Episode 8: ARC Advisory Group's Craig Resnick

Inductive Conversations

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This episode covers the benefits of moving to platforms, and what that transition means for visualization, and topics like leveraging the latest technologies, augmented reality, accessing documentation, OEE, and empowering operators on the plant floor. We’re discussing computing at the edge, OT-IT convergence, and the challenges of cyber security management.

“IT is working with OT … as the firewalls internally begin to come down, they're looking at the assets each of them bring to the table. It's an evolution, not a revolution, but each and every year we're seeing more and more of the convergence continue to accelerate.”

Guest Bio:

Craig is the primary analyst for many of ARC’s automation supplier and financial services clients. Craig’s focus areas include production management, OEE, HMI software, automation platforms, and embedded systems. Craig has 35 years of experience in sales, marketing, product development, and project management in the industrial market, gained with major suppliers of PLCs, process control systems, power transmission equipment, and field devices.  Craig has been with ARC since 1999. Prior to ARC, Craig spent four years as Director of Sales & Marketing for Roper Industries - Dynisco Instruments. Prior to that, Craig spent five years as the Director of Marketing for Altra Motion - Boston Gear. Previously, Craig spent four years as PLC Product Manager for Siemens Industry, releasing SIMATIC S5 into the U.S. market and developing distribution & vertical channels. Craig began his career at Schneider Electric - Foxboro Company, where he spent three years as a Field Project Manager, along with two years in Foxboro's Oil and Gas Industry Marketing group.


Episode Transcript:

Don: So, Craig Resnick, thanks so much for taking some time to be with us today. We appreciate your viewpoint. This year at the ARC Industry Forum, the theme was digitizing and securing industry infrastructure and cities. It was also well attended as a forum. I think largest ever. Can you give us a little perspective on how that theme emerges and why it was so critical and so well received?

Craig: I think because in a connected world, and let's look at the fact of, take a plant or a factory. At one time, you had separate systems for your control systems, or your DCS's, PLC's, and PAC's, and that was the real time manufacturing world. Then you had separate business systems from MES and ERP, but you also had separate systems for things like controlling facility management, building automation. All of these systems were completely separate. There was no communication between each system.

Now, you can save money by making better control decisions on the factory floor, but if you can now, feeding that information up into the business systems, into ERP and the ability to do a better job on the supply chain. It also based on what you're manufacturing might drive what type of energy the plant and facility needs as far as managing the facility energy consumption itself. How can you do a better job of managing that?

So, it's really trying to look at everything in a more connected fashion and in a holistic fashion. And, I think people want to see how they can get on board with that. So, it's not only being able to control the product that's being made in the plant floor, but worrying about HVAC, worrying about lighting, worrying about IT systems, and having it as to one connected converged system.

Don: No, that makes sense. Could you tell us a little bit about the ARC Advisory Group? You've been with them for a great number of years now, and I know your focus is on the control systems and production management and MES and SCADA. I know that's where we crossover with Inductive Automation and the work that we do. But, can you give us a little bit of perspective on what is ARC, what does it do, and how is it broken up? How does it bring value out into the industry?

Craig: Well, ARC, back in 1986, the acronym at the time stood for Automation Research Corporation. And, it was founded by Andy Chatha, and he wrote market studies primarily for DCS's, PLC's, drives, more of the industrial automation equipment, transmitters. And, it got to the point where as that industry began to evolve and going into MES and production management and getting into putting Ethernet on the factory floor. As the manufacturing world expanded, ARC needed to expand with it.

So, how we help customers is we still continue to write these market studies. And today, there's over 100 studies that ARC sells. They're updated usually annually or every other year depending upon the market and the demand for the product. And then, what we have is we have three kinds of clients that subscribe to our services. We provide advisory services.

The first type of client would be people that sell to the automation industrial world. The major suppliers. And, that can range in anything from startup companies all the way through, certainly, the Fortune 10 companies. Then, we have companies that make things. So, it's from the largest oil companies in the world to the largest automotive companies in the world. They also subscribe to ARC for advice and guidance and for research. And then, the third type of client we have are the financial analysts. The companies that actually are making the buy, sell, and hold decisions on various stocks because they are looking for long- term guidance as far as where are trends in the marketplace going and where they should be. What companies they see have a better prognosis based on who is aligning best with those trends.

So, it's a combination of selling studies, having this client subscription packages, and at the same time, doing custom research where if there's something that you specifically want to know and want to learn about to help your business and we'll go ahead and do custom projects. The result of all that is we do events all over the world such as the ARC Forum in Orlando, Florida that you were referring to. Because we need to gather in places where the manufacturers and processors and these people that sell into the industrial world, as well as the financial community, can all meet under one roof and collaborate and listen to presentations from manufacturers and processors and network and collaborate and be able to kind of keep up with the latest trends and help them do a better job running their businesses.

Don: That's great. I think puts a little perspective on where it is. I'm going to go back to the forum, not the exact theme of it, but one of the things that I noticed at this year's forum is it was pretty crowded. There was a record attendance. And, we're there every year and we certainly had conversations with a lot of end users where the end users seem to be getting pretty darn demanding. They're demanding change. They're very demanding.

And, it's changed over the last five, six years that Inductive Automation's been coming to the forums. Disruptive technologies, the demand for action now. Some of the challenges that surround that. I heard a World Economic Forum statistic that while 84% of business owners know that over the next five years they're going to have a major disruption in the way they operate from IoT industry 4.0, only 7% of them have a strategy for getting there. Can you talk a little bit about how there's disruptive technologies and the demand from end users, how that's all playing out as you see it in the market?

Craig: Well, one of the reasons that the forum was so well attended this year, I think it was a record attendance, actually, the one in Orlando, was because people are seeing all this change. They're reading about this change. But per your statistic of the 7% that has actually done something, there's such a fear of making the wrong decision. People are like, "I can do nothing and probably save my job by doing nothing. Or, I can do something where I could possibly be a hero to the organization. But, at the same time, the price of failure does not offset the reward of success."

Don: Sure. Exactly.

Craig: So, what they want to do is they really want to make sure that they go after, I would say, the low hanging fruit, where they can make an investment and have absolute certainty in the results to kind of guarantee that they don't look like they've made a very, very bad investment.

So, I think what the forum does is it allows the collaboration, and hopefully some of the 7% that you mentioned are attending the forum and presenting their cases and-

Don: To share with the rest of the folks

Craig: To share with the rest of the folks so they can kind of bring that knowledge back to their plant or factory and try to say that based on what other people have done. And, what's interesting with this forum is even though there's people here from the full spectrum of manufacturing and processing, they may take a case study in oil and gas and apply it to pulp and paper, and saying this. So, even though the vertical may be very different, but they're trying to see what they can learn from analogous technologies that maybe hey could bring with them.

So, even if it's from different industries, they want to really get that full perspective of what type of solutions are out there, what has worked. Typically, we only allow end users to speak at our forums. We don't allow suppliers or the financial community to speak. We allow them to participate on panels. But the reason is that people don't want the forum to be a series of sales pitches. They want to learn about what has happened.

And, most important from those sessions is the lessons learned. Because we realize no project is utopia. They want to hear we tried this, this failed, this didn't work. If we're going to go back to football, Monday morning quarterback. If they're looking in the rear view mirror, what would they have done differently so they can hopefully not make some of the same mistakes of kind of, I'd say, the pioneers that have kind of taken the early steps to go forward.

Don: Sure. If we take a look, and add onto that with a little bit of look about what might be called a megatrend, you mentioned Andy starting the forum 20-some years ago. It was the 22nd year this year, and he talked a lot in the keynote about platforms and moving to platforms. It's certainly something, obviously, we're minorly biased in that area because ignition's a platform and we believe platforms are important. I'd never heard it so much emphasized from the podium to the general session about how folks are looking differently at how they build out their organizations. Why do you see this move towards platforms, or do you see it as something really going forward?

Craig: Let me say this. It's to the point that companies that don't have a platform are saying they have a platform and-

Don: Make sure these people think they have a platform.

Craig: They all think they have a platform. So, people come to ARC and say, "What do you have to have in a platform?" A platform has to be kind of one coherent unit that has all the necessary software tools plug and play connected and enables you to not only connect to the products, communicate with the products, have the right analytic tools to make the right decisions and be able to be to the point where the product can be visualized and leverage a lot of the latest technologies.

For example, one of the things that excite us a lot of ARC is the use of augmented and mixed reality. Because with all the focus on maintenance, the fact is that when the baby boomer retires and they're replaced with a millennial who understands how to use the latest tools, but doesn't necessarily understand what's going on in the process, knowing the fact that they're walking a plant floor that has a combination of equipment from brand new to sometimes 30, 40 years old, they need to have that guidance as they're walking.

So, if they're staring at a box, for example, maybe it's a drive. Augmented reality helps them to see what's inside that box without having to open the door and maybe expose themselves to a safety issue because of exposing themselves, say, to high voltage.

Don: Sure.

Craig: It also enables them to pull on... for example, I need a drawing. How was that drive installed? How was that drive wired. And, knowing the fact that they'd probably have no idea where the original drawings are for that drive, from when it was installed, but now have the ability to access that documentation as they're walking the floor whether it be through a QR code or GPS technology to know where they are in the plant to make sure they get that right information.

So, it's really a situation where you have to augment the staff based on the fact that you're having a change of the talent pool that's coming on the factory floor. I mean, at one time, as we all know, the control room was very heavily staffed with operators. Many times they had been there for 10, 20, 30 years, and then you had separate maintenance people on the factory floor. Today, we're doing more with less, and sometimes they're asking those operators now to do dual roles and to walk the factory floor and do some of the maintenance functions.

So, they need to take the screen that they would have on their console, and essentially through a wearable type of product, be able to walk the floor and be able to get some of that HMI level information as they're walking the floor. And, knowing the fact that if they're looking at doing some diagnostics and need to figure out why there's a jam on the line, and it's all in the name of minimizing... the blasphemy of manufacturing is unscheduled or unplanned downtime.

So, what can you do when something is not producing. When your key performance indicators such as OEE, for example, are beginning to decline, you need to know that dynamically rather than waiting to run a batch report from the last shift to say, hey our OE, he went from 82 to 81%. Now, you want to be able to understand if it's beginning to decline so you can now find the source of the decline. Maybe it's a jam in align, maybe it's a problem in the supply chain on a conveyor for a flow of product. But, be able to fix that while it's happening, not looking in the rear view mirror while it's too late. So, those are really, really key technologies. And, the thing is that people want to know if they invest in a platform that that platform is going to be able to support all those technologies.

Don: Sure. To that point, let me build on that a little bit because I do know that certainly Inductive Automation has been a really big proponent of shifting how one architect, what topology one builds out, and as one moves to this IoT enterprise, this smart factory, the digital enterprise, and we've certainly pushed the idea that you need to decouple those applications from the devices and you need to bring data into an infrastructure so that you can have access to it any place.

I know you wrote a paper, you guys have things called ARC Views on various topics, and this one falls into your expertise and it was called Creating Modern Open Enterprise Architectures in the IoT Age. I know we can't go into the depths of this, it's six, eight pages long, but can you give a capsulization of what do you see, the architecture kind of requirements? How do people need to think differently about architecture if they're going to get the benefits of big data and connect the whole enterprise?

Craig: There was a time, certainly in the beginning of our careers, where anything that you were measuring or sensing, whether it be temperature pressure or level of flow or on-off proximity sensor, photoelectric sensor, the destination for that information was always to a program, a PLC, a DCS system. Today, we're saying some of that information is not just to make control decisions. Some of that information is to make decisions on maintenance, decisions on asset wearability, and the best place to send that information is not always going to be the control system.

So, in today's world, and especially with the advent of the low cost sensing, so you can now, in bed sensing devices, let's say, into the gearbox to measure things like bearing temperature and oil viscosity. Now, you're not going to invest in upgrading or adding IO, for example, to a DCS or a PLC for those measurements because that's not going to help you make a PID decision. It's not going to help you make a decision on a PLC to turn something on or turn something off. But, that is something that if you're beginning to detect where that can go up into the enterprise system, the MES system, the production management system and say that that particular gearbox, it looks like it's going to be wearing out. Now, what we can do is we can go back to the manufacturer of that gearbox and maybe order another one.

But, sometimes, as these older assets get retrofitted with low cost sensing, those assets are not manufactured anymore. Sometimes the companies that made them are no longer in business. So, what you're trying to do is you may have to have a brand new gearbox made and find another company to build it for you. So, you're talking about, sometimes, you could have 12 to 16 week lead times to even identify the source. So, the idea is getting that information as early as possible, and then, you can now get a new gearbox order, get it scheduled, do a planned shutdown to do the replacement. Maybe then you can now schedule some other things that need to be done as part of that maintenance.

So, the architectures of today have to really be a hybrid of far more sensors and, not only looking thinking from a control system strategy and going through like a traditional, say, ISA-95 chain, but be able to send that information up to the cloud providers and be able to make those types of business decisions so you can do a better job doing asset performance management, is what we would call it.

Don: Sure. You're talked about getting data to other places just for this and operations purposes. You can't read anything these days, and you wrote an article at the beginning, either it was the end of last year or the beginning of this year, I think it was the end of last year called Top Technology Trends in Automation for 2018, and one of them was clearly computing at the edge. Computing at the edge. You're talking about that right now and you're saying, let's get some data from the edge that goes someplace else. Why the big focus on the edge and any additional comments you wanted to make about edge trend.

Craig: Because, at one time, real time was only what went from the traditional sensors to the control system. In the business systems, no one really cared about real time. It was just run a batch report, run a shift report, and look in the rear view mirror and say, how did we do? Today, you cannot run a business unless you are bringing real time to the business systems as well as the automation systems. So, you need to be in a position that you're gathering data and making decisions where the measurement is occurring.

And, in a world where, for example, even though with the opportunity to connect things to the cloud, there's a certain amount of latency that can sometimes exist between going from where the measurement is happening, getting that data to the cloud, and running the necessary analytics, and then sending some sort of an output based on what that measurement is telling you. So, it's far more efficient if you can make that, and especially with the embedded technologies and certainly the progress we've made with chips and microprocessors, if you can do that computing where the measurement is happening.

And now, you can actually make decisions in real time at the edge, or at the point of measurement, rather than having to send it off to another location. Because in many cases sometimes losing that second or two seconds can make all the difference in the world between making the right or the wrong decision based on that measurement. So, the edge is one of the fastest growing areas in the industrial segment. And again, it's really being driven by the advent of microprocessor technology and all the different and various analytics providers that are writing these tools that can be embedded into these devices.

And, I think there's still kind of a mixed feeling about the cloud in manufacturing in the respect that people are very, very happy to use the cloud at an IT level. They're very happy to use the cloud to be the historian so they can archive the terabytes of data that they're collecting. But, obviously there's some people that still feel that when you're making real time control decisions, we'd like to keep it at a local basis. And, that's really why what we see in the future is these hybrid edge cloud solutions. What people are doing, the real time control, both to the traditional control systems as well as for asset management at the edge, and then sending a lot of data that can be stored and archived and using the cloud because that's the most securest and the most cost effective thing to do to manage that data.

Don: No, that's really good. We only have a little bit of time left, but because I was able to get you to agree to sit down with me, which I'm very much pleased that you would, I'm going to take advantage of all this expertise you've got. So, I'm going to ask a couple more of these trend questions for your comments. We can't have a discussion without at least talking about the challenge of cybersecurity management in the industrial world. It's every year for the last few years, and it was extremely crowded this year with all the sessions on cybersecurity on Monday at the conference. So, can you at least make some comment on the direction and the importance and the trend you see there and the criticalness of cybersecurity management?

Craig: I think the trend, and a lot of it's being accelerated by this OT IT convergence, is at one time that level of expertise really didn't disseminate into the OT world. The OT world either wasn't connected or it was essentially a series of islands because most of the time the connection was through the control system networks that might hook up from sensors to IO to the various controllers. So, you'd have more of the proprietary plant-wide networks.

Then obviously with the advent of technologies like Ethernet coming to the factory floor, and now that ability now with convergence, with business systems along with the control systems, it really brought to light, now somebody from the outside could theoretically go in and make an impact on the control system. And, you certainly had the case of, let's say for example, Stuxnet. You've had the case at Aramco with the people with thumb drives, for example, being able to corrupt the systems.

So, we look at cybersecurity more as a journey. It's not as if there's any one magic solution, I mean. But, the thing we were noticing certainly for the industrial automation providers is now they're building their systems with connectivity and cybersecurity in mind. No longer are they just saying we'll build our systems the way we've traditionally done it in the past and we'll let IT worry about the firewall. Now, we're thinking in terms of even as people are introducing the latest versions of DCS's and PLC's, and with the open process group that you saw at the forum, it's to design an open DCS, but obviously one that is as cyber secure as something that would be designed, let's say traditionally, for the IT world in the past. So, it's really seeing that cybersecurity extending into the industrial automation space. And now, when people are designing a motor or a breaker, they're thinking about cybersecurity. Would you ever have thought of a cyber secure breaker?

Don: Not that long go you wouldn't have. That's true.

Craig: But now, because they realize that could someone want to hack into that breaker and be able to cause a major disruption in a plant or a facility, and so what you really now think that if it's connected, that the opportunity is going to be there for somebody that may want to have access to it.

Don: Sure. I would say, maybe just as a final question... I knew what I was going to ask you about, you started to get into it anyway which is the OT IT convergence and how we're really going towards building one enterprise. It's going to be from the edge to the cloud and all these trends we've talked about here. I was really pleased to have you be willing to sit down with me because we're just launching this podcast and having an early guest that has the breadth of your knowledge is much appreciated.

Don: Is there anything else you might want to comment on, just as a final thing, that you think... I mean, you kind of know, you've been to our Ignition Community Conference and spoken for a couple of years. We've worked on things with you and certainly you've got a sense of what our company's all about. So, you've got a little sense of maybe some of who our listeners might be. Any final comments either on OT IT convergence or building the digital enterprise that you'd like to share as we wrap up here?

Craig: Well, I would say that as we've watched our forums evol  ve, as we've watched your conference evolve, look at the demographics of who's attending these conferences. 10 years ago, 99% of everybody from a plant or a factory came from the OT world. And, slowly but surely, the IT people are trying to attend these conferences because they want to learn about the OT world. They want to learn about, for example, what real-time really means, for example. At the same time, there's the fascination by IT when they look at the factory floor and say that, why are you using equipment that's 25, 30, 35 years old-

Don: That's pretty foreign to them.

Craig: ... when our life cycle is sometimes three or four years. Exactly.

Sometimes we compare it to the fact that a four year old dog is equivalent to a 28 year old human being. And sometimes, so we look at it in sometimes in human years and dog years based on the difference in life cycles. So, we're really seeing the fact that these people, and sometimes I have to admit it's been forced on them where through different cutbacks or whatever, that IT and OT have been told you're going to have to find a way to make this happen and work together.

And, we're starting to see those internal firewalls beginning to come down. Some of it is the fact that as the baby boomers continue to retire, the people that are replacing them don't have all of that legacy and a lot of the legacy feelings about us versus them and they look at it as we, and as a team. So, as the people are evolving in these plants, that's also helping to accelerate the convergence and the appreciation of what each side has brought to the table.

Again, cybersecurity has always been an expertise on the IT side. And, when OT sees their products being connected instead of looking as IT as an internal competitor within the organization, now they're looking at them as, can you help me secure my motors and my drives. At one time they would not have done that. Now, that IT is working with OT instead of looking at them as people who are working with equipment from the last generation, they are now saying, "Boy, wouldn't it be great if you could help me understand what does real time mean? I just can't do a patch or an upgrade arbitrarily in the middle of a production run. So, help me figure that out. How do I do that and not stop production?" So, what they're finding is that as the firewalls internally begin to come down, they're looking at the assets that each of them bring to the table. And so, it's an evolution, not a revolution, but each and every year we're seeing more and more of the convergence continues to accelerate.

Don: Craig Resnick, I really appreciate your time. I thank you for joining me and I really appreciate you sharing a perspective and what you bring with you in terms of the background. So to you and the advisory, ARC Advisory, much appreciated.

Craig: Thank you very much and I’m happy to share our thoughts with you anytime. 

Don: Thanks a lot. Have a great day.

Posted on November 21, 2019