IIoT has the ability to significantly transform many industrial sectors, both in discrete manufacturing and the process industries. Across the emerging IIoT ecosystem there will be an extremely large number of machines and devices that will transmit both large and small amounts of data. Smart manufacturing companies that want to compete will use advanced analytics to enact smarter decisions and more efficient operations. IIoT, big data analysis and connected networks will help manufacturers prolong their asset lifespan while simultaneously optimizing efficiency and minimizing energy consumption. Smart manufacturing systems will link production systems and business domains such as ERP and supply chain planning. There are many potential business use cases for IIoT in manufacturing. Several examples of process improvements that IIoT can impact include:
Production System Visibility and Business Intelligence
IIoT networks will connect real-time data and production events taking place on the factory floor to enterprise systems and decision makers that must rely on actionable information. While this is certainly not a new concept, IIoT will provide production line information based on a new generation of intelligent sensors, machines and systems. IIoT will spawn the next generation of continuous process improvement (CPI) that will function more accurately and correctly by using big data and advanced analytics. These IIoT enabled production systems will harken back to the concept of event-driven manufacturing, where bottom-up collaborative production systems used operations intelligence, visibility, demand-pull, and a synchronized supply chain to drive the manufacturing process based on an intelligent event-oriented environment. The primary differentiator is that today IIoT provides a pervasively connected and intelligent system of systems that can actually implement the concepts of event-driven manufacturing.
The benefits of visibility will extend beyond the enterprise to a wide range of suppliers and third party providers of services, consumables, and capital goods. IIoT systems will enable extensive involvement by third party suppliers in the direct operations and maintenance of manufacturing plants with new service and supply business models based on increased visibility and remote monitoring.
Suppliers of capital equipment may now be able to offer business models that comprise production-based revenue rather than capital equipment sales predicated on equipment that could be monitored for both performance and maintenance status. Parts and services suppliers within maintenance, repair and overhaul (MRO) will use IIoT to monitor distributed inventories, tank levels of process fluids, perishable parts conditions, and production rates. This will create entirely new and very closely linked business relationships between manufacturers and their equipment suppliers.
In many industries, energy is frequently the second or third largest operating cost behind material and direct labor. However, many companies lack cost effective measurement systems, modeling tools, and/or performance management tools to optimize energy use in individual production operations, much less in real-time across multiple operations, facilities, or an entire supply chain. There are numerous ways that IIoT and automation of environmental controls such as HVAC and electricity can create cost savings for manufacturers. Connected energy solutions can provide peak demand charge avoidance and enable economy model operations. Certain IIoT-enabled HVAC systems also offer integrated weather data and prediction analysis to help manufacturers understand expenses and plan energy usage. Energy analysts maintain that efficiency improvements of 5% in a small industrial power plant generating 15MW can save over $200,000 on average per year.
Predictive and Proactive Maintenance
Manufacturers have widely accepted the concept of preventative and condition-based monitoring but many remain in the process of implementing these programs, often extending projects because monitoring technology continues to improve and change. Today, lower cost sensors, intelligent sensors, wireless connectivity, and big data processing tools make it cheaper and easier to collect actual performance data and monitor equipment health. If a manufacturer has equipment that is designed to operate within a certain temperature, vibration, or stress range, the company can use sensors to actively monitor when it goes out of range and prevent malfunctions.
Measuring vibrations, as mundane as that appears to be, to detect out of specification machines and equipment is a frequently cited example of condition monitoring. Businesses, particularly industrial businesses, lose money when equipment fails. With next generation intelligent sensor information, IIoT can monitor, collect, and analyze data to provide a manufacturer with information to improve overall equipment effectiveness (OEE), save money by minimizing equipment failure, and allow the company to perform planned maintenance based on predictive condition monitoring. Moreover, by applying advanced analytics to long established equipment monitoring practices, factory operations managers can begin to apply longer term asset management practices that will prolong the operational lifecycle of assets and significantly reduce operational costs.
Connected Supply Chain
Just in time manufacturing has been around for decades, but IIoT, analytics and production networks will help manufacturers gain a better understanding of supply chain information that can be delivered in real-time. By connecting the production line and balance of plant equipment to suppliers, all parties can understand interdependencies, the flow of materials, and manufacturing cycle times. IIoT enabled systems can be configured for location tracking, remote health monitoring of inventory, and reporting of parts and products as they move through the supply chain, among many other things. IIoT systems can also collect and feed delivery information into an ERP system; providing up-to-date information to accounting functions for billing. Real-time information access will help manufacturers identify issues before they happen, lower their inventory costs and potentially reduce capital requirements.