IoT Blog

How the Industrial IoT Is Transforming Manufacturing Inside and Outside the Factory


Tom Mueller

Tom Mueller

Vice President, Product Line Management

The  Industrial IoT (IIoT)  offers the potential to transform manufacturing, both inside and outside the factory, increasing equipment use, improving workflows and optimizing supply chains. By understanding how the IIoT can deliver better business outcomes, manufacturers and other participants in the manufacturing value chain can reduce costs, improve product and service quality, reduce time-to-market, increase agility and better engage with their customers and suppliers – leading to significant competitive advantages in today’s digital economy.

The Industrial IoT Inside the Factory

Empowering Manufacturers to Build Smarter Factories

One of the most important ways that the IIoT can improve business outcomes is by enabling manufacturers to secure, analyze and use data from their factory equipment, so they can create “smart factories” with more orchestrated and efficient operations. Specifically, manufacturers can deploy industrial IoT solutions that integrate IoT devices into their factory equipment and use cellular and other wireless technologies to collect and analyze data from these devices. The data is then transmitted to manufacturing execution systems and quality management systems, where it can be combined with other factory data to deliver insights on how the manufacturer can optimize performance across all of their factory’s manufacturing activities.

For example, manufacturers can secure valuable insights that allow them to:

• Mitigate operating risks by identifying equipment problems, so they can correct these problems before negative impacts materialize.
• Identify workflow problems and other challenges that can slow manufacturing or lead to quality issues.

Enabling Industrial Equipment Vendors to Offer New Services
In addition to helping manufacturers create smarter factories, industrial equipment vendors can use the IIoT to offer manufacturers new services that increase the value of their factory equipment. For example, with connectivity adoption barriers dropping due to wireless technologies, equipment vendors can more easily justify integrating additional sensors into their equipment to offer rich insights to equipment operation by remotely monitoring their equipment in real time, 24/7. This monitoring not only helps these vendors troubleshoot if a problem arises, but also enables them to offer their customers new predictive maintenance services. With these services, equipment vendors can remotely diagnose equipment problems before they occur. In doing so, they increase the value that their equipment provides to manufacturers by:

• Reducing unplanned downtime
• Eliminating premature or unnecessary maintenance
• Improving overall equipment effectiveness
• Streamlining maintenance scheduling and parts ordering
• Increasing their equipment’s energy efficiency

In addition, the IIoT allows industrial equipment vendors to offer other new value-added services to manufacturers, such as automated alerts on machine status and automatic deliveries of equipment supplies when they need replenishing. Some industrial equipment vendors are even moving from selling manufacturers equipment to charging them based on how much they use their equipment, using field operating data delivered by IIoT applications. These equipment-as-a-service business models allow their manufacturing customers to avoid large, upfront capital investments and instead pay for the actual use of the vendor’s equipment, better aligning the expenses with the value delivered by the equipment. These business models also enable equipment vendors to tailor their service offering to a manufacturer’s specific needs and use data analytics to optimize equipment use over time, increasing their equipment’s efficiency and providing additional savings to their manufacturing customers.

The Industrial IoT Outside the Factory

In addition to transforming the factory floor, the IIoT enables manufacturers to more efficiently move materials and products into and out of their factory. A recent study estimated that $1.9 trillion of economic value could be created by using IoT devices and asset tracking solutions in the global supply chain and logistics sector alone.

The Input Supply Chain
Manufacturing can’t occur if the required parts and supplies are not on hand. Tracking sensors – located on parts, pallets or shipping containers – combined with cellular connectivity and cloud-based tracking services can allow a factory’s suppliers to provide manufacturers with up-to-the-minute identification and location of the parts and supplies they need to manufacture their products. With information like this from their suppliers, manufacturers can:

• Streamline operations with just-in-time deliveries
• Anticipate and respond to shortages
• Create greater cash liquidity through more streamlined inventories
• Optimize worker productivity
• Better manage customer expectations
• Eliminate frequent searches for parts and supplies located somewhere in the factory

The Output Supply Chain
IIoT solutions that combine sensors, cellular connectivity and cloud-based tracking services can also enable shippers and third-party logistics (3PL) firms to optimize the distribution of their manufacturing customers’ finished products. By connecting fleets of trucks to a central visibility platform, shippers and 3PL firms can optimize the movement of products from a manufacturer’s factories to the manufacturer’s customers and distributors. Product location and status information can also help shippers and 3PL firms speed deliveries by revealing choke points and other potential sources of delay. This also enables shippers and 3PL firms to respond quickly to evolving traffic and weather conditions, so they can find more efficient routes for getting their manufacturing customers’ products where they are needed. Knowing the exact location of products can even help shippers and 3PL firms prevent or respond to theft.

Finding the Right Partners and Solutions

How can manufacturers, industrial equipment vendors, factory suppliers, shippers, 3PL firms and other companies in the manufacturing value chain realize the benefits of the IIoT for the manufacturing industry both inside and outside factories? One way for these companies to improve their chances of success is by selecting the right partners for their IIoT digital transformation initiatives. Realizing the full benefits of the IIoT requires expertise in multiple areas, including IoT devices, cloud applications, network connectivity and IoT security best practices. Companies should seek to work with partners that have experience in all these areas as well as a deep understanding of both manufacturing processes and manufacturing supply chains.

Another key to success for manufacturing value chain participants is finding solutions that allow them to simplify and speed IIoT application deployment, rapidly scale IIoT applications globally and easily orchestrate the flow of IoT data from the cloud to edge devices and back. For example, new comprehensive device-to-cloud (D2C) solutions, like OctaveTM, use data orchestration technologies to integrate edge device, network and cloud APIs into a single solution. Rather than assemble and cobble together their IIoT infrastructure from scratch, these solutions enable manufacturing value chain companies to easily and securely extract, orchestrate and act on data from their edge assets to the cloud, so they can make sure the right data is sent at the right time, with the right priority, to the right systems of record. D2C data orchestration solutions like Octave enable all participants in manufacturing value chains to focus on building new and better IIoT applications and also maximizing the value of the data delivered by these applications, rather than on the underlying infrastructure needed to support these applications.

Start with Sierra and join our upcoming webinar, Transforming Manufacturing for Growth: Gaining a Competitive Advantage with IoT, to learn more about how you can use the IIoT to improve manufacturing productivity and safety, increase customer engagement, differentiate your offerings and generate new revenue streams.

A version of this article was originally published in Smart Industry.

Related Blogs:

Recent Posts