The market for IoT devices is expected to nearly double from its 2021 capacity to $1 trillion in 20221. Interestingly, however, the rise in popularity of internet-connected devices is not due to technological advancements or even to web-based services. In contrast, HFS Research discovered that the industrial manufacturing sector had the greatest adoption rate (85%) among the companies that were surveyed.
Benefits to industrial manufacturing are well-known and have been adopted over time as separate functional improvements. These include things like optimizing output rates and gathering more data to gain insights into operations. When manufacturers adopt a more comprehensive approach to integrating IT and OT to create the smart factory, they will be able to fully reap the benefits of this “industrial IoT” (IIoT) that is driving their industries forward.
Many aspects of the smart workplace are made possible by the Industrial Internet of Things (with some remaining challenges). However, before delving into those, it is worthwhile to examine the features that distinguish a smart factory from a conventional one.
Smart Factory Characteristics
The convergence of digital information and tangible assets that increase production capacities is the most obvious distinction of a smart factory. There are three main features of these Cyber-Physical Systems (CPS) that arise from the addition of sensors and automation of controls in industrial processes: asset connectivity, visibility into performance and trends, and operator autonomy.
Operators can access the machinery through a combination of digital and tactile interfaces. With this link, they are able to see a virtual representation of the current state of the apparatus on a screen in real time. By gaining deeper understanding of the process as it is being carried out, operators can keep a tighter eye on things while spending less time actively monitoring the machines.
A further feature of smart factories is the ability to gather data and perform the analysis needed by engineers to decipher process operation. In addition, the increased data volume necessitates the inclusion of new components, such as on-premise or cloud-based servers, that were not required by the previous system.
Benefits of the Smart Factory
The IIoT’s numerous benefits are what are causing this high adoption rate in manufacturing. Manufacturers’ past benefits from incorporating AI and ML into their workflow constitute the first layer.
- Improved inventory control – Historically, inventory was a high-priority KPI; recording insights into production flow allows lower inventory while also increasing resilience/component availability, which is a known drawback of just-in-time (JIT) production. Supply risks can be reduced and the equilibrium optimized with the help of analytics. With this enhancement, we can save money on both order administration and inventory storage.
- Lower production cost through higher Overall Equipment Effectiveness (OEE) – The smart factory analyzes historical data and uses AI to optimize output flows in response to changing demand. This method also enhances output and energy efficiency through asset optimization.
- Improved quality and lower scrap – Operators can gain valuable insight into equipment lifespans by gathering massive amounts of data during production. They can now see wear patterns on tools and anticipate the next (likely) point-of-failure thanks to this perspective. When thinking about run rates and aiming to reduce process waste through lean initiatives, predictive maintenance’s reduced repair cost and downtime to perform it is a significant advantage.
With these three ostensible enhancements, the IIoT promotes decentralization and thus further allows the smart factory. As a result of the recent disturbances in the global supply chain, many companies have shifted to a more vertically integrated model in an effort to speed up the qualification of new suppliers and increase their oversight of product quality and timely component deliveries. An intelligent factory without vertical integration can still profit from connecting suppliers’ assets to a shared network, especially as more companies implement IIoT tools further down the supply chain.
Further, the supplier’s ability to collaborate with other businesses is bolstered by this capability because it allows new partners to gain insight into process skills without requiring the supplier to conduct time-consuming quality audits or process reviews. The widespread adoption of IIoT in production has also facilitated the development of industry standards to guarantee proper adoption of the new capabilities by new business partners.
Improved customization options and product—or manufacturing—as-a-service are just two examples of how IIoT can help businesses branch out into new revenue sources. The manufacturing process, no matter the application, will receive quality through continuous improvement as a result of increased data gathering and analytics.
Lastly, integrating IT with OT streamlines product development or process improvement/troubleshooting efforts by leveraging virtual simulations to speed up iterative changes before cutting a physical part.
Smart Factory Challenges
There are many benefits to having an IIoT-enabled smart factory, but there are also obstacles that companies must surmount.
The original investment in data collection and digital processing equipment is the first. The business case needs to take into account the full effect of the investment, which can include things like modularizing data collection/processing tools, cutting down on inventory, and minimizing downtime.
Integrating new technology with existing systems is another obstacle. While it is easier to construct a new integrated design, this may not be an option. Increased dependence on a connected factory makes it all the more important that any retrofitting of a factory with IIoT tools take into account non-negotiables like connectivity, network resiliency, and cybersecurity.
Finally, it is crucial to have the right set of skills to apply the technology, such as the ability to predict future growth in network traffic and data processing needs.
Industrial manufacturing is racing into Industry 4.0 thanks to near-universal adoption of the IIoT, despite the fact that companies always face challenges when implementing disruptive shifts to an industry. Manufacturers can benefit from enhanced connectivity, visibility, and autonomy by optimizing inventory, reducing operating expenses, and raising quality. Moreover, the IIoT allows for the possibility of developing a standardized, decentralized, linked supply chain. This final state, together with advances in product and process development that can be implemented more quickly, has led to an exciting inflection moment in the industrial manufacturing sector.