TRANSFORMING MANUFACTURING WITH THE INTERNET OF THINGS

ABSTRACT
The Internet of Things (IOT) is changing manufacturing as we know it. Factories and plants that are
connected to the Internet are more efficient, productive and smarter than their non-connected
counterparts. In a marketplace where companies increasingly need to do whatever they can to
survive, those that dont take advantage of connectivity are lagging behind. Only 10 percent of
industrial operations are currently using the connected enterprise. Global competitive pressures are
challenging industrial and manufacturing companies to drive inefficiencies out of their systems,
manage workforce skills gaps and uncover new business opportunities.

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TABLE OF CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.

INTRODUCTION
CODE HALO THINKING
HOW IOT ENABLES INFORMED MANUFACTURING
IOT: THE PROMISE AND POTENTIAL
APPLYING IOT TO MANUFACTURING INDUSTRY
CONDITION MONITORING OF WINDMILLS
CONCLUSION
REFERENCES

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INTRODUCTION
The Internet of Things (IoT) is an environment in which objects, animals or people are provided
with unique identifiers and the ability to transfer data over a network without requiring human-tohuman or human-to-computer interaction. IoT has evolved from the convergence
of wireless technologies, micro-electromechanical systems and the Internet. The concept may also
be referred to as the Internet of Everything.
A thing, in the Internet of Things, can be a person with a heart monitor implant, a farm animal with
a biochip transponder, an automobile that has built-in sensors to alert the driver when tire pressure
is low or any other natural or man-made object that can be assigned an IP address and provided with
the ability to transfer data over a network. So far, the Internet of Things has been most closely
associated with machine-to-machine (M2M) communication in manufacturing and power, oil and
gas utilities. Products built with M2M communication capabilities are often referred to as
being smart.

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Key Drivers and Challenges in the Manufacturing Industry

Complex, dynamic value chains: Manufacturers participate in and manage complex,

overlapping value chains, with frequent change, as they seek new opportunities around the

globe.
Emerging market growth: Manufacturers continue to reshape supply chains and product
strategies to support emerging market growth sourced from and manufactured in emerging

regions and local markets.

Traceability, transparency, brand, and reputation. Manufacturers will use increased
traceability and transparency to strengthen their ability to deliver product quality and protect

their reputations.
Demanding customers. Manufacturers are compressing business cycles to meet customers'

increasing requirements for personalized products and higher levels of service.

Converging technologies for manufacturing. Technologies operational technology
(OT) and information technology (IT), including IoT are mandatory for manufacturers to

design, manufacture, and deliver their products.

Ubiquitous connectivity. Connectivity is ubiquitous in devices, interfaces, and processes
and extends to the edge, with manufacturers assuming that the communication infrastructure

will keep up.

Truth in data. Manufacturers are looking for the truth in data as they seek more valuable
analysis of greater volumes and variety of data and the information that will bring them closer
to digital execution.

Applying Code Halo Thinking

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The IoT represents a scenario in which every object or thing is embedded with a sensor and is
capable of automatically communicating its state with other objects and automated systems within
the environment. Each object represents a node in a virtual network, continuously transmitting a
large volume of data about itself and its surroundings we call these digital footprints a Code
Halo. Products built with this capability are often referred to as the new breed of connected
products; examples include the smart grid, connected cars and networked and connected factories,
all of which represent variations of the same underlying concept.
The IoT can include a person with a heart monitor implant that continuously monitors the patients
health and alerts care providers in case of an emergency. Other examples include an automobile
with built-in sensors that send an alert to the owners mobile phone when tire pressure is low,
precision farming equipment that can adjust the way each part of the field is farmed, or a home
automation system that adjusts cooling and lighting based on the level of activity sensed.
In a recent report, according to Gartner, the installed base of things (excluding PCs, tablets and
smartphones) will grow to 26 billion units in 2020, a near 30-fold increase from 0.9 billion units in
2009. This eclipses even the growth of consumer mobile and computing devices, as illustrated in
Figure 1. Importantly, this means that the Code Halos surrounding products will offer organizations
unprecedented access and insight into product usage.
The anticipated growth of things over the next few years coupled with the expected cost
reduction of adding basic IoT capability to consumer products means that the majority of devices
will be interconnected. We see organizations using online customization tools and quote generation
to configure and sell products. One of our clients (a diversified manufacturing organization) allows
customers to configure car designs, and arrive at estimated quotes. This information will be
transmitted to localized production plants to optimize the supply chain, drive cost-effective
procurement and provide real-time visibility of delivery dates.
In this landscape, the physical world is highly intertwined with the information world, compliments
of the Internet Protocol address scheme, with every object across the value chain sharing and
receiving context-specific information for performing a particular task.
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Some of the above isnt necessarily new many organizations have used sensors to capture
information for a better part of the last decade. What is different, however, is the high level of
device interoperability, the potential for information to traverse multiple platforms, and the
emergence of technology that permits companies to manage large volumes of data and uncover
deep, hidden patterns.

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How IoT Enables Informed Manufacturing

An informed manufacturing organization contains four elements: informed products, processes,
people and infrastructure. These essential elements of manufacturing are converging like never
before, creating a more automated, intelligent and streamlined manufacturing process.

Products: Advanced sensors, controls and software applications work together to obtain and
share real-time information as finished goods make their way down the production line.
Informed products will enable machines to take autonomous action.
People: By connecting people across all business functions and geographies, and providing
them with relevant information in real-time, informed people will provide intelligent

design, operations and maintenance, as well as higher quality service and safety.
Processes: By emphasizing bidirectional information-sharing across the global
manufacturing value chain from supplier to customer informed processes lead to a
flexible and adaptable supply chain.
Infrastructure: Using smart infrastructure components that interface with mo-bile devices,
products and people, informed infrastructure will better manage complexities and enable
more efficient manufacturing of goods.

Informed
Products

Informed
Processes

Informed
People

Informed
Infrastructure

IoT: The Promise and Potential

The pervasiveness of connected devices is not localized to certain industry segments or value chain
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processes; rather, this concept is finding applicability across multiple segments of manufacturing
and logistics, throughout the value chain.
Consider the possibilities across various industries:

Transportation and logistics: Traditionally, logistics and distribution networks are based
on a combination of material and information flow between various supply chain
participants. The network contains various nodes, and all of the nodes require manual
intervention for decisions, actions and issue resolution. Now, consider a scenario where
products have sensors and embedded tags. As they move across the supply chain, their Code
Halos interact with various partner and in-house systems in warehouses and distribution
centres. The flow of material becomes completely autonomous, and various decisions will

be made using information captured by readers throughout the supply chain.

Energy and utilities: A network of smart grids, smart meters and smart devices
continuously communicate with each other to ensure load balancing and peak levelling of
energy consumption, down to the device level. To reduce demand during high peak periods,
smart networks communicate with devices when energy demand is high and track how
much electricity is used and when. These technologies also give utility companies the ability
to reduce consumption by communicating with devices directly in order to prevent system
overloads and optimize total cost of energy generation and consumption. Examples include
reduction of power consumption by electric vehicles during peak periods and facilitating the

vehicle-to-grid flow of charge.

Automotive: Within the automotive space, the connected car concept is a game changer.5
New car models continuously generate data when in operation; this data can also be used to
automatically communicate with other vehicles (vehicle-to-vehicle, or V2V) and with
infrastructure (vehicle-to-infrastructure, or V2I) to improve overall driving experience and

safety.
Connected supply chain: By connecting the production line to suppliers, all stakeholders
can understand interdependencies, the flow of materials and process cycle times. IoT
systems can enable location tracking, re-mote inventory level monitoring and automatic
reporting of material consumption as they move through the supply chain. Access to
predictive analytics based on real-time data helps manufacturers identify issues before they
happen, lower inventory costs and potentially reduce capital requirements.
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Plant

floor control

automation:

The

IoT data

and

network

provide

interconnectivity between the shop floor and top floor, which enables the automation
of specific processes and reduces the human intervention required to address issues
or deviations. Additionally, sensors can continually measure operating parameters
such as temperature, pressure, alignment or thickness at a process level and send this
data to a remote controller. When deviations beyond pre-set control parameters are
sensed, the controller can automatically send instructions to actuators to make
adjustments to the process. IoT allows such feedback loops to run in near-real-time,
eliminating the need for active human intervention and associated time lags. IoT can
also advance shop floor visibility by providing continuous status at multiple checkpoints. The benefits of increased visibility extend beyond the enterprise to suppliers
and third-party providers. Suppliers will have increased visibility into material
consumption on the plant floor and can replenish stock just-in-time, avoiding both
stock-out costs and material carrying costs. In one such scenario, Apotex, a Canadian
pharmaceutical manufacturer, upgraded its manufacturing processes to automate
manual processes and jettison non-integrated systems. This included ensuring
consistent batch production (i.e., automatic identification of materials, addition of
ingredients at the right time and communication with the assigned operator) by
introducing automated guided vehicles, RFID tracking, sorting and process flow
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tracking. The end result: the company has real-time visibility into manufacturing

operations.
Remote monitoring and management of critical assets: While remote asset
monitoring has been around for decades, the ability to issue corrective commands is
rapidly maturing. Consequently, equipment suppliers have a more direct role in the
operations and maintenance of manufacturing plants if they embrace new service
offerings and business models. Models can pivot around hours of operation rather
than equipment sale, and the buyer gets to use the equipment in an as-a-service
offering. This will create entirely new and very closely linked business relationships
between manufacturers and their suppliers. A leading industry example is GEs

maintenance cost per (flight) hour model for its aviation business.
Proactive maintenance: Manufacturers have widely accepted the concept of
preventative and condition-based monitoring, but many are still in the process of
implementing these programs. If the manufacturer has equipment that needs to
operate within a certain temperature range, the company can use sensors to actively
monitor when it goes out of range and prevent malfunctions. Measuring vibrations to
detect operations that are out of spec is another example.

Fig:
Proactive maintenance

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Applying IoT to the Manufacturing Industry's Unique Requirements

Within manufacturing, we recognize three fundamental use cases that reflect the unique industry
challenges: connected products, connected supply chain, and smart manufacturing. In the sections
that follow, we expand our definition of these use cases and the benefits they bring to
manufacturers.
IoT and Today's Connected Products
From a service perspective, manufacturers have significant opportunities to use IoT and
connected products, starting with enhancing existing service delivery. Field service that is based
on actual product performance data allows manufacturers and the service channel to improve
customer satisfaction and time-to-repair metrics. Remote diagnostics and condition monitoring of
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connected products (and in some cases, remote fix) enables more loyal customer relationships,
increases customer lifetime value, and allows manufacturers to uphold product quality standards
throughout the product life cycle, including informing future design.
IDC projects that by 2018, 40% of the top 100 discrete manufacturers will rely on connected
products to provide product as a service. Forward-thinking manufacturers are already beginning
to deliver innovative services, such as assisted operations and ongoing maintenance supported by
IoT.
Another example of product as a service includes the paint manufacturer that can deliver a
continuous supply of white paint to the automotive OEM, based on production schedules and
real- time plant inventory status.
The key benefits resulting from the promise of connected products are as follows:

Documenting actual product performance, creating early warning and detection signals,

and enabling closed loop feedback to drive quality improvements in future products
Easing the transition to new services that should bring substantially higher margins and

greater customer satisfaction levels

IoT and the Connected Supply Chain

We've also seen substantial change in the supply chain from the adoption of mobile devices, as well
as a variety of sensors, including RFID and GPS, to better track inventory and assets in the
warehouse and in transit. But as much as supply chain performance may have improved over the
past decade, there are still visibility gaps in the supply chain. Furthermore, manufacturers are facing
higher customer service expectations from their customers. One of the most significant expectations
is faster delivery time. We predict that by 2017, 50% of manufacturers will explore the viability of
micro logistics networks to enable the promise of accelerated delivery for select products and
customers.
To reduce order lead time, many manufacturers are moving away from the traditional large,
regional distribution centre and exploring smaller, local warehouses to deliver a "micro logistics"
network. This is not a trivial undertaking, and the implementation of such a network absolutely
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requires manufacturers to have even more visibility into their logistics operations and inventory
to prevent costs from spiralling out of control. Through IoT, manufacturers have the ability to
revisit some of their early expectations for RFID and see them become a reality.
The practical use of IoT in the connected supply chain may be primarily at the asset level(e.g.,
shipping containers, pallets, and trucks); it also relies on low-cost, simplified data acquisition to
enable some of the critical decisions manufacturers need to make in the supply chain. In other
words, in their supply chain, manufacturers will use IoT to help create a level of visibility that
relates to a common set of "business objects" orders, shipments, and inventory positions, for
example. Furthermore, the availability of real-time or near-real-time data points that define supply
chain performance will enable manufacturers to respond to issues or changes in the environment
much more rapidly.
The key benefits resulting from the connected supply chain are as follows:

Managing inventory positions throughout an increasingly complex logistics network, with

greater visibility into actual inventory

Increased fulfilment execution capabilities, including the use of smaller, more localized
warehouses located closer to customers

IoT and Smart Manufacturing

As global market and industry dynamics push manufacturers to rethink their manufacturing
operations, effective factory management is essential. Smart manufacturing requires IoT-driven
data analytics to improve asset utilization and greater efficiency. Combining new and old data
with analytics-driven insight will give manufacturing workers the degree of flexibility and
decision-making capability they need to deal with increasing market complexity and demand
variability. We've predicted that in 2015, 65% of companies with more than 10 plants will
enable workers on the factory floor to make better business decisions through investments in
operational intelligence.
Unfortunately, today, many plant-floor workers are overwhelmed by an increasing amount of data
and struggle to quickly understand what that data represents. It's essential for smart manufacturing
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to include an intelligence layer that connects the shop floor with the executive suite, providing realtime analytics to key decision makers. The IoT-enabled operational intelligence platform should
bridge real-time information coming from the machine level with transactional business
intelligence that sits on top of enterprise applications. The most immediate benefit of the "Internet
of Assets" is eliminating the need to have personnel acquire and enter data on the plant floor. The
greater long-term benefit is the ability to run autonomic or self-healing processes. Eventually,
manufacturers should be able to have the operational intelligence that allows them to "see" across
products, materials, and back-office information. The key benefits resulting from smart
manufacturing are as follows:

Increasing reliability and quality through ongoing access to operational intelligence

Connecting shop-floor decisions with corporate-level objectives, whether they are
primarily focused on lowering costs, increasing customer service, or increasing revenue

CONDITION MONITORING OF WINDMILLS

Remote locations: Wind turbines are large and immense pieces of equipment. The largest wind
turbines have blades that are 415 feet long and weigh 25.5 tons. Their sheer size and remote
locations pose unique challenges for routine maintenance and triggers a need for regular on-site
inspection and preventative maintenance to sustain long-term returns.
Unanticipated damage: Storms and other natural events can lead to gusting wind, which can cause
unanticipated component damage in wind turbines such as cracks and damage between layers of
composite materials on the surface of the blades. Without regular maintenance, the cracks can
widen and deepen, causing the blades to become imbalanced, placing more stress on the gearbox
and other components. Large gears in traditional gearboxes can become misaligned due to the
uneven loads that are generated by damaged blades. Hence, wind turbines require a great degree of
maintenance to ensure a safe, cost effective and reliable power output.
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Maintenance and repair: Wind powers unique featuresincluding large turbines and remote
locations where wind farms are builtboth contribute to its success and pose challenges for
maintenance and repair.
Maintenance cost: Unscheduled maintenance visits can account for more than 70% of the total wind
turbine maintenance costs whereas preventive visits can bring that down to 20%.
Condition monitoring through IOT is the solution to manage wind farms to take into account the
above aspects, while providing a user-friendly UI and centralized control.
VIEW FEATURES

CONCLUSION
The current state of IOT in manufacturing: Although IoT is already in widespread use in
manufacturing and the supply chain, what it is used for is fairly limited and has only scratched the
surface of what can be achieved. For example, IoT is used frequently in road forwarding to drive
efficiency in route management and vehicle handling. While this is a great introduction to IoT in the
enterprise, there are a multitude of potential uses that will benefit manufacturing at every stage.
IoT to track exactly what happens to goods: In addition to package security, another major benefit
of IoT will be tracking in real-time exactly what happens to goods in transit or storage. Through
connected devices and sensors, it can be more easily confirmed that goods remain at the correct
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temperature and have been handled properly among other concerns. Sensors that alert shippers to
these behaviours will create significant cost savings up to billions of dollars in damaged.
The Future of IoT in Manufacturing: IOT will have an enormous impact on how the supply chain
operates and with the information available to supply chain and manufacturing leaders. In order to
benefit from this technology, it is not enough to simply implement it you have to understand how
what the most positive impact will be for your industry but also what the biggest implementation
value will be for your individual enterprise.

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REFERENCES
1. http://www.forbes.com/sites/ptc/2014/07/01/how-the-internet-of-things-is-transformingmanufacturing/#11a562cf228e12b84432228e
2. http://www.cognizant.com/InsightsWhitepapers/Designing-for-Manufacturings-Internet-ofThings.pdf
3. http://www.sap.com/pc/tech/internet-of-things/software/manufacturing-industry/index.html
4. http://www.automationworld.com/all/internet-things-effect-manufacturing

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