Internet of Things
Blog

How IoT is Changing the Manufacturing Industry

by
Brooks Rhinehart
July 19, 2018
7
Min(s)

Smart factories are trending right along with smart homes, smart cities, smart grids, and so on. But, for now, most manufacturing companies are in need of more proof prior to implementation. Internet of things (IoT) in manufacturing is a major area of interest, but widespread adoption and investment haven’t kicked in…yet.

Manufacturing veteran industry icons and professionals acknowledge the disruption standing on their doorstep, and they still ask, “Does this actually make sense for us?” Despite the promise of long-term benefits of IoT adoption, the focus remains on the short term difficulties and resource-intensity of implementation. For this reason, upfront proof of value is essential. Most businesses aren’t willing to dive into complete transformation without case-closed evidence.

It won’t always be this way, however. Soon, decision-making authority will be handed over to the next generation of manufacturing professionals who grew up with Google, Apple, Facebook, and Amazon at the breakfast table. The brightest stars of the future, however, have done their homework. They know adoption of emerging technologies within manufacturing will have a substantial learning (and confidence) curve.

The opportunity to get a headstart ahead of the transition is gigantic. The cross-section of the manufacturing market currently testing out IoT projects is relatively small, but the stage for new leadership and industry standards is panoramic.

Industrial IoT (IIoT): Essential Benefits

When you introduce smart connectivity into physical products, the industries that manufacture and sell those products will find the technology indispensable. Accenture predicts that the IIoT could add $14.2 trillion to the global economy by 2030. They report, “87% of business leaders say that the IIoT will result in the net creation of jobs.”

The endgame in manufacturing innovation is improved efficiency. Industrial IoT opens the door to a world of process efficiency tools tailored to transform every aspect of manufacturing production, service, and delivery:

Workflow: Support a workflow that progresses logically and scales readily for connected factories of any size. Automating workflow forms the foundation from which IoT can work in conjunction with artificial intelligence to identify and activate even more nuanced optimization opportunities.

Creating and monitoring processes: The use of “digital twins,” or digital representation of physical assets, is projected to increase dramatically in the next few years. Gartner named digital twins on of its top 10 strategic trends last year. “Digital twins drive the business impact of the Internet of Things (IoT) by offering a powerful way to monitor and control assets and processes,” says Alfonso Velosa, research vice president at Gartner.

Asset performance management: With intelligent sensors, machines can transmit information about a problem to any location or person in a connected factory. In field operations in particular, this efficiency allows technicians to bring the right materials to properly address service calls.

Safety and security monitoring: The status of individual workers in high-risk positions can now be continuously monitored.  Customizable sensors can detect any physical or security emergency and respond automatically. Responses can send alerts and call first responders or security personnel. They can also include immediate physical responses such as locking doors, and stopping elevators. Violations of safety procedures trigger alerts before an incident even happens.

Quality control monitoring: Quality control analytics combined with sensors can test materials and components to make sure they meet specifications. In a factory setting, operational parameters such as pressure and temperature are monitored to avoid subpar production conditions. Products are tested as they are completed with real-time alerts indicating if they have gone outside of specified parameters.

Inventory management: In the retail arena, for example, digital shelves, smart product tags and measures of foot traffic can help determine placement. Items are shipped directly from one retail location to another to meet the changing demands, without the extra stop at a central distribution depot. Using RFID chips to give each item an individual identity works together with location technology to provide complete visibility throughout the supply chain. A secure cloud-based system stores and interprets millions of data points.

Customer lifecycle enhancement: If products in use are connected, they can report when they’re having a problem. Some types of problems can be addressed by remote troubleshooting. But in all cases, the seller has vision into the evolving customer experience. This provides a high level of awareness and customer service response. If a connected device needs to be replaced, the seller can approach the customer before they experience any inconvenience.

Packaging optimization: A step up from “active packaging,” smart packaging includes embedded devices that record whether an item has been exposed to temperatures or moisture levels beyond the acceptable limits. Smart packaging also communicates with devices and creates a cost-effective firewall against counterfeit products.

Logistics and supply chain management: GPS tracking and embedded sensors mean that real-time inventory information is always available. Inventory providers, warehouses, shippers and customers all sign receipts on mobile systems instead of clipboards, keeping everyone in the loop. Order picking processes can also be automated, based on real-time needs.

Data, Data Everywhere…

To their credit, manufacturing companies almost compulsively collect what seems like infinite amounts of data. But there are many pain points when it comes to actually organizing and putting this data into action to improve workflows, sales processes, and customer support.

What manufacturers need, often from a third party, to get their data ducks in a row is:

  • A system that governs proper access to the data
  • Universal commitment to address their unique data challenges
  • A clear, accessible training plan
  • Trust in a process partner who can provide assurance around security issues
  • Understanding of their specific manufacturing niche, as well as an individual factory’s unique business pain points
  • A clear budget process and implementation plan

IoT leads this charge by offering efficiency tools, as well as analytics capabilities that help scope and scale large, diverse amounts of data.

IoT Buy-in is Worth the Time.

The manufacturing industry has historically been hands-on and relationship-driven. This doesn’t mean that perception of digital transformation or emerging technology is always negative–more so uncertain. Veteran manufacturers, like anyone else, always want to improve processes and reduce human error. The uneasiness centers around changing methods they see as tried and true, thus shaking the foundation of their business. Extensive proof of ROI before they rock the boat is expected. Thanks to IoT’s predictive analytics, that proof isn’t hard to offer. The harder part is starting the conversation.

IoT cannot and will not be mechanically forced into this industry. Especially because one of the fears around implementation is eliminating human touch. It’s important to emphasize how IoT solutions enhance human interaction and fine-tune communications to be more meaningful and productive. These tools help ensure that conversations happen between the right people. No matter how set your employees may be in their work routines, once they experience efficiency and savings first-hand, buy-in is almost guaranteed.

Business Tip: Make new tech training easy, user-friendly, and free. Take advantage of today’s best practices in employee training, and deliver a mix of interactive training methods that involve elements gamification, real-life simulation, and teamwork as part of the experience.

There’s Time and Space at the Top for Innovation Leaders.

As a younger generation of manufacturing professionals is being handed the baton, they will bring with them their expectations for smart, connected, innovative devices and methods. These expectations will raise the bar for other antiquated areas of the manufacturing business.

Manufacturing company websites, for example, often have vast room for improvement in both design and functionality. The next generation will be more sensitive to and take more ownership of online presence and reputation in addition to workflow optimization. In the current market, taking steps to innovate and brand with emerging tech is sure to open eyes throughout the manufacturing industry.

Early IoT adopters will enjoy time in the spotlight while most other companies will be filling their pros and cons columns. It is important to note, however, that there is value in building a strategy for IoT and taking the time to set expectations, internally and externally, prior to investment.

Shared Expertise and Trusted Partnerships Win.

Partnerships built on trust and shared expertise spell mutual success. Understandably, many manufacturing leaders approach technology platforms and companies with caution. The disparities in ideology, personality, and expectations require substantial trust and communication. Manufacturing companies need partners who ask questions, taking the time to learn about the industry and their current state conditions and approach.

IoT companies must commit to walking around in industrial shoes and clearly demonstrating how tech capabilities can hit specific industrial KPIs–without altering the culture. After the partnership kicks off, it is paramount to walk through:

  • Pricing and budget
  • Design approach and process (with its various iterations)
  • Development/delivery process

From a full IoT platform build-out for a smart factory to an introductory workflow optimization project, full transparency directs the journey. A phased approach aids in organization and clarity. There’s a lot of IoT development that takes the “just build something” route, and when it goes to market, it fails. Rapid iteration of IoT solutions is the foundation for success, and a series of defined phases from budgeting to distribution is essential.

Bigger, Brighter. IoT Integration is Just Getting Started.

Once IoT connectivity focuses and streamlines the sales process, quote delivery standards drop from a typical period of two weeks down to a matter of minutes. The supply chain view looks more like Domino’s Pizza: You know the moment your pizza starts being made, when it’s boxed, en route, and at your door. Major security concerns and delivery tracking are addressed by IoT with blockchain integration. Artificial intelligence (AI) and robotics physically transform factory processes. Deep analytics with IoT realize cost and time savings.

It’s all coming. And the opportunity to drive unprecedented profits and performance for manufacturing companies who recognize it–is here right now.

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