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Energy Management and the Factory of the Future

“The future of many companies will depend on their willingness and ability to rethink their supply chains, to experiment with new processes and uses for data from Internet-connected objects that may change supply chains at their foundations.”

John Kern, Senior Vice President of Cisco Supply Chain
As quoted in the Wall Street Journal


We often hear the terms Internet of Things (IoT) and Internet of Everything (IoE) or digitization. They have many definitions, but to me it’s fairly simple. IoT is about the instrumentation of discrete systems that “connect the unconnected” and pull data from devices that were previously unattainable or required physical proximity. On the other hand, digitization is really the innovation that occurs when you take these new connected systems and the information they provide and mash them together in previously impossible ways. One of the industries this is happening faster in than most is the manufacturing sector.

Supply chain image

Over the last year Cisco’s supply chain organization and Flextronics launched a pilot program in Penang (Malaysia ) to explore the “Factory of the Future“ and its possible benefits. One of the priorities was to monitor energy consumption of the many diverse devices on the manufacturing lines as a means to better understand how energy was being used on Flextronics’ plant floor and what could be done to reduce its use and cost to the company.

This portion of the project was led by the Cisco Energy Management Team and it is estimated to save 20%-30% in energy usage, reduce greenhouse gas emissions in the supply chain, and expand the Cisco Energy Management solution from our IT roots into the IoT domain.

How it Works

Our energy management solution is a cloud-based software and analytics package that measures, monitors, and manages the energy consumption of any connected device. In the Flextronics instance it also required the deployment of sub meters located on the manufacturing shop floor.

Information from the devices is collected, displayed on a robust reporting visualization engine, and analyzed allowing for continued data monitoring, modeling of efficiency improvements, and automated system alerting. This level of sophistication enables automatic energy optimization using highly intelligent device control and management policies such as hibernating or gracefully powering off end devices. Additionally, the solution provides visibility into:

  • Power usage (baselines and trends)
  • Power analytics and device management to reduce consumption by changing behavior
  • Carbon emissions and reduction reporting
  • Utility bill analysis and many other data points

Optimization: Going Beyond Reduced Energy Consumption

Imagine having the visibility and agility to adjust the timing of runs to limit cost based on electricity and nitrogen gas costs during temperature testing. This energy information can be measured and visualized in manufacturing terms such as: areas of the factory (test, assembly), types of equipment (temperature chambers, chillers), and specialized views such as heaters, compressors, blowers and nitrogen gas flow.

Adding a data virtualization layer along with the Cisco Energy Management software suite, brings together a complete energy picture that includes IT devices, Operation Technology devices and IoT sensor data into a single enterprise-wide energy focused view. This delivers an extensive ROI model based not only on energy costs but data driven opportunities to improve operational workflows that help to cut costs.

Where We Are Today?

Man installing energy management deviceTo date, we have nearly 1,300 devices instrumented to monitor energy data on Flextronics’ (Penang) assembly and test floors, its equipment (temperature chambers, chillers, heaters, and compressors), and on the specialized energy use of nitrogen flow.

We are in the final stages of correlating the many data sources such as device energy, shop floor equipment test schedules and the manufacturing production and test databases to determine all the ROI opportunities available for decreasing energy costs from the manufacturing business.

We believe this initiative will help manufacturing supply chains greatly reduce their energy consumption and save tens of millions of dollars in the process. With Flextronics Penang alone, conservative estimates show the company saving $85,000 a month or just over $1M a year in USD.

Whether it’s the manufacturing floor, institutions of education, or smart cities, our goal is to find new ways to connect the unconnected for the benefit of all. The Internet of Things (IOT) is the engine to make it happen and cutting-edge innovation will lead the way.

What does the future look like? Only time will tell but it is clear IoT opens the door to a world of limitless possibilities and innovation will continue to prove supreme in this virtual kingdom.

What are your thoughts and questions about instrumenting the factory floor as a means to reduce energy consumption? Leave your comments below.


Cisco Energy Management Suite At-A-Glance
In Malaysia, Cisco Systems trials plant fully wired to Internet (article)

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The Proliferation of Mandates: A Growing Threat to Supply Chain Security

As the focus on securing Information and Communications Technology (ICT) supply chains intensifies, the number of standards and guidelines is increasing at a troubling pace. These well-intended efforts to provide a framework for security may very well be “cooking the global ICT supply chain goose,” without moving the security needle. For more on this challenge see SC Magazine from the CSO’s Desk: The proliferation of mandates.

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Cisco Releases Tenth Annual CSR Report

I am pleased to announce that Cisco has released its tenth annual Corporate Social Responsibility (CSR) Report. The 2014 Cisco CSR Report outlines our strategy to use our expertise, technology, and partnerships for social, environmental, and business impact.

Each day, people around the world face many challenges: access to quality education, unemployment, poverty, and climate change, to name a few. We’ve learned that when we bring people together, they find innovative solutions to address these problems. And when you add technology to the mix, we can multiply our impact and uncover even greater opportunities.

For example, in France, a team of Cisco Networking Academy students used the connections between people, process, data, and things to create a networked walking stick for the blind. Watch this video to learn more:

Our CSR Report contains many more examples like this, organized according to five pillars:

  1. Governance and Ethics: Promoting responsible business practices at every level—with employees, suppliers, distributors, and partners
  2. Supply Chain: Working closely with our 600 global suppliers to maintain our high standards for ethics, labor rights, health, safety, and the environment
  3. Our People: Attracting, retaining, and developing talented people through an inspiring workplace, engaged management, and flexibility
  4. Society: Combining technology and human creativity to solve social issues and help communities thrive.
  5. Environment: Creating new business value for our customers using sustainable Cisco technologies, products, and solutions

Here are just a few highlights from our 2014 CSR Report:

  • We updated our Human Rights Roadmap to align with the United Nations (UN) Guiding Principles on Business and Human Rights, and we launched an online human rights training program for our employees.
  • 58% of our key suppliers set goals to cut their greenhouse gas emissions — up from 45% in 2013.
  • We ranked number 55 on the Fortune “100 Best Companies to Work For” list.
  • We made $275 million in cash and in-kind contributions to community organizations worldwide; and our employees volunteered 136,000 hours to support organizations in their own communities.
  • Employee-led “Pack It Green” projects saved approximately 888 metric tonne of packaging material and are expected to save over $6 million annually through material and freight cost reductions.
  • 97% of Networking Academy students who participate in a selective internship program with local IT companies in Italy get jobs; the partnership is creating a pipeline of tech talent while combatting a youth unemployment rate over 40%.

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Sub-Zero Innovates with the Internet of Everything

Blog authored by Chet Namboodri, Cisco and Marieke Wijtkamp, Librestream

Sub-Zero is a family owned business and, perhaps, best known as the developer of the first cabinet built-in refrigerator in the 1950s. Today, the company is the leading manufacturer of luxury appliances in North America, selling its top-of-the-line appliances worldwide. Sub-Zero employs more than 1,000 workers, with production facilities in Madison, WI, Richmond, KY, and, now, Goodyear, AZ. They are also a world-class example of a company who’s leveraging the Internet of Everything to drive innovation and who truly embodies the renaissance in American manufacturing.

Accelerating New Product Introduction (NPI) Cycles

In order to prepare for the largest product roll-out in the company’s history–60 new appliance models across refrigeration and its premium cooking brand, Wolf–Sub-Zero needed a top-notch, end-to-end network to provide flexible communication and collaboration between its engineering groups, the existing factories in Madison, and the new production facility in Goodyear. In addition, Sub Zero needed to ensure robust communication and diagnostic data exchange with external suppliers and installation partners. Dubbed the “New Generation Collaboration Initiative,” Sub-Zero worked with Cisco and Librestream to aid the design, launch, and ongoing manufacture of its new products.

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The Digital Renaissance Is Here. Is Your Company’s Culture Ready?

Sooner or later we all feel like throwing up our hands and cursing the complexity of modern life. But while technology may seem the chief culprit in making things unmanageable, it is also the ultimate solution to complexity.

In the Internet of Everything (IoE) era, it is particularly important for business leaders to understand the power of technology to simplify our lives and support JBradleySAPinformed decision making. And this was a core theme at Sapphire Now 2014, an event in Orlando, Fla., that I was privileged to attend last week.

By using network technology to integrate people, process, data, and things, IoE counters complexity in unprecedented ways. In a city, this can involve something as simple as cutting the time it takes to find a (connected) parking space. Or IoE technologies can scale up to reroute traffic lights; for example, to head-off highway backups before, during, and after a large event.

In a brick-and-mortar retail setting (a key area of discussion at Sapphire Now), IoE can alleviate the complexity of managing customers, staffing, and products. With data from multiple sources comes heightened, real-time awareness, empowering managers to react faster than ever. For example, they can then stock shelves and reorganize staff in response to constantly changing levels of demand. With predictive analytics they can even respond before a customer rush begins.

The idea of hyper-aware, real-time decision-making resonated during a Sapphire Now panel discussion titled Thrive in the Digital Networks of the New Economy. I was honored to share the panel with such luminaries as Erik Brynjolfsson of MIT; Michael Chui of McKinsey Global Institute; and Jai Shekhawat, Deepak Krishnamurthy, and Vivek Bapat of SAP. And there was much discussion on the impact of bad decisions on failed organizations. Which is why we all take such an interest in technology that enables good ones.

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