IoT Impact on the Manufacturing Industry (Part 1)

“Industry 4.0” and “Smart Factory” are some of the terms used to describe the technological and social revolution that promises to change the current industrial landscape. Industry 1.0 was the invention of mechanical assistance, Industry 2.0 was mass production, pioneered by Henry Ford, Industry 3.0 brought electronics and control systems to the shop floor, and Industry 4.0 is peer-to-peer communication between products, systems and machines. It is clear that IoT will have a different impact statement depending on the application and/or industry, one that is of particular interest, given the emphasis on process, is Manufacturing. Compared to other realms such as retail and its intangible ways, manufacturing is about physical objects and how we can bring them to the consumer in a more efficient and automated way. The manufacturing landscape is ever changing, with automation through robotics the most recent enabler.

Challenges and Possibilities of IoT and Manufacturing 1

Gartner analyst Simon Jacobsen sees five immediate challenges and possibilities posed by the IoT for the manufacturing industry1.

1. CIOs and manufacturing leads will have to move even more rapidly

Jacobson says manufacturers have moved heavily toward individualization and mass customization as part of the luxury of connected products. But in order to enable that, you have to maintain alignment with supply management, logistics functions and partners to make sure all service levels are maintained: “I have to have knowledge of my processes and optimization of my processes at a hyper level, not just simply understanding at week’s end or at the end of the shift where I need to make adjustments and improve,” Jacobson said.

2. Security must be reimagined

A connected enterprise means that you can no longer simply physically secure the facility but should blend approaches of mobile and cloud-based architectures with industrial, control and automation, ensuring information is being managed. Jacobson says the challenge will be to merge the skills of engineers and process control teams with IT and more importantly, unify their disparate approaches to security.

3. IoT will create more visibility in process performance

There’s always been a form of automation and control in manufacturing, but implementing new business applications powered by IoT will allow you to connect devices to the factory network and know tolerances: “Being able to connect those dots and derive contexts of how processes are performing is absolutely going to be where the return on investment is coming from,” Jacobson said.

4. Predictive maintenance can generate revenue for OEMs

Asset performance management is of high value today. This is the ability to drive availability, minimize costs and reduce operational risks by capturing and analyzing data. Original Equipment Manufacturers (OEMs) have already started creating revenue by using IoT-enabled tools like predictive maintenance in order to guarantee uptime, outcomes and certain levels of performance for the customer: “When you guarantee these kinds of outcomes to the customers, you have to look at this from two different perspectives, how I monetize this but also how my customer monetizes this,” Jacobson said.

5. Production will play a new role in the manufacturing value chain

The boundaries between the physical and digital worlds are blurring. Chief Information Officers (CIOs) and manufacturing strategists can use the IoT, big data and cloud to redefine the role production plays in the manufacturing value chain. It no longer has to be restricted to being a cost center, and this has all to do with the new ability to not just accelerate but innovate on the factory floor. It’s the CIO’s challenge to keep pace with these new competitive changes.

Figure 10: Real Time Intelligence on the Shop Floor [2]
Figure 10: Real Time Intelligence on the Shop Floor [2]
In my next blog post, I will continue this discussion on IoT and Manufacturing, giving further use cases, and outlining the building blocks for IoT in Manufacturing.

References:

1: Gartner Best Practices for IoT in Manufacturing

https://www.gartner.com/doc/2899318?ref=AnalystProfile

2: Building Blocks for a Smart Plant

http://www.mbtmag.com/articles/2014/10/manufacturing-transformations-building-blocks-future-smart-plant

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