Stronger demand for customization, increasing customer expectations, the complexity of the global supply chain – these and many other challenges encourage manufacturers to find new, more innovative ways to remain competitive. In an attempt to gain productivity improvements and uncover new ways of enhancing manufacturing and supply chain operations, businesses resort to digital transformation.
Industrial Internet of Things (IIoT) is a way to digital transformation in manufacturing. Industrial IoT employs a network of sensors to collect critical production data and uses cloud software to turn this data into valuable insights about the efficiency of the manufacturing operations.
The main adoption drivers for the Industrial IoT solutions include:
Cost reduction: Due to optimized asset and inventory management (hence, lower inventory carrying costs and search times), reduced machine downtime, more agile operations, and more efficient energy use, companies reduce operational costs and create new sources of revenue. For instance, smart, connected products allow to shift from selling products to selling experience – product usage and post-sale services.
Shorter time-to-market: Faster and more efficient manufacturing and supply chain operations allow reducing product cycle time. Harley-Davidson, for instance, leveraged IoT to reconfigure its York, PA manufacturing facility and managed to reduce the time it takes to produce a motorbike from 21 days to 6 hours.
Mass customization: The mass customization process requires a dramatic increase in the variety of produced SKUs, which causes inventory to go up and become more diverse. Manufacturing operations get more complex as well – the production of 20 items of SKU X can be immediately followed by the production of 10 items of SKU Y. Tracking the inventory and the manufacturing operations becomes burdensome and, in some cases, not feasible. IIoT facilitates mass customization by becoming a source of real-time data required for thoughtful forecasting, shop floor scheduling and routing.
Improved safety: IIoT helps to ensure a safer workplace. Paired with wearable devices, IIoT allows monitoring workers’ health state and risky activities that can lead to injuries. Along with ensuring workers’ safety, IIoT addresses safety problems in potentially hazardous environments. For instance, in oil and gas industry, IIoT is applied to monitor gas leakages as it travels through the pipe network.
EXPLORE THE FACTS
CGI’s study reports that 62% of surveyed manufacturing enterprises are already executing digital transformation pilots and programs.
McKinsey estimates that IoT applications in manufacturing are expected to generate $1.2 to $3.7 trillion of economic value annually by 2025.
Bsquare annual IIoT maturity survey reports that 86% of manufacturers have already adopted IIoT solutions, and 84% of them find IIoT extremely effective.