Six IoT benefits for an organization
Most organizations have already implemented technologies—such as instrumentation, supervisory control and data acquisition (SCADA), and asset management or computerized maintenance management systems—to provide near-real-time visibility of their processes and operations. So what value will the Internet of Things (IoT) add to existing technology investments? The short answer is a lot, though the specifics depend on the industry. In general, IoT’s benefits can be lumped into the following six categories:
1. Democratization of analytics
In the past, organizations had to build their own analytics—spending their own time and money to develop and test their own algorithms. However, IoT’s interconnectivity standards means there’s a new market of pre-built analytics engines that provide low-cost, plug-and-play access to the analytics needed to monitor specific types of markets, facilities, and asset classes. By democratizing analytics—making it accessible to everybody, not just the big spenders who could afford to build their own—IoT disrupts the traditional consulting and customized software market.
2. New business opportunities
According to Forrester, only 27% of business-to-business firms have a coherent strategy for adding value through digital transformation; yet, a Gartner survey shows that CEOs expect revenue from digital services to grow more than 80% by 2020.
The International Data Corporation (IDC) explains this discrepancy by predicting the emergence of the digital transformation (DX) economy." Like the dot-com revolution of the late 1990s and early 2000s, the digital transformation economy will create entirely new opportunities that never previously existed. Gartner describes these emerging fields as "algorithmic" and "programmable" products and services, such as the aforementioned democratic analytics engines, cloud computing, artificial intelligence, and smart utility grids.
Traditional industries will also benefit from using the IoT to collect customer feedback and usage data to develop new, forward-looking innovations that discover and deliver new value to customers. For example, McKinsey suggests considering Tesla, which collects terabytes of data from its vehicles, as "IoT on wheels." Tesla uses this information to continuously improve drivers’ experience of their vehicles and to inform future development cycles—from improvements in maintenance, self-driving capabilities, to totally new features. In other words, each mile driven in one of Tesla’s cars helps it identify its next must-have product or service.
3. Safer and more productive work
IoT will change the overall workplace. First, IoT will create new jobs, tasks, and skills for personnel to master. Digital literacy and data analytics will take increasing importance. As GE chairman Jeff Immelt said, "If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company."
Second, the IoT will improve the safety of our workplaces. IoT-connected sensors will help us monitor confined and hazardous places and processes, removing humans from danger. Then, by correlating sensor and environmental data over time, new insights can be identified to better understand past events and mitigate future risks.
The IoT will also create new ways for personnel to work together as a team. Many of us already live in a world where we get work-related notifications on our phone, make a quick decision on how best to respond, and press a button to delegate the action to the best party. While some view our ever-connected personal devices as the padlock to a 24-hour-workplace panopticon, many consider the autonomy and flexibility it grants rewarding: a way to make your job fit into your life, instead of fitting your life around your job. That’s why 58% of respondents in a Harvard Business Review survey rated the improved collaboration and flexibility a benefit—not a burden.
The IoT will overall improve productivity. Just as robotics eliminated repetitive physical tasks, the IoT’s "cognitive outsourcing" will enable computers to be responsible for menial or repetitive mental tasks, enabling personnel to spend more time on finding operational insights rather than collecting, transforming, and processing the data. The IoT also helps us bridge the generational divide—providing a way to transfer the experience and institutional knowledge of retiring baby boomers into sleek and engaging work for millennials. Some analysts also expect working together in new ways with new data will help cut down on unproductive meeting time and focus more on identifying new ways to help functional areas deliver their best possible work.
4. Process and behavior monitoring
In the consumer-facing market, IoT-enabled behavior tracking is synonymous with near-real-time marketing; however, industry also benefits from tracking peoples’ and processes’ behaviors.
As previously discussed, the IoT’s customer feedback and usage data provides insight into customer preferences that will enable traditional industries to develop new business opportunities.
Behavior tracking enables businesses to improve employees’ efficiency and productivity. Analysts expect that IoT-enabled near-real-time data on injuries, illnesses, absences, near-misses, and incidents will make the identification and isolation of health, safety, and environment issues more timely and effective.
Consider, for example, tracking clicks and eye movement on a critical human-machine interface (HMI). While commonly used in website design, this data could also enable designers to improve the usefulness of the interface, improving user efficiency and reducing errors, production defects, and accidents. In near-real-time, this data also enables supervisors to identify stressed or fatigued operators and adjust their workload to a manageable level—lowering the likelihood that the operator will fail to notice warning signs or make an error that contributes to an abnormal event occurring. When quality problems inevitably arise, or abnormal events occur, tracking people and processes provides the traceability and operator accountability you need for conducting root-cause analyses and identifying appropriate solutions.
5. Process and resource optimization
Among the widest touted of IoT’s benefits, IoT-enabled Big Data analytics provides several new avenues to improve operational efficiencies and helps boost the bottom line. By uniting data that was traditionally segregated between the enterprise resource planning (ERP), product lifecycle management (PLM), manufacturing execution (MES) and supplier relationship management (SRM) systems, IoT aligns your facility’s operation with its suppliers and customers and improves load forecasting and production scheduling.
Consider, for example, an automated inventory management system that extends all the way from the customer to all levels of the supply chain. Historical and forecasted demand can be viewed against processing times and a suppliers’ response time – optimizing plant loading and taking just-in-time to a whole new level.
The IoT also enables real-time quality monitoring. Imagine identifying nonconformities before the piece or batch finish processing, and automatically making the appropriate machine or process adjustments that improve quality, enhance efficiency, and reduce waste.
For example, there have been advances in progressive metal stamping processes that use IoT-connected embedded sensors to create pressure and draw-in maps across the face of the punch and die; then, real-time analytics use these maps to dynamically adjust the punch angle, stroke, pressure, and binder clamping force—greatly reducing piece-to-piece variation in a machining process that traditionally scraps 15 to 20%.
Combining energy rates with IoT-connected energy metering and process data also helps control energy expenses. This information can be used to identify cost-effective equipment upgrade opportunities and/or reduce waste.
For example, Motors@Work recently generated a work request for low-load alert for one client. The engineer who received the work order immediately noticed that Motors@Work generated the notification based on measurements taken during off-shift hours; examining the measurements, he saw this particular pump regularly kicked on throughout the night when the facility wasn’t operating. Reviewing pressure and flow data downstream of this pump helped this client to identify a leaky valve.
Imagine how much more efficient this process could’ve been had these downstream flow and pressure readings been IoT-connected. Instead of a low-load alert on the pump-motor, a maintenance technician could’ve directly received a work order to replace the leaky valve based strictly on comparing current flow values to historical ones at the same production rate. Additionally, the solution could’ve verified that a replacement valve was in stock—including ordering it, if not regularly stocked—before assigning and scheduling the work. In addition to detecting impending maintenance issues, IoT-enabled predictive maintenance promises to eliminate ineffective PMs—minimizing maintenance costs, increasing equipment reliability and availability, and thereby unlocking additional capacity while lowering the cost of production.
6. Better decision-making
By moving data out of traditional silos, IoT enhances situational awareness and empowers new contextual insights, resulting in faster and better-informed decision-making and big operational dividends.
Today, many business case analyses and purchase triggers are based on spot-checked or average prices and break-even thresholds. IoT-enabled rapid costing upends this system: receive time-based price signals, update your analyses, analyze tradeoffs, and choose the optimal response.
IoT also enables enhanced situational awareness. Sometimes referred to as cyber-physical production systems (CPPS) or the convergence of information technology and operational technologies (IT/OT), these advanced analytics solutions provide new levels of visibility and control in complex systems.
Nicole Dyess is director of client solutions at Motors@Work, a CFE Media Content Partner.