The Fourth Industrial Revolution (also known as 4IR or Industry 4.0) will tangibly connect the physical and digital worlds, delivering both business and cultural gains. The World Economic Forum’s Founder and Executive Chairman Professor Klaus Schwab is often credited as defining the scope of 4IR, noting that “We are at the beginning of a revolution that is fundamentally changing the way we live, work and relate to one another… It is characterized by a range of new technologies that are fusing the physical, digital and biological worlds, impacting all disciplines, economies and industries, and even challenging ideas about what it means to be human.”
As a key enabler of 4IR, IoT is facilitating economic growth opportunities through the rapid evolution of production and service delivery processes for improved operational efficiencies and enhanced quality of offerings. The Industrial Internet of Things, or “IIoT,” is empowering manufacturing organizations to seize the opportunities that 4IR offers to undergo a digital transformation and digitize legacy processes and equipment.
Accenture data suggests that IIoT will transform industries that account for nearly two thirds of global outputs, and has the potential to add nearly $14.2 trillion to the global economy. Some of the most effective IIoT use cases involve industrial organizations reducing costs and gaining competitive advantages from actionable business intelligence through:
Asset Monitoring and Predictive Maintenance
IIoT asset monitoring solutions help industrial organizations continuously monitor equipment-specific conditions related to quality and performance. This insight can alert business users to imminent breakdowns, potential damage, or environmental conditions.
Through IIoT asset monitoring, businesses can reduce unplanned equipment downtime, which Aberdeen Group estimates can cost up to $260K per hour. By servicing equipment before it fails, organizations can reduce the quantity of unnecessary maintenance tasks associated with a schedule-based process and eliminate wasteful production associated with sub-optimal operation. For example, IIoT sensors can monitor the temperature of manufacturing equipment and alert maintenance teams when the machine is overheating. By remediating the problem early, the organization can prevent permanent damage that could affect production schedules.
Further IIoT data analytics will show performance trends that help industrial organizations discover and implement more effective maintenance schedules. McKinsey & Company predicts that these data-based predictive maintenance insights will help businesses save $630 billion by 2025.
Warehouse Optimization
IIoT can also provide considerable efficiencies in Manufacturing Operations Management, or “MOM,” by enabling better management of end-to-end manufacturing processes to gain efficiencies. According to a Forbes Insights report, 27% of organizations are already prioritizing IoT across warehousing and logistics functions.
Manufacturing organizations can track and monitor real-time location information for items such as inventory levels of raw materials and final products, helping to accurately maintain adequate inventory levels and implement more efficient production processes. IIoT real-time location solutions can also quickly locate high-value equipment for more effective utilization of forklifts, pallets, and other pieces of mobile equipment and can ensure worker and workplace safety by tracking and monitoring personnel.
Automated Field Servicing
IIoT also plays an important role outside the factory, helping manufacturers deliver enhanced assistance though their field service organizations. With IIoT capabilities, organizations can automatically deploy and schedule field technicians to complete preventative or emergency repairs. These technicians can be armed with mobile devices to support the cloud-based applications and the data needed to efficiently and effectively service machinery and record service time, parts, service readings, notes, and photos from the field.
With IIoT capabilities, manufacturing and service organizations can add value to downstream customers and implement more effective and cost-efficient repair processes to reduce repeat visits. IIoT can also help organizations better monetize existing field service operations with more accurate reporting and invoicing capabilities. An Accenture survey found that 84% of C-suite decision makers believe their organizations are ready to create these new, service-based income streams from IIoT.
Getting Started
While IIoT remains an emerging technology, it offers significant potential for industrial and manufacturing organizations to improve operational efficiencies and reduce costs. Many organizations are working to implement IIoT solutions, with IDC predicting that IoT spending in the manufacturing industry will reach $183 billion, and production asset management spending will account for $45 billion.
And, despite the nascent stage of IIoT, some organizations are already achieving ROI. The Wall Street Journal published data in its “Unlocking Performance” series that reported that some organizations are experiencing fewer equipment emergencies, resulting in a 14% reduction of downtime and 71% lower maintenance costs.
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IIoT may be a new concept in industry, but that doesn't mean there aren't already emerging best practices. Watch our webinar "Implementing Industrial IoT: Common Pitfalls and Best Practices for Success," to learn more about using IIoT solutions to effectively monitor equipment conditions, perform predictive maintenance, transform legacy machinery, and protect the longevity of vital assets.