Why industrial IoT is catching on in manufacturing
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Why industrial IoT is catching on in manufacturing

When manufacturing devices talk to each other, they talk about how to improve efficiency. And the results can be remarkable.

According to a report by the New Jersey Institute of Technology, a Harley-Davidson plant in York, Pennsylvania, is producing 25 percent more motorcycles with a third fewer workers thanks largely to the gathering and analysis of data captured through the Internet of Things (IoT).

Pankaj Raushan, lead analyst at the consulting firm MarketsandMarkets, said the IoT improves manufacturing by providing information that otherwise might not be obtained.

“Sensors generating data can be implemented at each process of production so that you can get the data, analyze it and take corrective action in order to increase the efficiency,” Raushan said. “This increases profitability.”

Productivity depends on efficiency, just as profit depends on productivity. Two companies exemplify how the IoT can make a big difference with both, according to MarketsandMarkets.

  • General Electric is using connected devices to make next-generation fuel nozzles for jet engines using 3-D printers at its manufacturing facility in Chakan near Pune in India; and
  • Audi is using IoT devices to boost production by 30 percent at a plant in Mexico, where modern equipment, connected devices and highly efficient logistics are coming together to annually produce 150,000 Audi Q5 vehicles.

To achieve its potential, IoT devices typically are accompanied by other advanced technologies. GE is using 3-D printers to make its jet engine nozzles, for example, while Audi is leveraging IoT along with modern manufacturing equipment and highly efficient logistics.

The IoT paradox

Although acceptance of its importance is widespread, relatively few organizations are actively exploiting the Internet of Things, according to the consulting firm Gartner. A survey conducted in November 2015 found that fewer than a third (29 percent) of responding organizations had implemented IoT technologies.

This could soon change, if it hasn’t already. Survey participants at nearly two-thirds of the organizations surveyed (64 percent) said their organizations planned to implement the IoT eventually.

But not all survey results were encouraging. Participants at 28 percent of the surveyed organizations said there were no plans to deploy IoT technologies.

One reason for the apparent disconnect between perception and action, according to market analyst Raushan, is that IoT devices are difficult to implement in established manufacturing facilities.

“You can’t change the basic design of (an established) machine or factory system to implement all those sensors and other related technology,” he said. “This makes the implementation of IoT in current or old manufacturing facility a bit difficult and in some cases impossible.”

And there are other reasons. Businesses need well trained staff to manage data, install and operate the software, and network the technologies, Raushan said.

Key among these staff is the data scientist. “Just generating and extracting data is not going to help,” he said. “We need to extract insights from that data to help increase the efficiency and profitability of a company.”

Although completely transforming an established factory with IoT technologies might not be practical, Raushan said manufacturers might implement IoT in selected environments on an “experimental basis.” The experience can lead to a knowledge base that can be referenced when considering further expansion, he said.

An industrial IoT revolution

Manufacturers that employ new technologies such as the Internet of Things are part of a “revolution in the making,” according to Capgemini, a Paris-based services and consulting company. Their factories could “turbo-charge” manufacturing performance, adding between $500 billion and $1.5 trillion in value to the global economy by 2022, according to the French firm.

Improved manufacturing enabled by IoT applications could lead to a surge in annual productivity, creating value up to $3.7 trillion per year in 2025, according to a 2015 report by the McKinsey Global Institute. IBM has embraced this potential. Its Watson IoT will improve reliability, reduce downtime, enhance quality and optimize production resources, according to the company.

IoT-enabled systems can spot warning signs early, allowing plant managers to preempt equipment failure, according to IBM. They can also help manufacturers assess production processes and product quality.

But such advances come at a price. The data intense environment poses substantial risks, Raushan cautioned. “Data generated at the machine level and transferred to central control systems for further analysis (raises) data security issues,” he said.

Implementing IoT in manufacturing, therefore, can make intellectual property and other design parameters particularly vulnerable.

These concerns should be carefully considered before companies enter the new world of manufacturing, a world being reshaped by the benefits and risks of the Internet of Things.

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