May 18 2018

Piloting AR Solutions: A conversation with Delphine Hautoy from Saint-Gobain’s NOVA External Venturing unit

Source CleanTech Group
By Jules Besnainou, Director, CTG


AT THE CUTTING EDGE                                   

Our At the Cutting Edge series will keep an eye out, cut through the hype, and give early warnings on trends we believe will be important enablers of future innovation waves. Expect articles and interviews on topics like 5G, gene editing, virtual reality, artificial intelligence and more.


Jules Besnainou: Hi Delphine. Could you tell us a few words about yourself and the team, and the group?

Delphine Hautoy: I’m part of NOVA, the external ventures arm of Saint-Gobain, one of the largest manufacturing companies in the world. We design, manufacture and distribute high value added materials and solutions for different markets like automotive, aerospace, construction and life sciences. Our team members are located in Europe, China and the US. We’ve been focusing on target areas identified by senior management. Each team member focuses on one target area. I have been working on the Augmented and Virtual Reality space since I joined the team at the end of 2016.

JB: How does NOVA typically interact with the innovation ecosystem?

DH: NOVA is not a traditional CVC as we do not have our own fund. We partner directly with startups, selected VC partners in Europe and North America, and with incubators around the world. For instance, we collaborate with Greentown Labs, one of the largest cleantech incubators in the world based in the Boston area. We are currently developing the Global NOVA Network with identified members in locations where the NOVA team does not have a presence yet. Our goal is to develop partnerships with local innovation ecosystems such as in Brazil where we started a collaboration with CUBO, a digital incubator located in São Paulo, back in 2016. We build all types of partnerships ranging from research and development, marketing, distribution agreements to direct investments for equity and full acquisitions. Depending on the type of partnership, we engage experts and relevant business leadership to evaluate, develop, and agree on a deal. NOVA’s role is to get to this win-win situation where our business and the startup both benefit from the relationship.

JB: You said most focus areas came from senior management. Was that the case with Augmented Reality?

DH: It was. I arrived when we started deploying the new NOVA strategy that was moving from a tech scouting approach to a more transversal and business development approach. AR/VR was (and still is) clearly a big trend, along with Sensors and IoT, as well as Digital for the Customer Journey. In AR/VR, venture capital investment was pouring into startups, especially on the hardware side, with around $3.9B in 2016, led by Magic Leap having raised $1.4 billion. It was labeled as a mega-trend, but most of the applications were in gaming and entertainment. Today, the needle is moving to applications in the Enterprise, which is what we are looking at.

JB: Had there already been a lot of enterprise applications?

DH: Enterprises quickly saw the potential for this technology and got interested. That’s when software-only startups started to enter the fray, especially enterprise software tackling low-hanging fruits like remote assistance or logistics and supply chain. Running a few pilots at Saint-Gobain plants was the logical next step.

JB: Was your judgment that hardware was commoditized, or were you interested in the hardware race?

DH: At the time, it was the beginning of the hardware development frenzy. OCULUS had been bought by Facebook back in 2014, HTC developed its Vive in 2015, and we were already far from the Google cardboard released in 2014. It is still tough to say if such products will be commoditized or not. The first time we tried the ODG glasses, we definitely felt the wow effect. We understood quickly that we could use the technology to help our expert engineers troubleshoot issues from a distance in plants located on the other side of the globe. ODG connected us to software companies that were relevant for that application, and we started piloting in different parts of the world. For NOVA, my main goal was also to deploy the technology with easy applications to get our employees up to speed on the power and usefulness of the tool. I still believe that there is a big potential for this technology, but it requires a step-by-step introduction in the company. It’s a real change management exercise.

JB: Was your initial thesis that it would be an internal or client-oriented tool?

DH: It could be both, but we decided to start internally with trials in a couple of plants. Saint-Gobain has hundreds of plants all over the world, and if a machine breaks we often need to fly an expert to the plant to fix it. We started a pilot where a technician in Germany would troubleshoot a machine in Asia through smart glasses. Our conclusion was that the investment of the glasses and software pays for itself in two or three trips. But while the ROI case is easy to make, we are still very much in pilot mode. I don’t think the technology is ready to deploy at full company scale yet, given the development stage of hardware and to some extent software too.

JB: Great, let’s get into ROI, scale and technology readiness. Maybe one way would be to dive into a specific project. Can you tell us more about this remote maintenance use case?

DH: In one of our businesses, we have a machine located in Germany and Taiwan. Only one engineer located in Germany knows how to operate this machine. If the machine breaks or needs maintenance in Taiwan, he typically has to fly there or call the technician based in Taiwan to give him assistance. The business decided to try the smart glasses and dedicated software to give guided instructions live to the local machine operator. In the first three months of trial, the troubleshooting was successful at least three times. We attribute this to the hands-free nature of smart glasses: the engineer can provide the operator guided instructions while his hands are free, and the central person sees what he is doing. The results are significant in terms of savings: cut downtime at the plant, travel costs and time lost during these travels. But what we learned is that it’s not just about savings. Remote assistance gives us the opportunity to train the local operator, as he or she can save pictures of past maintenance events, and learn different fixes. The local technician ends up gaining more autonomy and expertise.

JB: Did you try to do ROI calculations?

DH: Some businesses did, and it was on the positive side regarding travel and expense savings or downtime at plant. We were also very surprised by how little pushback we got from employees. There’s definitely a “cool effect” in using smart glasses! Like in most manufacturing environments, there is a major concern of robots replacing humans. In this case, it’s more about training the people we have and we can only hope that we will augment our plant capabilities.

JB: In this pilot, what did you develop internally vs. external solutions?

DH: Both the hardware and the software were external solutions. There was not much doubt on the hardware side and there is good software on the market that we were able to try. The hardware has been stagnating recently; product development takes time and it still costly to put into production. Lately, companies have been experiencing cost and quality issues. The software side is waiting on hardware to catch up. We could consider building internal software for improved security of our data and network. Most of the software developed by startups works on the cloud, and we can think of several drawbacks such as safety, network, and bandwidth. Our remote assistance project involves a lot of actors, which is why it’s still in the pilot stage, and will take a bit more time to scale. We are currently exploring more options to leverage the technology for our external customers.

JB: You say glasses are expensive. But does it really matter given the quick ROI?

DH: It’s not really about the glasses being expensive, but more that the prices vary a lot from supplier to supplier. Some outliers have better glasses than others, but eventually price and quality will coalesce into a bracket, and we are waiting for that commoditization. Software is also all over the place, I believe there will be some consolidation in the field. Last year, Upskill merged with Pristine, two companies we were in conversations with. The alliance of these two complementary solutions makes total sense, but we did not expect it so early in the commercial process due to the complexity of its development and the pull from the market. We already know that we will witness more of these consortiums in years to come. Once we will decide to integrate this technology ubiquitously within the organization, making sure that it works in every plant and with every customer will require a built-up support of Wi-Fi and connectivity all over the world - that is what will be truly costly.

JB: How does the pipeline look for Saint-Gobain? Are you continuing to seek partnerships, or are you ready to invest in or acquire companies to build an internal solution?

DH: We don’t know yet, and still need to explore the technology more deeply. There is no one-size-fits-all. We notice that there are more and more use cases relevant to us. Remote assistance was the easiest to install and get buy-in for – it really is the low-hanging fruit – but logistics, inventory, warehousing and product assembly all have big potential, too.

AR can also be used in client-oriented situations. In marketing, it can provide customers an experience of the product before buying it. This is the case for a company like HOVER, with which we partner in the US with our CertainTeed construction product branch. The app allows homeowners who want to renovate their house to choose and visualize a new color for roofing and siding before buying the products. We also have a broader set of projects that would involve 3D sound systems embedded in a helmet for instance to demonstrate the acoustic properties of some of our products.

JB: Are you going to focus on these customer-oriented solutions, or are you continuing to pilot internal use cases?

DH: Over the past six months, our Smart Manufacturing group in Germany has taken over these internal pilots to better deep dive on the applications in our plants. NOVA still supports it with head-starts and trend reviews, but Smart Manufacturing is totally in charge of the operations now. The team can do analysis of use cases in the plant. This year, my focus will be to couple Augmented and Virtual Reality technologies with our Digital Customer Journey focus area, and see how we can enhance our customers’ experience, whether it’s B2B or B2C.

JB: You say glasses will be commoditized and software will be consolidated. Where will startups make money? What business models do you see emerging in this space?

DH: If smart glasses become commoditized and cheaper, we will have to ask ourselves if these devices will be able to replace our technicians’ computers or laptops. If that’s the case, companies will offer tablets and glasses. Today, the hardware is evolving so fast that it becomes obsolete within months and very few studies are available yet on the impact of wearing headsets or glasses for an extended period of time. On the software side, companies will make money through licensing. There will be consolidation, and we can predict that one or a couple of them may become very important for the future of AR/VR in Enterprise. But there needs to be a harmonization of the price of solutions.

JB: In terms of maturity, how far away do you think we are from commercial-scale deployments? What are hurdles to growth?

DH: We are all waiting for 5G! To be able to transmit so much information with low latency, network and bandwidth improvements need to happen, but great network connectivity and security may be the hardest to achieve. The software technology field is waiting for these issues to be solved, while the hardware is trying to overcome the hurdles of going into mass production. In the meantime, we are already envisioning more futuristic applications, like live co-design of products with our clients and our customers.

JB: We’ll keep those exciting developments for our next talk! Thanks for taking the time to speak to us.

DH: Thank you!



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