The Internet of Things (IoT) has revolutionized various aspects of connectivity. However, when it comes to industries, expectations are much higher. There is a steady and robust demand for personalization, growing customer demands, and supply complexities. Besides, many other challenging needs encourage industries and manufacturers to look for innovative and extraordinary ways to stay competitive and lead the market. To improve productivity and discover new ways to enhance manufacturing and supply chain, businesses are now transforming to digital methods. IoT in manufacturing is leading the way.
The Industrial Internet of Things, or IoT, is a way of digital transformation. Internet of things manufacturing employs its network of equipped sensors that collects production data critical to the industry. A cloud software turns this data into insights about manufacturing operations and their efficiency.
Importance of IoT In Manufacturing Industry
The total IoT connections in the world will reach 83 billion by 2024. Moreover, the industrial sector, including internet of things manufacturing, will account for more than 70% of these IoT connections.
There are few key reasons for the increasing fascination with the internet of things:
1. IoT platforms collect and process the massive volume of data without having any negative impact or putting pressure on the system’s performance.
2. As IoT involves large-scale data, it also drives IoT app development and Big Data analytics. As a result, companies are predicted to invest at least $15 trillion in modern IoT development by the end of 2025. Hence there is an exponential demand for IoT.
3. IoT reduces major expenses in business, which includes the cost of running an office. As such, it saves maintenance overheads while alleviating downtime.
4. IoT devices make global communication much faster and easier. Exchanging information and collaborating is more efficient, regardless of where the location of the business or individual.
5. Irrespective of the business or industry, organizations can use their IoT devices to customize their offerings, meet the frequently changing customer demands and interests, deliver superior customer service, and increase overall business value.
IoT and Manufacturing: Industry 4.0
The world is in the middle of an enormous digital transformation. Businesses create products and deliver services and strive to meet customer needs. The aim is to move towards a flexible factory system with industrial automation. Ultimately, IoT in manufacturing industry should be able to deliver results. This transition is termed “Industry 4.0.”
While Industry 3.0 presented computers, the next revolutionary phase in industries involves warehouses and factories and how they can leverage IoT solutions for manufacturing industry.
Since more and more industries are automating their operational methods, protected wireless connectivity must enhance factory automation. It supports the intelligent machines accessing more data, which, in turn, improves productivity and performance.
For example, intelligent machines facilitate flexible goods production in the manufacturing industry. It rapidly changes the lines of overproduction to reduce lead times. This type of technology makes the global industrial revolution a possibility on a larger scale.
The main drivers for adopting IoT in manufacturing are:
- Reduced Cost: As inventory and asset management would be optimized (lower search times and inventory logistics), industries can expect lesser machine downtime, better agility in operations, efficient use of energy, reduced operational expenses, and new revenue source creation. For example, connected products facilitate the transition from retailing products to delivering experiences, including product use and after-sales service.
- Shorter Marketing Time: When the manufacturing process and supply chain operation are more efficient and fast, it reduces the product cycle time.
- Mass Personalization: This process requires an intense rise in production, which boosts the inventory, making it more diverse. As such, manufacturing processes become more complex, but producing 20 items of a particular SKU A and another ten SKU B items is possible. However, inventory tracking and manufacturing operations become burdensome. Internet of things in manufacturing facilitates mass personalization by becoming the most excellent source of actual data needed to thoughtfully forecast, schedule shop floor and route.
- Better Safety: IoT in manufacturing industry ensures a better and safer workplace for everyone. Paired with the latest wearable devices, monitoring workers’ health status, injuries, and risky activities leads to accidents. Besides, internet of things manufacturing addresses all kinds of safety issues in potentially dangerous environments.
Impact of IoT in Manufacturing Industry: 3 Dimensions
IoT technologies can transform the process of developing production units and running them, thus driving improvements in three dimensions:
1. View of shop, floor, field operations
2. View of manufacturing across the supply chain
3. View of remote/outsourced operations
#1: View/Visibility of Operations
Undoubtedly, IoT solutions for manufacturing industry offer revolutionary visibility into different operation fields, including the field and shop floor. Besides, it also increases control over the resources of enterprises. These technologies bridge the gaps between systems such as MES and ERP when they reach their limits due to their dependence on manually-fed data and the incapacity to work with comprehensive data such as the location of inventory items, equipment status, and real-time records, etc.
By providing minute-to-minute shop floor data, IoT in manufacturing allows companies to increase the manufacturing process’s productivity. According to IBM reports, using the latest IoT insights in the process optimizing manufacturing process could lead to a 20% increase in product count from that very production line.
IDC research shows that by 2025, operation improvement driven by advanced IoT applications would value over $470 billion annually. IoT solutions for manufacturing industry include equipment performance monitoring and optimization, quality control in production, and man-machine interaction.
According to ITIF research, IoT applications are widely used to monitor machine utilization. It increases manufacturing productivity by up to 25% and is predicted to produce approximately $1.8 trillion by the end of 2025. These solutions can provide real-time equipment usage metrics.
Other uses include condition monitoring for product quality control, safety monitoring, industrial asset tracking, enterprise inventory management, and predictive maintenance.
#2: View of Manufacturing across Supply Chain
At present, visibility of end-to-end chain of supply is still a distant dream for 52% of managers in this field. Nevertheless, the optimistic prognoses of IoT-driven supply chain management for manufacturing solutions are appreciable.
With intelligent solutions for supply chain management, manufacturers can have real-time insights into status, location, and the condition of objects (whether it is individual inventory or truck supplies or warehouse shelf supplies) at different segments of the supply chain in manufacturing.
Another more enormous shift is that it gives SKU availability status and knows the status of items belonging to that particular SKU.
#3: View of Remote/Outsourced Operations
The high cost of logistics, growing demand for personalization, and complexities of the global supply chain demand proper distribution of the shop floor’s operations.
When a business purchases or builds a new manufacturing facility in another location, state, or nation, it should maintain the standards of production and manufacturing – such as material testing, predictive maintenance, industrial automation, and others. Traditional methods can’t monitor this. However, IoT for manufacturing can monitor compliance with production standards.
IoT In Manufacturing Encourages Equal Opportunities
IoT aims to drive improvements in businesses and their manufacturing processes. It provides equal and transformational opportunities to both small as well as medium-sized companies. For example, a prominent business firm may have affiliates in America and Mexico. In contrast, a medium-sized business may have affiliates in Texas and Arizona, geographically distributed, facing similar hurdles of the concept of distributed marketing. Because of its dependence on universal and cloud computing, IoT often makes it possible for SMEs to undergo digital transformations.
IoT Adoption Challenges
While there are many advantages of IoT, there are some inherent challenges too. Significant concerns are:
- Heavy Investment & Uncertainty: IoT initiatives involve many expenses in terms of hardware like gateways and sensors, cloud storage, connectivity, technical support, and administrative labor. Businesses must consider the timeframe to roll out innovative solutions and revenue generation.
- Data Security Concerns: Up to 58% of IoT adopters opine that it increases cyberattacks and threats. Half of the IoT users also claim that they have no plan to avoid losses from such security threats. Gartner estimates that up to 25% of attacks would involve IoT, whereas IoT security expenditure would reach as high as $547 million.
- Lack of Trained Staff: According to Inmarsat, 72% of the businesses lack employees at their management level having IoT experience. Besides, 80% do not possess the skills needed for IoT deployment.
IoT solutions can maximize productivity by maintaining production uptime, cost reduction, and waste elimination. By leveraging bulk IoT data, businesses and manufacturers can better view the manufacturing and supply chain processes, improve demand projection, achieve quicker marketing time, and enhance the overall customer experience. Nevertheless, the level of complexities involved in the IoT initiatives makes successful adoption a challenge.