Just as the Internet of Things (IoT) has enabled greater connectivity between consumer technologies, the Industrial Internet of Things (IIoT) is making manufacturing equipment smarter.

In addition to improving operations, it’s giving us more valuable business intelligence through sensors and other integrations.

Here’s how to take advantage of its transformative power and prepare for the fourth industrial revolution, or Industry 4.0.

What is IIoT?

GE, a pioneer in this space and the first to coin the term “industrial internet”, defines IIoT as a phenomenon that brings together “brilliant machines, advanced analytics, and people at work.”

The idea is for all these elements to communicate with each other to enable more efficient, cost-effective operations. At a technical level, this typically requires sensors or other connected devices to integrate with a software platform where all the data can be aggregated.

At a strategic level, it requires a deep understanding of big data analytics and having the processes in place to act on it.

This enables smarter and faster business decisions, which is the core objective of Industry 4.0. It should come as no surprise, then, that IIoT is expected to become a $575 billion market by 2025.

IoT vs IIoT: what is the main difference?

While both IoT and IIoT connect devices and allow them to communicate, the types of the devices, the infrastructure they use, and the end user are different. The IoT typically uses a public cloud, while IIoT often uses a private cloud for storing proprietary information. Many IoT devices are made for consumers, including smart appliances, voice assistants, and fitness trackers. They deliver data to the end user directly through the device. IIoT devices are typically industrial sensors that deliver data to a company’s network, private cloud, or software platform instead. Because they are collecting more sensitive information, they tend to come with more stringent cybersecurity protocols. For this reason, implementing IIoT devices often involves greater consideration and higher costs. However, when the IIoT is well integrated into an organization, the potential savings are often exponentially greater.

The IoT can make consumers’ lives easier by allowing them to adjust their thermostats, monitor deliveries through a smartphone, or help them improve their sleep habits. The IIoT can potentially save a single organization millions of dollars by predicting when an expensive piece of equipment will fail.

What areof IIoT benefits ?

IIoT is changing the landscape of the manufacturing economy. The impact is not only at the macro level, but on day-to-day operations. Although enterprises vary considerably in the extent of their IIoT adoption, some have already achieved great things with industrial automation.

Here are just a few examples:

Enabling predictive maintenance

Being able to detect and address potential failures before they occur is the superpower every manufacturing leader wants. Condition-based maintenance is possible with frequent inspections to monitor asset health, but IoT sensors take this to a new level.

Sensors gather real-time data on asset performance and alert maintenance professionals if conditions fall outside normal limits. For instance, if a machine is running at a high temperature or vibrating excessively, it may be low on lubrication.

Identifying these potential failures early increases asset reliability.

Fanuc, a leading manufacturer of industrial robots, developed an approach it calls zero downtime. Sensors embedded in the robots identify issues and trigger notifications to the service team. The team can perform maintenance or replace parts to prevent more expensive failures later.

Increasing operational efficiency

High operational efficiency is a key objective for every manufacturer. Before Industry 4.0, many achieved this goal to some extent by automating manual tasks where possible. The interconnectedness of the IIoT allows them to take this to a new level.

Tapestry, a Boeing subsidiary, introduced an Enterprise Sensor Integration (ESI) software platform that resolves interoperability issues between devices and machines that use different protocols with different architectures. The platform allows leaders to see asset and supply chain data in a consistent format at every stage of the production process. This reduces assembly time, enhances inventory management, and improves quality and safety, said Robin Wright, president and CEO of Tapestry Solutions, in a recent article.

In its first year, the solution saved Boeing over $100 million.

Reducing costs

IIoT helps manufacturers identify opportunities to reduce costs by optimizing maintenance and workflows.

Caterpillar is a good example of this. The combination of IIoT and big data enabled Caterpillar’s ship fleet operators to save millions of dollars. They used sensors to monitor everything from generators and engines to fuel meters. In one case, the data helped them understand that running more generators at lower power was a more efficient approach than maxing out a few. This seemingly simple discovery resulted in a savings of $650,000.

The team also wanted to find out the optimal cleaning schedule for their hulls. The data they collected using the Industrial Internet of Things helped them determine that an interval of 6.2 months is ideal. Inefficiencies due to dirty hulls were costing Caterpillar up to $5 million every year. By switching to the new schedule, they could save up to $400,000 per ship.

Improving employee safety

Many employees are exposed to on-the-job hazards, such as toxic gases and sharp objects. The Industrial Internet of Things and wearable technology can help manufacturers identify potential dangers by monitoring conditions on the ground.

North Star BlueScope Steel, a steel producer for global building and construction industries, used the Internet of Things to gather data such as heart rate and temperature using sensors on employees’ helmets and wristbands. They added data from external sources, such as weather, to detect risky situations and prevent workplace injuries.

Enabling predictive analytics

Enterprises that are more advanced in the IIoT adoption curve are using data to identify patterns and predict likely scenarios.

For example, at Microsoft’s plant in Suzhou, China, IIoT helped identify inventory that was on the verge of becoming obsolete. This saved the company nearly $5 million in one year and cut inventory costs by $200 million. To achieve this, the company used sensors across different business functions and integrated them with advanced machine learning algorithms.

Improving overall equipment effectiveness

End-to-end connectivity is the core principle of a smart factory. This can lead to significant improvements in equipment performance.

Stanley Black & Decker, a leading provider of products and services for industrial applications, created a highly networked factory floor in Reynosa, Mexico, and increased their overall equipment effectiveness (OEE) by 24% in their router production line.

In 2019, they opened an advanced manufacturing center of excellence called “Manufactory 4.0”, which serves as the epicenter of the company’s smart factory initiative. It houses Industry 4.0 experts who help prepare the company’s workforce for a new-age manufacturing environment focusing specifically on the connected factory, flexible automation, and advanced analytics.

How to integrate IIoT assets?

While these are great examples of what’s possible with the Industrial Internet of Things, they shouldn’t intimidate you or discourage you from getting started.

Like any digital transformation initiative, embracing the IIoT is a journey your company needs to take at its own pace. Any efforts should align with your specific business goals.

Because the IIoT is about connectivity at its core, it starts by integrating data from multiple sources into one place. This is where enterprise asset management (EAM) software can help.

The best EAM solutions consolidate data on your company’s assets, costs, equipment performance, inventory, and maintenance activities into one platform so your whole organization can make better business decisions.

For instance, you can see how often you’ve needed to repair a particular piece of equipment in the past year and compare maintenance costs to the cost of replacement.

You can pinpoint the most common causes of equipment failure and take steps to address them by investing in new assets, more frequent maintenance, or better training.

And you can optimize inventory by knowing how often you’ll need certain parts, based on preventive maintenance intervals. This keeps you from wasting valuable storage space or waiting a week to receive a part you don’t have on hand.

IIoT insights

While you may not be ready to roll out equipment sensors or wearable technology across your organization, you can take the first steps today by collecting the right data.

The IIoT is just one of many emerging trends transforming the future of manufacturing.

To learn more, check out our latest guide.

About the author

Jason Cockerham

Jason is a storyteller at heart with a career spanning everything from film and TV to iPhones. Just don't expect much before his first cup of coffee.
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