A Conversation With Patrick Bass, CEO of thyssenkrupp Elevators
ArcInsight Partners’ Principal Analyst Praas Chaudhuri sat down with Patrick Bass, CEO of thyssenkrupp Americas elevator business to gain insights into the company’s industrial-IoT journey.
Having looked closely at dynamics driving the need for smarter cities worldwide, we were interested in examining how these dynamics drove global demand for smarter elevators as well. More so, the complex challenge elevator manufacturers face keeping their growing installed equipment base humming smoothly without any visible service interruptions.
thyssenkrupp is one example of a business model where service availability is the sole visible manifestation of heavy machinery performance. Its a business where the ability to merge transparently into the lifestyle of modern city dwellers is the best assurance of product design and user-interface design excellence.
(Patrick Bass was formerly Executive Vice President Research and Development for thyssenkrupp Americas Elevator business. He has also spent time at thyssenkrupp’s global headquarters in Essen, Germany)
An excerpt from our industry research delving into the global elevators business and of thyssenkrupp’s business context, is available following this interview.
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Praas: Tell us about your Vision for thyssenkrupp as a player in the Elevators-Industry ?
PATRICK: Some estimate by the end of this century, around 70% of the global population will be living in cities and in this, the age of smart technology, companies like thyssenkrupp have an intrinsic role in shaping urban landscapes.
By 2020, the global demand for elevator equipment (elevators, escalators and moving walks) and services is projected to rise by 4% annually to about 61 billion euros; the maintenance service business is valued at approximately 30 billion euros.
Time wasted by people waiting for elevators is a global issue. With over 3 billion people expected to move to cities in the next 35 years, the impact of these waiting time grows exponentially.
Efficiencies of elevators is required to improve significantly if we want to keep cities evolving.
Praas: How did interest in IIoT come about for the elevator business? Was there a burning platform (perhaps too many breakdowns, high servicing costs, pressure for service revenues) ?
PATRICK: thyssenkrupp is aiming to ease stress in the lives of over one billion people who use elevators each day — a number expected to rise as urban populations increase by three billion in the next three decades — thyssenkrupp launched its Microsoft Azure IoT -enabled MAX to increase transport capacities in buildings.
As one of the world’s leading elevator manufacturers, thyssenkrupp Elevator maintains over 1.1 million elevators worldwide, including those at some of the world’s most iconic buildings such as the new 102-story One World Trade Center in New York (featuring the fastest elevators in the western hemisphere) and the Bayshore Hotel in Dalian, China.
thyssenkrupp wanted to gain a competitive edge by focusing on the one thing that matters most to their customers – having elevators run safely and reliability, round the clock. The company wanted to go beyond the industry standard of preventative maintenance, to offer predictive and even preemptive maintenance, so we can guarantee a higher uptime percentage on our elevators.
Praas: How much of your current installed base is now connected to a cloud-data platform for monitoring and predictive analytics purposes?. How do you expect to benefit ?
PATRICK: MAX is a major milestone in thyssenkrupp Elevator’s business strategy.
As of today (and this number grows daily), 70,000 elevators in the U.S. are connected through MAX and report all of their actions from the movement of the doors to the error codes, at minimum, every 12 hours. MAX is already connected with thousands of units in the pilot countries of US, Germany and Spain, and is on track to be connected with 180,000 units by the end of 2017. In two years, the offering will be expanded to all continents, becoming available to some 80% of all elevators worldwide.
With MAX, data collected in real time from millions of connected thyssenkrupp elevators is sent to Microsoft’s trusted Azure cloud platform, where an algorithm calculates the remaining lifetime of key systems and components in each elevator.
500,000 elevators and escalators that are added in China alone each year. This type of growth could put a lot of strain on their ability to train enough technicians in these markets to meet demand. However, the ability to use machine learning and remote diagnostics has helped augment employee talent while reducing the amount of time needed for training.
Praas: What were primary technology challenges thyssenkrup faced moving to a IoT-based strategy?
PATRICK: Developing a coherent strategy. Evaluating the right enabling technologies that might work best. The size of investment. Funding required to gain meaningful scale. The perceived & real downside risks should the project not pan out. Finding key people with combined domain+IoT related skills.
Elevator is a service heavy industry, and we could clearly see that there’s data, that there’s activities in the elevator system that if we can extract that from, we can derive efficiency value and derive customer value.
Changing the approach from a reactive path – remote monitoring activities relying on a device to tell you an error has occurred – into a predictive path using IoT which enables you to begin thinking about what’s happening in real-time and over a distribution of time curve. This lets you see, through constant improvement, the efficiency of the elevator and lets you know when predictive or preemptive maintenance is needed.
Praas: What goals+outcomes were set out for the project team embarking on IoT for elevators
PATRICK: Develop an integrated solution into an end-to-end process solutions for the business. Use machine learning and remote diagnostics to help augment employee talent and reduce the amount of time needed for training.
Move from tribal knowledge to shared knowledge. The elevator industry, from a service basis, was traditionally a local business. Service mechanics know their customers, know their equipment, and are able to provide the best service because of that relationship. When a company owns the data and the intelligence behind the data, it no longer has to rely on the tribal knowledge.
Praas: Who were your key technology partners supporting the initiative?
PATRICK: thyssenkrupp teamed up with Microsoft and CGI to create a connected intelligent system. Microsoft Azure Machine Learning (Azure ML) is used to feed the elevator data into dynamic predictive models which then allow elevators to anticipate what specific repairs they need.
Praas: Besides core IoT technologies, what other technologies do you believe have or might play a synergistic role for your particular solution building requirements?
PATRICK: The work thyssenkrupp is doing with HoloLens centers on the use of Skype – which is available to all users of HoloLens without any additional development work required. With Skype on HoloLens, technicians can be hands free while on the job, even when making remote calls to subject-matter experts and sharing holographic instructions between users. This enables more flexibility while also complying with safety regulations.
Using HoloLens, 24,000 elevator service technicians can now visualize and identify problems ahead of a job, and have remote, hands-free access to technical and expert information when onsite, improving the way people and cities move. All of this is resulting in significant savings in time and stress. Initial field trials have already shown that a service maintenance intervention can be done up to four times faster than before by using the device.
Praas: Looking Ahead – What opportunities do you see for the elevator business in creating new value through IIoT ?
PATRICK: PLM / Digital Twins / Digital Threads / Machine Learning / AI /
Praas: Beyond Elevators – Where does the company see new opportunities ?
PATRICK: We expect IoT to transform existing business practices and enable new business models.
Operational efficiency and equipment optimization is expected to deliver an $1.4 – $5 trillion annual impact. This includes vehicles, cities, logistics and navigation, worksites and factories.
thyssenkrupp sees opportunities to harness data from our machines and products by partnering with technology enablers like Microsoft to create value and added services.
Praas: How does the thyssenkrup Board perceive the strategic opportunity in IIoT/Smart Cities?
PATRICK: thyssenkrupp’s Board as well as its leaders across the company believe the future not only needs eco-friendly and sustainable solutions, it will be digital.
Leadership believes when it comes to digitization and Industry 4.0, it’s not about what is produced but how it is produced. As a diversified company we can connect competencies from our many different global business areas.
Praas: Looking ahead, which industry/verticals & geographic-regions/countries do you see the greatest medium-term potential for IIoT?
PATRICK: In Vehicles: Autonomous vehicles and condition-based maintenance
In the Smart Cities space: Vertical transportation and sustainable building
In our Factories: Operations and equipment optimization.
ABOUT THE GLOBAL ELEVATOR INDUSTRY
Twelve million elevators worldwide move one billion people each day, making the elevator the most used means of transport – and also the safest – but in one year of operation these elevators are unavailable due to service interventions in a cumulative amount of over 190 million hours (or 216 centuries).
An estimated additional 85% of the existing urban floor space will need to be developed by 2025, with the number of elevators to be serviced and kept in operation at optimum performance levels also growing by a similar percentage. Already by 2020, the global demand for elevator equipment (including elevators, escalators, and moving walks) and services is projected to rise over 4% annually to 61 billion euros, with the maintenance service business valued at approximately half of the total.
Time wasted by people waiting for elevators is a global issue, generating significant stress in large office and mixed-use buildings, and affecting the efficiency levels of cities. Although this element of additional stress is not widely taken into consideration, as urbanization progresses rapidly, with over three billion people expected to move to cities in the next 35 years, the impact of these waiting times also grows exponentially.