Entrepreneur’s Risk Management Strategies

Risk is as old as man and has been an old time acquaintance of businesses. There is no approach that will make risk to go extinct in business environment however; it can be controlled to an appreciable level. As an entrepreneur, you are duty bound to reduce your risk level to the barest minimum if you can continue to make profit. To this end, better risk management strategies are good inhibitors of business failures.

No matter what the sizes are, companies must have an approach to risk management since they can be easily managed when identified. To protect a business against risk, an entrepreneur needs to do the following:

1. Stop activities associated with risk: Activities that brings about risks to an organization need to be stopped. For instance, if a business fund is not separated from a personal fund, the temptation of using the company’s fund for personal expenses will always be there. Quick and unilateral decisions of top members of the management most times pose great risks to the company.

2. Spread the risk: there is no need for the risk to be concentrated on your desk. Spread the risks in form of contracting out some projects/services with a performance bond signed by the contracted firm can help. Sometimes, selling out products on credit to trusted customers can help to minimize the risk of obsolesce and high inventory cost.

3. Reducing risk through better management control: if the pros and cons of running an organization is properly spelt out for management staff, employee and customers etc, certain risks will be averted in the business. Proper management of the company’s data also helps to prevent risk. Hardcopy data can be digitalized and stored by reputable data managers for safety.

4. Insuring against risk if possible: a company need to insure against damage brought about by fire and natural disasters.

5. Apply improved technology: if risks will be averted, modern techniques will be applied in the operation and service provision of any company. This will enhance the business supply chain management hence making service provision to be excellent.

Managing some aspects of our businesses against risks takes automation. This will eliminated a lot of human errors associated with the risks. To be able to reduce risks in planning, monitoring and evaluation, software tools will be a veritable instrument.

Achieving "Plan B" Through Individualpreneurship – The Notion Of An Individual As An Enterprise

What is entrepreneurship?

Entrepreneurship is a competency (set of knowledge, skills, and activities) required to start, develop, and assume risk for an enterprise. An entrepreneur is an individual who organizes, operates, and assumes risk for an enterprise with the intention of transforming innovative ideas in products and/or services for a profit.

An enterprise is an undertaking for a prize or cause. It is a group of activities intended to produce income organized for:

  • Profit as a business of any size and type: unincorporated or incorporated; one or many entities, of which one is designated as the “holding entity” in a multi-entity structure; and such that one enterprise can incubate another
  • A not-for-profit association, such as a public charity or a private foundation
  • A government agency

When an enterprise is referred to as an entity, the reference is specifically to the holding entity, unless otherwise specified. The term “not-for-profit” is generic; the term “non-profit” means an entity that has been approved by a taxing authority as being exempt from income tax. “Not-for-profit” does not mean “not-for-revenue.”

As a discipline, a business delivers products and/or services to a customer for a profit. As an entity, a business can be:

  • Sole proprietorship (individual)
  • Partnership (pass-through to individuals): general, limited, or limited liability
  • Limited liability company (pass-through to one or more individuals as a partnership or as an equivalent to a “subchapter S” corporation)
  • Corporation: general with directors appointed by shareholder investors, and officers appointed by directors (“subchapter C”), pass-through to one or more shareholder investor individuals who may also be directors and officers (“subchapter S”), professional (pass-through to one or more individuals), or foreign

An upwardly mobile enterprise is a small-to-large enterprise focused on large market dominance (share being either industry-wide or in niches) with local-to-global aspiration in both traditional and non-traditional industries. It has growth potential from highly innovative people, processes, and products and/or services, and/or duplication of a business system. It is financed by founders and/or third-party investors (closely or widely-held) seeking capital appreciation, and potentially cash flow from dividends and/or interest, with medium to high risk. An upwardly mobile enterprise may be founded by one or more entrepreneurs, who either become part of a larger management team as new investors come on board, leave to form another venture as serial entrepreneurs, or retire.

Upwardly mobile enterprises are the heart of Wall Street.

A lifestyle business enterprise owner operates an enterprise in a local community, and may also be the founding entrepreneur:

  • Either as an active owner-manager, making a living from its activities for their own lifestyle
  • Or as a passive owner-manager, with an active management team in place

Lifestyle business enterprises are the heart of Main Street.

A lifestyle business enterprise owner can be a sole proprietor, partner, member (and usually also a manager) of a limited liability company, or a shareholder investor in a corporation (and usually also a director and an officer).

An employee is an individual who provides services in exchange for compensation under an explicit or implicit contract for hire, whereby the employer (hirer) has the right to control what work is performed and how. An independent contractor is self-employed; the hirer has the right to control only the result of the work, and not how it is performed.

What is individualpreneurship?

Individualpreneurship is a mindset for thinking about oneself as an enterprise, actively developing and managing multiple sources of income, and without being highly dependent upon any if possible.

Sources of an individualpreneur’s income include:

  • Employment
  • Entrepreneurship/business ownership
  • Investing

The individualprise represents the aggregation of all sources of an individual’s income. Gross income results from wages from employment, and from both revenues (commissions, dividends, fees, interest, rents, royalties, and sales) and from capital gains from both entrepreneurship/business ownership and investing activities. Net income (profit) results from gross income less the cost of revenue and the expenses required to generate it. The cash flow generated from net income generates wealth, which can be used for investing activities and supporting a personal lifestyle.

The broadest definition of wages includes all remuneration or compensation paid for services rendered by an employee, whether in cash or in other media including bonuses, commissions, and gratuities, based on piece, task, or time.

The need to develop and manage multiple sources of income arises from increasing uncertainty about economic, regulatory, and social trends.

For many individuals, the primary source of income is remuneration from employment, and the largest asset is their home. Employment is an active form of income – in effect employees exchange time for money. However, the best forms of income are those that are residual and passive.

Residual income results from an initial transaction at some time in the past for which an ongoing cash flow is received; passive income results from transactions where the individualpreneur is not actively involved.

Examples of residual income include enrolling members in systems where downstream commissions can be earned; selling items, such as subscriptions that are automatically renewable, or consumables where the ordering is processed by third-parties; and affiliate programs based upon referrals.

The rise and fall of employment opportunities

Prior to the industrial revolution, families were in effect enterprises. Augmenting farm work with other trades and crafts, families flourished in cottage industries working from home, effectively as a group of individualpreneurs. Merchants brought raw materials to homes and would take finished products to markets. Entrepreneurs would “put out” work to families, who were in effect their subcontractors.

As the industrial revolution progressed, work was transferred form homes to factories when the required machinery became too large or expensive. Initially, the “put in” system was used whereby workers in a factory were treated as subcontractors, and eventually became employees. Labor movements were founded to fight for workers’ rights, from which today’s employment and labor laws have evolved.

As the economy shifted from family to commercial and industrial enterprises, employment opportunities grew. Workers could expect long-term employment opportunities as manufacturing demand increased. Through improvements in manufacturing techniques, such as production lines and automation, the scale of units produced increased dramatically. Through improvements in energy, transportation, and telecommunications technologies, reach extended into new geographic markets for acquisition of materials and supplies, and delivery of end-products.

However, recent globalization trends have changed the cost structure of certain activities through outsourcing to providers who offer economy of scale, or to lower cost production markets. As a consequence of information and process control technologies, work has shifted from manufacturing to knowledge-based services. Technology can play a major role by creating jobs in new areas and eliminating them in others.

Enterprises have been impacted dramatically by these trends. For example, “big box” and online stores have had an impact on retailers on “Main Street” – but the savvy ones offer specialty products coupled with exceptional service. Even the local coffee shop is impacted by the price of green beans in global markets. Many manufacturers have downsized through strategic sourcing of components to scale providers, and in the construction industry, general contractors take advantage of prefabricated assemblies. As industries shift from manufacturing to knowledge-based, a major differentiator is marketing capability. Marketing capability requires understanding customer needs and wants, and responding with products and/or services designed for niche or mass markets, regardless of where the components are made.

The consequence is that job markets are dramatically changing, and that old assumptions for employment have become invalid. The notion of working for one employer for forty plus years is no longer possible because technology is changing the structure of industries and the nature of employment. Downsizing has become common, and it is a challenge for the education system to keep up with changing trends in the knowledge, skills, and technical requirements for jobs in emerging enterprises and industries.

The increase in consumer debt coupled with unstable employment opportunities has created stress for many individuals and their families, especially for those who are unemployed, face foreclosure on their homes, or even bankruptcy.

What is “Plan B?”

The term “Plan B” is used to describe an alternative course of action in case the preferred or primary “Plan A” fails. For many individuals, Plan A is a combination of a good education leading to a well-paying job. This form of Plan A stresses individual achievement through successes in education and employment – failures are usually downplayed. However, changing trends in employment put pressure on most individuals’ Plan A, who may face downsizing or even their employer going out of business.

For others, Plan A is a combination of entrepreneurship and business ownership. This form of Plan A can result in failure. However, ultimate success in entrepreneurship and business ownership is often achieved by learning from mistakes and failures over time, and by building teams. Plan A for entrepreneurs and business owners may change from time to time as their ventures change. Eventually, many entrepreneurs and business owners finally get it right as lessons from past failures lead to successes. Many entrepreneurs and business owners become investors in other enterprises with a sense of “wanting to put back,” and often with a higher tolerance for risk than those who have, in effect, earned income in exchange for time.

The uncertainty of the economy, regulation, and social trends as evidenced by downsizing, high consumer debt, government debt and unbalanced budgets, and high unemployment has created the need for all individuals to have a strong “Plan B.”

An effective Plan B begins with the notion of an individual behaving as an enterprise in their own right – the individualprise. Whereas Plan A may provide a primary source of income, developing a Plan B means understanding opportunities for earning multiple sources of income and allocating time efficiently by prioritizing on the best. Executing a Plan B may allow an individual to keep their primary form of employment, but work on other income producing activities, such as part-time employment, home-based businesses, or investing in real estate and/or securities.

The income statement of the individualprise is the tax return – after all, if the an individual has multiple strong streams of income, taxes are likely to be an important consideration.

The basis structure of the Individual Tax Return (IRS Form 1040) applicable to both Plan A and B activities includes:

  • Wages
  • Interest (Schedule B)
  • Dividends (Schedule B)
  • Business income from sole proprietorships (Schedule C)
  • Capital gains (Schedule D)
  • Supplemental income from rental real estate, royalties, partnerships, and subchapter S corporations (Schedule E)

The tax return offers clues as to opportunities for alternative sources of income; however, it is useful to separate the type of income from the forms of business, such as sole proprietorships, partnerships, limited liability companies, and corporations.

Types of income include:

  • Wages – all forms of compensation for full or part-time employment
  • Interest on investments
  • Dividends on investments
  • Capital gains on investments
  • Net income from active revenue generation such as commissions, fees, rents, royalties, and sales less expenses
  • Net income from passive revenue generation activities – primarily real estate rents and royalties less expenses

Types of business forms include:

  • Sole proprietorship and single member limited liability company – an individual that sells products and/or renders services, including as an independent contractor to hirers
  • Partnership or limited liability company – where an individual is a partner or member in an enterprise that shares profits, losses, and capital with others – the individual may be a general partner or member-manager, or a limited partner or member; a single member limited liability company is considered to be a disregarded entity
  • Subchapter S corporation – where an individual is a shareholder investor in a corporation that passes its profits and losses through to its shareholders – the individual also may be a director and/or an officer, and as such earns wages as an employee in addition to receiving dividends
  • Subchapter C corporation – where an individual is a shareholder investor in a corporation that is taxed separately from its shareholders, but may pay tax on the dividends received (thus is subject to double taxation) – the individual may also be an employee, and as such earns wages in addition to receiving dividends

Only individuals and corporations are legal entities, and as such, corporations have separate rights and privileges from their shareholder investors. Individuals are natural persons. However, a juristic person is a group of natural persons behaving as if they are a single group, such as in a partnership, a limited liability company, or an association. A company is a group of individuals that make up an enterprise regardless of business or legal form.

Entrepreneurs may start enterprises in any business form, but lenders and investors may require a specific form, and may place personal guarantees in individuals for contingent liabilities. Venture capital and investment firms may place specific requirements on business forms and management structure, such as being a Delaware subchapter C corporation. Thus a founding entrepreneur could become a shareholder investor in an enterprise that they are no longer in control of if an investor group brings in its own management team. Delaware is the preferred choice for incorporation for many investors because of its well established corporate laws.

Although self-employed individuals are treated as business owners through sole proprietorships, single member limited liability companies, and single shareholder corporations, they are unable to leverage their time unless they can delegate to trustworthy employees, or earn residual and/or passive income.

Individuals who are sole proprietors, partners, and members in limited liability companies are subject to self-employment taxes, and shareholder investors who are officers in subchapter S corporations are subject to employment taxes.

Achieving “Plan B”

There are many ways to develop and achieve a Plan B that has multiple income streams, and it is possible that one component may become the new Plan A eventually. Some opportunities result from converting a hobby into an income producing activity, whereas others result from leveraging professional qualifications and experience.

Examples of income producing activities include:

  • Part-time employment
  • Establishing a home-based business on a part-time basis, that has the potential to become full-time
  • Earning fees and commissions from referrals through affiliate marketing relationships
  • Earning royalties and fees through writing and speaking engagements
  • Investing in real estate for rental income and capital gains
  • Investing in securities for interest and dividend income and capital gains

Businesses that require separate physical premises, inventories, and employees should be avoided as a Plan B because of the high overhead of carrying costs, insurance, payroll, risk of theft, and governance. Whereas the notion of owning a restaurant can be a dream to many, all too often such an enterprise becomes nothing but a nightmare.

Home-based businesses can take many forms such as buying and selling products on the internet or providing professional services on a part-time basis. It is important to note that home-based businesses are subject to licensing and zoning laws and regulations, and may be subject to property, sales, and use taxes, in addition to income tax.

Any form of revenue generating activity requires business development and marketing capability to create awareness and build relationships. The degree of selling experience necessary is a function of the type of business. These activities can be routinized through duplicable, predictable, and measurable processes that can be learned over time.

Some investing activities may require active trading to ensure that capital gains can be properly realized in up markets, and to prevent losses in down markets.

The best form of income is both residual and passive, whereby ongoing cash flow results from activity that occurred in the past, and for which little or no management activities are required in the present.

An effective way to achieve a blend of residual and passive income is through a combination of sources from membership systems and investing activities as follows by:

  • Enrolling customers in membership systems where commissions are earned from ongoing sales of consumables, for which the ordering and distribution is handled by third-parties – this activity generates residual gross income
  • Investing the residual income in an investment portfolio that diversifies risk, and generates cash flow from interest and dividends – this activity generates residual gross income; the income is passive if the portfolio does not require active management through trading
  • Note: investing in real estate may generate residual income from rents; however active management may be required for finding tenants, negotiating leases, collecting rents, paying expenses such as utilities, and performing maintenance and repairs; investing in securities may require some trading to hedge from risk, and to take advantage of capital gains.

A shorter-term objective of Plan B is provide a hedge against Plan A as an alternative. A longer-term objective of Plan B is to gain financial independence – the state of having sufficient wealth to cover expenses required by a certain lifestyle. Wealth is achieved by having sufficient assets and income producing activities to generate a gross income that exceeds all professional, physical, and personal expenses required by that lifestyle. Wealth is a source of capital for future investment. It is usually advisable to eliminate debt in the quest to achieve financial independence.

Enterpriship

A key success factor in developing a Plan B is understanding those enterpriship (entrepreneurship, leadership, and management) competencies that are essential to income generation.

OPC UA: The Communication Standard for the Internet of Things?

As we prepare ourselves for the expansion of the IoT (Internet of Things), many businesses today are looking for ways to take advantage of the opportunities that are beginning to present themselves. Of course, as with anything new there are many questions and concerns.

Many organizations are struggling with interconnectivity. How do we get existing information systems to communicate with new information systems? If leveraging the IoT requires a wholly rebuilt information infrastructure and a complete reformatting of business processes – well, that’s just not going to work for most people.

There are also organizations who will have questions about how to make use of the unstructured data coming in real time from any number of different sources. How can they create the context to translate this endless stream of raw data into useful information?

And what about the scalability and flexibility needed to deal with growth and change. After all, if the changes implemented today need to be undone in order to keep up with the future needs of your organization, then is it really worth it?

Another common concern is that of security. Are we going to push sensitive information up to the cloud, where it may be exposed to any number of potential threats ranging from cyber-terrorism to corporate espionage? And even if our sensitive data is not being broadcast over the internet, how do we protect these interconnected systems from internal threats? How can we ensure that our employees and contractors have access to all of the information they need to do their jobs and nothing more?

These and many other questions are preventing some organizations from realizing the many benefits of the IoT. Some think it will be too difficult or expensive to implement; others may question the value of it. Fortunately for us all, these questions have been asked for several years, and there are answers.

The communication protocol often cited as the best fit for IoT applications has already been developed, tested and deployed in live environments around the world since it was fully released in 2009.

OPC Unified Architecture (UA) is platform-independent, service-oriented architecture developed and maintained by the OPC Foundation. As the interoperability standard for industrial automation, OPC has become an integral part of most SCADA (Supervisory Control and Data Acquisition) systems. As data systems expand beyond their traditional roles to include more sensor data and consolidate data from multiple systems, it makes sense that the OPC Foundation has remained at the forefront of the standardization process and have developed a communication standard that has been embraced by proponents of Industry 4.0 and the Internet of Things – companies like Microsoft, Oracle, SAP, GE, and many others,

OPC UA is universally embraced because it directly addresses the obstacles faced by organizations involved in IoT implementation projects. The problem of interconnectivity, for example, is exactly the problem that the communication standard was developed to address. Today, OPC drivers exist for thousands of different devices, and many devices today are manufactured with embedded OPC servers to allow for exactly this type of interoperability with other devices and systems.

The concerns about the usefulness of multi-system data is addressed by information modeling. The OPC UA information modeling framework turns data into actionable information. With complete object-oriented capabilities, even the most complex multi-level structures can be modeled and extended. Information modeling also makes an OPC UA-based system significantly more customizable and extensible. As virtual representations of actual systems, information models can be modified or expanded to meet the changing needs of a modern company.

Of course, one of the most important considerations when choosing a communication technology is security, which is one of the great benefits of OPC UA. Security is provided in a number of ways, including: Session Encryption, Message Signing, Authentication, User Control, and Auditing of User Activity.

While it is difficult to say that there is anything “standard” about the Internet of Things, OPC UA is the closest thing we have to a communication standard, and every day it is becoming more widely accepted and adopted.

Change Management Systems – Is There a Better Way?

There is no denying that plant floor automation can dramatically improve efficiency and increase productivity, but there is an unintended consequence of automation that can make it problematic. That consequence is the increased dependency on new technologies like PLCs, PC-based control systems, SCADA systems, and HMIs. As long as everything is working as it should, the automated workplace proceeds as a well-oiled machine, meeting every quota and price point. Of course, when something is not working as well as it should things can get complicated.

Imagine if a type of hardware used in your process has proven to be ineffective and you've decided to replace it with another model. Not only does the hardware change, but changes must be made to your overall control logic. This is likely to require changes to your PLCs, your SCADA system, and your HMIs. And what if the new equipment is even less efficient and you decide to roll back to the previous version? All of these control logic changes must be undone.

Change Management Systems

These concerns have become of such major importance that many companies are investing thousands of dollars and countless man-hours in software designed specifically to help manage plant-wide changes. These Change Management Systems are intended to reduce the overall cost of implementing plant-wide changes by automating as much of the process as possible. A good CMS will provide the following features:

– A backup / archive of prior revisions of programs

– Tools for documenting changes

– A historical record of what and when changes were made, and by whom

– User- or role-based permissions determining who is able to make changes

– Disaster recovery procedures to recover from hardware failures

– Notification of changes

These change management functions have been performed manually in most cases, requiring enormous investments of time. Furthermore, the updates made to PLCs and SCADA systems typically require taking the process down while changes are made. This inevitable downtime creates another enormous gap in profitability. Even when a sophisticated CMS is employed, there is no way to avoid the fact that traditional SCADA and HMI systems are inextricably linked to the hardware that they are monitoring. Any significant change will require taking the entire process down and starting it up again after the changes are fully implemented.

Is There an Alternative?

If it seems that change management is just a fancy new way for software developers to make more money on some unnecessary product designed to solve imaginary problems, just think about what would be involved in making plant-wide changes in your enterprise. Would you have to make changes to your SCADA system? How long would that take? Would you have to update your HMI screens? How many of them? And how long would you have to take the process down in order to make these changes? Consider the cost of the labor. Consider the lost production due to downtime. And imagine if the change you made does not produce the intended result, and you want to roll the process back to a previous state. How much more time and money would that cost?

The benefits of change management are various and undeniable, but is it possible to realize these benefits without introducing another management system – another system that will itself need to be managed? What if your HMI / SCADA system allowed you to manage plant-wide changes with ease, and without extravagant investments in labor or lost production? One way this is possible is through the concept of Data Modeling. By creating a logical model of your plant and your processes, your control logic is abstracted away from the actual hardware and becomes much more flexible and scalable. A change made to a piece of equipment in your data model will automatically be in effect for anyone who is using that model. Data modeling also allows you to create templates of your HMI screens that can be used for all assets of the same type, so instead of making changes to dozens of different screens a change can be made to the template and will be automatically applied to all instances of that template. And since graphics are bound to data in the model instead of actual hardware, changes can be made to your HMI screens without taking the process down. As today's enterprises become more automated, and as more data points become measurable, a SCADA system that employs data modeling is becoming more and more of a necessity. The good news is that such a system will surely pay for itself in a short time as efficiency is increased and downtime is reduced, providing a significantly lower total cost of ownership.

The need for a CMS can be eliminated in many cases by using an HMI / SCADA system that employs data modeling. And while data modeling alone will not replace the full range of features provided by a quality CMS, many of the benefits can be duplicated, and additional benefits can be derived from the ability to perform these change management tasks from inside of your SCADA system without having to deploy a separate system.

By combining the power and efficiency of high-quality SCADA software with the sophistication of data modeling, it is possible to incorporate capabilities that bridge the gaps between process control, maintenance management, change management, asset management and resource planning. With the dawning of the new interconnected industrial environment, industry 4.0 or the 'Internet of Things', there has never been a better time to change your expectations about SCADA software and what it can do to bring your enterprise into the 21st century.

How Is the Automotive Industry Handling the New Industrial Revolution?

Bill Gates is alleged to have once quipped that "If GM had kept up with technology like the computer industry has, we would all be driving $ 25 cars that got 1,000 MPG." Even though the authenticity of this quote is questionable, it has been circulated throughout the internet for years because there is something about the sentiment that rings true to us. It certainly does not seem that the automotive industry has kept up with advancing technology the way that the computer industry has.

This may be due in part to the manufacturing infrastructure that has evolved over the years. Making sweeping upgrades to equipment and / or processes seems a very expensive and risky proposition. & Nbsp; When you couple this with the fact that many automobile manufacturers today struggle to find enough demand for their current supply, it is easy to understand why keeping up with the latest technology isn't always a top priority.

The problem with this reluctance, though, is that automobiles are not inexpensive consumables that people buy casually. Customers expect vehicles to come with the highest standards of safety and efficiency. Customers expect the latest technology possible. How can manufacturers keep up with this demand for innovation without changing their processes?

It seems that some manufacturers are beginning to embrace the ways of the modern industrial world, and are finding ways to align their business models with the current wave of interconnectivity and streamlined automation.

Honda Manufacturing of Alabama

Honda's largest light truck production facility in the world – a 3.7 million square foot plant – was faced with a problem all too common to large manufacturing facilities. Over the years, a number of different automation systems were introduced to help streamline production. With operations including blanking, stamping, welding, painting, injection molding, and many other processes involved in producing up to 360,000 vehicles and engines per year, it is not surprising that they found themselves struggling to integrate PLCs from multiple manufacturers, multiple MES systems, analytic systems, and database software from different vendors.

Of course, on top of these legacy systems, Honda continued to layer an array of smart devices on the plant floor and embed IT devices in plant equipment. The complexity introduced by this array of automation systems turned out to be slowing down the operations they were intended to streamline.

After reorganizing their business structure to merge IT and plant floor operations into a single department, Honda proceeded to deploy a new automation software platform that enabled them to bring together PLC data with the data coming from MES and ERP systems into a common interface that allowed the entire enterprise to be managed through a single system. This also allowed Honda to manage and analyze much larger data sets that revealed new opportunities for further optimization. While this reorganization required a significant investment of resources, they were able to realize benefits immediately, and ultimately positioned themselves to maintain a competitive edge through the next decade or more.

Ford Motor Co.

Ford Motor Company operates a global network of manufacturing operations, and have had difficulty when trying to promote collaboration and share best practices between their various plants. They found a solution using technology based on the Google Earth infrastructure.

Ford was able to develop a cloud-based application that stores 2D and 3D representations of Ford's global manufacturing facilities, and allows users to navigate through these virtual environments, place pins, and upload video, images and documents to these pins that are shared throughout Ford's global operations. Engineers and operators can share information about current plant conditions and procedures, which can be accessed in real time from anywhere in the world. The accumulated data can be used for training or to update standard procedures. By creating a global collaborative tool, Ford has created a means of ensuring that each and every one of their employees has the latest, most accurate information on how to best perform a particular task or how to avoid a problem that was encountered elsewhere.

We will have to see in coming years whether or not these innovations will lead to improved market performance for either of these manufacturers, but in the meantime it is probably safe to expect other companies to follow suit. With the advances in manufacturing technologies and machine-to-machine communication, it is becoming very difficult to remain competitive without playing by the same rules as everyone else. Industrial technology has advanced to the point that we are experiencing what people refer to as a new industrial era – or Industry 4.0. Reluctance is no longer a viable option.

During Industrial Revolution 4.0 Era, Palm Oil Plantation Have to Implement Digital Technology

At this time the world is in the era of the 4th Industrial Revolution (Industry 4.0) which is characterized by the implementation of artificial intelligence, super computer, big data, cloud computation, and digital innovation that occurs in the exponential velocity that will directly impact to the economy, industry, government, and even global politics.

The Industrial Revolution 4.0 is characterized by a smart industrialization process that refers to improved automation, machine-to-machine and human-to-machine communication, artificial intelligence (AI), and the development of sustainable digital technology.

Industrial Revolution 4.0 is also interpreted as an effort to transform the process of improvement by integrating the production line (production line) with the world of cyber, where all production processes run online through internet connection as the main support.

Road Map to Industrial 4.0 in Palm Oil Industry

In Indonesia the application of industry 4.0 is expected to increase productivity and innovation, reduce operational costs, and efficiency that led to increase the export of domestic products. In order to accelerate the implementation of Industry 4.0, Indonesia has developed a roadmap for industry 4.0 by establishing five manufacturing sectors that will be a top priority in its development, including food and beverage industry, automotive, electronics, textiles and chemicals.

The five industry sectors are favored considering that they have shown their great contribution to the national economic growth. For example, the food and beverage industry, especially the palm oil industry, has a market share with growth reaching 9.23% in 2017. In addition, the industry also became the largest foreign exchange contributor from the non-oil sector which reached up to 34.33% in year 2017.

The magnitude of the contribution of the food and beverage industry sector can also be seen from the value of exports reaching 31.7 billion US dollars in 2017, even having a trade balance surplus when compared with the import value of only US $ 9.6 billion. This figure also places the palm oil industry as the largest foreign exchange contributor to the country.

In order to increase productivity and efficiency optimally, the technology supporting the industrial revolution 4.0 is imperative to implement, including the implementation of Internet of Things (IOT), Advance Robotic (AR), Artificial Intelligence (AI) and Digitalized Infrastructure (DI).

The structural transformation from the agricultural sector to the industrial sector has also increased per capita income and driven Indonesians from agrarian to economies that rely on an industry-driven value-added process accelerated by the development of digital technology.

In the context of this industrial revolution 4.0, the palm oil industry sector needs to immediately clean up, especially in the aspect of digital technology. This is considering the mastery of digital technology will be the key that determines the competitiveness of Indonesia.

Because if not, then the Indonesian palm oil industry will be increasingly left behind from other countries. If we do not improve our capabilities and competitiveness in priority sectors, we will not only be able to reach the target but will be overridden by other countries that are better prepared in the global and domestic markets.

Digitalization Era in Palm Oil Industry

As a major player in the global palm oil industry, Indonesia needs to clean up soon. Absolute process and operational efficiency is immediately undertaken especially concerning activities involving many manpower such as field work (infield activity) such as crop maintenance, land treatment, fertilizing activity, weeding, harvesting and transporting fruit to weighing and sorting. This is because in this sector there is often time and cost inefficiency.

Digital technology has facilitated a lot of work in the palm oil industry. Now no longer need to make statistical data collected from a number of palm plantations manually. Ease and other advantages of digital technology is able to capture images or photos of fresh fruit bunches, as well as precise location of the garden using a tablet that can access the GPS.

That way, field managers can not only easily track and monitor real-time activity in the garden, but they can also see for themselves the quality of the palm fruit and know exactly which areas are experiencing the problem. And incredibly, it does not need their presence on the field.

In addition to the ease of transferring data from the field to the Excel sheet on the computer and also making reports on the quality of the palm fruit, digitization also facilitates in recording the presence of employees and field workers to then process the data for the purposes of remuneration and incentives.

Is Your Company Ready For Industry 4.0 Transformation?

What is Industry 4.0?

Industry 4.0 is the 4th industrial revolution. To give a little history, industries used steam to make the machine work which increased production and reduced cost in the industrial revolution. The next phase of the revolution was the mass production with implementing electricity and assembly lines. The third revolution introduced automation and computers. We are now here in the fourth revolution through digitizing and networking where we can connect the digital world with the physical world.

With hassle free wireless networking you educate the machine. Earlier the intelligence lied with the humans and machines just helped with the physical work, but now we can educate the machine and the products itself, also get a virtual image. Using Internet of Things (IOT) you can connect all the physical machines with software, networks and censors and they would exchange data with each other making human life and production much more simpler.

How many hours have you spent to hire a mechanic because your machine stopped working and the mechanic failed to understand what went wrong with the machine? With Industry 4.0, the machine will tell you what part has been failed and what has to be replaced. With artificial intelligence, it also tells you which spare parts need to be fixed.

Why Transform to Industry 4.0?

The Cyber ​​Physical systems enable your product to communicate with your machine. Your product will instruct the machine as to the quantity and the type of product that needs to be produced, and the machine is then produces and labels the products. After detecting the product, you can never go wrong with packaging, also your quality check has been performed by the machine while packaging itself.

Industry 4.0 allows you to have a flexible manufacturing process that will better react to customer demands. This new manufacturing technology reduces your cost of production, cost of wastage, reduces errors, increases efficiency due to use of robotics, yields higher revenue, improves customer service and increases innovation. It also allows you to create a virtual image of the real world using 3D printers and help you test your product and know your contingencies beforehand which would allow you to change the process in order to avoid the contingency before you even start your production.

You don't need to manually check your stock. You can add a censor to your forklift and your products, and while stacking up your goods, you get the data of the quality, description, weights and dimension as well as the location of the product. This would immensely reduce errors and damages.

Feed your machines, knowledge of automated systems with this new manufacturing trend and let them communicate with each other while you see your profits rise up high and costs go low.

Boy Has the Printing Industry Changed Over the Years

Not long ago, I got a ride from a rent-a-car agency back to my car, and the older gentleman giving me the ride was a part-time employee, only working a couple of days a week, supplemental income, giving him something to do between his hobbies, and social life in retirement. He lives comfortably in a high-end retirement community and we got to talking about days gone by. You see, he’d owned a printing company, making “business forms” in the Southern California area in the 70s and 80s.Perhaps you recall all those business forms, and memos with the carbon copies? Hardly anyone uses carbon anymore, although there are a few companies which do. Interestingly enough the Rent-A-Car company that I had rented the car from still used carbon copies. He told me stories how he grew his company due to the fact that he was able to do a very fast turnaround. Interestingly enough, not more than a week later I talked to another gentleman who would also been in the same industry. Indeed, I asked him a similar set of questions such as;What sort of industries did you serve?Did you supply Government Agencies, Corporate, or just anyone who needed anything, with an army of printing brokers in tow?The interesting thing is; the second gentleman I talked with had come along with the new technology entering the digital phase of the printing industry, just as the other gentleman was reading the writing on the walls, realizing that he needed to sell his company and retire before the new innovations took over the sector. This is the natural progression and evolution which occurs throughout the free-market system.Many believe this is disruptive, and it costs jobs, but it also brings technological advances, more efficiency, and lower costs. We should relish in the fact that we are able to so quickly move with new divergent technologies, as it acts as an adrenaline shot to the forward progression of our nation and economy. I asked the second gentleman;You certainly must have had the speed advantage, yes, that was a revolutionary time for the industry? 80s? Of course by the 90s hell, Word Perfect and personal printers, game over I guess?It turns out the second gentleman had a similar experience as the technology was changing once again. Soon, everyone would have home printers, peripherals, fax machines, and the printing industry would go through its next revolutionary change 10 years later. HP saw that one didn’t they? You know, it seems the every 10 years rule holds true in a good many industries, especially when those industries are blindsided by another industry which brings technology into their realm, completely disrupting the status quo and the market incumbents.Rule number one: the world changes.Now then, I did meet some of the founders of PIP once, what a fascinating industry. Some of those original Xerox machines cost much more than a luxury home back then. I read a book on the sales strategies of Xerox back then selling those machines, w/service contracts, GE apparently borrowed that model too for many of their divisions, mostly medical devices.New selling strategies, bundling strategies, marketing strategies, and technology are all part of both incremental gains and paradigm shifts. Now then, my question is to you;”Are You Ready for the Future?”Indeed, I hope you have a plan, and I hope you will please consider all this and think on it.

Information Technology in the Hospitality Industry

Traditionally, hotels were largely dependent on cards and paperwork at the front desk to keep in touch with old and current customers. They were largely at the mercy of the desires of vacationers to arrive, and on their own efforts and staff to be ready for potential surges or long droughts of occupancy. Luckily, such inconvenience and old-fashioned methods are long since past, thanks to advances in information technology.The first area in which information technology became important was in regards to billing. Old-fashioned paper-based book-keeping was time consuming and inefficient, and was not able to quickly tell a hotel owner what the situation of their hotel was. Luckily, advances in modern record keeping allow for a hotel owner to keep track of what they have on hand, how much of it they have, and how much it costs. Accounting is complicated, but advanced accounting software, especially that tailored to the unique needs of the hospitality industry, helps to enable hotel owners to make smart decisions. Services and products that are no longer used can be quickly cut off to save money, while those who show demand can be increased in quantity or modified so as to reduce the heavy usage.Most hotels are familiar with booking rooms and reservations over the phone, but information technology has expanded well beyond that. Hotels can now work with various online travel companies and booking services to have their rooms booked online, with no need to employ expensive staff. This also allows a hotel to advertise their open rooms and special deals directly to persons who would be most likely to purchase them, instead of wasting lots of money advertising in an unfocused manner. High quality information technology thus allows for better arrangement and management of bookings in order to allow a hotel to better maximize occupancy, and to know in advance when large groups or lean times are approaching. This allows a hotel manager to make plans regarding temporary staff, good times to renovate or expand, or other concerns, because he/she can determine the state of their hotel currently and for the next few months with only a few clicks on the computer.The advances in information technology extend well beyond booking, however. The internet is essential for vacationers who wish to contact those back home, and for those traveling on business to get in touch with the office. Therefore, wireless internet has become a very common and very useful service for hotels to provide. Many business minded persons even require that a hotel offer internet services so that they can keep working while on the road. Luckily, such services are easy to provide, as all that is required is a wireless router and various devices to ensure the entire hotel is filled with the network. Modern advances in wireless internet also allow for the wireless internet provided for hotel visitors to be used to network the hotel itself. Security cameras, door locks, and other devices essential to hotel security and safety can be wired into the network, so that staff are alerted whenever a door is propped open, a fire alarm goes off or suspicious activity occurs. Though the hotel guests are wholly unaware of it, this sort of added safety and security keeps them safe, and in the event of a problem they will most certainly appreciate the benefits of such a system.As advanced as it is, information technology in the hospitality industry is still going forward. Intelligent booking systems enable rapid and efficient guest feedback, along with the ability to predict who is likely to use the hotel again and inform them via e-mail or text messages when good deals arrive. Hotels with room service or other guest services can offer their menus online, allowing for quick updates, high-quality photos, and other ways to allow guests to see and order services before they even arrive. There are also advances in terms of payroll and inventory which make information technology a valuable asset for saving money and maximizing profits. The unique nature of the hospitality industry makes it a great place for new and emerging information technology, and forward-thinking hotel owners and managers are always looking for smart equipment and software to invest in.

The Reality Gap Part 6: The Technology Industry

No industrial sector right now is flying as high as technology. Companies like Apple, Microsoft, and Google are climbing the ranks as the biggest businesses in the world. No strangers to innovation, these companies have found some very fascinating ways to project a certain image, style, and status to the public. Today, nothing is more revered or coveted by consumers than the newest piece of gadgetry or technology. But it is immensely important to keep in mind that these companies aren’t as much out to make functional and fantastic products as they are to sell them.The most widely recognized example of the gap between actual product quality and perceived quality right now is Apple’s new tablet, the iPad. Termed a “magical device” by the company itself, the iPad has been sold in record-shattering quantities across the globe in the past few months. But, when asked where this technology is manufactured, most iPad owners probably couldn’t tell you. In fact, they’ve been so overwhelmed by its “coolness” that they probably haven’t even given it a thought. The reality is that they are made in China, along with most other modern pieces of technology. This, of course, is not to say that the iPad isn’t a highly advanced, high-quality device, as it most certainly is. But the image that Apple’s marketing team and CEO Steve Jobs have given it doesn’t completely match the product itself.Another facet in the technology industry’s use of image and the reality gap is the concept of “latest and greatest”. Though a given product may suit a consumer’s needs well, they are easily convinced that a given company’s newest device will suit their needs even better. It is another example of masterful image creation because it taps into the old American idea of “keeping up with the Joneses”. That is, the consumer feels a need to have whatever is newest in order to achieve a sense of self-efficacy and status. The technology industry knows this adage well, and takes advantage of it. To see how, look no further than how often companies like Microsoft come out with new software. The differences between MS Word 2003 and 2010, for example, are largely minimal except for looks and design. But the consumer, whenever he or she sees that a new version of a certain software is coming out, feels compelled to buy it. The actual differences between the older product and the newer one may be minuscule. But by creating an image of the “newest and best”, technology companies tap into the consumer’s innate desire to have the most advanced products.Perhaps no industry is more adept at taking advantage of the reality gap than technology. It is arguably one of the biggest reasons for the sector’s immense success over the past few decades. Honestly, it can’t be argued that their products have revolutionized society. But consumers should certainly be aware of the hype and largely false image that technology industries create so effectively. By staying sharp, one can separate the true beneficial qualities of technology companies’ products from consumerist ideals and conjecture.