Manufacturers Must Strategize to Incorporate the Industrial Internet of Things (IIoT)

August 8, 2016

Recent breakthroughs in a number of advanced technologies are making the Industrial Internet of Things (IIoT) a reality today. Gartner predicts that by 2021 one million IoT devices will be purchased and installed every hour. Given the vast scale of this trend, manufacturing firms need to strategize for this new normal or risk becoming targets for digital disruption. After revolutionizing other areas of the economy, digital disruption is now making waves in manufacturing, forcing manufacturing firms to get serious about information technology. Recent innovations allowing for economical application of information technology in factories are changing industrial production all over the world. Rapidly advancing technologies such as predictive analytics, machine learning and cloud computing are converging to form the IIoT.

Industrial Internet of Things IIoT - Top Applications and Value Adds

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Predictive Maintenance Boosts Factory Uptime, Lowers Costs

By collecting equipment usage data from device sensors, maintenance teams can more efficiently schedule equipment repairs and replacements. Changing the dynamic of equipment repair from a reactive one to a proactive one, where problems are anticipated and prevented, can significantly increase the uptime of production lines. Analyzing diverse and complex data sets with advanced algorithms and cloud connectivity makes this possible on a large scale today for the first time. Lower maintenance costs, increased uptime for production lines and a safer work environment are some of the tangible value adds achievable through applying this technology. The resulting gains in operational effectiveness can be significant as these solutions are spread across the enterprise. Bosch contracted with Cisco to connect their industrial tools to an IIoT architecture to improve production quality and worker safety. The solution has enabled Bosch to automate routine tasks, such as replacing worn out drill bits, and usage data from connected tools is used to measure and track things like torque applied, or even whether or not the right tool is being used, leading to higher levels of quality and safety.

IIoT Leader General Electric: Fostering an Industrial App Economy

GE has made significant investment into IT development due to its wide ranging application across its business units. It opened the Global Software Center near San Francisco and now employs 1,200 developers there. Approximately 10,000 more developers are employed in GE’s business units, which highlights industrial software’s strategic importance there. In 2015, GE launched its primary initiatives into IIoT, a platform called Predix, and a cloud-based developer ecosystem,, to support the development of IIoT applications. This IIoT solution has recently been made available to external parties such as Boeing, claiming to deliver the same 10-20% bump in productivity that GE itself has realized with internal IIoT applications. GE’s Chief Digital Officer, Bill Ruh, has talked of an “emerging industrial app economy” which poses an unprecedented opportunity to transform industries. GE’s transportation facility in Grove City, PA has reduced unplanned downtime by 10-20% by equipping machines with sensors to monitor operating conditions and relaying and analyzing that data to improve performance.

Rich Opportunities Loom for Optimizing Production with IIoT

Today’s factories produce enormous amounts of data, but many data streams aren’t sufficiently integrated and, therefore, aren’t as useful as they could be. Combining available production data in an integrated software solution and developing the right analytical tools to make those data streams useful for decision making is critical. Optimizing production with an IIoT solution first requires firms to identify what type of data they need, and second, to identify from where it can capture that data. The next step is to develop or outsource IIoT infrastructure and associated software applications to bring those data streams to life. Of course, internal support of IIoT efforts from pilot stage to later stage scaling up is necessary to capture the full value of optimization. Identifying areas to improve production in the average manufacturing facility and crafting an IIoT strategy must be a collaborative effort, combining the process expertise of manufacturers with the IT expertise of IIoT supplier firms to achieve best results.

IIoT Leader Intel: Accelerating IIoT Development by Linking Legacy Equipment to the Cloud

Intel’s position as a leading chip maker, and a founding member of the Industrial Internet Consortium, has prepared them to make a strong push into the IIoT supplier space. In fact, the company formed an IoT business group in early 2015 to focus on strategy and initiatives. Its latest offering is the SmartLink Technology platform—a hardware/software stack specifically designed to be used with any type of machinery—announced in March 2016. It acts as a management and security proxy for unconnected, legacy devices, does light analytics and data transformation. The platform is fully customizable through a Java-based software developer kit.

Intel deployed an in-house IIoT solution in one of their semiconductor plants in Malaysia to troubleshoot its IIoT infrastructure before making it commercially available. The factory was fitted with sensors to collect data, gateways to transmit it and analytics software to deliver real-time insight from their CPU modules, devices used in the final steps of the assembly process. The result was a reduction in the number of machine failures and an increase in assembly line uptime, which have resulted in higher yields.

Opportunities to Unlock Value with Supply Chain Optimization Abound

Gains in productivity by streamlining inventory management and distribution processes can quickly add up to sustainable competitive advantage in a manufacturing industry where tiny performance margins can be the difference between success and failure. Companies are collaborating with third party vendors to design innovative systems leveraging IIoT to automate and optimize critical parts of their supply chains in an effort to achieve crucial gains in operational efficiency. Wurth USA, an automotive parts supplier, implemented a system called “iBins” that uses smart camera technology to monitor supply levels to inform an inventory management system which automatically reorders supplies as they are depleted. Such IIoT-enabled inventory tracking systems can save on costs associated with inventory management and storage.

IIoT Leader Cisco: Betting Big on IIoT With Acquisition of IoT Firm

Cisco’s strength in networking equipment and architecture has solidified their position as an IIoT supplier, however they are actively pursuing a strategy to become more a competitive one. In early 2016, it acquired Jasper Technologies, an IoT services firm with a large customer base and experience managing and automating the lifecycle of IoT services solutions. Cisco’s IIoT offering is comprised of the Connected Factory, Connected Machines and the Connected Supply Chain, all of which leverage Cisco’s proficiency in network connectivity and security. With the addition of their recent acquisition, expect Cisco to improve and expand their service offering in the IIoT space in the near future. Stanley Black & Decker fully connected an entire production line in Mexico with the help of Cisco and AeroScout Industrial. They developed a Real Time Location System by attaching small Wi-Fi Radio Frequency Identification Devices (RFID) tags to materials, tools or virtually any object, giving workers real time information about location and status of critical materials. The system has allowed Stanley Black & Decker to gain more insight into how to increase efficiency and lower storage and inventory management costs.

Conquer IIoT Strategy Development Armed with Information

Adjusting operations to the digital era requires an informed strategy, supported with insights into the competition and the IIoT services market. If the IT world is any indicator, expect this market to evolve quickly. Manufacturers with the foresight to utilize the power of information have the opportunity to change their businesses for the better. An investment in IIoT is a smart bet on technology with myriad uses, but making sure that bet pays off is a more complicated matter. Considering challenges of digitizing operations, selecting the right partner firms and targeting investment where it will have maximum ROI are important factors for any manufacturer venturing into an IIoT implementation in the era of Industry 4.0. For more insight into IIoT implementation strategy, download our complimentary report.

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