Digital Transformation industry leader Jeff Winter joins 4IR Solutions CEO James Burnand and CTO Joseph Dolivo on “Heads in the Cloud” podcast to discuss Pt. 2 of Industry 4.0 and AI trends.

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James Burnand:

Hey everybody and welcome to Heads in the Clouds with James Burnand, Joseph Dolivo, and our special guest for part two, Jeff Winter. Hey Jeff, good to see you again. Thanks so much for jumping-

Jeff Winter:

I am back.

James Burnand:

Thanks so much for jumping on for another one here. We appreciate it. For those of you that this is your first podcast with us, Joe and I talk on a fairly regular basis about a whole bunch of different technology topics. We have our esteemed guest, Jeff Winter on board. This is part two. The first part of our discussion, we spent a lot of energy on ChatGPT and the effects on business, and now we're going to focus a little bit more on some of the industrial technologies and how they connect into this world and what some of the trends are in the industry. So, for those of you that don't know who Jeff is, which I'm certain there's no one that's on this podcast who doesn't know who Jeff is, he is one of the world's foremost Industry 4.0 influencers. He is a host, he is a content producer, and he is a personal friend of ours and someone who we've known for a very long time. Welcome to the podcast, Jeff.

Jeff Winter:

Thank you for having me back. I'm excited to be here.

James Burnand:

Cool. Let's get started. Last time we talked, we talked a lot about ChatGPT and how large language models were going to impact business and how much investment and connection that's driving to other technologies. So, why don't we talk about what those other technologies are. I know you mentioned things like data models and IoT and there's a bunch of different parts and pieces that are prerequisites for data modeling and things that are kind of peripherally related. So, maybe walk us through what you're seeing and what you've seen in the industry over the last little bit.

Jeff Winter:

Sure, and there's a couple ways to answer this. There's one thing I put together that talks about, tries to answer the question between the difference between hype and substance right now. And so, if you look at the technologies that are on an upward swing, meaning more accelerating in their adoption or interest, so adoption would be related to market size, interest would be related to Google trend search. So, I've kind of looked at both of these and put them together. And then same with on the downward slope. So, downward slope doesn't mean that there's less actually being purchased. It means that the rate at which they're being purchased is going down. So, if you look at the main ones on this upward slope are artificial intelligence, digital twin, and edge, those are kind of on the big uprising. And if you actually even pay attention to a lot of the companies out there, the solution providers out there, some of them are switching away from having a IoT centric messaging to actually being more edge driven messaging.

And if you pay attention to that, part of it is reading into what people are searching for and how they're thinking about the particular technology. From a downward side, they're actually kind of related to each other, is virtual reality, augmented reality, and the metaverse. And then surprisingly actually blockchain, which is a little bit different is on the downward side in terms of, once again, Google search and the acceleration at which they're being adopted within the industry. So, those are some things that kind of recently looked up that will help kind shape the perception of what people are thinking about those technologies.

James Burnand:

Interesting. Yeah, I would say anecdotally the My Feed as well of information that I receive is definitely edge in particular is something that seems like it's exploded in the last little bit. And I do feel that there's a strong number of new offerings and technologies in that space that are supportive of data ingestion, data modeling, and it's become, to me a big area of focus for a lot of folks. What are you seeing, Joe?

Joseph Dolivo:

I think edge is interesting in particular 'cause you look for example at some of the managed edge hardware appliances that the cloud vendors have had, there's a bunch of vendors in this space now, and initially it seemed like it was basically focused on data collection, store and forward, in some cases you'd collect a bunch of data on a box and you'd ship it over to somebody to get it pumped up into the cloud. And then it kind of evolved into doing use cases like machine learning inference. So, I've already trained my models, I'm just going to run it locally 'cause I have specific latency requirements for machine vision, stuff like that.

Now, these models are getting so efficient and also the compute power is getting so great that you're not only doing inference at the edge, you're doing training at the edge and you're running entire compute workloads at the edge. So, the edge is kind of blowing up into this thing that's really expanded beyond, I think, it's original use case. But it totally makes sense to me what you're saying, Jeff, that we're seeing this kind of explode as we're seeing ChatGPT explode and we're seeing these other areas in machine learning and AI and just general smart manufacturing blow up as well. So really, really insightful.

Jeff Winter:

I think it also depends on how you look at how companies justify projects, and I think it's one of the failures of IoT as a general concept. Everyone gets IoT at a high level, it's connecting stuff together, oversimplified, but that inherently by itself doesn't really have any ROI. Just by making a connected factory doesn't justify itself, it allows you or enables you the ability to do cool things that will justify the connectivity. So, if you reframe the way that companies look at projects, I also would argue that they're shying away from initiatives like IoT initiatives and towards these others, whether it's edge, digital twin or AI, 'cause those can justify value by themselves even though you can't really do any of them without IoT. It's not that IoT isn't going anywhere, it's the fact that it reshapes how people think about their digital transformation journeys and how they can turn it into projects that can justify their mission.

James Burnand:

I would say that's probably why industrial metaverse is, I wouldn't say it's struggled, but it certainly hasn't taken off the way I think it was intended to, was because the use cases while being cool and having augmented reality and virtual versions of everything and collaboration and three dimensions, a lot of that is still so dependent on IoT and dependent on data, and there's such a barrier to entry and the value, the ROI of having that versus the other alternatives which are having someone physically there or using tools like your phone or other remote access tools to gain access and the ability to troubleshoot. Yeah, the story is just not that clear yet for a lot of manufacturers. I do see us having more and more of that capability as we move forward. But I wonder how much maturity there needs to be in the IoT space before it becomes more practical.

Jeff Winter:

Well, one thing to the potentially add to that, 'cause I would agree, is that it was Microsoft and Intel came out with a report called IoT Signals for Manufacturing last August, and it was around the drivers, well, it wasn't around, but one of the aspects was around the drivers of smart factories and where the investments are over the next three years. So, 2023, 2024, 2025, the investments aligned with those drivers. So, what are they trying to do and then what are they spending their money on? And the outputs, I think we all understand in terms of what they're trying to do, have more intelligent automated systems that are adaptable and flexible.

What's interesting about this study is if you look at the top two areas that companies were investing their money in terms of increase in spend over the next three years, number one was process control, and number two was condition-based monitoring. And I would argue... Those are Industry 3.0 things. So, it's fascinating to see how companies attempting to do Smart Factory Industry 4.0 stuff are realizing I can't do that without some of the fundamentals in place. And so, they end up spending more on this in attempt to do Industry 4.0. And so, it shifts the driver even though the projects may be similar to what they were done, same thing 3, 4, 5 or in those case, 20 years ago, but what's causing them to be implemented has shifted.

James Burnand:

Well, practical example from our world is with Factory Stack being a cloud-based platform and it can operate hybrid on the edge and we operate Ignition as well as other software in the cloud, you would think this is a lot of data ingestion, this is a lot of modeling, which there are quite a number of use cases of that. But we're also finding there's a lot of people who are doing basic OEE gathering because unified performance management, which is arguably a very Industry 3.0 sort of a thing, hasn't really been completed at a lot of companies. And it's something that, I think to your point, is a base level requirement for you to be able to do more with the data as you need to have a certain amount of information normalized in a way that you can use a model in a way that you can use. And that's a lot of what's been going on that we've been seeing.

Joseph Dolivo:

You mentioned a bit about this last time, Jeff, when we talked, and also you look at companies that are saying, "Oh, I want to do machine learning." Because machine learning was kind of the buzzword of just prior to let's say, ChatGPT and these other forms of AI. But that's something where companies want to do machine learning, but really they could probably be solved pretty well with some pretty basic math and statistics. And so, you got to walk before you can run, and before you can do your basic math again, you have to have the data in the system in the first place. So, you got to keep taking these steps back to the fundamentals. And to your guys' point, a lot of companies don't yet have the fundamentals that's going to enable all these other things, but you got to start somewhere. And for us, I mean anything that drives companies to start integrating their data and doing it well and doing it securely and all these things that we kind of focus on as core tenants is really important.

James Burnand:

I do think too, that part of what we've seen too is the labor challenges that we experienced over COVID have made a big impact on the staffing levels and the skill levels that folks are able to maintain in their factories. And it's not even across the board and in every industry, but it's harder and harder now to get the right level of skill in every building that you need that level of skill. So, the concept of having more things delivered as a service, including hardware and software, creates the ability for folks to be able to take advantage of these technologies without necessarily having to deal with the ability and having the resources themselves and manage those resources in a distributed way at different factory sites.

Jeff Winter:

It's interesting you say that too, because there was a McKinsey study that was done a couple years ago that looked at different occupations and they found that 5% of occupations, at the time, I think this was three years ago, 5% of occupations had 100% of tasks that can be automated with then's today's technologies, whereas 30% of occupations had at least 60% of tasks that can be automated with today's technologies. And if you then take that, 'cause McKinsey partnered with World Economic Forum for their Lighthouse program, they went and evaluate all these factories for those that were doing Industry 4.0, as of January this year, they're up to 132. That's it.

After doing this for 4, 5 years, up to 132 Lighthouse factories, one of their key findings was how the successful companies were able to take their existing employees and repurpose a portion of their time and skill based off of what tasks could be automated, not automated, to make work that's more meaningful for them as individuals and simultaneously more valuable to the company. That was one of the major findings of this Lighthouse program. They weren't replacing operators, they were repurposing what they were doing.

James Burnand:

It's as a mission to try to give people the ability to have the right sort of work and to remove some of the parts of work that people don't enjoy. Obviously, you can't do that completely, but if you look at that concept from Dan Pink and Drive, the concept of intrinsic motivation, you don't get there by giving people monotonous tasks or by having people do things that are beneath their skill level. You do that by having that right balance of challenge and responsibility. And I think the promise of the way technology and the way services and the way we use this new connected capability to make work more meaningful for people is truly going to give the ability for people to feel more valued and important and be more engaged in what they're doing, no matter what their job is.

Jeff Winter:

I agree.

Joseph Dolivo:

Yeah, there's the other potential of, you could say, well, if we're automating 50% or 60% of our work and we'd be working shorter weeks, but I think the push is going to continue to be move folks into work that is more intrinsically valuable to them, that's going to drive more value to their company and that they're going to be able to hopefully get some level of satisfaction out of, and it tends to be for at least for a lot of knowledge workers, that monotonous work is the stuff that's not very fun to do. So, I'm all for automating that away.

Jeff Winter:

The interesting part to add on top of it though, so not only are you re-shifting what people are due, but the skills that are needed and the knowledge that is needed is also dramatically changing. There's actually a different report done by World Economic Form that came out with the predicted top three jobs for the next few years. Number one is data analyst and data scientists, number two was AI and machine learning specialist, and number three was big data specialists. All three of those are related to your ability to understand and make use of data, which shows the digital literacy that is going to be required of pretty much anyone in an organization to understand what to do with that data. So, it shifts what all of us need to learn and be good at.

Joseph Dolivo:

Yeah, I don't know if it falls into that second category, but there's a term I've heard around, it's called prompt engineering, where basically you're having to figure out how do I request to a ChatBot, a ChatGPT or something else to get data back in the form that I want, and then I'm doing this back and forth iteration to get what I want. And that's a whole different skillset that's required, and I think it makes sense that that would be an AI machine learning specialist, for example, that you mentioned. So, that's going to be pretty hot for sure.

James Burnand:

Well, I would say it took us a number of tries, Joe, for that podcast we did a couple of weeks ago to get the moose on the surfboard. That took a lot of words, I think, for us to try to get something that we could use as a cover image. So, it's prime example.

Joseph Dolivo:

It's definitely a skill that we need to build ourselves to.

James Burnand:

Yep. Love it. So, what do you see are going to be the winners and the losers in the technologies that are being adopted and that are being kind of shelved? Do you see anything that's a need to jump on now or if you're not doing this now you need to, or is there things that you know see fading into the background maybe in the next couple of years?

Jeff Winter:

It's an interesting question 'cause I think this depends on how individual companies view their Industry 4.0 and or their digital transformation strategy. And it's one that depending on how you do this, when I talk to companies about this, each company seems when they have this done, and some of them don't, I would argue a lot don't have it, but when they've gone through and have a clear definition of what they're trying to accomplish with Industry 4.0 and digital transformation kind of representing their strategy and journey to get there is how they organize it. And I see some companies organize it by technology as an example. How are we going to leverage AI in our company in all the different functions in all the different cases? That's a technology driven strategy, all right? Another could be functional. How are we going to make the best of, whether it's production, whether it's manufacturing, maintenance, engineering, or could be sales and marketing, legal, how are we going to make the most out of that function utilizing different technologies.

Another way of looking at it could be outcome driven. How are we going to get to 30% increase in profitability, how are we going to enter into a new market, whatever the outcome is as a part of it. And so, the way of answering your question is interesting 'cause some companies will be able to quickly adapt to that and go, "All right, a new technology came out, we can add it to our strategy 'cause it's technology based or we need to smatter it across all the different ways that we're looking at." And there is no right or wrong as to whether you're looking at it as, "Hey, a new technology came out, how do we adopt that as an organization, as a culture?" And so, the point I'm trying to make here is that it really depends on how you think about it. And I actually encourage companies to think less about the technology and I would argue it should be more around the outcomes.

So, you should have your 3, 4, 5, 8 outcomes you're trying to achieve and you should be constantly paying attention to what is out there of which some of it may be technology, some of it may be new processes, some of it may be different things to go, how can we achieve that better, faster and more efficiently? And so, you should pay attention to the technologies, but I don't think you should have a technology driven strategy for the organization to go, "All right, new technology came out, what exactly are we going to do with it?" So, I don't know if that's answering your question because then you're going to have things like blockchain just kind of fade potentially as opposed to blockchain should be apart, your supply chain should be thinking of how to utilize blockchain. But that's different than having a blockchain strategy for your company to having a supply chain strategy that uses blockchain as part of it.

James Burnand:

It's interesting because typically when it comes to adoption of high technology, it's something where the bigger companies have a distinct advantage. I view that the money, the resources, and the capability to, and technology's maybe not the word I should have used there, but some new concept, some new way of doing business, something that could drive value for the organization. I view that with the latest technology and the latest advancements with these models and AI. And I actually think it's democratized enough to the point that smaller companies can actually really take advantage of it if they're smart and if they're thinking about it and if they're thinking about their business problems and how different techniques or different investments or different strategies could apply to doing that, they have the benefit of being able to move much faster than a big company can in terms of implementing that change.

Whereas the bigger companies have the ability to afford to figure out whether the change makes sense for them or not from a bigger research budget. I actually don't know who has the better deal on this, but I think both have an opportunity that, again, I don't know if I'm kind of talking myself into circles here, but...

Jeff Winter:

I would agree with it. It's one of the key aspects of the era we're living in right now. Industry 4.0 is the speed at which new technological progress is made and the ability to adapt that as an organization. And that is an inherent advantage of small companies is the speed at which you can adopt. The disadvantage is the lack of resources and money. Big companies have the money and resources, but they struggle with the agility to be able to adopt, implement, and roll out, and scale technologies quickly. And that's why I would argue the concept of a chief innovation officer is one of the prominent positions a company should have right now because you need someone at the helm to be able to instill a culture of innovation to know how to identify, how to include and integrate these various different ideas of which technology could be one of them into the culture.

And what's funny is the whole concept of chief innovation officers actually relatively new, didn't even exist 20 years ago. And according to LinkedIn, there are 541,000 people with that title now today. And according to Forbes, 30% of all Fortune 500 companies have that role in place. So, companies are seeing the need to do this because what could have taken three, five years in the past, you might have two months now before you're at a competitive disadvantage to figure out what to do with it. ChatGPT is a great example. You can't wait three years, you'll be massively behind. And I bet you 10 years from now they're going to be things that can created and adopted much faster. So, your company needs to have a plan for what to do and how to deal with that. And that typically is led by someone like a chief innovation officer.

James Burnand:

Interesting.

Joseph Dolivo:

Well said. Yeah, the democratization of AI, I think as you mentioned, James, is really key that's making this really approachable and accessible to folks who otherwise wouldn't have been exposed to it or wouldn't have had the resources to do so. It's a bit of a raising the bar for everybody, if you will, and kind of a level set. Exciting.

James Burnand:

Awesome. Given that is, and you mentioned chief innovation officer, you mentioned having a strategic focus and... Is there anything else that manufacturing companies should be doing to make themselves prepared for technology and prepared for innovation as it moves forward? Or, how do you keep up? 'Cause I know my line of work and in your line of work, it's part of our job to keep up with what's happening, what's going on. How of you as someone who's focused on building the best widget or providing the best experience for one of your customers, how do you try to keep up with all this stuff? 'Cause there's a lot of information, there's a lot of, some of it's really useful, some of it's a lot of hot air and noise. What's your advice for people that are trying to figure out how to absorb and how to figure out how to make good decisions in this space?

Jeff Winter:

I wish I had a good answer for you that, but what I can tell you is based off of the yearning for people to figure that out. That's why I think there are just even so many associations and groups that have sprung up to have communities for people to stay connected on this information and the application of various different technologies. It's one that I think shifts organizations to have a better focus on a partner ecosystem, not a dedicated partner, but a partner ecosystem. Because when you look at the world of Industry 4.0, it is absolutely massive and there isn't one company that can do it all, not even close.

If you look at Microsoft as one example, I mean, they had something like several hundred thousand partners to show how they, along with their partners, actually showed up to customers to deliver a full end-to-end digital transformation journey. And I would argue they're one of the biggest companies in the world. So, imagine everyone else and how they're fitting in. You need to have a partner ecosystem so you can stay educated, stay current with the what, the how, the why, the when, and all these basic questions 'cause it's too much for one person. And I would even argue one company to be your sole answer for all of it. So, it's developing that ecosystem of places and people that you know that can help you with it.

James Burnand:

Yeah, good point. I know there's a bunch of different ecosystems out there that I'm aware of. I know there's some that Joe, you're a part of, and Jeff, I think you're a part of some as well. So, trying to figure out who all those are. And certainly there's the opportunity to collaborate, there's the opportunity to absorb, and then there's just the opportunity to contribute as well. And I think part of being a good citizen in this ecosystem is to be able to contribute where we can to the greater learning. I know Joe's favorite saying is all about pies, he's like, "Yeah, we'd like a slice of the pie, but our goal is really to make the pie bigger for everyone." And I know I probably butchered that, Joe, so if you'd like to explain what that means.

Joseph Dolivo:

I'm glad you said it so I didn't have to. No, I think you did a good enough job. But it does come down to education. So, we talked about the education gap and how I think it's the responsibility of all of us in the industry. So, those of us who are privileged to have access to some of these tools, technologies, even knowing what's there to share that with our ecosystem, with our partners, with our peers, with other companies, and to really help advance the industry even more quickly. So, it's nice to be a part of it. And not everybody's driven, I'll say, probably by shiny new things, but we are, so if we can share some of that joy with other folks, then I think it's the right thing to do.

James Burnand:

That was a really, really long plug for everyone to keep listening to our podcast 'cause we talk about really cool stuff all the time. And hopefully this has been useful for those of you that have listened, we thank you. I'd like to offer a special thank you to our guest, Jeff Winter. We appreciate you. We really thank you very much for your time and all the insight that you've brought to not only this podcast, but via LinkedIn and via all the channels and all the different organizations that you're a part of. Certainly helping the industry to continue to drive forward is something that I know you've taken a personal mission in and it's been appreciated and noticed by us and I'm sure by lots of others as well. So, wanted to say thank you for that. Any closing thoughts from you guys?

Jeff Winter:

I'm excited to be here. A lot of this is around education. I think you guys are doing a great example of helping to educate the industry on some of these complex and vague topics.

James Burnand:

Appreciate it. Joe, anything before we go?

Joseph Dolivo:

I'll echo your thanks. And Jeff, it's been great getting some of your insight, especially from the top down. You've got a lot of really good interactions with folks at the C level of these companies, really helping to drive strategy. So, it's an important way of looking things and definitely brought some insight to me and hopefully to others as well who are listening who tend to focus on the bits and the bites. So, I thank you for your time and insight and looking forward to staying in touch with wherever the industry takes you.

Jeff Winter:

Thank you. And likewise.

James Burnand:

All right.

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