The Digitalization Journey - Are You Future Ready?

The Digitalization Journey - Cummins

In our journey to help our customers unlock the potential in their businesses, we have looked at 23 industrial companies to determine how to deliver the right digital footprint to our customers. 

Is industrial market digitalization here to solve customers’ problems or to improve companies’ operational efficiency, or both? Enhancing the customer experience by solving customer problems is a key objective of digitalization. Hopefully, you have already read about five customer problems solved by digitalization in industrial markets. Yet this could be just half of the story. 

According to recent research, companies that balance enhancing customer experience with improving their operational efficiency in their digital business transformation efforts perform better than their industry peers. These future-ready companies, top right quadrant of the chart below, have delivered an average net profit margin that is 16 points better than their industry average. Future-ready companies were able to not only solve key customer problems, but also concurrently reduce their costs or improve their efficiency. 

Three Types of Digitalization Journeys

Let’s narrow our focus onto companies serving industrial markets that use power systems (defined here as engines or power generators) as primary or emergency back-up power sources. For this purpose, we have explored how these companies take different paths forward in their digitalization journey. Our benchmark included 23 industrial companies and found out that these companies generally fall into three categories:  

1. Companies that take a System Level approach and are trying to create the Operating System (OS) for the Internet of Things (IoT). Let’s call this model, “Platform as a Service.”  These companies market their platform not only to their customers, but also to other companies. They expect other companies will develop applications to solve customer problems with their platform as a service.

2. Companies that take a Component Level approach and create proprietary platforms. Let’s call this model, “Software as a Service,” or SaaS. These companies focus their expertise around their products and services and aim to create solutions for customers in their core businesses. The focus is on the application, like an app for the operating system of a smart device.

 Digitalization Journey - Three Categories

3. Companies that take a Component Level approach and leverage third party platforms to offer digital solutions to their customers. These companies are customers of the companies in the first category. They may brand the solution as their own, but it is built on another platform.

Component Level digitalization serves to improve the reliability, availability, and operating cost of physical assets. Varying levels of sophistication exists across component level solutions. Basic level solutions feature sensors to monitor health and viability of the assets while enabling basic detection and diagnostic capabilities. The more advanced solutions leverage data and analytics to plan component level maintenance and to proactively identify advanced performance issues. 

System Level digitalization serves to improve broader system processes and operations. These improvements could be flexible and scalable production, higher production yields and quality, and improved throughput and supply chain agility. Less advanced solutions leverage real-time data and analytics on products to increase process visibility and transparency, better allocate resources and increase overall production and supply chain performance. More advanced solutions leverage data and analytics to manage a broader set of operations, from fleet management to asset collaboration, and/or personnel to optimize the overall business performance. More advanced solutions could deliver improved safety, improved asset utilization, reduced asset base for same throughput, reduced labor expense, and more.

As companies embark on their digital transformation journeys, a balance between solving key customer problems and improving operational efficiency would be the path to create successful customers and companies. For industrial markets that use power systems (engines or power generators) as primary or emergency back-up power sources, we believe the path forward entails seven key solution themes, which we will cover in a future update. 

Cummins Office Building

Cummins Inc.

Cummins is a global power leader that designs, manufactures, sells and services diesel and alternative fuel engines from 2.8 to 95 liters, diesel and alternative-fueled electrical generator sets from 2.5 to 3,500 kW, as well as related components and technology. Cummins serves its customers through its network of 600 company-owned and independent distributor facilities and more than 7,200 dealer locations in over 190 countries and territories.

Cummins Marine powers adventurists around the Great Loop

Bill and Amy Denison
Bill and Amy Denison complete the 6,500-mile journey around the Great Loop

Many mariners have the Great Loop on their bucket list but only a few are lucky enough to accomplish the task. Bill and Amy Denison are one of those few. With great pride, they were able to complete the 6,500-mile journey down the east coast, up the inland rivers and back across the great lakes.

Their journey began on the waters of Maine and Nova Scotia. Bill and Amy cruised along the coast and visited remote islands in their boat, Mar-Kat – a Back Cove 41 named after their daughters, Margaret and Kathleen. They decided that they wanted to venture further and joined the American Great Loop Cruising Association (AGLCA).

After six months of research and planning, the couple said goodbye to friends and family to set off on their journey to tackle The Great Loop. Departing on 15 June 2018, from Albemarle Sound in North Carolina, they headed south. Mar-Kat powered by a 710 horsepower Cummins marine diesel engine and a 9kW Cummins Onan marine generator.Cummins marine powered boat

Over the course of their journey, Bill and Amy travelled across 13 states and the Province of Ontario, going through 100 locks and racking up almost 500 hours on their boat. By completing the Loop in a counter-clockwise direction, they were able to take advantage of the swift river currents.

Bill said, “The Cummins QSM11 engine worked flawlessly throughout the journey and only required a few oil changes.” When service maintenance was required, the couple got in touch with their local distributor and “received good support from the Cummins Virginia team.”

With unique heavy-duty design elements, Cummins small diesel engines have an extended engine life and provide proven acceleration and torque performance. This reliable, four-valve-per-cylinder marine engine is trusted by hundreds of manufacturers and can be found in the engine rooms of pleasure boats all over the world. Additionally, with more than 8,000 dealers and distributors, the Cummins product gives customers the peace of mind that they need, regardless of where their journey takes them.

After successfully completing The Great Loop in 10 months, Bill and Amy are now planning their next adventure with Mar-Kat, maybe exploring Florida or the southern Bahamas. Regardless of where they head next, Cummins will provide the power, innovation and dependability to drive their voyage.

Discover the Cummins marine range at cummins.com/marine, to see how our engines and generators can power your journeys, on sea or by land. 

Need assistance in choosing the right solution for your boat? Find your local Cummins rep

Cummins Office Building

Cummins Inc.

Cummins is a global power leader that designs, manufactures, sells and services diesel and alternative fuel engines from 2.8 to 95 liters, diesel and alternative-fueled electrical generator sets from 2.5 to 3,500 kW, as well as related components and technology. Cummins serves its customers through its network of 600 company-owned and independent distributor facilities and more than 7,200 dealer locations in over 190 countries and territories.

Australia’s landmark hybrid renewable energy microgrid complemented by thermal power generation from Cummins Power Generation

Cummins QSV91G gas generator and QSK60 diesel units support the Agnew Gold Mine's renewable energy microgrid.
Cummins QSV91G gas generator and QSK60 diesel units support the Agnew Gold Mine's renewable energy microgrid.

With an installed capacity of 56MW, the Agnew Hybrid Renewable Power Station became Australia’s largest hybrid renewable energy microgrid – and the first to utilize wind generation at a mine. The energy produced is equivalent to powering 11,500 homes and will abate 46,400 tonnes of carbon dioxide in the first year alone. 

Agnew Hybrid Renewable Power Station, AustraliaWith an installed capacity of 56MW, the Agnew Hybrid Renewable Power Station became Australia’s largest hybrid renewable energy microgrid – and the first to utilize wind generation at a mine. The energy produced is equivalent to powering 11,500 homes and will abate 46,400 tonnes of carbon dioxide in the first year alone. 

“The renewable energy technologies of EDL’s Agnew Hybrid Renewable Power Station are complemented by thermal generation from Cummins gas and diesel generators,” said Jason Dickfos, EDL Head of Growth. “We’re pleased to be working with Cummins to deliver this landmark project, which will provide the Agnew Gold Mine with more than 50% renewable energy over the long term, without compromising power quality or reliability.” 

The hybrid renewable energy solution at the Gold Fields mine in Western Australia consist of a new off-grid 23MW power station incorporating gas, photovoltaic solar and diesel power generation, followed by 18MW wind generation, a 13MW battery and an advanced microgrid control system. A crucial requirement was that the generators had to provide continuous, reliable power at temperatures up to 45°C. The Cummins QSV91G gas generator model was selected due to its ability to operate in high ambient conditions, in addition to providing high impact step loads and fast ramp rates while maintaining power quality, while the Cummins QSK60 diesel units provide additional power during peak periods of demand and have black start capabilities in the event of a power outage. 

Read more about the Agnew microgrid in this case study

Angela Papageorgiou

Angela Papageorgiou is the Senior Marketing Communications Specialist for the Energy Management Segment of Cummins Inc. Prior to joining Cummins in 2014, Angela worked in Marketing Communications agencies supporting the development and execution of B2C and B2B campaign projects. [email protected]

Energy IQ: Three situations that maximize the advantages of cogeneration applications

Three situations that maximize the advantages of cogeneration applications
Three situations that maximize the advantages of cogeneration applications

Greenhouses, hospitals, industrial manufacturers and commercial building owners are some of the many turning to cogeneration, also known as combined heat and power (CHP). They enjoy benefits ranging from improved financial performance to reduced environmental footprint. Cogeneration applications’ high efficiency in converting the energy in the original fuel into useful energy is the foundation of these advantages.

These benefits of cogeneration applications are further amplified under certain situations. Let’s cover these situations and associated examples of cogeneration applications. 

No. 1: Certain aspects of your business operate 24/7

The most cost-effective cogeneration systems operate at full output 24/7. 

This doesn’t mean your whole business needs to run 24/7. Instead, you can identify aspects of your business that run 24/7, and power these with a cogeneration system. Meanwhile, you can still have the utility connection and on-site boilers. These are useful to power the rest of your business operations and to manage potential peaks in electricity or thermal energy demand. Another advantage of using a combination of cogeneration and utility power is around maintenance events. This combination allows you to conduct maintenance and service on your cogeneration system without interrupting access to electricity for your business.

Hospitals are a good example of cogeneration applications for this scenario. Controlling the temperature, managing air quality, keeping the medical equipment operational and many other activities require electricity and thermal energy throughout the day. 

No. 2: The need for thermal energy is consistent; it is also simultaneous with the need for electricity several months of the year

Many facilities leverage cogeneration applications with increasing popularity over the years
Many facilities leverage cogeneration applications with increasing popularity over the years

Selling or storing excess thermal energy is often not practical. Excess heat is commonly released as waste heat, lowering the overall efficiency and financial gains of the cogeneration application. The efficiency of a cogeneration system increases when the thermal needs (steam, hot water or chilled water) stay at a consistent level. The same doesn’t apply as much to electricity needs, since excess electricity could often be sold back to the electric utility.

The longer the simultaneous need for electricity and thermal energy, the more advantageous a cogeneration application is. In fact, a good guidance is to consider cogeneration applications if your business has simultaneous needs for electricity and heating/cooling around half of the year or more 1. There are exceptions to this, and some applications are feasible even when the simultaneous need is 2,000 hours a year, about three months. 

Industrial manufacturing is a good example of a cogeneration application for this scenario. Thermal energy needed in industrial processing tends to be consistent throughout the facility’s operation. Moreover, thermal energy and electricity is usually needed simultaneously throughout the year in these facilities.  

No. 3: Electricity prices are high compared to the cost of natural gas

You are financially better off if producing electricity on-site is cheaper than purchasing electricity from the utility. Many cogeneration systems that produce electricity on-site use natural gas as the fuel, and this is where the spark spread comes into play. 

The spark spread is a metric for estimating the profitability of natural gas-fired electric generators. It is the difference between the price of electricity and the cost of the natural gas needed to produce that electricity 2. As the spark spread increases, savings provided by a cogeneration system also increases. Spark spread is an indicator of financial viability, but it is not an exact measure of profitability. 

Facilities where the cost of electricity is high and natural gas as a fuel is available are good examples of cogeneration applications for this scenario. 

Beyond the factors above, the Evaluating Cogeneration for Your Facility white paper outlines other aspects to consider as you explore cogeneration as an option.  

Sign up below for Energy IQ to receive energy focused insights in markets ranging from data centers and healthcare facilities to manufacturing facilities, and everything beyond. To learn more about cogeneration and trigeneration power solutions Cummins Inc. offers, visit our webpage.

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References: 
1 Hamilton, J. (n.d.). Evaluating Cogeneration for Your Facility [Bulletin]. Cummins Inc. Retrieved from https://www.cummins.com
2 U.S. Energy Administration Office (February 2013). An Introduction to Spark Spreads. Retrieved from https://www.eia.gov/
 

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ: Three energy and power system considerations for edge data centers

Three energy and power system considerations for edge data centers
Three energy and power system considerations for edge data centers

Technologies that require fast computing and low latency are the key drivers of edge computing, and this need for low latency necessitates edge data centers to be near the users they support. Edge data centers are the physical structures where edge computing takes place and are usually located within a few miles from where the data is generated.

Edge data centers, whether located at the base of a cell tower or on-premise at a hospital or factory, will have distinctive energy and power system considerations compared to traditional data centers. This article outlines three of the key energy and power system considerations for edge data centers. 

No. 1: Continuity of computing service will be ensured through redundancy within edge ecosystem and reliability of power systems

One of the advantages of a distributed edge data center ecosystem is that computing workloads can efficiently be moved across a network of nearby edge data centers. Consequently, users can enjoy the continuity of service even when their nearby edge data center suffers an unexpected service downtime. Therefore, edge data centers part of a robust network and able to seamlessly move computing to nearby data centers may require less redundancy in their power systems.

However, power systems’ reliability will be paramount for edge data centers that are not able to seamlessly move computing to nearby facilities without compromising latency requirements. Power systems in these applications will often feature redundant starters and batteries for increased reliability, in addition to state-of-the-art digital monitoring systems to be covered next.

No. 2: Unmanned edge data centers will require state-of-the-art monitoring systems

Many edge data centers will be unmanned, without on-premise facility technicians. Moreover, these data centers will be scattered around cities and towns, making it even more challenging to build a responsive service strategy. This is where state-of-the-art digital monitoring systems come into play. 

Power systems in these edge data centers will feature digital monitoring systems that go beyond the traditional remote monitoring and diagnostics. Often, they will include monitoring systems that provide predictive diagnostics and prognostics with a robust communication and response protocol. These state-of-the-art digital power system monitoring solutions will help operators build a more pro-active service capability.

No. 3: Power systems may be subject to stringent emission and noise requirements

As many edge data centers will be in highly populated urban and suburban areas, they will likely face stringent emission and noise requirements.

Power systems in these edge data centers could deviate from traditional systems depending upon user location. In fact, edge may be the proving ground for power system technologies beyond the historically common approach of supplementing the grid connection with back-up diesel power generators. For instance, natural gas generators with lower emission levels could be preferable in areas with robust pipelines. Solar photovoltaic (PV) and energy storage systems deliver further reduction in emissions and noise levels in areas where there is land availability and solar exposure. Finally, fuel cells could be an option for selected edge data centers. Edge data centers will likely adopt a variety of energy strategies driven by diverse deployment locations and user preferences.

As the industry’s power system needs evolve, Cummins Inc. continues to innovate. These innovations range from continuous enhancements within its diesel and gas power generator portfolio, to innovations in complementary technologies. Cummins’ recent investments in energy storage, fuel cells and advanced microgrid control technologies has boosted its capability to offer comprehensive energy solutions tailored for the data center industry’s emerging needs.

Sign up below for Energy IQ to receive energy focused insights periodically. To learn more about the data center power solutions Cummins offers, visit our webpage.

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox. Read about energy technologies and trends on our Energy IQ Hub.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

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