Pepperl+Fuchs: Leading The Change In IIoT

It is either change or be changed in the new world order. Pepperl+Fuchs decided neither. Instead it will lead the change -- playing an active role in the digitalisation of the industry. By Eileen Chan

The Industrial Internet of Things (IIoT, Industrie 4.0) has been identified as a key capability in Singapore’s Advanced Manufacturing thrust and the Singapore is looking towards Pepperl+Fuchs as a leader in this direction.

At the opening of its new 17,700 sqm, Global Distribution Centre in Jurong, Singapore, on October 14, 2016, Minister S Iswaran, Singapore’s Minister for Trade and Industry (Industry) credited the German controls and automation manufacturer, as a member of a pioneering group of companies that has leveraged Industrial IoT technologies to digitalise their facilities.

Figure1 webThe five-storey, S$65 million investment for the leading manufacturer of process and factory automation systems and components, will serve as the central warehouse from which Pepperl+Fuchs Group provides a worldwide distribution of more than 15,000 products.

The facility, is an important step forward in Pepperl+Fuchs’ strategy to deliver both stock and custom solutions more quickly and efficiently to its clients around the world, said Dr -Ing Gunther Kegel, its CEO, in his opening address.

Speaking at a press interview at the opening ceremony, Dr Kegel stated that as the world is changing, and moving forward, the manufacturing industry has only two choices: “Either we accept that we are going to be changed or, we turn it around and we become the frontrunner of the change, and we do the change.”

The Future Of Things To Come

Pepperl+Fuchs decided right from the onset, not to be the ones that are changed, but to lead the change -- playing an active role in the digitalisation of the industry.

For example, its own internal communication system was changed to the next generation of social media. Instead of the usual email, they produced a ‘FaceBook’ alternative, P+F net, for its workforce. “This is especially popular among the younger generation and it now forms an integral part of the company’s general communication,” added Dr Kegel.

“We provide necessary communication infrastructure and we are changing all our business models to Internet-based business models. That does not mean that we sell something on the Internet, but we use Internet technology to actually improve our work processes.”

Dr Kegel cites that in the earlier years, when a sales quotation was called for, it was up to the local sales personnel to formulate an appropriate price for the product. Putting the company’s vision into practice, today there is an Internet-based pricing tool that allows the sales personnel to key in details of the order, the volume, type of product, etc, and he gets an automatically-derived recommended selling price. “Even in Mongolia, Russia, or South America, we use the same identical tool over there, and they are all connected via the Internet. We use Internet technology to intensify and raise the efficiency of our process.”

For Pepperl+Fuchs, creating connected manufacturing operations in the Internet of Things starts by looking into its own backyard, or in this case, its own products. Dr Kegel said: “It is important to understand the meaning connectivity -- we need to connect all our embedded systems to the Industry 4.0 standard.”

Data and information in the industrial IoT will be generated predominantly by more and better sensors. As a consequence to this, all companies have to develop their own digital agenda to cope with the rapidly changing business environment. “By integrating Open Platform Communications (OPC) inside our devices,” Dr Kegel said, “we make them an integral part of the next generation of communication.”

With the introduction of a collaborative project called Overall Equipment Effectiveness (OEE) introduced at CeBIT this March, machine uptime and productivity can be increased significantly with easy-to-retrofit hardware components and a business platform with special analysis tools.Figure2 web

Working on smart status monitoring and maintenance, it will allow even older systems to be connected to IT systems and modernised in line with Industry 4.0, without any major investment. Dr Kegel said: “That provides the necessary software so that every product built from now to a few years time, will seemingly connect to the Internet of Things.”

Inroads In R&D

Industry 4.0 is making manufacturing increasingly smarter, more flexible, and more transparent. The most significant role in this changing environment is played by people -- the creators of the factory of the future.

Pepperl+Fuchs walks the talk, as its investment in digitalisation works towards a higher efficiency of manufacturing in the future. “The digital plant will only work when we have improved sensors, smart sensors, therefore we have the initiative called Sensorix 4.0 -- the next generation of sensors. The smart sensor, that is what we are currently developing. All our sensor development divisions have a task to come up with the digital expansion of the product offering into the direction of Industry 4.0 or smart sensors.”

Developed both in Germany and also here in Singapore, the company has about 50 design engineers (in Singapore and other R&D facilities around the world), furthering this area. “We see the engineering capabilities of Pepperl+Fuchs group expanding in this territory. In the old days we do R&D in Germany, today, we do in Asia -- in Singapore, Vietman. Also in Germany, UK, Italy and in the US.”

He added: “We are looking for talents, and where we can find the appropriate talent, we can set up an R&D team to lead in the different industries.”

The ‘Smartification’ Of Things 

Looking ahead as to whether they will be a change of business model for Pepperl+Fuchs as it makes its way towards a future propelled increasingly by the digitalisation of how we do things, Dr Kegel gives a definitive answer: “In the future people will require sensors, so there is no need we should not be afraid that the Internet of Things will make our things obsolete. We will sell sensors even 20 years from from now -- that I am absolutely sure.”

“But the sensors will change because they become an integral part of the IIoT and on top of this, there might be new business models using the data of our sensors.”

Industry 4.0 systems capture a wide range of data that can be used to improve performance and productivity with the application of analytics. As analytics can be used for real-time predictive maintenance, it would prove invaluable as manufacturing companies can avoid interruptions by machine failures and improve asset utilisation. Other applications include the optimisation of production operations, improving productivity and energy efficiency.

He added: “We could easily use this to expand this into more service-oriented structure. But that is a really difficult task as you have to predict what service-oriented structure the customers will want in the future. Do not forget Industry 4.0 is not about technology but about generating additional extra customer value.”

In many ways Dr Kegel says it is an evolution of things, not a revolution: “Considered a ‘smartification’, it is just a matter of doing what we always do, more efficiently.”

Figure3 webFuture Forward Statements

Main growth segments in the Southeast Asian region for Pepperl+Fuchs will remain the in the energy and intralogistics arena.

While the entire energy sector is expected to remain sluggish in the near term, Dr Kegel added: “We expect this will basically take off in a year from now when we see more investments into renewables or investments in highly-efficient power plants, and gas power plants to get rid of coal-fired power plants.”

Whereas in the discrete industry, like in automotive or in intralogistics, he points out: “We can see that the industry is still booming, so that is definitely our main growth."

Dr Kegel strongly believes more growth opportunities still lie in China while countries like South Korea and Vietnam is expected to do well too. “So there are definitely opportunities for us and do not forget the ‘Tiger’ countries of Malaysia, Taiwan and also Singapore.”

Pepperl+Fuchs remains at the heart of it all, an automation company and “we want to stay as an automation company, there is no further plan to diversify into anything else but automation.”

Its position as a leader in the industry is fortified by the way it positions itself and its brand. “The Pepperl+Fuchs brand says we want to do what we do in a passionate way. People must be not only satisfied, but really delighted from what we do. So increasing our service level, increasing our performance in regards to delivery, liability, capability, to deliver every product to the edge of the world inside of four days to two days, this is something we are investing our money, for example, in this Global Distribution Centre.”

In conclusion, Dr Kegel added: “With digitalisation, our product will become smarter with the coming years and will become the part of the Industrie 4.0 conformal communication standards as with our marketing mission, our marketing strategy statement.”

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