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“Building Smarter Manufacturing With The
Internet of Things (IoT)”
Part 2. of “The IoT Series”
January 2014
Lopez Research LLC
2269 Chestnut Street #202 San Francisco, CA 94123 T (866) 849-5750
W www.lopezresearch.com
Manufacturing: IOT and the Next Industrial Revolution
Since the Industrial Revolution, manufacturing has been transformative
for countries and companies. In 2012, the World Economic Forum published a
research report titled “The future of manufacturing: Opportunities to drive
economic growth.” The research stated, “manufacturing has been immensely
important to the prosperity of nations, with over 70% of the income variations of
128 nations explained by differences in manufactured product export data alone.”
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In 2012, The Economist claimed we are entering the third industrial revolution,
which is based on the digitization of manufacturing
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. Others refer to this as
“Smarter Manufacturing”.
According to a December 2013 survey by the American Society for
Quality (ASQ), only 13 percent of the manufacturers surveyed said they use smart
manufacturing within their organization. Of those organizations that claim to have
implemented smart manufacturing, 82 percent say they have experienced increased
efficiency, 49 percent experienced fewer product defects and 45 percent experienced
increased customer satisfaction.
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The development and adoption of the Internet of Things (IoT) is a
critical element of smarter manufacturing. Though manufacturing companies have
been implementing sensors and computerized automation for decades, the sensors,
Programmable Logic Controllers (PLC) and PC-based controllers and management
systems are largely disconnected from IT and operational systems. These systems
are organized in hierarchical fashion within individual data silos and often lack
connections to internal systems. There are several reasons for these legacy
structures, including significant security issues. These legacy structures differ from
the open, highly connected IP network structures that play such a large role in the
value propositions of IoT. While the transition to more open network architectures
and data sharing of IoT poses challenges in manufacturing and industrial markets,
the combination of IoT, Big Data, and M2M optimization will bring profound
opportunities.
IoT describes a system where items in the physical world, and sensors
within or attached to these items, are connected to the Internet via wireless and
wired network connections. The Internet of Things will connect and share data
from inanimate objects. IoT will also gather and transmit data from sensors
“Building Smarter Manufacturing With The Internet of Things” Copyright Lopez Research LLC
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connected to living objects such as people, animals and plants. IoT will connect
everything from industrial equipment to everyday objects that range from medical
devices to automobiles. IoT can share this data with systems and with people. (For
more information on the definition of IoT read Part 1 of the series “The IoT
Primer”).
In the case of manufacturing, high value production equipment has been
heavily instrumented for some time in a closed, hard-wired network environment.
Industrial standard sensors, controllers and networks are expensive and upgrade
projects in existing facilities are not easy. The growth of IoT on the consumer side
has driven cost reductions in sensors, controllers, and communications through high
volume semiconductor manufacturing. However, industrial standard equipment is
constrained by a huge installed base of legacy equipment and standards.
As costs of industrial standard “smart” sensors with IP communications
and embedded controls falls, these solutions will be implemented across the whole
range of manufacturing equipment and in new areas that have not seen heavy
investment in automation, such as Balance of Plant
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(BoP) equipment and supply
chain logistics. IoT will benefit manufacturing companies by collecting data from
these sensors and communicating that data to factory floor workers, plant managers,
software systems and many aspects of the supply chain.
Where’s The Value In IoT For Manufacturing?
Bosch, a German manufacturer of consumer and industrial products,
refers to the next wave of manufacturing with IoT-enabled systems as Industry 4.0.
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Stefan Ferber, Director for business development of the IoT at Bosch Software
Innovations, said “Industry 1.0 was the invention of mechanical help, Industry 2.0
was mass production, pioneered by Henry Ford, Industry 3.0 brought electronics
and control systems to the shop floor, and Industry 4.0 is peer-to-peer
communication between products, systems and machines.”
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The basic principle of Industry 4.0 is the essence of IoT and smart
manufacturing. By connecting machines, a manufacturer can create intelligent
networks along the entire value chain that communicate and control each other
autonomously with significantly reduced intervention by operators. Bosch, GE and
Johnson Controls describe an IoT-enabled vision where machines predict failure
“Building Smarter Manufacturing With The Internet of Things” Copyright Lopez Research LLC
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and trigger maintenance processes autonomously rather than relying on unreliable
monitoring by maintenance personnel. Another IoT example is self-organized
logistics that react to unexpected changes in production, such as materials shortages
and bottlenecks. Manufacturers will use technology to deliver dynamic, efficient, and
automated manufacturing processes. IoT delivers new value by connecting:
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People.
Connected sensors will provide an unprecedented level of visibility into
the factory operations and supply chain flow in a much broader range of
manufacturing than just the very high value processes currently enabled. IoT in
manufacturing will improve business by connecting people to the right
information, over the right device at the point of need and cross company
boundaries to include suppliers, maintenance partners, and distribution chains.
New mobile-ready software will allow plant managers to have access to data
such as equipment efficiency, line efficiency, data visualization tools and alerts
from any location at much lower costs than previous custom systems.
Process.
In the first phases of IoT deployments, manufacturers will seek
visibility into specific visibility and supply problems. Manufacturers may deploy
these systems of use third party managed solutions to get started. As IoT
becomes more pervasive, manufacturers will enable faster information flow,
faster decisions, and greater market responsiveness by connecting devices into
both operational and business software processes. Machine to machine (M2M)
communications will enable new levels of automation. For example, GM uses
sensor data to decide if it’s too humid to paint an automobile. If the system
defines the conditions are unfavorable, the automobile will be routed to another
area of the manufacturing process, reducing repainting and maximizing plant
uptime. This change alone saved the company millions of dollars.
Data.
Mobility and the IoT will change the types of devices that connect into a
company’s systems and these newly connected devices will produce new types
of data. IoT will connect physical items such as sensors, actuators, video
cameras and RFID readers – to the Internet and to each other. Big data
processing and analytics, either on-premise or in the cloud, will collect and
analyze data from IoT-enabled devices. These solutions will turn data into
context that can be used to help people and machines make more relevant and
valuable decisions.
•
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“Building Smarter Manufacturing With The Internet of Things” Copyright Lopez Research LLC
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What It Means For Your Business? IoT Manufacturing Use Cases
IoT impacts every business, but has the ability to radically transform
industrial businesses such as manufacturing, utilities and aviation. There will be an
exponential number of machines and devices that will transmit both large and small
amounts of data. Smart manufacturing companies will use analytics to enact smarter
decisions and more efficient operations. IoT, big data analysis and IP networks will
help manufacturers prolong their asset lifespan while simultaneously optimizing
efficiency and minimizing energy consumption. Smart manufacturing systems will
link production and business domains such as Material Requirements Planning
(MRP), Manufacturing Resource Planning (MRPII) and Manufacturing Execution
Systems (MES). There are many potential business use cases for IoT in
manufacturing. Several examples of process improvements that IoT can impact
include:
•
Factory visibility.
IoT data and IP networks will connect what’s happening on
the factory floor to enterprise-based systems and decision makers. IoT will
provide production line information to decision makers and improve factory
efficiency. For example, a plant manager walking the production floor could also
use IoT and visibility tools to access the efficiency of each machine, view
production from any location, and reduce the time to decision and action. For
example, GE mobile-enabled SCADA applications allow tablets to display
performance data and status updates traditionally available only on PCs.
Instead of being chained to a control room, facilities managers and
production personnel will have easy access to real-time information and
collaborate more effectively. Mark Bernardo, the general manager of automation
software for GE Intelligent Platforms, says “When you equip people with
mobile technology, you can dramatically shrink the delta between when a
problem occurs and when it’s acted upon. If there’s a quality control problem in
a production line, they can shut down the line before it continues to create
products that will all be waste.”
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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. IoT systems will enable extensive involvement by third party
suppliers in the direct operations and maintenance of manufacturing plants with
“Building Smarter Manufacturing With The Internet of Things” Copyright Lopez Research LLC
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