastic demonstration of industry innovation and evolution via the use and application of all things connected.

Quite simply, the Internet of Things has captured the imagination of many companies from the virtual retail experience, to the cars that drive automatically, and streaming entertainment shows that rely on analyzing audience data as much as the expressive pulling power of the chosen cast.

However, in all of this excitement and realization of “the Jetson's world," we have a key challenge as custodians of the digital business world, and that is balancing privacy with the risks around cyber mitigation. 2014 was clearly one of those years when large compromises occurred across many companies and left a trail of frustration and angst about the digital infrastructure and the trusted delivery of the real-time digital experience.

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Why settle for today’s paper when you can have a peek at tomorrow’s?

453645891For many, the contents of the Financial Times or Wall Street Journal are a bit like maps that guide them into battle against their competitors each day. Information on stocks and shares, mergers and acquisitions, and even speculation on how things might pan out in the future can all be drawn on to inform business decisions.

Now, imagine if you had access to the Financial Times or Wall Street Journal before anybody else. What if, instead of waiting until Wednesday for that day’s paper, you got it on Tuesday? How valuable would the information be, and what sort of advantage would it give you? You could correctly predict the stock price movements, corporate takeovers, and major government decisions on economic and monetary policy. You would be able to forecast future outcomes and steal a march on the competition. What’s more, you would be more informed about what would be in Thursday’s paper and beyond.

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5 analytic resolutions for oil and gas professionals

115780102There’s a lot of hand-wringing in the oil industry these days. Prices are down, supply and demand are out of balance, companies are merging, and jobs may seem insecure. In uncertain times, individuals can get distracted from professional goals. So, it is in this spirit that I offer 5 analytic resolutions for oil and gas professionals to keep us all focused for the new year.

While these ideas won’t make the oil price rebound, if leaner times are ahead, a little analytical know-how may translate to job security. With a little time invested in the resources below, you can deliver analytical value and be equipped with knowledge of leading big data analytic technologies.

  1. Read Chapter 1 of “Harness Oil and Gas Big Data with Analytics” by Keith Holdaway. Just released this summer, the book “takes the idea of analytics work to a new level[1].” If the 30-page excerpt whets your appetite, the full book is available for purchase on Amazon or
  2. Get up to speed on Hadoop, Deep Learning, and Data Virtualization. These technologies are critical for managing and deriving value from big data. Develop your knowledge in these areas for your next career step via the “Big Data Matters” webinar series.
  3. Visit to watch the webinar Real-time Data Analytics for Critical Asset Performance with Paul Barnes, former Innovation Director at Aera, and Moray Laing and Mike Pool of SAS. Paul reveals his tips for bringing disparate groups together to drive change, then Moray and Mike introduce the art of the possible with streaming data analytics.
  4. Download “Don’t just visualize, Predict!” This oil and gas webinar will have your mind spinning with new ways to use your treasure trove of data to build predictive models. And if it looks too good to be true, try your hand at SAS Visual Analytics with these free downloads.
  5. Register for SAS Global Forum 2015 in Dallas, TX, April 26-29. Networking, training, and did I mention networking? Keith Holdaway (book author from tip #1) and other industry peers will be there presenting papers of use cases for advanced analytics. Register soon to get the best deal!

Did these suggestions spark some ideas for your own analytic resolutions? Please comment back to share them! Happy Holidays!

[1] Digital Energy Journal, Aug/Sept 2014

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