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Going Hybrid: IIOT in Manufacturing

Big Thinks Magazine April 2021 Hybrid Manufacturing by Jenya Peterson

IIOT (Industrial Internet of Things) is rapidly changing and innovating manufacturing by offering connectivity of assets, linking machines, people, products, and analytics into one ecosystem. 93% of Manufacturers started the IIOT journey. 78% have at least one project that reached “use” stage. According to Deloitte, there are two main value propositions of IIOT: growing the business and operating the existing business more efficiently. The efficiency of business covers increases in the production capacity and employees being more productive.

By the numbers: Discrete manufacturing is one of the top three industries with the largest spend on IoT in 2020, according to Statista (Supply Chain and Utilities are the other top industries heavily investing in the technology). By 2025, manufacturers and suppliers implementing Industry 4.0 tactics are expected to create $3.7 trillion in value, according to research by McKinsey and the World Economic Forum.

Statistic: Spending on Internet of Things worldwide by vertical in 2015 and 2020 (in billion U.S. dollars) | Statista
Find more statistics at Statista

IIOT Value proposition: IIOT implementations in the manufacturing sector are focusing on areas where cost reduction and efficiency improvement can be achieved. Top use cases have been identified in automation, quality and compliance, production planning, supply chain, and logistics, and plant safety and security.

  • Decrease downtime via predictive maintenance – IoT devices capture different sensor points of the machinery (temperature, vibration, etc.) over a period of time, allowing to estimate the current condition of machinery, determine warning signs and transmit alerts. This allows manufacturers to take preventative action before problems occur, thus saving time and money by minimizing damage and disruption.
  • Revamp the process based on data – data that is being collected from the plant floor and analyzed for patterns can be fed back quickly into the manufacturing and maintenance process. This can optimize component purchases and reduce error rates.
  • Remote production control – Covid-19 highlighted the benefits of IoT for industrial systems. The centralized supervision over the machinery in the process of production allowed to reduce the number of people required on the floor.
  • Asset tracking – IoT-based asset tracking helps the producers calculate the usage of movable equipment elements and initiate measures to shorten the idle periods and improve utilization.

Barriers to adoption: 

  • Cost – Companies hesitate to make high upfront manufacturing IT investments in connecting their entire manufacturing footprint to an IIoT cloud. Proof of concept at a smaller scale can mitigate this barrier.
  • Work in Progress – According to the IoT Signals report, 31% of surveyed indicated that they are still implementing a current solution and managing challenges at hand, presenting a delay to further rollout of IIOT.
  • Security Risk – The manufacturing industry traditionally was not subject to cybersecurity threats. With IIOT rolling out rapidly, topics of security risk and data integrity are coming to the forefront of plant operations. If connected devices and systems are not secured properly, hackers or competition can gain access to sensitive information or disrupt operations.
  • Mind shift – a successful rollout of IIOT requires strong collaboration between IT and Operations and upskilling of the factory personnel to enable the use of the new technology. 26% of survey participants point to the lack of human resources to implement and manage IIOT.
  • Leaders vs. Laggards: There is a wide gap between the top and bottom performers, even among companies with large-scale IoT efforts. The leaders report a significant payoff with a positive cost and revenue impact of 15%. The laggards yield less than 5 % of aggregate benefits. Companies aggressively pursuing IIOT rollouts enjoy higher benefits, the effect is leveling off at around 30 use cases. Change to the business process is an essential part of a successful IoT implementation. The use of advanced endpoints is another differentiator between leaders and laggards. Leaders utilize drones, wearable devices, and augmented reality applications, reporting high satisfaction rates with the results.
  • Look ahead: The future of manufacturing lays with the Integrated industrial automation stack – cloud-based IIoT-platform deeply integrated with hardware and factory-level software. IIoT connectivity coupled with data verification technologies such as blockchain is an enabler of the increased traceability within the supply chain. In addition, industry leaders report using AI with their IIOT programs for a range of applications – prescriptive and predictive maintenance, customer experience management, visual image recognition. Change in demand or unexpected commodity shortages can be identified fast and operations adjusted on a remote basis. The high level of flexibility and adaptability to market conditions will differentiate the leaders in the industry and offer unprecedented competitive advantages.

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