ML Journal February 2022

ML Journal February 2022

DIALOGUE: Ericsson’s Sustainable 5G Lighthouse Factory

Ericsson SVP Åsa Tamsons believes 5G provides a digital backbone that can help drive transformation, innovation, and sustainability in manufacturing.

Ericsson SVP Åsa Tamsons believes 5G provides a digital backbone that can help drive transformation, innovation, and sustainability in manufacturing.

“We see an exceptional opportunity to create connections with 5G that will help make the unimaginable possible.”

Åsa Tamsons, SVP and Head of Business Area Technologies & New Businesses, Ericsson

Founded in 1876 by visionary telegraph engineer Lars Magnus Ericsson, Swedish communications and networking giant Ericsson Inc. has since grown into a $25 billion global enterprise with 100,000 employees serving clients in over 180 countries and reaching over a billion people worldwide through its mobile network managed services partnerships alone.

In the fall of last year, Ericsson’s new $100 million greenfield 5G Smart Factory in Lewisville, Texas, which was built to serve the company’s U.S. customers and had already won World Economic Forum Lighthouse accreditation for its application of next generation manufacturing technologies, also became one of the world’s first facilities to gain Lighthouse status under the WEF’s new Sustainability Leadership category.

In our latest Dialogue with a manufacturing industry thought leader, Ericsson’s Åsa Tamsons, Senior Vice President and Head of Business Area Technologies & New Businesses, talks to Manufacturing Leadership Council Executive Editor Paul Tate about the transformational impact of 5G networking, how Ericsson has used agile development approaches to deliver value at scale, how it created one of the world’s most sustainable production plants, and the importance of empowering human creativity with digital tools.  

 Q: What excites you about your role at Ericsson?

A: I’m a naturally curious person, So, having the chance to work with new ideas and learn new things on the job every day, is amazing. It’s exciting to work with a 145-year-old company that has already had such an impact on the world and to be part of the transformational change that our technologies have enabled. And we are still just  scratching the surface. Now we’re entering the fifth generation of mobile technologies and we see an exceptional opportunity to create connections with 5G that will help make the unimaginable possible.

That makes it much more than just work. Not only is it fun and exciting to work with new technologies and new solutions, it also feels deeply meaningful. And it becomes even more meaningful in the context we’re living in right now, where the world is facing major challenges when it comes to sustainability. Technology will not be the only thing, but it will play an important role in finding sustainable solutions that can help people, businesses, and economies worldwide. So, I’m very proud to be working for a company with so many knowledgeable and talented people with such a strong sense of purpose and a commitment to a more sustainable future.

“Technology will play an important role in finding sustainable solutions that can help people, businesses, and economies worldwide.”

 

Q: What challenges still keep you awake at night?

A: I have a very optimistic outlook and tend to see the potential of things before they happen. What keeps me up at night is that I always have a sense that things are moving too slow. If you think about IOT, or automated machines, or AI, people have been talking about these things for 10 to 20 years. But it takes time to get new standards out that work across the world and are interoperable across many systems. We know 5G works. The next step is to make sure the devices are out there and that people can implement it into their existing IT and OT environments. The exciting thing is that, once you get over that hurdle, you can start to see a significant impact. And it’s not only incremental, it’s exponential. But it’s important to recognize that this represents a real change, a transformation, a challenge, as much as getting the technology to work. So, it’s going to take some time.

We’ve also been living through the pandemic for almost two years now and the world has changed a lot. I think we’re also going to change how we work in the future. We’re not going to go back; we’ll go forward to something new. The challenge is, how do we continue to adapt our operating model and the way we work with our teams so we can have the best of both worlds? The pandemic showed that when there’s a real sense of urgency, we can change. It was not a technology issue; it was about our habits. How can we use that force for something better and bring together some of the great things from the past with some of the changes we’ve adopted over the last two years so that we can create a better way of doing things? That means we need to continue attracting and developing the best talent. The competition for talent is increasing, so I’m thinking about that a lot. If we want to turn that challenge into an opportunity, to be a leading and competitive force, we need to actively adapt how we work and how we attract the best talent for the future.

Q: What was the strategic intent behind the creation of the new Lewisville plant?

A: We needed to increase production capacity and we saw a lot of value investing in a site closer to our customers in North America where we have a number of strong and close strategic collaborations. Lewisville was also an opportunity to build a new style of production environment, with the smart implementation of the latest manufacturing technologies and the best ways of working when it comes to the connectivity of information and intelligence. Given the promise of 5G to help transform manufacturing, we wanted to implement the technology in our own site to show that it’s not only faster technology, it’s also an impactful technology and it can be successfully applied in a comparatively high-cost location. So, in part, it was also about showing innovation leadership, not only in terms of cost and productivity, but also in quality and sustainability, from the way we built the plant, to the technology applications, to the type of materials we used, to the types of energy sources, in order to create a cost-effective, high-performing, and sustainable plant that can deliver more in terms of both its economic and sustainability impact.

“From day one we wanted to be able to obtain data from every single source, device, machine, and person operating in the facility, both now and in the future.”

 

Q: The Lewisville plant has been described as a “5G-enabled, digital native” facility. What does that mean, in practice?

A: We believe that 5G is not only a next generation networking technology. It’s really the digital backbone and the platform for innovation with Industry 4.0. That’s because the architecture, the build, and the scale of many of the other technologies that you want to apply in a 4.0 world – like AR, VR, and AI at scale – not only need to send, but also process and quickly react to vast amounts of data from across many different devices.

In practical terms that meant, from day one of this factory, we wanted to be able to obtain data from every single source, device, machine, and person operating in the facility, both now and in the future. One part was implementing 5G, but we also needed a data architecture to secure that and to use equipment that is able to extract both production data and operational status. So, the intention was to build 5G into the fabric of the factory, along with several other networks, such as WiFi 6, to make sure we have full connectivity with both current equipment and any new systems in the years to come.

We also designed the industrial IT platform with the intent to be flexible and scalable enough so it could capture all the data and use all the benefits of 5G while also working with things that you could say are not directly technology-related, but more design-related. For example, we decided to make data easily available across the whole workforce. You can overcome some of the transformational barriers you may typically see in 4.0 implementations by using this approach and industrializing the whole platform. It served us really well and had an important impact on how quickly we could scale up new use cases to get value from all the technology and intelligence in the machines, in the system, in the processes, and from the people in operations too.

Q: How did that agile development process work?

A: We had a mission to develop 25 use cases within a year. First, we went through an ideation process, which generated around 100 ideas based on internal and external best practices. Then we started to prioritize and set about designing and protoyping the first five of those use cases.

One of the keys here was to ensure we had small, empowered teams, and that we had the right people on those teams. Those teams combined the expertise of around six to eight people from production, from supply chain, from IT, from sourcing, and from the technology side. It’s important to get that kind of diversity when you are working on end-to-end ideas. If it’s too siloed, you can get stuck.

In parallel, we wanted to design the use cases with a long-term strategy in mind and establish a common data architecture because it’s important that people have easy access to many different types of data. That may take some work initially, but you gain a lot in return once you really start use that data. It’s fundamental to build that architecture  to be able to quickly develop new algorithms and connect new solutions in the future. So, we established a way to launch completely new solutions, end-to-end, while still securing the long-term architectural strategy. That not only enables us to scale each solution across the factory network, but also to quickly scale any new applications that use similar or overlapping data sources or devices.

“Innovation is not all about technology. It’s about how you apply it and how you can use the best of technology to create better solutions that are also more sustainable.”

 

To show the power of this approach, in the first eight months we launched seven of those 25 use cases. In the remaining four to five months, we launched the other 18. It just shows the power of doing that groundwork, while also demonstrating that you can launch end-to-end solutions in rapid time. Then you really start to have platforms that you can scale.

Q: How are you measuring the impact of what you’ve achieved in Lewisville?

A: We now have a site that serves one of Ericsson’s biggest and most important markets in the world with a 5G-enabled high-tech factory operated by 100 people. I think that, in itself, is quite impressive. In terms of performance, Lewisville is now delivering 2.2 times more output compared to similar sites that don’t have the same degree of automation or technology in place. That’s more than 100 percent improvement. That brings us a lot of credibility with our customers and shows that we can do this and fully implement this technology in an ideal way.

Q: How do those 100 people fit into this highly automated factory concept?

A: People drive transformation. In many ways, technology emphasizes the importance of those people because you cannot succeed with this kind of transformation if they’re not in the lead and driving the change. You need that human competence. Take process engineers, for example. Those are the people who typically drive and design how we produce and run our production processes. Now we have empowered them with even more tools and more intelligence to do that. If anything, they’re now playing an even more prominent role in how we develop and produce our products in more innovative ways. So that puts a new emphasis on human creativity and problem solving, because it becomes a bigger part of many roles on the plant floor. We have been able to replace many repetitive tasks, which seem demanding and challenging at first, but for many, it also makes their roles more exciting and fulfilling. We don’t see a digital approach as a way to replace humans. It’s about bringing out the best in humans in collaboration with the machines and intelligence on the factory floor.

Q: Lewisville is also one the world’s first manufacturing plants to achieve Lighthouse status under the WEF’s new Sustainability category. What aspects of the plant’s design and operations supported this award?

A: On the sustainability side, it’s a lot about how the plant itself was built. That’s an integral part. When we first prepared the site, we reused all the things that we could, either on site or shipped to other parts of Ericsson so it didn’t get wasted. We also used almost 100 percent recyclable material and a lot of reused materials. That’s one dimension.

The other key area is energy usage. With solar panels, we’re running the factory with 100 percent renewable energy. Also, we’re reusing rainwater, and that’s been a key, fundamental driver for the impact on the indoor water usage. A big area for us has been energy monitoring and utilization, which is a combination of tracking the energy usage and adjusting in real time, while also using digital twin and AI models to optimize any actions. So, we have been able to reduce energy consumption by 24 percent and indoor water usage by 75 percent compared to similar sites. This is an exponential improvement when it comes to the efficiency of water and energy usage.

The location itself also has many benefits. We’re now able to manufacture closer to our customers.This has reduced airport travel from 30 to 10 percent. We still need to source some components, but that’s a significant and major reduction.

And then there’s the impact of the technology and how we’re using it in many other areas to drive more efficiency, reduce new material usage, reduce transportation time, and reduce the need for energy in a smarter way. I think that demonstrates the holistic view of innovation we take. Innovation is not all about technology. It’s about how you apply it and how you can use the best of technology to create better solutions that are also more sustainable.

Q: What are the next steps for the Lewisville plant? Where do you go from here?

A: We’ll continue to build out the data structure and cloud capability, really focusing on how we can continue scaling up the value of existing use cases and applications and on what the next use cases will be. We are also looking at scaling the things we have learned across our other facilities. We’re continuing to invest in upgrading our manufacturing sites to make sure we continue to develop a reliable, sustainable, global supply chain, not only in Lewisville, but across the world. We have a global production footprint with a presence on all continents and main production operations in the U.S., Brazil, Mexico, India, China, Poland, and Estonia. We’re looking at how can we use the capabilities used in Lewisville in an agile way to get better information and capture more value from data across the whole supply chain and the whole production system worldwide.

“We don’t see a digital approach as a way to replace humans. It’s about bringing out the best in humans in collaboration with the machines and intelligence on the factory floor.”

 

Q: Looking forward, what do you think the biggest challenges and opportunities will be for manufacturing in the next five years?

A: The next five years will be about successfully adopting technologies that are important to manufacturing businesses and then implementing those at scale to drive transformation. That will be the game-changer.

Companies today need to build more supply chain resilience, create more agility, make sure they can customize to customer’s needs, meet environmental compliance standards, attract the right skills, watch out for cyber security, and continue to upgrade and integrate. If you think about all those things together, that’s a massive challenge. So, companies will need to adopt a lot of technologies and automate a lot more. I think we’ll see more recognition of how analytics can work at scale, more remotely controlled machines, more AR and digital twins deployed at scale, and we’ll see more collaborative robots.

Many companies are already embarking on this journey, of course, but the reality is that many have old machinery, completely different data IT infrastructures, and often lack the talent they need to drive transformation. There are also new disrupters entering the market that do not have legacy issues to overcome and can implement these technologies from the start. So, I think one of the biggest challenges is how companies make sure that they keep pace and are not too far behind because that will impact their competitiveness.

Yet we also see an urge in the industry today, a real need to start adopting these technologies to drive transformation. I think the future will be less about proving, “is it worth it?” It will be more a question of, “how do we get started and how do we accelerate the execution?”

Q: What kinds of skills will the next generation of manufacturing leaders need in that new era?

A: First, leadership needs to be able to drive and navigate change, which means building the right culture and fostering a platform for change. Leaders need to tell a positive, forward, exciting story on why change is needed and one that motivates people and drives new behaviors. That has to be combined with building a culture for constant growth and development to create an empowered mindset among their colleagues. I think that combination will be extremely important.

“Lewisville is now delivering 2.2 times more output compared to similar sites that don’t have the same degree of automation or technology in place.”

 

The second area is the ability to attract and develop talent, and talent with a much more diverse skill set than we have traditionally seen before. If leaders want to succeed and transform their organizations, they will need a mix of designers, process engineers, and data scientists. These are different people with different drivers, and companies need to be able to attract and motivate all of them.

Leaders must also continue to develop their understanding of technology and architecture. They need to complement their traditional management skills with an understanding of how these new technologies can be used and applied. It doesn’t mean they have to be experts, but they will need to understand and get more educated about what they can do with certain skills and certain technologies and how they can be applied across the business. An appetite for continuous learning, as a leader, is fundamental.

Q: Finally, if you had to focus on one thing as a watchword or catchphrase for the future of manufacturing, what would that be?

A: Empowered, smart, and sustainable – in production, in operations, and in manufacturing. Sometimes we talk about technology like it’s taking over, but it’s really about empowering humans, empowering customers, and empowering the world to develop better products and improve businesses. It will be smarter because we will have easier accessibility to the data insights and intelligence we will need. And we must make sure it’s sustainable, not just through the smarter use of resources and energy, but also in terms of security and privacy. These are all critical elements for the future of manufacturing.  M

*Ericsson Lewisville Plant Tour – October 2022: Learn more about Ericsson’s 5G digital native, double Lighthouse award-winning plant in Lewisville, Texas, on the MLC’s upcoming Plant Tour on October 4-5, 2022. Save the date and watch for more details.

FACT FILE: Ericsson
HQ: Stockholm, Sweden
Industry Sector: Communications and Networking
Revenues: $25.3 Billion (SEK 232.3 billion, 2021)
Net Income: $2.5 Billion (SEK 23.0 billion, 2021)
Employees: 100,000 Employees
Presence: 180+ Countries
Production Sites: 7 Production plants worldwide
Website: www.ericsson.com

EXECUTIVE PROFILE: Åsa Tamsons
Title:
Senior Vice President and Head of Business Area Technologies & New Businesses; Member, Ericsson Executive Team, Ericsson
Nationality: Swedish
Education: Master of Science degree in business administration from the Stockholm School of Economics, Sweden
Languages: Swedish, English, French
Previous Roles Include:
– Head, Ericsson Group Strategy, M&A, and Venture Investments
– Partner, McKinsey & Company: serving technology, telecoms and industrial companies worldwide
– Consultant, Advention Business Partners
– Strategic Purchasing & Business Controller, H&M
– Business Development, International Herald Tribune 

Other Industry Roles/Awards/Board Memberships:
– Independent Director and Member, CNH Industrials’ Board of Directors

Paul Tate

About the author:
Paul Tate is Co-founding Executive Editor and Senior Content Director of the NAM’s. Manufacturing Leadership Council.

 

 

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