Cisco Systems, Inc. (CSCO) Earnings Call Transcript & Summary

Hello, everyone. Welcome to Cisco's Insider webinar series for networking. In today's webinar, we'll be talking all about simplifying your network for the manufacturing industry. My name is Elle, and I'm the Product Marketing Leader for Wireless here at Cisco. And I'll be your host for today's webinar. I am absolutely thrilled to have with me today a distinguished expert and leader in the manufacturing industry, Carlos Rojas. Carlos, can you introduce yourself for the audience. Tell us a little bit more about yourself.

Absolutely, Elle. Hi, my name is Carlos Rojas. I am the Global Manufacturing Solutions Lead at Cisco. Our manufacturing practice is around 17 years old and I've been with the company just about that entire time. I come from the manufacturing background. I'm more of an industrial technologist, having run manufacturing companies for 21 years even before joining Cisco. And I'm really happy to be here, maybe share a little about the infrastructure for manufacturing.

Absolutely. One of the most exciting parts of my job is getting to talk to experts like yourself. So with that, let's get to the good stuff. All right. So here's an overview of what you can expect to hear about today. We'll first talk through Industry 4.0 and the ideal state for IT and manufacturing then we'll talk about the pursuit of that ideal state. And Carlos will shine some light on some things he's seen in the industry and really what's been challenged by many organizations in the manufacturing industry. And then we -- from there, we will dive into what the path forward looks like, including some real-life examples from huge brands that you all know and love like Jack Daniel's. But first, what do we mean by Industry 4.0? Well, to answer that, we have to go back in time just a little bit. So since the very early days of manufacturing, we've been dreaming up ways to show how we can build automation and efficiencies into our process. And for a good reason: the efficiencies pay off big time. So here's some fun trivia for you all, as an example. Back in 1913, Henry Ford installed the first moving assembly line. This new process lowered the price of a car from $850 in 1908 to only $300 about 15 years later. So that moving assembly line meant that, for the first time ever, the average American could actually afford an automobile. Now we've come a long way since implementing assembly lines. And in the new generation of Industry 4.0, [ we've proved ] that. So -- but with this new renewed dream of automation and efficiency, it comes with a steep hill to climb, as you can all imagine. But the truly exciting part of all that is that living the dream is finally within reach. So back to our question, what exactly is Industry 4.0? While the more precise definition that's out there in this industry is the coming together of cyber, physical systems, automation, the Internet of Things and better vertical and horizontal integration. Now most of you are probably thinking, boy, did that sound just like a list of buzzwords. So with that, Carlos, I'd love to pass it off to you, and you being the expert, help our audience better understand Industry 4.0 and what does that ideal state for manufacturing really look like for the IT teams?

Sure, absolutely. So the best way to understand Industry 4.0 is how it manifests itself inside the manufacturing environment, and what are the use cases and applications that are being deployed in manufacturing in the real world. So at the root of Industry 4.0, the goal is to provide manufacturing executives with more data to be able to make more data-based decisions. And in order to do this, they have to connect all the systems that are providing telemetry or data. In manufacturing, you have a lot of legacy industrial control systems. You have a lot of new automation things being deployed such as robotics, cobotics as well as automatically guided vehicles. All these additional systems require this level of connectivity to capture that telemetry in order to make these data-based decisions. You also even have new systems and new networks such as sensor networks being deployed in manufacturing environments to monitor environmental conditions for sensitive products that are being manufactured such as drugs or even semiconductors. And when you add on all of these different systems in order to achieve the connectivity, you need a network or a transformative kind of environment for connecting all these different multiple systems and devices that only Cisco can provide, and that means connecting things from the edge all the way into the cloud. And in doing so, doing it very securely.

And we talked a little bit before as we were preparing for this webinar, we talked a little bit about what that means in terms of sustainability. And you mentioned the circular economy as we were preparing for the webinar. So tell me a little bit about that.

Yes, that's right. Manufacturing network systems have also had to be taken into account the element of the circular economy. This is a top-of-mind concern for all manufacturers. So the point of view of Cisco is to have networking systems that are contributing to that overall circular economy effort. In order to achieve that, that means that we have to extend the life cycle of the hardware products that we produce. And to do that, we have very good systems to support that circular economy initiative of any manufacturer such as providing software upgrades to existing hardware devices, minimizing e-waste, providing recycling programs and affording our customers the ability to use recycled or repurposed products the next time that they have to introduce more equipment into their environment. So the network can actually make a contribution to the overall circular economy efforts of a company.

Got it. So Carlos, what I'm hearing from you is that the ideal state for IT manufacturing really looks like there's a beautiful orchestration of people dreaming it up, processes to optimize and the right technology put in place to make it all come to life and both -- and that gets both into the delivery of applications as well as this achieving sustainability goals. So what I'd love to do now is transition into what that pursuit of this ideal state looks like for manufacturing. So -- but before we jump in, we want to hear from everyone out in the audience. Please find the chat feature and drop us a note. We want to know if you have been piloting or if you've deployed an Industry 4.0 project. We want to know what challenges you've been facing. Were they related to people or processes or technologies? Maybe it could be that you didn't bring in the right stakeholders or the technologies didn't have the interoperability that you were hoping for. You may be surprised to hear that when it comes to Industry 4.0 pilot projects, most of them fail. In fact, the World Economic Forum ran a survey and found that up to 70% of those pilots fail, including applications that you would think would be pretty well adopted by now, such as 3D printing. So Carlos, again, as we are preparing for this webinar, you shared with me 4 major challenges pursuing -- to pursuing Industry 4.0. Can you walk through those with our audience and I think starting with our first one, which is the lack of efficient management.

Yes, absolutely. So when you deploy connectivity at scale, it's important to be able to manage that connectivity. So I gave you an example of all the different systems that are being connected in order to capture the telemetry legacy and new systems and new devices. And in order to understand that, we have this illustration here showing how, over time, manufacturers have deployed these different systems from different vendors. And every vendor could have a different protocol or a different method for delivering telemetry. That means the I/O or the input and output feature to collect the telemetry, that could be wired or wireless with a lot of different protocols as well. So this provides a high level of complexity, and that level of complexity creates inefficient management of the systems that are being connected. So there's no single platform here. And that also creates a difficulty in terms of the inability to scale. So when manufacturers have to add more systems because they're growing or they make an acquisition or they buy a new technology, making the integration of that simpler in the future is also key and that helps with the ability to scale, but complexity drives difficulty in scale. And last but not least, over time, all these different systems and protocols being inefficient to manage also means that they provide security risk because now you have multiple points of entry. You have a difficulty in seeing all the different systems and managing them efficiently. This provides windows of opportunity for risk or even cyber attack.

Yes. hugely important. I want to dial in on something that you said. You talked about scalability, and as IT -- or as organizations are adding maybe new business initiatives or new technology or application, it sounds like the IT teams are kind of bombarded with this, right, with this pressure to scale. So a question for you. What happens to the relationship between IT and their stakeholders they're faced with some of these inefficient management?

Well, I think it just creates a lot of friction because there's multiple platforms to be able to manage. There are third parties that have to be brought into the loop, vendors, in particular, that are providing these systems. There's a training issue in terms of learning all the different systems. And that just creates a lot of friction between IT and operational technology people, and it just makes it more difficult to exist in the workplace. Just like you and I, right, when we're working, we want things to work simply. We want them to work quickly. We want them to be easy to use so that we can get on with our jobs. But when you bring in multiple systems and all this level of complexity, it just creates general friction and that's not good for companies who are on a transformative journey. Remember, we're talking about transforming infrastructure. And at the root of that is a lot of projects and activity that has to happen to get to the end state. And some people would argue the end state is really just the beginning of the journey. But that transformative environment means that you have something that's flexible, that's manageable, that's easy to use and is scalable.

Got it. Right. Thank you for that. So it sounds like inefficient management is even more than what's on the screen here.

Right.

It's that relationships with their stakeholders, which I know we'll get in a little bit more to in just a bit. So let's jump to the next one, which was that lack of visibility.

Yes. So when I speak to customers around the world, one of the first things that they bring up to us is that they have little visibility as to what is connected out into the manufacturing environment. And that means that when there are problems, outages or whether there's inefficiencies or new projects being deployed, team members can't see what's going on and you can't resolve it. And in some companies, the cost of manufacturing their product is $7,500 an hour. And in other companies, like in the automotive industry, it's thousands of dollars per minute. So when those outages occur, people who have lack of visibility can't resolve the outage quickly in order to minimize the impact to the business. So this creates also the inability to drive the collaboration that we're talking about, and also lack of visibility impedes process improvement because if you're constantly dealing with outages and just trying to fix things after the fact, you're really not proactively managing a business, trying to grow it and make it more efficient, right? So improved network performance really comes from better visibility, to begin with, as job #1.

Yes. So something you said was that this impacts the dollars lost basically if you have an outage, as an example. And I love that example because it shines a light on how your infrastructure influences profitability. So given your vast experience working with organizations all over the world, when it comes to lack of visibility in these various attributes that you have here on the screen, is there anything that surprised you about what's maybe most common among organizations? Or is it pretty use case-driven?

I think just the general lack of visibility is the most common. So everyone has this problem because of what I explained before, the complexity of how the networks have evolved in manufacturing companies over time. That complexity leads to a lot of different systems and learning the systems, and lack of visibility is the common denominator for all of that. And if I think about it operationally, what happens in the manufacturing floor is that many times you have to make what's called moves, adds and changes to the assembly line. So when you're running a particular product and you need to run a new product that's a different color or a different size, you may use many -- much of the equipment in the production line for that next production run. So you have to rearrange the equipment physically. And in doing that, you may have to rearrange the network connections as well. And this causes a lot of problems in terms of outages. And we're going to talk about one example of how that happened, in particular, with our customer, Jack Daniel's, and how they resolved it. But that is just the kind of outage that will cause the longer mean time to repair. And the longer it takes to repair something, the more cost to the company. And again, everything goes back to lack of visibility in that manner. Who made the change? How did that change happen? Was it recorded? Did it get reported back up to operations? Does operations have line of sight into that change that happened from the move, add and change on the next production run? Not always the case.

Right, right. I love the example that you gave because it's so visual. And I think even those who may not sit within the manufacturing space and may be listening today can imagine what that must be like. And it's a nice segue, too, to our next -- the next challenge that you shared with me, which is this lack of modern technology, right, to help make some of those changes that you mentioned in your example. So walk us through this one.

Yes. So I'll start on the left-hand side here. There are more and more technologies out there that are causing greater demand load onto the network and this is causing bandwidth constraints. The simple example at home is when we were all at home in the pandemic and those of us who had a lot of people at home in the same house, staying together, had to share the network. And all of a sudden, people who are streaming versus people who were doing work had constraints on their -- on the bandwidth of the network. But in manufacturing, new technologies such as augmented reality or virtual reality headsets demand a lot more from the network. Digital twin applications and AI capabilities, all those things are causing more load on to the network. So many times, those networks were not designed for this new technology. So therefore, more bandwidth is required. And also, things are happening with a greater speed in manufacturing. So there's always the faster robots and faster machines, including automatically guided vehicles being deployed that require very low latency in terms of network packet exchange. And the networks that are traditionally manufacturing are mainly for connectivity, connecting a bar code scanner or connecting some industrial control systems that are designed to fit for use. But when you add in these new technologies like an AGV, automatically guided vehicle, you need low-latency data transfer. And in many cases, you need what's called 0 packet loss because the worst thing you can have happen is, is in that new environment that you were showing earlier with robotics having to move at high speeds and AGV is having to work together with those robots, you don't want any packet loss because when they're running over a wireless network, they need to perform at precision, otherwise, you could have an incident where maybe they could crash into each other and that's bad, right? And at the root of this is -- and at the center of this is cybersecurity risk that we talked about with a disparate network system environment and all these new devices, you literally create holes in the network where you can have a greater attack surface. And that's not good. So embedded security is something that is pervasive. Recently, Cisco won 2 awards, one was for -- they were impact awards, the most modern manufacturing security solution. And the reason we got that award is because we embedded security into the network. So just a little plug there for Cisco, but that's important is to have pervasive security across the new network environment. And of course, we talked about simplification at scale, but another thing and function that people are needing and demanding at the edge is edge compute. So edge compute provides these manufacturing companies to be able to take applications and put them on to devices where the telemetry is being delivered and captured and be able to do low-level analytics for real-time performance of workers needing the data in real time. And you need edge compute at the point of connection as much as possible so that you don't have to send everything to the cloud and have latency waiting for a response of a real-time data analytics. So you can get real-time data analytics if you have edge compute functions inside your network. So these are the kinds of modern technologies that you don't see, but are necessary for all the reasons I mentioned as you evolve into an Industry 4.0 environment.

Yes. What I feel is the most exciting about you walking through this slide is thinking about how all of these various technologies, what they have to offer, so you mentioned AR/VR headsets and robotics. But you mentioned also really critical components about each one of these that have to be in place. And what I've seen, certainly in my history centered around the IoT space and connectivity, is that when something doesn't work, especially when it's an emerging technology, then you get the skepticism about it and it's much harder to see the adoption. So my question for you is it's especially hard to diagnose why something isn't working when in a new technology you're trying to deploy it. So I guess what advice do you have for the audience who may have been burned before by trying to deploy one of these emerging technologies and it didn't work out as they hoped?

Yes. I think that's a great question. And the best advice is from what the most successful customers I've seen do, so it's not just a Cisco thing, although we have adopted this practice and that is to lead with a business use case and then marry the technology to that business use case as opposed to being excited about a new technology and saying, "Wow, this is fantastic. Let me go see if I can use it somehow. I could find some good ways to use it." I think that is one of the reasons that people fall into the trap you're talking about a lot. But rather if -- we see the most success is if you start with the business use case and marry the right technology to it with the right architecture, then you're going to have a greater chance of success.

So digging into our final challenge that you shared with me ahead of time, it was this lack of best practice adoption. So we talked a little bit about adoption of technology and now this is adoption best practice. So walk the audience through this one?

Right. So more and more, these 2 worlds of IT and manufacturing are converging on different fronts and the idea here is to be able to adopt the best practices of both organizations because they both bring some very positive things to the table in terms of best practices. Manufacturers know what they're doing when they produce high-quality products such as the technology we're using here for this webinar, right? These are precision devices that require a high level of skill in manufacturing. But at the same time, IT providers are providing world-class network management capabilities in order to run the networks of the Internet in the world. Just think about it, with our penetration in terms of our market footprint of networking technology across the globe, Cisco has successfully delivered network connectivity for the world's largest applications, businesses, enterprises and even the Internet. And that's a strength that can be leveraged in manufacturing. So also, we provide open standards technology that can benefit the interoperability goals of multiple manufacturing systems that we were talking about earlier, right? Those open standards and flexible operating systems allow for this connectivity. And then also on the industrial side, certifications are very, very important. We do not go to market with our industrial connectivity systems unless they're certified by the vendors who are actually working in that space. This provides another level of interoperability. So collaboration with the ecosystem is another key component. And only the manufacturer relationship can help with that with IT who's trying to connect more things, right? And of course, at the center of it, I keep bringing it up is embedded security solutions. So that's absolutely key.

Yes. It's so helpful to hear you talk through it. So with this lack of adoption of best practice, what do you think is the biggest barrier to -- because of what you're saying sounds really practical and really -- and somewhat easy to do. So -- but I'm curious, what's the biggest barrier to adopting some of these best practices?

Yes. So I think it's the way that organizations are structured creates inherent silos for collaboration and communication and roles and responsibilities. I think those barriers can be hindrances to progression of a transformational infrastructure in manufacturing or achieving your Industry 4.0 goals. So I think those should be overlooked. And when customers have to deploy an Industry 4.0 project or they're looking to deploy, sell a use case, focus on the use case and not on the silos of individual roles and responsibilities and collaboration around that use case will lead to success, 100%.

I'm hearing a theme here around aligning your goals to your use case.

Oh, yes.

And focusing on collaboration with stakeholders, which is a really fantastic segue into our next section. So Carlos, you just walked us through 4 major challenges of the pursuit of the ideal state for IT in manufacturing. Now I want to talk through the path forward, right? So Carlos, you hinted a little bit about some of this already. But the way that we'll do this is looking at 3 real-world examples honing in on these 3 major areas of people, process and technology. So with that, let's skip ahead to now our 3 examples. So again, in preparation for the webinar, you were sharing 3 really fantastic stories with me. Let's dive into the first one, Jack Daniel's, right? We're all familiar with the brand, of course, but tell us about their setup and what they were trying to achieve?

Well, as you said, it's a global brand, very well known and their manufacturing operations in the United States, particularly in barrel assembly, had some unique problems around those outages that we were talking about. So when you're producing these products, you have to make moves, adds and changes in the manufacturing environment, as I described earlier, and that's exactly what was happening inside Jack Daniel's operational technology environment. And the network wasn't as easy to make moves, adds and changes and people were not trained in how to do that. So as a result, they created things like what's called multicasting. Bad multicasting. Multicasting is a good thing because you leverage the ability to send traffic over the same network wire for multiple systems. But when you have too much of that, you can literally shut down the network. So this multicasting was shutting down the network time and time again and they looked to us to be able to help resolve that. And with managed switching being deployed, we were able to provide new tools and capabilities to the users of the network to be able to preempt any of the bad multicasting incidents and properly manage network traffic flow. So network traffic flow are tool sets that we provide in a managed switching environment. So when you're able to extend manageable tools that we talked about earlier from IT down to the shop floor over the industrial connectivity network switch, then you provide new tool sets to the user and you prevent problems from happening. That's exactly what happened at Jack Daniel's. And now they have a managed network. Not only could they manage it at scale, but they could preempt and manage network traffic whenever they make moves, adds and changes.

Got it. Got it. When you made the comment about the network being shut down, what I thought of is what you showed earlier with all of us that when the network is shut down, that digs into profitability. And I imagine that's something that is fairly important to brands like Jack Daniel's. So once they deployed with the modern technology and switching, how do they handle that from a process perspective?

Well, all the users that had access to the network now had new tool sets and they were trained on how to be able to make changes to the network as easily as they were making changes to the manufacturing production lines. So it provided a new level of skill set to the manufacturing worker and being able to easily manage changes to the network as well. So that's key to really provide simplicity to manufacturing so that they can move at speed. To your point, you don't want to have any delays in delivery. And they have a lot of people who are depending on their products, not only the end users, but also they have a complex system of distribution and warehousing customers and those customers are dependent on supplying the products to the end users and consumers.

Yes. And it sounds like the core technologies that you used were modern switching. Is there anything else that you feel is noteworthy to mention?

Well, yes. I mean, we have tool sets such as Network Address Translation and NetFlow management tools inside of our software management platform and that allows for preconfiguration of the network so that this traffic is optimized over the systems that are connected into our switches. So we have validated designs that call out all of those features and capabilities at a managed switch. You see an unmanaged switch is designed to perform 1 or 2 functions. And you set it and you forget it and it performs those functions. This requires that you -- when you have multiple functions above 1 or 2 functions, you have to add more and more unmanned switches to be able to perform all these different functions and you have to physically go in there and make changes. Whereas if you have a managed switch, you have all these feature sets that you can preprogram and deliver that functionality to the edge on to the switch in a software-defined networking manner, right? And all those features and capabilities that IT brings to create a scalable network environment can be delivered down to the manufacturing floor as well. And our validated designs provide all that information.

Amazing. And is there anything you can share on what the result was for Jack Daniel's once they deployed?

Well, they had a lower mean time to repair in terms of outages. They had fewer outages. Overall, they improved their overall equipment effectiveness, which is a contribution to profitability to their business. But at the same time, they had very few delivery issues with their finished goods of their products. So all of those were some very positive outcomes, so both internally and externally to the market and the customers that they serve.

Yes. Fantastic. So Jack Daniel's was a great example of leveraging process and technology. Let's move on to Unilin. So give the audience some background: who are they, what do they do, what do they produce.

Yes. So Unilin is a global flooring products company. They're part of the Mohawk organization. And this particular division in Unilin is headquartered in Brussels, and they produce some of the highest grade floor coverings in the world, both industrial and commercial uses as well as private uses in your home. And they produce a high-quality product and they produce a large variety of product, as you can imagine, because consumers like you and I or people who are in the industry of design, they need a lot of choices, right? So you can only imagine the number of choices of floor products that they provide. And for this, they need a flexible manufacturing environment so that they can repurpose the machines as -- for as many different products as possible. Can you imagine if you had to have a machine for each one of the different varieties of products that they had? It's impossible. So you have to repurpose the machine for a different variety of their products. And in doing that, it becomes very complex to make moves and changes to the production line and it creates a lot of security gaps. And during an audit, it was discovered that they had some OT cybersecurity risks, particularly because they were not managing the network in a way that was creating proper segmentation. And when they went to try to fix the problem, lo and behold, the primary issue with trying to fix it was they had lack of visibility because they had managed -- unmanaged switching and they could not see what was connected to what. So the first step in helping them was to provide them new levels of visibility. And the way that we did this is through our Cisco Cyber Vision tool. This provides an extensive discovery functionality to search around what's connected to the network and then provide that insight to the OT operator or the IT manager to see what's being connected and what is connected to the network. But another thing that we did for them was we provided that visibility and discovery asset inside a managed switch platform. So we use Cisco IE ruggedized products to be able to host the discovery tool software in real time on -- at the edge on all those machines. So this created a new level of visibility and discovery into the environment and show them where all their weak points were. And this was really good to map against the original audit where they found these problems to be a security risk and be very prescriptive about how to resolve that, and that's exactly what they did. They began to use Cisco segmentation tools, Cisco Cyber Vision on an ongoing basis. They deployed more industrial Ethernet switching at the edge that was managed. And then they had a wonderful management platform of greater visibility. And they go on to say that it has helped them with higher productivity, higher throughput and also the ability to make more products at a given production shift per day.

Wow. So what I'm hearing is that their big transformation initiative was around getting more visibility and then they were able to use a large number of Cisco products in order to achieve that. You mentioned managed switching and a number of tools. And then you did mention something about IT and OT, I want to dig in a little bit more about that. Tell me more about like the stakeholder relationship and who they had to bring in to kind of make this happen.

Right. This was a real people story. So this lack of visibility was really foreign to the manufacturing worker who had managed the whole environment quite robustly. But our Cyber Vision tools, which are very easy to use and provide user-friendly interfaces that identify the assets not in an IP address way, but in we use something called pxGrid to be able to provide a characteristic or set of features to an IP address asset, such as the brand model of the asset, the year that it was made, the firmware that's on there, the last time it was upgraded. And this technology gives a user-friendly tool to the OT operator, which really bridge the gap between IT and OT quite rapidly. So they began collaborate very quickly and they deployed this across all of their sites. And it was -- if it wasn't for people provided with easy-to-use tools, I think it would have been difficult for those 2 parties to really work together at scale.

Absolutely. So what I love about the Unilin story is that it's a beautiful illustration of how people, process and technology all come together to make that vision a reality. So let's move on to our last example, that's Krones. Tell us about Krones, what do they do? What was their big transformation initiative?

Yes. So Krones is what we call in the industry an OEM. So an original equipment manufacturer. So when you go into a manufacturing environment and you want to create a business and you want to make a product, you have to have machinery to do that. Now a robot is one thing, but there are other pieces of machinery that provide an end-to-end capability, such as the bottling line that I'm showing here. Something that will take bottles and securely move the bottles without breaking them down a production line and allow them to be filled automatically with the product that it's going to be filled with, and then subsequently labeled and then subsequently packaged. That is called an original equipment manufacturer piece of equipment, right? Let's just use one example as a bottling line. And Krones makes these for manufacturers around the world that use packaging lines, bottling lines, filling lines, injection molding lines. So they can make all these types of equipment. And even in their own manufacturing environment, they had a lack of visibility into the connectivity to their machines. And they started to put in managed switching in order to just get greater visibility of the hundreds of machines that they had in their factory environment, right? Machines making machines. So this led to securely connecting all of the managed machines inside the factory, and it built a trusted Cisco network infrastructure that was highly robust and reliable. The interesting part about this was that Krones then had the idea of how they could embed Cisco switching into the machines that they made for other manufacturers. And the reason they did that is because in their own manufacturing environment, they realized that good visibility led to faster mean time to repair. And when they had to service their equipment that they sold to another manufacturer, they had the kind of visibility that they were accustomed to in their own factory. And this provided for a better SLA or service level arrangement for their customers. Customers were happier because when there -- something always goes wrong, right? Things break, right? We get a flat tire in our car or we -- something happens, the turn signal doesn't work anymore. And you have to send -- you get to take it in for repair or you have to have somebody service it. Same goes for these machines. So under service level agreements, you have to provide a certain level of maintenance and repair for the equipment. And when you put Cisco inside, they realize, "Oh my goodness, I have the ability to service my equipment better and keep my customers happy." So this was a twofold win story, inside Krones and also for products that they manufacture.

I love the fact that they were able to not only achieve the goals related to trying to access better visibility, it's obviously meeting their KPIs from an IT perspective, but extending the benefits to their customers and being able to offer better SLAs. That's got to be doing some nice things from a business relationship and hopefully a profitability perspective as well.

Yes, you can even say that it's even added some level of sustainability to the longevity of the machinery because now you can manage it over the Internet through software connections with secure connectivity.

Absolutely, absolutely. So there's one more story that -- a bonus story that I think you have for us. You mentioned a totally different new trend. Tell me a little bit about that, and I can [indiscernible] as well.

Absolutely. So I would be remiss if I didn't mention anything around wireless technology, which is really sweeping the world right now. More and more devices are becoming wireless enabled, the ability to connect things and provide telemetry capture from wireless infrastructure. And at a global automotive client, we were able to deploy Cisco Ultra-Wideband technology into the environment to provide that 0 packet loss, lower-latency performance networking so that these robotics essentially or automatically guided vehicles can perform at a high level without any interruption to service. You mentioned the Henry Ford assembly line, what it did to bring down the cost. And it also improved productivity in the manufacturing environment because you didn't have workers walking around looking for equipment. The conveyors were bringing the cars to the workers. Well, imagine breaking down all conveyor systems and having AGVs move the vehicles to the destination where the workers are now. What this means is that I can have groups of AGVs coming in and out of the conveyor system, which was previously there, to the production worker and then another set of AGVs bringing in a different product model to the worker. So essentially, you're multiplying the effect of a conveyor system with having AGVs coming in and out of the path where there was a previous conveyor. So this requires a high level of precision in Cisco Ultra-Wideband technology, the only technology can do this in an environment where there's literally thousands of AGVs being deployed. And these kinds of pilot results are here posted in terms of performance. And it is a demonstration of how evolution of technology and connectivity is moving towards wireless, and it is possible. It's a great use case.

Yes. I love this and it really illustrates that art of the possible with wireless infrastructure and opens the door to new opportunities. And I can imagine how the accuracy that's required as these devices are physically moving and bringing the car pieces to the workers. That has to be accurate. You cannot get that messed up. There is too much risk involved in accidents and things crashing into each other. So the fact that we're able to pull this off for a customer with a wireless infrastructure, it really shows the progress that we've made on an innovation perspective. So that's really, really exciting. So I want to quickly share with the audience as well something that I found preparing for this webinar. This is something -- this was an article that was published actually by Audi talking about their technology and how they are innovating to create a smarter factory. So this quote published by Michael Haeffner at Audi. Essentially, what he's saying is that using Cisco's Connected Factory technology, they know that whatever is to come in the next 10 years, they'll be ready for it and they won't be dealing with the bottlenecks that they're dealing with today. So instead, they built, relying on Cisco, this future-proof foundation that withstands the test of time. And I think that really speaks to the volume of innovation that we're seeing in technology. And Carlos, you talked so much about how IT and OT teams have to come together and be able to accommodate all these new business initiatives -- new digital business initiatives or new technology that they need to deploy in order to meet new sustainability metrics, for example. So being able to set yourself up for success, leveraging this foundation, I think, is really critical and something I wanted to share with the audience. So Carlos, though, as the Global Lead for Manufacturing here at Cisco, can you share more about where Cisco is going and what we have to offer beyond some of these customer use cases? I'm sure there's so much more in our portfolio beyond the transforming infrastructure stuff.

Yes. So we've taken a lot of industry polls and information from the marketplace on where customers are really focused to deploy technology. And this formulated our portfolio of manufacturing solutions that we call industry solution use cases. So again, lead with the use case and then the technology will follow. So we mentioned a lot about advanced manufacturing technology and industrial security and industrial automation, both wired and wireless. But we also have some key offers and solutions in our use cases that focus on workforce enablement, the digital worker of the future, and also in the area of supply chain operations. The supply chain operations have become even more critical these days with all kinds of macroeconomic things that happen as well as things coming out of the pandemic. And now we have a complete portfolio of use cases across these 5 pillars of focus areas from what our customers told us are important to them.

Yes. That's really helpful. And then who else is involved in making some of this come to life?

So we depend heavily on our ecosystem of partners that work in the manufacturing space. Traditionally, manufacturing workers and employees and operational technology people don't know Cisco by name or by brand unless they have something at home that they work with. But it's these manufacturing vendors, these ecosystem partners that are well known and trusted in the space. So we have created alliances with these partners. We have created joint solutions with these partners. And we also have go-to-market motions and capabilities with these system integrators across the world. So it's important for us because we can't do everything, but we do provide that transformative technology component that's important in transforming infrastructure, but the ecosystem partners add the other component to it.

Right. So our customers are really able to extend their -- to new use cases or to new digital initiatives with the help of these ecosystem partners. That's very exciting that we're able to do that. Thank you for sharing. So now I'd like to talk about some practical next steps. So Carlos, what's something that our audience can do or maybe a few things our audience can do today to begin their journey to that ideal state that you illustrated at the beginning?

Yes. I think, first and foremost, it's to bring together the people within your organization around that use case or that initiative. Drop the silos of organizational structure and focus around the job at hand, the project at hand, the initiative and the use case at hand and leverage each other's best practices and capabilities and strengths. That's step number one. I've seen this being done at companies to a great deal of success, and I think it's absolutely important. Secondly, I think, at a high level, it's to identify the gaps in achieving those initiatives. So site assessments are important. Unfortunately, in the case of Unilin, they had an OT security assessment and it showed some gaps, but that's what got them started. It was very important. So it's important to do some gap analysis on where you are versus where you want to be, that ideal state that we started with, right? And then last but not least, establish some short-term goals and long-term goals as well. So I'd like to use this expression that I've taken from a colleague of mine is you want to think big, start small but move fast because technology moves fast. Then you should be able to have these long-term goals gradually achieve towards small-term projects and wins and you will achieve that longer-term goal over time.

These are fantastic. And really things that our customers or organizations or those of you in the audience, you can start acting on this today, right, having these conversations, doing that benchmark analysis. So thank you so much, Carlos, for sharing that with the group. One last note that I'll share with everyone is that we'll display some resources on the screen for you to help illustrate how you can start working even with Cisco today as you pursue that journey towards that ideal state. All right. So Carlos, this has been incredibly insightful. It's been such a pleasure working with you on this webinar and having this conversation with you today. So thank you so much for sharing your knowledge with us.

Absolutely, Elizabeth. Thank you very much. It was a pleasure.

Awesome. Okay. Well, thank you, everyone, for spending some time with us today. This concludes our webinar for today.