Press Conference- ABB @ ARC Industry Forum 2016 Orlando, FL

Thanks Greg. And looking around the room here, I recognize many of you and also recall many good discussions we've already had together with you on what the Internet of Things, services, and people, what the Fourth Industrial Revolution actually is or will be, and how ABB participates in that. Let me tell you that from my perspective, Industry 4.0 is about enabling business innovation through how we digitally connect the things, the services, and the people. And it's an exciting topic both for me personally as well as for us at ABB, with more than 125 years as a company, born around the time of the Second Industrial Revolution. Basically, even when you're 125 years old, you don't get to see that many revolutions.

We all, I guess, recall the Third Industrial Revolution, and now to be part of and in the middle of the Fourth Industrial Revolution is absolutely a very exciting time. Since at ABB we talk about the IoTSP, and that's a bit of a difference to some of the other people who are involved with these changes, let me tell you why we do that. In terms of the things, it's probably going to be next year that will be the first time when there will be more connected things on this planet than there will be people living on the planet.

If you look at the services, both the people as well as the things need as well as can provide services, so that's clearly also a non-debated part. But we think the people dimension of it is really important for success here, because connecting, supporting, and ultimately empowering people and the art of balancing the corners of this triangle will be what is really decisive in creating value from this revolution.

We all understand the trends of the digitization of the world, so I won't spend time here. You've heard this one often enough and you could probably recite that better than I could. And you also know for the industries that we are serving, what they're looking for is basically always about safety, productivity, energy efficiency or uptime, speed, and yield. If you just take the productivity dimension and zoom in one level more, and if you look at this chart and each of its columns, you can see that basically you find different names, you find different new answers when we talk about cloud-controlled irrigation systems, cloud-controlled electrical vehicle charging networks, the integrated operation across process automation as well as the power side across operations.

The service and also the automated container ports and integrated vessel and even fleet management, or simply back home in everyone's lives, the increasingly smart homes that we can surround ourselves with today, there is one common theme throughout all that, and that's the IoTSP. The Internet of Things, services, and people is really happening as we speak and happening across the industries with solutions small as well as large. And let me take you through some examples.

If you take this one here, this is actually a mine that is older than ABB. This is a mine that dates back to the 13th century, Garpenberg, a mine of Boliden as a mining corporation. And basically today it is not only the most integrated but probably the most productive mine after a number of technology changes that we've implemented there. And if I just sketch this out, basically this is about removing people from the danger zone and moving smarter sensors, better actuators, and the collaboration of those things and the people and services together to actually produce more tons of ore per person than any comparable mine.

At the same time, on the energy efficiency side, rather than ventilating at full power all the time, basically ventilating as needed in specific sections of the mine for the people, for the equipment that is there at certain times. And basically you improve on all these counts, on the safety, on the energy efficiency, and on the productivity. Because rather than the people going down into the mine, drilling holes, planting explosives, evacuating out of the mine, doing a blasting, going back into the mine, basically you can see how that's actually causing a lot of non-productive time. By removing people from the danger zone, you basically get a much more continuous production out of this process, which helps on all three dimensions.

If you take another industry, and by the way I see several of you taking photographs, you'll receive the stack from Laura so we will have that as a PDF for you. If I take this pulp example that you see here, this is a new plant that is currently being built in Brazil, and it's an integrated solution for the power, the automation, the process side. But it's not only an integrated system for the new mill that they're building, but it's actually also for the already existing mill that's right next to it. It'll be one integrated control solution for the whole thing.

And if I've now given you two examples of rather large integrated automation solutions, actually the hero of this slide and of this application case, a distributed oil and gas production setup in need of power, is actually a low-voltage breaker. And you would say, what, aren't we talking serious DCS process control systems here? Actually, a low-voltage breaker, these days an MNS2 breaker, has the capability of automating the connected loads. And basically it is able, by energy managing the connected loads, to tell them, look, we're going to have a surge if you guys consume power like this, so please actually reduce and you go off, so that I don't have to trip the whole branch here in terms of maintaining stability, avoiding surges, consuming too much power.

And the breaker actually does that in seven different languages, if I can call it that. So when we're talking the Internet of Things, and when I see some people sometimes also saying, well is it for real, is it coming, I certainly didn't imagine even in my time as Chief Technology Officer, when we built prototypes of that nature, that we would see these Internet of Things technologies in objects like low-voltage breakers in production so fast. And this is not pilot cases, we're having many of these applications already today.

When we talk services and people, the examples are rarely as spectacular as you get when you look at real big systems, but actually I find this one stands for exactly what we mean by the services and people side. So this is an FPSO and they're having a problem with a drive somewhere in the offloading of the FPSO. So actually at some point that's negatively impacting production. Since the crew actually doesn't have the ability to find out what's wrong with that particular drive, both the crew, they get in touch with our support center, and together they look at the data from the drive. So the support center get a connection to the drive, they get a connection with the crew, and then basically they can sort out what was the root cause of the issue here.

It was the expertise of the drive guys looking at the data in detail and then actually helping the crew to deploy spares that they have on board of the vessel to restore the situation in less than five hours, with just minimum production lost. I think that's really a great example of people and things getting together through the IoTSP and then delivering value for the customer who would have otherwise lost a lot of production in this setup.

Now from my perspective, the integration of things, services, and people, we haven't talked much about the people yet, but I think that's a really big part of it. So I'd like to talk about the people a bit more. You know that we last year completed the acquisition of Cogent, a company that is specialized on this people part, on creating intelligent ergonomics for the 24/7 operations environment in order to actually help operators stay healthy, stay alert. And I think it's important that we recognize the other dimensions, the things and the connecting networks, and with that many of the services, they are scaling pretty well with Moore's Law, but we as people, we don't.

So if we really want to have a balanced triangle between the Internet of Things, services, and people, the people part, how we connect people, how we keep them motivated, how we keep them healthy in an environment of increasing automation and connection, is a key topic. And that's something we really want to continue focusing on. A typical pattern, if I stay on the people side, that we see in the Internet of Things, services, and people, is this collaboration triangle between, well in the graphics I'm using here, between the crew on the ship, but this could just as well be the crew in the mine, mill, plant, you name it.

And there be it corporate headquarters, be it specialized engineering pool, be it fleet management or asset management depending on the industry, and then our operations center supporting them. That collaboration triangle is something we see increasingly and in a lot of cases. And to give you an example of a contract, and that's why I use the marine slide here, that we won late last year for AP Moller-Maersk, the largest container operator, we won a significant contract that basically looks at how do you efficiently route a vessel and a fleet of vessels.

So we're working with both the crews as well as the fleet management center here. How do you route them in view of energy consumption, in view of weather, what weather does to waves, what waves do to the hull, and what actually disturbances to the challah due to the cargo on board of the vessel, so that you can get there in the most timely, energy efficient, and safe, and from a cargo point of view intact perspective ever possible. So that's a significant part that's playing just in this triangle, and that's actually a contract that's not a hardware delivery contract at all. It's a thing, services, and people kind of contract which I think exemplifies what I'm trying to say here.

Now if we look ahead, I mentioned it in the beginning. If you look at current numbers of connected devices, I don't think it's going to be much longer than next year that we will see more connected devices on this planet than people living there. And a lot of other supporting trends are also going in the direction that the Internet of Things, services, and people happens right here as we speak. And making the difference from these possibilities is then what really counts, in terms of focusing on customer outcomes, on safety, productivity, and energy efficiency, on uptime, speed, and yield from intelligent infrastructure engineering, from software, and services.

So ladies and gentlemen, let me wrap up here. I think it's a great time to be in automation. Many of the technology limits that, looking around the room, I can say we all grew up with, they're going away. And I personally am convinced that the best way to predict what the Internet of Things, services, and people will be is to create it. Thank you.

Let me repeat the question for the recording. So the question was how, especially the small and medium enterprises, in the example of the question from the UK, would have a chance in actually getting to the Fourth Industrial Revolution, even though some of them are not yet entirely through the Third one. Let me give you examples here. And I really, one of my favorite examples isn't a process automation example, but a discrete manufacturing example.

When I was starting to look in a German business that I used to run, when I was starting to look for orders in which actually the business innovation side, enabled by connecting the things, the services, and the people, where would this already be happening, I actually found some orders in a robotics business where people were innovating the model of how you produce shoes. In that basically they were offering a website, on that website you could custom design your own shoe based on the geometry of your foot, based on the preference for colors and various other features of the shoe. And then they would basically use that information that you entered yourself there to basically automatically generate a robot program.

And the robot together with a machine would then produce the shoe. And these are not huge companies that do this, but these are actually small and medium-sized enterprises who are having a business innovation idea. Some of them are leapfrogging the Third Industrial Revolution, much in the way as in emerging markets you find people are not actually going through first the fixed-line telephone and then the mobile phone, but they go mobile directly. I'd say it's very much that.

And if you look at what it does for the industry though, it basically eliminates the whole inventory carrying cost and the whole inventory risk. So rather than actually producing these shoes in a remote country and then having them on sea freight spending weeks or maybe even months in transit, and then at the end of the season you find out nobody liked size whatever, size ten and a half in green, so you scrap a lot of inventory, instead of all that basically you deliver customized, probably with a price premium, exactly what the consumer wanted, and there's no scrap in the process. And actually also smaller players nearshore or onshore can play the game that had increasingly become an industry that was entirely an offshoring play. So I think there's huge opportunity for small, medium, and large enterprises, and it's about the business innovation based on the technology trends that will make the difference here. Yes, please.

Yeah, basically you can look back, you can look now, and you can look forward to new offerings in the space of remote diagnostics as well as services around that. I mean the example of the marine vessel I used was one, and instead of talking about a drive I could have talked about medium-voltage switchgear and the connected relays there. Instead of the marine vessel I could have talked about the more than 5,000 robots that we already have connected today.

So that actually you can remotely, and by the way these robots, though, the ones we have under these contracts are very often in small and medium enterprises. So they have no robot technician, they have maybe three, four robots, and we have a contract with them that actually helps them. The speaking robot can say, look, in my axis number three I'm starting to feel a bit more slack and it's about time somebody in the next 72 hours comes and does something about it in terms of whatever lubrication or a spare part. So that kind of contract we have, and we're increasingly for assets that we've supplied to customers as well as for other assets, we're increasingly in service relations where we look after an entire fleet of such assets and have experts at be it gearboxes, mill drives in mining, or be it entire marine vessels and all the connected things that you have on board, and then people who support that. So it's there today, but it's a trend for more, so definitely a space to keep an eye on. Yes, please.

Again, I repeat the question. So the question is about the obstacles. If the obstacles are not technology, are they in cybersecurity, are they in cultural acceptance, or wherever else? And first of all I have to say, maybe I was simplifying, as an ex-technologist maybe I was simplifying too much. So clearly there is tons of technology challenges in the details and opportunities for getting this right, getting it even better. There's also the question of at which point do you want to standardize versus where do you want to innovate and differentiate. So all the lessons learned in previous waves of technology, including the introduction of digital field buses and all that, that still applies.

Having said that, I would still say much of the innovation is going to be business innovation in terms of what do we do with that digital information in order to better connect the things, the services, and the people. You mentioned cybersecurity already, definitely that's one that must be right, because especially in the industries we're serving, we're talking about mission-critical 24/7 equipment. So cybersecurity is a must, and I would resist the temptation of putting it somewhere in a ranked list, because it's just a must.

On the other part, yes, and I can almost echo the proposed answer you gave me was the question. If you look at the cultural acceptance dimension, I think it varies very much by society. We're having great experience with the YuMi robot. We've launched a collaborative two-armed robot that basically doesn't need a fence between the robot and the person, so you can really literally work elbow to elbow safely with each other, which is a complete departure from decades of robotics paradigm that you have to treat a robot like a wild animal that needs to be locked up in a cage.

So I think through such technologies we're really making progress also on the cultural side, because we've seen a number of people, both highly prominent people as well as just people who happen to come by, try to stick their finger into the gripper or kind of touch the robot with the elbow to see what happens. So I think people are getting more used to these technologies, but not at a uniform speed, and I think we have to respect that.

And then the part that I mentioned about ergonomics. I mean when your automation systems get more and more powerful, if you do the statistics of any major industrial customer and the number of loops that today a single operator oversees, from any of them you will get statistics that show an enormous increase how many loops today a single operator is actually looking after. And at the same time we're still the human beings more or less the way the previous generation was, which you can't say of the technology. So making sure that in an environment of more capable automation, humans remain engaged, they remain healthy, they have the optimal support from an intelligent infrastructure, that I really see as a very important priority. Because I don't believe for a second in completely lights-out factories that has been visioned in the 80s, it failed in the 90s. But I do believe in really empowering people with the Internet of Things, services, and people.

Yeah, and also I think Laura knows where to find me. I'm certainly moving around the event here because there's a lot of interesting conversations and talks are ongoing, but I'm here until Wednesday actually. Thank you.