The Industrial Internet of Things (IIoT) has been a major topic among manufacturers and third-party logistics providers (3PLs) for several years. However, the IIoT is beginning to encroach on all aspect of manufacturing and supply chain management for its wide-ranging deployment and application to improving processes. In addition, the IIoT’s nature allows companies to reduce overhead and maximize efficiency without dramatically increasing initial investments. But, some companies have avoided this trend. Over 2017, this will become an impossibility as the IIoT by manufacturers moves closer to every aspect of the economy and business operations, and you know why.
1. The IIoT by Manufacturers Is Extremely Valuable.
Business has a way of moving toward technologies with the greatest value. According to Louis Columbus of Forbes magazine, the IIoT is estimated to unlock manufacturing savings more than $11 trillion by 2025 globally, boosting overall economic value by 33 percent. In the U.S., the IIoT’s value could easily surpass $3.7 trillion by 2025 as well. Meanwhile, the use of the IIoT by manufacturers will continue to transform business as its data-processing powers grow and provide unparalleled views and insights into how businesses, particularly manufacturers, can realize greater cost savings. So, how exactly does the IIoT achieve such savings?
2. Predictive Maintenance and Customer Marketing Analytics Will Cut Manufacturers’ Primary Costs.
Much of manufacturing overhead derives from costs associated with equipment repair and replacement and marketing to consumers. However, the IIoT can be leveraged to generate advanced predictive maintenance schedules, including rerouting of processes to equipment during times of repair, to maximize the life expectancy of each item. As explained by Shane Laros of Engineering.com, the IIoT, or Industry 4.0, put the power of maintenance into the hands of machine learning.
Parts can automatically detect their imminent failure, spurring workers to correct issues before they cause system-wide delays. Meanwhile, digital monitoring of equipment boosts operational efficiency by isolating potential problems and areas that increase a company’s costs.
For example, if a piece of equipment is using more electricity than other equipment of the same type, it may indicate a problem with its electrical wiring. Consequently, the information can be relayed to an appropriate party to correct the issue before it shorts out.
Concerning marketing benefits, the IIoT connects information generated by consumers through social media, point-of-sale systems, internet trends and beyond to manufacturers directly. As a result, companies can predict and respond to changes in the market with greater accuracy and precision. Although this is commonly compared to the usefulness of the basic Internet of Things (IoT), its connection to manufacturing begets the IIoT title. Essentially, the IIoT by manufacturers will serve to keep product costs down by cutting the costs associated with each item’s manufacture.
3. The IIoT Meets Demand for Increased Visibility.
Modern manufacturers have plenty to worry about, and visibility is often at the top of this list. As companies grow, the level of visibility is also directly related to the companies’ level of connectedness in its respective supply chain, reports Chad DeJong of Industry Week. The IIoT by manufacturers enables broad-scale implementation and visibility to companies expanding in size or changing business models. Since traditional, internal software systems cannot handle such increase in operation, the IIoT is the natural solution.
4. IIoT Deployment Provides Significant ROI.
Manufacturers are expected to invest more than $70 billion into the IIoT by 2020, reports John Greenough of Business insider. The following graphic details how this investment has increased since 2014.
Based solely on the increased investment rates, the use of the IIoT by manufacturers will become more important in the coming years. More manufacturers will leverage its capacity and analytics to bring costs to record lows and eliminate redundancy and inefficiency wherever possible.
The speed of realizing a positive ROI for implementing IIoT technologies is difficult to define in terms of averages. Some companies with extreme, inefficient overhead costs will realize returns earlier. Meanwhile, companies looking to cut minor inefficiencies and boost overall revenue may require months to achieve similar returns. Ultimately, the size of the company and the dedication in deployment determines the time to return.
5. Fear Is No Longer a Major Factor.
One of the main reasons companies have avoided the IIoT is fear of a cyber-attack. Who can forget the numerous attacks that have rocked national companies in recent years? In 2016, the largest cyber-attack in history took place, affecting DynDNS, impacting domain name servers (DNSs) and shutting many sites down for an extended period. In response to looming cyber security threats, more companies involved in the manufacture, distribution, and sale of IIoT-based products have increased cybersecurity spending by 23.7 percent since 2015.
In addition, overall spending to increase cybersecurity among the IIoT will increase in speed after 2020, reports Gartner. In fact, some experts suggest that up to 25 percent of all cyber-attacks will focus on IoT-based technologies after 2020, Therefore, the need for increased spending to prevent them will rise. In turn, the level of cyber security deployed in your company’s IIoT initiatives will increase as well.
The Big Picture.
There is no longer a logical argument against using the power of the IIoT in manufacturing and supply chains. Rather than waiting for your company to fall behind your competitors, you need to embrace the IIoT now. It is a reality, not science-fiction.