Pirelli’s Annual Report 2017 has the title Data Meets Passion. This reflects the digital transformation currently taking place across the company – from the factory floor to customer- relationship management – fuelled by Pirelli’s ongoing passion for innovation. It is a process that combines the potential of state-of- the-art technology with a people- centred approach and a commitment to corporate development. Pirelli’s Annual Report 2017 offers the stories of five Italian digital businesses – a kind of “Made in Italy 4.0”. Some of these entrepreneurs are harnessing technology to bring traditional crafts up-to-date from tailoring to upholstery to making surfboards. Others are using technology’s potential to address current problems – whether to transform our relationship with food or protect the future of bees.
Pirelli called on the leading Italian illustrator Emiliano Ponzi - who collaborates with some prestigious publication Italian and non (like New Yorker and New York Times and many others) - to provide an artistic interpretation of these stories using a 3D virtual-reality painting app. Clearly the impact of digital technology is being felt not only by companies, but also within wider society and the personal lives of individuals. So Pirelli commissioned three internationally-renowned authors, known for their expertise in analysing and interpreting the contemporary scene, to share their thoughts on current trends. Read on for the insights of English writer Tom McCarthy, Pakistan’s Mohsin Hamid and Ted Chiang from the United States. So welcome to the world of digital, where data meets passion.
As a company founded in 1872, Pirelli has made the most of each new technological revolution – from electricity to automation. Now it is harnessing the possibilities of digital technology to become data-driven, something that reaches into its factories, its products and its relationship with customers.
A WORKER WHO HAD PREVIOUSLY OPERATED A MACHINE WAS NOW LOOKING AT DATA, INTERPRETING IT AND PROACTIVELY TAKING STEPS TO AVOID POTENTIAL ISSUES.
Pirelli only started its digital transformation process a year ago but already some pleasing – and surprising – results are emerging. It is here, in fact, that some workers who work on machines are involved in the transformation process that, through the use of data and calculation algorithms, aims to anticipate problems rather than react to solve them. At the forefront of the process are Pirelli’s factories where some machine operators are now using data to anticipate problems and solve them rather than simply react to them. It is an example of the vital part Pirelli’s people are playing in the company’s digital tran- sformation – taking the technology in new directions and making new things possible. Smart manufacturing is just one of a series of digitalisation projects to have been started since November 2016 – others include forecasting, marketing and customer relationship management – and it demonstrates the far-reaching impact of the new approach as the company starts on its digital journey. Initially everything was run by a smart manufacturing team from Milan, but when the team visited the factories and started demonstrating how the digital tools could be an advantage some factory colleagues sought to make their own contribution. They wanted to know how it worked and started proactively to propose additional things they wanted to have, all the time supported by a change management programme called Manufacturing to Digital – or M2D – which aims to build a digital culture based on lean principles.
THE ULTIMATE GOAL IS TO CREATE A DATA-DRIVEN CULTURE
Now some factories have smart manufacturing teams who are customising what they want in the plant, and sharing information and best practice via WhatsApp and Yammer groups. This has been a boost to the workforce as well as factory efficiency and productivity, with lower scrap and less unplanned maintenance. And it is having a domino effect across the company. Today some Pirelli plants are equipped with systems for displaying the parameters relevant to each individual process, such as the vulcanisation times for a given tyre. This enables the machine operator and the factory engineers to intervene in real time if the process is not proceeding as planned. Some workers are equipped with wearable technology such as smart watches to supply them with key data. While our virtual reality training programme – PLAY 2.0 – is being used to further accelerate the improvement process. In the future the factories will continue to evolve towards predictive maintenance, harnessing the power of artificial intelligence. The plan is to connect the data coming from Pirelli’s factories around the world with the ultimate goal of creating a data-driven culture and an integration of the supply chain inside and outside the factory.
The enthusiasm of the manufacturing workforce has shown what can be achieved with people at the centre of the digital transformation. A major training and development programme is underway across Pirelli to explain the changes and support a shift towards a flexible, “digital” mindset and a more data- and customer-driven approach. There is no doubt that the switch to digital involves more than just adopting new technology – Industry 4.0-style – it also requires changes to the whole company from the cultural, organisational and managerial perspective. That’s why it has been vital to have strong endorsement from the very top of the company in the shape of executive vice- chairman and CEO Marco Tronchetti Provera for what is set to be a quite long process.
IT’S PIRELLI’S LONG RECORD OF WORK ON DIGITAL TECHNOLOGIES THAT IS MAKING THAT FUTURE DATA-DRIVEN APPROACH TO THE CUSTOMER POSSIBLE
The most challenging part is changing how Pirelli approaches the customer and it’s the company’s long record of work on digital technologies – and its passion for research and development and pushing boundaries – that is making that future data-driven approach to the customer possible. Pirelli’s scientists and researchers first dared to dream of the intelligent tyre – gathering and relaying information from the only part of a car in contact with the road – more than 20 years ago. The first three related patents were registered in 1999. Since then, Pirelli’s Cyber Technologies team has collaborated with a series of prestigious partners, including the Milan Polytechnic Foundation for Smart Mobility and Berkeley Wireless Research Center, adopting the latest technologies as they emerged – and filing 300 patents along the way.
A car owner in Los Angeles, for example, can install P Zero tyres with Pirelli Connesso, open an app on his mobile phone and check on their car’s tyre pressure, temperature and wear. The same app can also show her – or him – figures for any other Connesso- connected cars in their garage. With this kind of data available it is then possible for Pirelli and its partners to offer consumers a range of services for the first time, in particular around roadside assistance and tyre related servicing. Car manufacturers are interested in information provided by the intelligent tyre about the car’s static vertical load and “Tyre ID” which can be used to optimise the car’s chassis control system to improve safety and performance. The static vertical load – the downward force applied to the tyre – is particularly useful for makers of electric cars as by knowing the car’s accurate weight, the vehicle’s central control unit can calculate more precisely how much longer the battery will last before needing a recharge.
The Tyre ID – a record of the tyre’s brand, size, load capacity, and more – makes it possible to offer new services. For example, the car could remind a driver using summer tyres that it is November and time to switch to winter tyres. If your tyre has a puncture, a repair team would be able to check the Tyre ID via the Cloud and come directly to where you are with a suitable replacement, ending the cycle of wasted time and money involved in taking a car into a garage.
THE CAR COULD REMIND A DRIVER USING SUMMER TYRES THAT IT IS NOVEMBER AND TIME TO SWITCH TO WINTER TYRES
In the future a tyre dealer will be able to come and change your tyres while you are having dinner with your family, so that in the morning your tyres will be mounted and ready to go. Pirelli’s relationship with its partners – such as tyre dealers – will become even more important as the data coming directly from the end user can be processed and interpreted to provide better products and services. For example, data on tyre wear helps to predict the demand for tyres. Pirelli can then suggest to a dealer how to optimise the type and number of tyres it needs in stock. The dealer will also be able to know when to contact a driver – via Pirelli’s dealer portal which is currently being built – to tell them that their tread wear is high and they need to change their tyre. So the dealer can contact the end user directly and make an appointment to do that.
These data-driven insights are changing Pirelli’s relationships with its customers; they are also changing the nature of Pirelli itself. Including the existing IT department, the Pirelli Digital team has grown to 300 people, the majority of whom are based in Milan. Here people with new competencies and skills – such as Full-Stack and UX developers – will manage the data science and algorithms driving the company, along with its major digital projects, as well as develop its customer-facing digital platforms. The new office will be in keeping with Pirelli’s digital philosophy – open-plan offices, hot-desking and rooms designed to encourage teamwork and agile thinking.
DATA-DRIVEN INSIGHTS ARE CHANGING PIRELLI’S RELATIONSHIPS WITH ITS CUSTOMERS; THEY ARE ALSO CHANGING THE NATURE OF PIRELLI ITSELF.
All of which demonstrates Pirelli’s commitment to developing a transparent data-driven approach and decision-making process with horizontal teams that are all working together, and a focus on listening to customers and creating value for them. When this is blended with the company’s core experience in tyre production and R&D and passion for advancing the future of mobility, it promises a powerful digital future.
Mohsin Hamid writes regularly for The New York Times, the Guardian and the New York Review of Books, and was named one of Foreign Policy's 100 Leading Global Thinkers in 2013 and was a 2017 Man Booker Prize nominee. He is the author of the novels The reluctant fundamentalist, How to get filthy rich in rising Asia, and Moth smoke; and a collection of essays, Discontent and its civilizations. Born and mostly raised in Lahore, he has since lived in between Lahore, New York and London.
Tom McCarthy lives in London, where he was born in 1969. He is known in the art world for his role within the avant-garde International Necronautical Society (INS). His novels include: Remainder, Men in Space, Tintin and the Secret of Literature, and C (Bompiani, 2013). He was shortlisted for both the Man Booker Prize and Walter Scott Prize in 2010.
Ted Chiang is an award-winning writer of science fiction. Over the course of 25 years and 15 stories, he has won numerous awards including four Nebulas, four Hugos, four Locuses, and the John W. Campbell Award for Best New Writer. The title story from his collection, Stories of Your Life and Others, was adapted into the movie Oscar- winning movie Arrival, starring Amy Adams and directed by Denis Villeneuve. He freelances as a technical writer and currently resides in Bellevue, Washington, and is a graduate of the Clarion Writers Workshop.
The dream is to keep alive a manual art handed down through the generations. Technology is the means that has made it possible. Veronica Druetta and her brother Gabriele are upholsterers from a three-generation family tradition: their grandfather Matteo founded the business in 1953 and their father Antonello still runs the company, based in Moretta, between Saluzzo and Alba - «the Piedmont slow food triangle» as it’s known. In 2012 the pair decided to enter the profession as well. Veronica was still very young (she's now thirty) and her career path seemed to be leading in a completely different direction: after studying languages she began work as an interpreter, and she spent some time living abroad. For his part, her older brother had studied architecture. Then something clicked, and the two of them chose this profession with the aim of bringing it into the new millennium. They equipped themselves with a 3D scanner and a parametric software package. One of the difficulties in traditional upholstery is that to upholster an item of furniture you first need to take measurements and carry out tests, a preliminary phase that takes time and is even needed just to prepare a quote: consequently the profession is becoming increasingly unsustainable. By using a simple three-dimensional scanner, however, Veronica and Gabriele can create a model, complete with all measurements, in just a few seconds.
In 2016 their company was selected for Botteghe Digitali, a project to assist in the training and advancement of outstanding Italian craftsmanship. The word upholsterer is rather reductive to describe what they do: they not only upholster furniture but also design it, working with prestigious architectural practices; there are also collaborations with art galleries. The algorithms in the software enable them to modify their designs in situations in which one small adjustment would require complex calculations in a short space of time. These savings in time and energy are enabling them to take «an endangered skill», as Gabriele defines it, and to make it compatible with a globalised market. Veronica’s linguistic knowledge, and her experience abroad, allow them to communicate directly with international customers and suppliers. Innovation and tradition also coexist in the materials they use: the Druetta siblings know how to work with the most classic velvets and horsehair padding, while simultaneously experimenting with 3D printed fabrics, polymer gels and original textures They love eclectic combinations, using fabrics designed for fashion, technical clothing or medical applications. They seek out innovation, says Veronica, but with an age-old spirit. «We go to trade fairs, we knock on doors, we seek direct contact with anyone creating interesting things». They dislike the rhetoric of progress as an end in itself. Digitalisation has revolutionised the design stage, but production is still done by hand. Nonetheless they look with great interest to augmented reality applications such as Google Tilt Brush, the virtual paintbrush that enables the creation of 3D designs. But technology is simply the means: the goal is to do things well, in the pursuit of beauty.
Having originally embarked on academic careers, Niccolò Calandri (engineer) and Riccardo Balzaretti (biologist), have resisted the allure of the “brain drain” to take a risk, focusing their efforts on developing an idea entirely their own and applying it in the place they love most: the Italian countryside. In so doing they’ve invented a unique new profession: a cross between an IT specialist and a vet with a mission to prevent diseases in beehives. It seems that the two of them were struck by the famous warning attributed to Einstein: «If the bee disappeared from the surface of the earth, man would have no more than four years to live». The beehive has been exalted as a model of the perfect society since the times of the ancient Romans, and Pliny the Elder praised the perfect organisation of that humming factory. Only in the seventeenth century, however, was the discovery made that the boss of the beehive is the queen bee, and this mythologised bees still further as the symbol not only of hard work but also of a matriarchal society. The post-industrial world has somewhat lost this fascination for bees and everything they represent. As a result the work of the beekeeper has been undervalued , and the fact that honey is seen as a luxury product has also not helped. In the past twenty years the health of bees has also declined as a result of diseases linked to intensive pesticide use, and the dramatic condition of the species is now leading them to take on a new symbolic role: not so much as hard-working citizens of an ideal community but as the guardians of the world, whose work is channelled not just into productivity but above all into protecting the environment.
For many years beekeepers limited the problem using antibiotics, but fortunately these are now illegal in Europe. Without antibiotics the only way to save the bees is through preventative measures. And this is where 3Bee enters the scene. The electronic IoT device produced by the startup is a system for optimising the welfare of bees: it's like having somebody watching over your beehives day and night, monitoring pa- rameters like the temperature, the humidity and the vibration of the hive, which is rather like a human cough: if the bees are not well the beat of their wings changes. Through the Hive-Tech platform the be- ekeeper is constantly kept up-to-date on any abnormalities that might disturb the peace within the hive. 3Bee began to distribute its technology on an experimental basis a few months before its official market launch in March 2018. As many as 500 devices have already been sold in Italy in the first days since the launch, coinciding with the start of the beekeeping season. The startup now forecasts a distribution rate of around 100 to 200 devices a month until October, when a new peak in demand will occur. Italy is the main theatre of activity for the two young partners who, having abandoned their scientific careers, have also made the emotional decision to remain in their country of origin. But they are also already exporting to Moldova, Romania, Russia, Germany and South America, and all with a staff of only four. The words of the poet Franco Marcoaldi, dedicated to a child beekeeper, spontaneously come to mind: every beehive / is clear proof / of the supremacy of insects.
Expanded polystyrene is initially cut by hand, and is then glued to two lateral components in cork. When the glue has done its work and after two days left to set in the workshop, a technician places the as yet unsculpted form into the shaping machine. The vision begins to take shape, evolving from a mathematical representation in 3D software to a physical draft of the almost finished product. A scrubbing and resin coating stage is the final operation, entrusted once more to human hands. This is how AlterEgo surfboards enter the world: «Working as an architect I’ve always been a bit more interested in designs with a strong physical element. I love the physicality of materials, the way they change and interact to give shape to the concept in my imagination», says Luigi Salustri, co-founder of AlterEgo Surfboards. A youthful-looking 58 year-old, with a slightly unkempt dark beard and the healthy tan of a surfer, Salustri was born and raised in Rome where he has worked in architecture, scenography and set design. In early 2017 he moved to Alghero to open the AlterEgo workshop. «From the moment I decided to found the company my idea was to build surfboards ecologically, using recycled and recyclable materials and working in the most environmentally-friendly way possible». The story of AlterEgo is typical of a garage hobby that became a business opportunity. Salustri started crafting surfboards in his youth, as a passion, but never imagined making much out of it. He was just a surfer who wanted to try his hand at creating the tools of his long-time hobby. Then his friends started asking questions about those beautiful surfboards: could they buy one? The seed had been sown. The decisive impulse came from Smart&Start Italia, a government initiative offering grants and zero- interest loans to new companies that combine a digital element, an innovative idea and a concern for environmental sustainability.
For AlterEgo respect for the environment is of central importance, driving both its choice of materials and its manufacturing processes. The use of cork as a structural element, for example, is not common practice in the industry. Salustri chose it both for the natural visual touch that it gives the boards and for its typically eco-friendly characteristics compared to more traditional choices such as carbon fibre or aramid (commonly known as Kevlar). But then there’s the polystyrene, a key component with a markedly non-ecological production process. To get around this problem AlterEgo sources its polystyrene exclusively from a recycling plant located 40 km from the workshop. The waste materials produced by the shaping machine (a made-to-measure CNC lathe designed and built by an Italian engineer using steel from Terni, German-made electronic boards and high-precision Japanese microchips) are also fed back into the recycling loop. The bio-resin used to finish the surfboards, produced exclusively from vegetable oils, is also one of the most environmentally friendly solutions currently available.
Once upon a time buying a made-to-measure suit was a privilege reserved only to aristocrats, the wealthy and show business celebrities. Then over the years it came within the reach of increasing numbers of people. But never before has it been possible to imagine designing your own clothing, having it made and taking it home. This is now possible with Differenthood, a startup founded three years ago by Riccardo Bigio in Milan. «My father has always worked in the silk business in Como, while on my mother’s side we have a tailor’s shop that was founded in 1856» says Riccardo, an engineer by training who, until a few years ago, worked as a strategic consultant; he always dreamt, however, that one day he might set himself up in a sector that seems an unavoidable passion given his family pedigree. A pedigree that evokes an era, the 19th century, in which gentlemen (and gentlewomen) would entrust their custom to a tailor’s shop to create exclusive garments. Tailors and dressmakers often copied the patterns of the most celebrated stylists or tailoring houses, bringing the style of the great capitals to the provinces. Now, however, everybody can be their own tailor and designer rolled into one. No particular skills are needed: customers choose from a “base” of overcoats, suits, jackets, trench coats and shirts. They then personalise the shape of the base by choosing their preferred variants: lengths, collars, pockets, cuffs. At this point they choose the fabric and add buttons, buckles, inserts and other accessories. And as if by magic the garment is ready, seemingly produced by the skilled hands of a tailor from another era. But with the convenience of today. Differenthood is also working on another way of assisting the choice process. «Our idea is to provide a box: when you register we send a set of garments in different sizes to your home, with samples of fabrics. You keep them for a week to ten days, then when you’ve chosen you can order online. It isn’t rocket science but nobody else is doing it», says Riccardo.
Another possibility not available to the customers of 19th century tailors was sharing: with a catalogue of five thousand fabrics, which crossed with the different design variants enable up to a billion different combinations, each garment is absolutely unique but can be shared with other customers. Earning money in the process: «If someone wants the same garment as you, exactly as you designed it, you as customer-designer take a percentage». It’s fair that you be paid for the copyright», says Riccardo. The tailoring service provided by Differenthood also achieves another ideal aim, at least for company management: the absence of warehouse stocks. And the prices, thanks to the lack of intermediaries, are also 40% lower than for traditional fashion. Once your unique product has been designed it generally takes around 3-4 weeks for it to be made. Shirts are made up in Bergamo, and suits are produced in Rome. «My dream has always been to create something of my own, starting from zero», says Riccardo. “I’ve been working on the project for a long time, including at night during my previous job. Then I took six months’ leave before giving in my notice to open Differenthood». Now his dream has become reality. Technology and courage have enabled him to continue an ancient profession, but with a modern twist.
Innovation, in the guise of blockchain technology, combined with the most ancient element of all, the soil. This is the connection that two young Italian entrepreneurs have made the cornerstone of their partnership. An idea that brings agriculture to the 4.0 stage, creating a direct connection between growers and consumers. It’s called Demeter.life, and is a platform or line that enables people to rent a portion of land anywhere in the world, a “micro-field” cultivated by the local farmer under the directions of the customer, who can then decide whether to personally pick up the products or to have them sent. The project was launched in 2016 by two friends in their thirties, Marco Mettimano and Luigi Tonti, respectively CEO and Platform Advisor of Demeter.life. In 2013 Mettimano lived in China, where he was involved in investment activities in the automotive and photovoltaic industries. For his part Tonti took over his family’s farming business in Puglia two years ago, and in doing so he realised that the majority of earnings in this sector are taken by the intermediation system. «This led to the idea of the platform which, by cutting out the middle men, would ensure higher profits for farmers, lower prices for buyers and at the same time a relationship based on trust», says Mettimano.
It was a dream with very genuine roots, but it still lacked an important piece of the jigsaw. Producers, even if in good faith, could have been able to modify the production process without letting consumers know, or - even worse - could have falsified the products. «We needed to find a guarantee system – admits Mettimano – and this is where the blockchain came in». It’s the same underlying technology as that used by cryptocurrencies like Bitcoin, and is developing strongly in the agrifoods sector. It works like a database that stores information online in a sort of ledger, impeding any kind of manipulation, and through this the activities of producers on their micro-fields are monitored at every stage. The startup has launched its own cryptocurrency called Demeter Token, which can be used to purchase all the services offered on the platform. «It’s a indispensable tool both for the supply chain and for self- financing», comments Tonti. Adding expertise in the healthy nutrition sector is Arianna Vulpiani, the startup’s Business Development Manager. In 2017 Vulpiani founded the BioFarm Orto project, a sort of garden produce sharing system that enables consumers to rent remotely and then personally harvest vegetables grown by small farms. This too led to the idea of the micro-field, which was then developed by the Demeter portal using the blockchain. Prior to the beginning of enrolment requests have already come in from 23 countries, from Asia to South America And in Italy there are already a number of farmers, accounting for a total area of about a thousand hectares, who are ready to use the platform. It’s an example of how technology is enabling a small revolution in the way we think of, consume and experience our food every day.
Emiliano Ponzi is one of today's leading illustrators. Every afternoon of his childhood was passed sitting at a table drawing, his feet not even touching the floor. Now, Emiliano Ponzi draws at a table in a large studio he shares with other creatives in Milan. He spends a few months every year in New York, where he has received nu- merous awards including three gold medals from the Society of Illustrators, as well as silver and merit ones. He is also the only Italian to have won the Art Directors Club Gold Cube in the Big Apple. You have very probably had your hands on an Emiliano Ponzi work as they feature on the covers of prestigious publications, Italian and non-: the New York Times, New Yor- ker, Le Monde, La Repubblica, Esquire and Vogue, to name but a few. His clients also include institutions such as the Triennale di Milano and MoMA, for which he recently illustrated a New York subway map book. His painstaking daily practice has spawned an unmistakable style of simple strokes and pastel shades reminiscent of Edward Hopper. His are concise, elegant metaphors - be they cover illustrations for a series of Bukowski books, murals for a Milan metro station surrounded by Isozaki, Libeskind and Zaha Hadid skyscrapers or the latest cover of the Pirelli magazine World. However, if you ask Emiliano, his finest illustration is always the one he is going to draw tomorrow.