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Big data and analytics, cybersecurity investments and the cloud have all become familiar terms when you analyse today's enterprise setups, but the internet of things (IoT) is another area being explored to create more intelligent and efficient business processes.
When IoT is applied to the consumer level, mobility and smart home products come to mind. However, the enterprise has a far wider scope to include IoT into manufacturing, supply chains and business practices for profit.
IoT is not necessarily new at the manufacturing level. For many years, manufacturing equipment has utilized sensors, data collection and reporting, embedded systems and, to a certain degree, automation.
Wi-Fi and connected device development mean that we can now go far beyond single purpose, dumb machinery. If a factory is manufacturing vehicle parts and sensors spot a defect, for example, this information can now be fed through a supply chain in real time to order new parts immediately without the need for human interference or disturbing operations.
However, in order to implement IoT at every part of the cycle, systems may need to be rebuilt from the ground up, with connectivity and networking at the heart of the manufacturing and supply chain ecosystem.
General Electric's Brilliant Factory implements IoT and smart technologies from the design to distribution stages with this concept in mind.
As a "smart" factory, systems automatically capture information from customers at the beginning of the chain. If an automaker requires a fresh supply of parts, production orders are automatically added — or if an entirely new part is required, specifications are sent to design teams for fabrication.
If an order is sent directly to manufacturing units, the line — mostly staffed by robots — then produces the items, all while sensors carefully monitor the proceedings and send feedback to operators. If product flaws are spotted, then the order is automatically re-issued.
Should factory equipment experience breakdown or need maintenance, operators are also informed of the need. All in all, the introduction of IoT can improve communication between different facets of the supply chain, as well as speed and efficiency.
Tim Clark, head of manufacturing solutions at SAS UK & Ireland says it is the integration of information and sharing across the full product lifecycle which makes IoT so valuable in manufacturing and the supply chain.
"In industrial settings, operational efficiency might be considered the first phase of IoT adoption," Clark says. "Improving asset performance (reducing costs, improving quality, yield) and sustainable process improvements are all in the wheelhouse of most manufacturers."
Introducing IoT into the supply chain can also assist vendors in gathering information in real time with the correct context, which also may reduce time wastage and human error, according to Sabby Gill, executive vice president of Epicor Software International.
"The value-add is aggregating data quickly to make meaningful decisions today that manufacturers couldn't make yesterday," Gill says. "What's 'new' and notable with the IoT is this ability to aggregate data, analyze it and even use it for predictive modeling."
According to marketing firm TrendForce, the market for intelligent and connected solutions in manufacturing and the supply chain is estimated to exceed $250bn this year.
Traditionally, manufacturing and the supply chain centered around cost-cutting, speed and scale. However, today's vendors demand more.
Given an international market to choose from, customers now demand more customized services, greater flexibility, and better service from the enterprise. The expansion of IoT in the market allows factories to become smarter, and transform from traditional supply chains and contracts to a business model closer to manufacturing-as-a-service.
GE's factory, for example, offers separate service packages for aircraft manufacturers and airlines. By leveraging IoT in the supply chain, manufacturers can offer not only the production of parts but maintenance and preventative repair when required by using sensors and IoT monitors — which, in turn, keeps planes in the air longer and improves the profitability of the business as a whole.
SAS is another vendor which is leveraging IoT and big data to improve the efficiency of manufacturing and supply chains. Asset, product and process data is harnessed through the SAS for Demand-Driven Planning and Optimization suite to provide manufacturers with sales forecasts, demand-driven planning, inventory optimization and market-driven suggestions based on the season, prices, promotions and events.
IoT can also provide other services for manufacturers. For example, the Cisco Connected Factory offers data-driven solutions alongside enhanced security through control of network access by user and location with connected devices that register user identities, while a collaboration between Intel and National Instruments focuses on automated data monitoring with an eye focused towards market trends.
Competition between manufacturers to offer more flexible solutions which drive business internationally is also a contributing factor to the development of new IoT technologies in the production space.
The U.S., Germany and Japan are only some of the countries seeking ways to standardize the processes and procedures in what is called the "industrial internet."
The Industrial Internet Consortium (IIC) and the International Organization for Standardization (ISO) are industry groups gunning for international standards which would give manufacturers a level of standards and a starting point for modernizing their supply chains.
By doing so, industry players could improve the quality and efficiency of their own supply chains, as well as potentially compete more effectively in the global market. According to Gartner Research Director Chet Geschickter, when scrutinizing IoT from a business context, one mistake the enterprise tends to make is by approaching it as an entirely new form of technology.
Geschickter says that vendors fail to realize IoT is not new but the applications in usability, interoperability and openness are.
"Smart devices combined with IoT networks moreover can simplify various tasks, such as coordination among various components of the production system (e.g., personnel and equipment), setup of self-regulatory mechanisms for the facilities, and predictive modelling," Geschickter says.
Innovation, however, can come at a price. Time, research, energy and money are all necessary to push next-generation technologies forward — and so vendors must make sure such investments are worthwhile before going ahead and introducing new features into their supply chains.
On this note, Epicor Software's executive offered caution.
"While these disruptive technologies are expected to improve responsiveness, they create new challenges in managing an increasingly overwhelming volume of data that must be converted into actionable intelligence," Gill says. "Manufacturers can't afford to allow these technologies to inadvertently slow them down, as this would be contrary to the aforementioned goal."
In addition, SAS’s Clark believes that ensuring a return on investment has to be tackled in steps. In the initial stages of introducing IoT into manufacturing and supply chains, enterprise players must look for a straight line-to-value, and then they must consider every component of the supply chain, as well as the system as a whole.
"Perceived value in one area can push difficulties in others," Clark says. "There is also a risk to pushing new or untested technology too far too fast.
"There are a lot of use cases around supply chain that focus on operational efficiency, like the adoption of wearables and beacons in the warehouse — or advanced fleet management capabilities to reduce costs," Clark says. "SAS consistently takes a structured approach to these challenges."
IoT is the term we use to define connected devices. It is this connection which allows us to collect, analyze and share data from these devices, which can in turn be used to the benefit of the enterprise.
Vendors seeking to exploit this technology to improve the efficiency of manufacturing and supply chains need to keep this connectivity at the forefront of their minds. Harnessed correctly, IoT can award companies the chance to create smarter, more profitable systems which can compete well on the global scale, but implementation must happen carefully, in a way which considers every unit in supply and partner chains.
"There is no successful future that does not involve industrial organizations becoming data-driven organizations," Clark says. "Understand the interdependent processes of your business and how quickly they can or can't be changed, then empower the business with the best technology to succeed."
Resources: Internet of Things World
Where: Santa Clara Convention Center, Santa Clara, Calif.
When: May 14-17, 2018
Agenda at a Glance: Industrial IoT, Smart Cities, Energy & Utilities, Smart Construction, Smart Home, Edge Computing, IoT Security and more
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