Juha Remes’ 4-part blog series discusses the current situation in the electricity market. The second part of the blog series delves into the importance of telecommunications as part of society’s infrastructure.

Telecommunications as part of socially critical infrastructure

All production companies depend on ERP systems. Initially, systems were differentiated, but today ERP systems control production almost all over the world without interruption in a centralized manner.

Almost all production facilities are managed globally through centralized production control, often with SAP. Industrial automation receives raw material calculation, production volumes and cost control through the production control system. In practice, there is no such factory that would run without an uninterrupted connection to the ERP system.

In Finland, electricity consumption has been stable for two decades. At the same time, the amount of data traffic in Europe and Finland has increased more than tenfold.

Now, consumers have had a significant impact on the consumption of telecommunications, but the share of companies will grow exponentially, perhaps even a hundredfold in the next few years. At the beginning of the millennium, industrial production was completely disconnected from industrial automation. Now, the lack of centralized order management solutions causes the competitiveness of the production plant to collapse.

ERP systems control operations in almost all production in the world, whether production is critical to society or not. At the same time, the comprehensive optimization of raw materials and the entire logistics chain is completely dependent on ERP systems. Order management for subcontractors, raw material suppliers, passes between numerous ERP systems, tightly integrating the global production of the whole world with each other. Ordering and supply chains extend infinitely over different suppliers very widely, and the largest global production chains may have up to thousands of interdependent systems. The systems are often accompanied by financial solutions that are used to secure orders, liquidity and invoicing in near real time. A loss of connection with payment transactions very quickly stops the factory in different parts of the world.

In practice, there is no global or even medium-sized factory that would not stop if subscription management buffers for data have been used. These buffers are only enough for a few hours even in the most reserved companies. If the communication to the ERP system’s online cloud is interrupted for a longer period of time, production stops with a delay. With extensive global interdependencies built between ERP systems, ERP problems at a critical subcontractor have a slight delay in affecting the next step in the value chain, and eventually a disruption at one important point in the logistics chain may collapse the industrial production network that is widely connected to the entire world.

There are many suppliers of critical raw materials, critical material refiners whose production is heavily dependent globally, in the world. Some of the actors are related to the physical production structure, and some to the digital infrastructure, the interdependencies between which have hardly been taken into account in the world.

There is no regulation, and there are hardly any standards that go beyond industries. They have been well targeted at each industry, but not across industries. Now all organizations and companies act as they see fit, and very few organizations have started comprehensive preparedness or doing to ensure the TRUE continuity of their own operations  , or even to understand it.

Is the wall between industrial telecommunications and ordinary IT traffic just a myth?

It is believed that industrial production is differentiated from traditional information systems. Automation-related telecommunications live in their own road world, which is not related to traditional internet traffic. New standards for the industrial standards world and the rest of the digital world are coming together. Traditional telecommunications models in industrial production are moving to IP-based models, such as the OPC UA standard.

Simply; A sensor or device developed for the same use need is created more cost-effectively when it can be utilised more widely in industry and outside industry. With the change, industrial production can make wider use of technology that previously could not be connected to internal factory production networks and the number of new IoT solutions is growing globally. The equipment of factories requires more and more extensive connections to the online cloud services of various equipment suppliers. In these, the condition of the equipment is often monitored in real time.

Devices are becoming more and more automated. New types of “turnkey” and “at a monthly price” business model increasingly require maintenance-related entities, where you need to be more closely informed about the condition of the equipment and how it has been used. A turnkey solution requires close maintenance and logistics functionality and that essential verified data related to the operation of the device must be available. This enables maintenance timings and the use needs of spare parts. The more the devices move, the more real-time information is needed. Mobility is also associated with wirelessness. In the factories, the production line is being reorganized, at the same time there is a desire to eliminate unnecessary cabling. The devices work with downloads and the connections are wireless.

With the current model, device manufacturers equip their devices with stand-alone solutions, in which the devices are equipped with SIM cards, or different types of connections are opened to the industrial network to solve the issue. The logistics of SIM cards, functionality in different countries and quality assurance have caused a lot of problems for global operators. The transmission of data over an industrial network has often been easier to implement, but poses ever-increasing security risks.

Initially, data was needed to analyze the condition and use of devices, but in the future, connections moving in both directions will be needed. The connections must be able to adjust or even control the settings related to the devices, as well as be able to update the “firmware” operating systems of the hardware. The need for updates increases due to security risks, but at the same time due to quality problems. New requirements, such as the EU Cybersecurity Act, AI Act, IoT security CE requirements, NIS2 and similar requirements on different continents, are also becoming more common and changing rapidly. Support for all IoT devices must be available in the EU for at least five years, including security updates, under threat of a fine. The fine is determined by the GDPR models already learned. In the future, fines will become more common and increase corporate responsibilities in the own industrial sector, but also increasingly cross-sectioned with binding general rules on safety, continuity, responsibility and security of supply.

Complex technical environments are almost impossible to test in advance. There are so many devices and different types of applications in production that it is not possible to isolate and export to test environments. The functionality of individual devices can be tested in the laboratory, but the constantly changing production environment complex with the coordination of different systems and the need for updates must be realized in production. Functional adjustments and improvements have to be made on the basis of analytical data obtained in production. This makes it increasingly important to develop transparency between actors. Responsibilities, dependencies, information security and the direct and indirect effects of quality between different actors must be easily monitored and updated. In the end, the fulfilment of regulations and regulations will often be divided between several actors together.

Link to finish version:

https://uutishuone.pwc.fi/liikummeko-energiakriisista-kohti-tietoliikennekriisia-tietoliikenne-osana-yhteiskuntakriittista-infrastruktuuria