In what is referred to as the “Internet of Things,” the physical realm is turning into

an information system with the actuators and sensors embedded in objects and
linked through either wired or wireless internet connection.
In the industrial field, there exists a vast potential for physical systems to increase
productivity in supply chain and manufacturing.
Imagine processes that can govern themselves, where smart tools can take
automatic corrective actions for avoiding damages, and if any damage occurs, the
individual parts can replenish themselves on their own.
These technologies have already surfaced and could drive what many in the
industrial world are calling “the 4th industrial revolution” following the first steam
engine, second electricity and the third information technology and automated
systems.
Often when we hear about IoT’s fourth industrial revolution, we find people
talking about its widespread applications in the commercial sector, business world
or logistics, but nobody gives a clear example of how it can be used in a particular
scenario.
Well, we shall, therefore, talk about something different for a change as we’ll
highlight the potential of the internet of things (IoT) in transforming tool
manufacturing companies.

Opportunities for IoT

We can categorize them into two categories:
 IoT to support the process
 IoT to support the product.
For methods that are IoT-supported, by 2020, about fifty-percent of all operations
at the corporate level will adopt automated protocols of data acquisition while a
quarter of these processes will possess capabilities of self-correction.
For IoT-supported products, manufacturing companies will see their revenue
getting doubled in total industry share because of the internet of things and
interconnected products by 2020.
Tool manufacturing companies can adopt IoT in their processes to optimize
operations, lower costs, improve productivity, reduce consumption of resources,
control supply chain and improve customer services.
Similarly, IoT can also provide benefits related to tool production such as increase
uptime, enhance the quality of tools and use actual data from performance to drive
design change in the future for the next generation of machines.
Since the internet of things provides a foundation for the automated acquisition of
data, tool manufacturers can adapt their tools and processes not just to derive
incremental enhancements, but also to transform their service, products, and
business model.
IoT allows manufacturers to develop intelligent machines that can learn, sense and
predict the needs of customers and connect with other devices in an interconnected
ecosystem.

IoT to Meet Unique Requirements of Tool

Manufacturers
Within tool manufacturing, several use cases reflect the increasing demand of IoT
to enhance the business operations. Read further to understand the disruptive use-
cases of IoT for tool manufacturers.
1. Connected Tools and IoT
From a service point of view, there are significant opportunities for tool
manufacturers to use relevant tools and IoT, starting with optimizing service
delivery. On the field, services based on actual performance data can enable
manufacturers and service providers to improve the satisfaction of the customers
and reduce the time taken to address the issue.
Monitoring conditions and remote diagnostic of connected tools can improve
customer relationship, increase their satisfaction and enable manufacturers to
maintain quality standards throughout the tool life cycle, for example, informing
about better designs in future.
With IoT, tool manufacturers can provide innovative services like ongoing
maintenance and assisted operations. The significant benefits that can result from
the connected tools in the future are:
Documenting the actual performance of the machine, creating detection and early
warning signals, and establishing closed-loop control that could drive significant
quality enhancements in future devices.
Making the transition into new services easier that could bring significantly higher
margins and increase customer satisfaction.
2. Supply Chain Connection and IoT
The modern supply chain has witnessed a substantial change since it adopted
mobile devices and a variety of other sensors, including GPS and RFID, for
keeping better track of inventory and goods in warehouses and transit. But even
 though the performance of the supply chain has improved, there still exist several
gaps that must be filled.
Customers always demand better service from tool manufactures. The most
important demand of the customers is the faster time of delivery. The network of
micro logistics can accelerate the delivery of products to the customers.
For reducing lead time of orders, many tool manufacturers are looking to shift
from traditional large centers and explore local smaller warehouses for a viable
micro logistics network.
The process is not simple, and for implementing a network like this, tool
manufacturing companies need to bring greater visibility in their logistics and
inventory for preventing costs from getting out of hands. IoT gives tool
manufacturers an opportunity to re-examine their expectations from RFID sensors
and see their dreams turn into a reality.
In the interconnected supply chain, the use of the IoT may initially be directed at
asset management (e.g., trucks, shipping containers, and pallets). It depends upon
simplified, low-cost data acquisition for enabling some critical decision which
must be made by tool manufacturers in managing the supply chain.
In simple words, for supply chain management, tool manufacturing companies can
use the internet of things for creating specific visibility that is important for
ordinary business objects, such as inventory position, orders, and shipments.
Moreover, IoT can help tool manufacturers monitor data in real time which would
allow them to recognize changes or issues and respond to them more efficiently.
The significant benefits that can be acquired from an
interconnected supply chain in tool manufacturing business are:
 Better management of inventory position in a complex network of logistics with more
visibility of inventory.
 Increased capabilities for fulfilling execution through more localized, smaller warehouses
that are at a lesser distance from customers.
3. Smart Manufacturing and IoT
The industry dynamics and the global market is pushing tool manufacturing
companies into rethinking their operations, and efficient factory management has
become essential.
In smart manufacturing, data analytics from IoT is required for increasing
efficiency and improving utilization of assets.
 If old and new data is combined with analytics-generated information, it will give
workers certain flexibility and capability of decision-making required to handle
demand variability and increasing complexity of the market.
Many plant workers in tool manufacturing companies are weighed down by
handling large volumes of data and struggle in understanding what the data
represents. In a smart manufacturing system, it is essential to have a layer of
intelligence that connects the plant with the enterprise to provide real-time data for
decision-making.
In tool manufacturing plants, an intelligent platform developed through IoT can
connect real-time data coming from the plant machines with business intelligence
to administer the enterprise decisions.
An immediate gain from this “internet of assets” is that it would eliminate the need
for a worker to enter and acquire data from the plant. In the long-term, such
systems can provide the autonomous operations or self-healing. Eventually, IoT
will make tool manufacturers operationally intelligent to look across materials,
tools and other information.
Other benefits that will result from adopting smart
manufacturing are:
 Increasing quality and reliability with access to operating intelligence.
 Connecting plant-level decisions with enterprise-level objectives to allow real-time decision
making.
4. Predictive Maintenance with IoT
Real-time status monitoring is not the only benefit of IoT smart manufacturing
system, but it can also be used to reduce machine failures through predictive
maintenance. Traditionally, machine maintenance involves following routine
preventative maintenance.
It generally includes replacing components of the machine based on the suggested
timeline of the manufacturer rather than actual data from the device itself.
Since tool manufacturing companies have complex machines and parts, it means
that they’ll be paying substantial amounts for unnecessary replacement parts or
scheduled preventative maintenance which, in most cases, is not required.
Or, if something goes wrong during scheduled maintenance, they might have to
suffer from unexpected downtime which means a halt of production and loss of
profits.
Predictive maintenance removes the guesswork as decisions for support can be
based on the data provided by the machine in real time. For example, temperature
sensors and vibration sensors wirelessly connected with the device can sense any
signs of loose, misaligned or worn out parts.
The information can then be transmitted to a controller that makes the information
available to the technicians immediately so that repairs can be made.
By real-time monitoring of machine components for increasing temperature and
vibration, issues can be identified and resolved before they become worse and
cause more damage or unexpected downtime. With time, the data from the
machine creates a performance log which can be used for making better
maintenance decisions in the future.

IoT can Streamline Communications in Factory

For tool manufacturing companies, IoT is not just useful for improving machine
operations. In fact, IoT can also enable better interaction between human workers
and have a significant impact on tool production lines.
For example, in a manual system, a machine worker may have to walk to the
technical manager to get help with a particular issue. On the other hand, if the
system is made wireless through IoT, switches, tower lights and pushbuttons can
be used for alerting managers whenever assistance is required.
Think of a wireless notification system through which a worker can press a button
or switch to notify the technician or manager that he requires assistance with a
particular machine.
A light connected to the device would then show the technician or manager where
aid is needed. Colors can also be assigned to the lights to indicate if a manager
(red) is required or a technician (yellow) is required.
Wireless pushbuttons with LEDs can aid two-way communication if LEDs are
configured to change colors when the technician or manager indicates that he is
coming to solve the issue.
Use of wireless notifications means that manager and technicians would no longer
have to continuously check each machine and workers won’t have to go to them
physically when assistance is required. With an interconnected network of devices
streamlining communications, technicians, managers, and workers can use their
time more productively and efficiently.

What the Future Holds

IoT can genuinely transform the way tool manufacturing businesses work, but
specific challenges are being faced in its implementation. In tool manufacturing
machinery, it is critical to receive the message and traverse that message promptly
to handle the machines.
Sometimes the devices are located at considerable distances from the asset and in
such a case, timely communication becomes crucial to utilize the full potential of
IoT.
IoT needs upgrades and expansions to meet the rapidly changing industrial
requirements. Tool manufacturers must build their smart manufacturing IoT
systems with flexible software and hardware that can adopt evolving technological
developments.
An IoT-equipped manufacturing unit can communicate with machines and self-
heal. However, data which is collected from such groups must be analyzed for
improving the production, efficiency, and profits. With more intelligent and
flexible manufacturing, optimization of logistics for tool manufacturers leads to
sustainable and better operations and quality control.
Tool manufacturing companies must overcome many hurdles in implementing IoT
if they wish to avail of its full advantages.
In the coming years, IT departments will face several challenges to managing the
complex data as the new systems that are to be switched to IoT will require
sophisticated algorithms and data management techniques.
The potential problems for IoT can be overcome through a solution that would
monitor the whole information technology and data created by the machine.
The IoT systems will also require advanced monitoring protocols and security
systems to avoid potential threats of the security breach.
All in all, a lot of efforts needs to be made before IoT can be implemented in a tool
manufacturing business, but once the system becomes operational, there will be no
stopping it.
 How IoT and automation
will transform how
industries function
Technology Update: Internet of Things (IoT) is changing
the future of automation engineering and manufacturing.
Learn the five areas driving IoT and why they’re
important.
BY RUTUJA JATHAR, GRAND VIEW RESEARCH INC. AUGUST 23, 2018

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Development of the Internet of things (IoT)

is considered as one of the major events in modern day industrial revolution. Digital
transformation has become inevitable for majority of organizations wanting to achieve
better productivity and management of processes and assets.

As companies strive to earn larger market shares, manufacturers and engineers face the
challenge of creating innovative machines and systems. Industrial Internet of Things
(IIoT) assist them in providing high-speed and efficient systems in running flexible
production processes at affordable prices. Another basic challenge is the integration of
these advanced systems for seamless applications. Design engineers and original
equipment manufacturers (OEMs) are using research and development (R&D) to
develop low cost solutions for the evolving demands.
Impact of IoT on automation

The IoT has entered the next stage of business, where the focus is primarily on
integration and convergence across industrial verticals, compared to the prior initiation of
novel projects. Businesses are more focused on the value and goals than versatility of
the connected devices. Advancements taking place in IoT connected devices, platforms,
software, systems, apps, and connectivity among others is the key factor taken into
consideration. It is imperative for the manufacturers to possess or develop instruments
and equipment with flexibility in design, movement, reusability, and interconnectivity.
Manufacturers increasingly rely on incorporation of subsystems and modular
components that can help improve the efficiency and eventually reduce manufacturing
costs.

IoT-enhanced manufacturing

With applications in healthcare, home automation, and building and construction, IoT
has become ubiquitous. The major challenge for manufacturers is to develop smooth
communications to enhance capacity and flexibility of actuators, analyzers, and robotics.
IoT-enabled industrial automation can offer integration of various commercial
technologies across major industrial applications, such as with programmable logic
controllers (PLCs).

Management of the overwhelming amounts of data is a primary digitization concern.

Analysis and distribution of collected information and data is essential for OEMs to
derive predictive models. These models can assist end-users to reduce often costly
unplanned downtime. Along with the use of cloud, manufacturers need to program an
interface to read the data and present the most relevant information for the end user. In
this way, engineers can collaborate with automation suppliers without prior knowledge of
big data.

How IIoT is transforming manufacturing?

Increasing cost-effectiveness of cloud technologies, IoT, operations and maintenance

personnel are turning to IIoT by embedding more intelligent controls, sensors, and smart
switches. Industries need systems that can do predictive analysis and determine the
projected time of servicing. Researchers find that such abilities are capable of
significantly reducing overall maintenance costs of organizations and can reduce
breakdowns.

Organizations are taking keen interest in integrating the three vital elements of business:
machinery, robotics, and humanpower. Traditional manufacturers are adopting the
advanced systems to reduce operational efforts and manufacturing costs.
Increasing adoption of supervisory control and data acquisition (SCADA) systems has
been a sign of growth for traditional manufacturers. Traditional SCADA systems cannot
communicate with operations and logistics. This is where industrial IoT becomes
invaluable for businesses by moving data gathered beyond SCADA. IIoT can link all
aspects of manufacturing, including delivery, operations, sales, and inventory. IIoT
connections make the machines more autonomous and most importantly, they can
coexist with SCADA. This is expected to boost integration and eventually replace or
integrate data acquisition systems into the IoT.

Five areas driving IoT

Global IIoT initiatives will unlock approximately $933.62 billion by 2025, according to
Grand View Research. The need for real-time information remains the primary market
driver, and innovation is expected to propel IIoT demand. Most companies focus on
databases to detect, categorize, and optimize processes. Emerging regions also are
expected to witness impressive growth in coming years with increased industrialization
and adoption of IoT across all walks of life. Five major IIoT trends follow.

1. Security

Researchers expect security to be the primary IoT and IIoT concern. Threats like
cyberattacks, data privacy, and data security threats from public and private networks
and devices are anticipated to be among major risk factors for industry. Major challenges
ahead of the organizations is to keep IIoT devices updated and secured throughout their
lifecycles. The key is to enable security patches and system updates for devices that
might sometimes have weak security systems and passwords.

2. Data intelligence

Increasing efforts to improve digital literacy is one major trend expected to emerge in
near future, across the board. Organizations are focused on investing in systems and
programs to ensure the right kind of data is collected. Preference for data quality over
data quantity is something that manufacturing organizations are careful about.
Companies are likely to hire data engineers and data scientists to figure out a way to
gauge the capabilities of major cloud service providers with the use of advanced tools.

3. Smart cities

Rising demand for connected infrastructure, autonomous technologies, and high

precision location services can ensure rapid growth of IoT and for smart cities. This
factor is anticipated to boost the adoption of IoT and IIoT and is poised to improve
infrastructure services and applications. Integration of these systems can boost accuracy
of services, traffic lights, parking systems, security systems, and so on.

4. Business collaborations

While innovations like flexible machines and system integration continue, businesses
vigorously seek innovation. Most companies are engaging in business collaborations
and cooperative partnerships. Mergers and acquisitions (M&A) are expected to help
organizations develop advanced capabilities and work faster and smarter. Researchers
suggest M&A can assist in bringing analytics and digital capabilities under one roof and
provide a strong competitive edge to the businesses.

5. Advanced applications

Development of advanced applications, predictive maintenance, software upgrades,

next generation manufacturing, blockchain (an internet ledger that can be accessed by
all parties involved in transactions and that serves as a depository of transactions
among involved parties), and autonomous data centers are also expected to positively
influence the manufacturing and automation engineering industries for years to come.

Lack of data visibility across most existing businesses

remains a hinderance. Data visibility is one of the vital IIoT requirements. Another
problem concerns system upgrade costs. Data gathering and analysis and system
upgrades can be extremely expensive and also can disrupt routine operations.
Researchers suggest that resolving these challenges can help IIoT reach its potential.

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Home » Networking » Industry 4.0: Autonomous, Customizable, Flexible Manufacturing

Industry 4.0: Autonomous,

Customizable, Flexible
Manufacturing
Kevin Magee, Global Security StrategistMay 31, 2017
To achieve lower production costs, Adidas has mass-produced sport shoes in Asia.
However, the process comes with an 18-month lapse between design and store
delivery, which, for customers, is becoming an increasingly unappealing wait.
Customers are looking for unique, customizable products and want immediate
access to the latest styles. But because the traditional manufacturing model is just
not meeting these demands, Adidas is creating a “speed factory” concept to
manufacture bespoke sport shoes at locations much closer to points of sale.
Similarly, Okuma, a machine tool manufacturer in Japan, has developed a
complete milling process capable of operating autonomously, 24 hours a day,
seven days a week. The integrated process includes the ability to automatically
select and change cutting tools as required and provide raw materials and supplies
without any need for human intervention. Workers are onsite to supervise plant
operations by means of monitoring applications on tablet devices and to perform
high value-added tasks. Beyond that, the factory is otherwise completely
automated.
These examples provide a glimpse into a fourth industrial revolution that’s taking
place right now—and that will transform both our current global economic
paradigm and the underlying mechanisms that determine how we create economic
value. As with previous three industrial revolutions, it will be based on the rapid
adoption of new and transformational technologies that will challenge all our
assumptions and change everything we think we know about manufacturing. It will
also mean that workers, manufacturers, and governments need to take note and
begin to either prepare for the inevitable or be left behind.

Vive les Révolutions

The first industrial revolution was sparked by the invention of steam-based
machines that mechanized previously manual labor and enabled incredible scale.
Next, electricity enabled the assembly line and, along with it, the rise of mass
production. The third major industrial advancement was brought by the invention
of computers, which enabled the automation of robots and machines that could be
integrated into assembly lines to either enhance or, in some cases, replace human
workers.
Today, manufacturing is evolving from the model and mindset that guided the
previous three industrial revolutions, which focused on centralization and mass
production to achieve economies of scale, to one based on mass customization and
flexibility with actual production of goods located as close to the centers of
demand as possible.
Rather than creating and managing inventories, manufacturers are looking to build
fully integrated supply chains that dynamically adjust and adapt to real-time
requirements and upstream supplier and consumer demand. This includes the
ability to both be predictive and take corrective measures in terms of production
adjustments in real time. What makes this transformational and “revolutionary” is
that manufacturers are looking to accomplish all of this with minimal or ideally no
human intervention throughout the end-to-end production process.
Dubbed Industry 4.0, this manufacturing model relies extensively on automation
and data exchange amongst manufacturing technologies and includes the
integration of cyber-physical systems, the Internet of Things (IoT), cloud
computing, and Big Data.

Decentralization and Automation with

Smart Factories
The Industry 4.0 model seeks to essentially turn the factory itself into a computer
or a “smart factory.” Within each smart factory, modular manufacturing processes
can be developed by means of cyber-physical systems merging computer
technology into the machines themselves, not simply for remote control and
monitoring. These modular smart factories will be able to autonomously enable the
decentralization and automation of decisions regarding production as well as be
able to communicate and cooperate via IoT with both human operators and other
smart factories to complete a full vertical or horizontal supply change.
In effect, this is like what the Information Technology industry has been doing
with data centers for years: Virtualizing physical servers, enabling automation and
orchestration technologies to allow machines to self-manage to a limited extent.
And we continue to push these models to further advancements with software-
defined networks (SDNs), hybrid clouds, and artificial intelligence (AI).
But while data center virtualization may be somewhat mainstream now, the
Industry 4.0 movement is still both new and largely unfamiliar to many. It is,
however, growing in significance within the global manufacturing community. It
began only a few short years ago, in 2013, when the German government coined
the term while outlining a plan to fully computerize the country’s manufacturing
industry.

German Chancellor Angela Merkel then presented the concept at the World
Economic Forum in Davos in 2015 and referred to it as “Industrie 4.0.” She spoke
enthusiastically of this new model as a way to “deal quickly with the fusion of the
online world and the world of industrial production.” And much of the
industrialized world has seemed to take note.
Far from political rhetoric, the German government is currently investing upwards
of €200 million to encourage practical and actionable research across academia,
business, and government. And Germany isn’t the only country where similar
investments are being made.

Four Design Principles of Industry 4.0

There are four design principles that support and help define Industry 4.0:
 1. Interoperability: The ability of machines, devices, sensors, and people to
connect and communicate with each other via IoT or the Internet of People
(IoP).
2. Information transparency: The ability of information systems to create a
virtual copy of the physical world by enriching digital plant models with
sensor data. This requires the aggregation of raw sensor data to higher-value
context information.
3. Technical assistance: First, the ability of assistance systems to support
humans by aggregating and visualizing information comprehensibly for
making informed decisions and solving urgent problems on short notice.
Second, the ability of cyber physical systems to physically support humans
by conducting a range of tasks that are unpleasant, too exhausting, or unsafe
for their human co-workers.
4. Decentralized decisions: The ability of cyber physical systems to make
decisions on their own and to perform their tasks as autonomously as
possible. Only in the case of exceptions, interferences, or conflicting goals
are tasks delegated to a higher level.

(Source: Design Principles for Industrie 4.0 Scenarios)

Technical Challenges of Industry 4.0
Revolutions, however, can be both challenging and messy—and this one will be no
different. Beyond cultural and political challenges inherent in any changes related
to economic productivity, there are several technological challenges that to be
overcome to enable the adoption of the Industry 4.0 model. These include:

 Data security issues are greatly increased by integrating new systems and
more access to those systems. Additionally, proprietary production
knowledge becomes an IT security problem.
 A high degree of reliability and stability are needed for successful cyber-
physical communication, but can be difficult to achieve and maintain.
 Maintaining the integrity of the production process with less human
oversight could become a barrier.
 And avoiding technical problems that could cause expensive production
outages is always a concern.
In a world where organizations struggle to ensure both availability and security of
the technology residing in their data centers, the idea of building cyber-physical
applications that involve not simply software, but also industrial machinery and the
additional responsibility of securing a factory where every machine, device, and
control is now an endpoint seems to be the greater and yet-to-be-mentioned
challenge of industry. All of this will need to run on a network, which means that
figuring it all out and enabling these revolutionary changes will likely be the job of
the IT department.
Application performance management, in particular, in an Industry 4.0 world will
be exponentially more complex than it is today. When a traditional software
application goes down now or, even worse, is “slow,” it’s difficult enough to figure
out what’s causing the problem. Most organizations have deployed an array of
tools to help monitor and diagnose these issues and avoid the late-night conference
calls where the application team blames the network and the network team greps
through endless logs to prove it’s the database causing the problem, etc.
Unfortunately, for many of these incident response teams there are still too many
tools and not enough visibility to get the job done.

The Gigamon Visibility Platform

This lack of visibility problem can largely be addressed today by the Gigamon
Visibility Platform, which provides an end-to-end view of users’ interactions with
not only an application, but the complete infrastructure supporting that application.
This allows IT to leverage diagnostic tools more effectively to solve these pesky
application performance problems.
But imagine a future, not so far from now, where IT departments are asked to
diagnose the problem when a cyber-physical, fully-automated and autonomous
assembly line goes down or, even worse, is performing “slow.” The entire
assembly line and all of its physical components will be the new “application” and
introduce complexity at a scale that will make traditional software applications
seem simple in comparison.
While the problem of monitoring and managing the performance of Industry 4.0
cyber-physical applications seems enormous, the solution is much the same with
traditional network visibility. Tapping points of interest throughout the assembly
line application and smart factory network, only the Gigamon Visibility Platform
can continue to see what matters to operators and intelligently assist and enhance
the ability of monitoring and diagnostic tools to scale to the tsunami level of data
volumes that will likely result.
Along with application performance issues, securing the “smart factory” will be a
much greater challenge as well. Not only will there be the additional complexity
resulting from adding machinery, sensors, and countless other IoT endpoint
devices to the network, but the very nature of the Industry 4.0 model is based on
intimately interconnecting and integrating not only trusted corporate networks, but
also those of the entire vertical and horizontal supply. How then does IT secure
“the network” when the concept of a perimeter is completely eliminated and the
network now potentially spans the entire world?
This is where traditional approaches to network visibility for security will begin to
break down. A new approach based on a Security Delivery Platform will be needed
to constantly monitor and provide intelligent data feeds to security tools in real
time to keep pace with the volume and velocity of data generated by the smart
factories of Industry 4.0 companies.

Preparing for the Inevitable: Visibility

First
In the end, where performance management and security intersect is at a trust level.
Suppliers, factory floor operators, shipping and receiving, and consumers must
have confidence and trust in the underlying systems that enable Industry 4.0
initiatives. Without that trust and strict adherence to service level agreements, as
well as confidentially and integrity of systems and data, the Industry 4.0 model
completely breaks down. Therefore, the challenge for IT will be to keep pace with
developments and ensure that instrumentation and visibility at the network layer is
not an afterthought, but rather that visibility and Security Delivery Platforms are
integrated into the earliest stages of smart factory design.
 And it’s all happening very fast. Why? Because the first movers and adopters of
Industry 4.0 concepts are expected to gain significant benefits from investments
with some early forecasts indicating revenue gains of more than 30% and cost
reductions of more than 30%. These financial incentives along with the imperative
to remain competitive in the global market will drive strategic business decisions
to embrace Industry 4.0 and like employees, manufacturers and governments, we
in IT need to take note of this revolution that is forming and begin to prepare.
https://www.youtube.com/watch?v=5qqZynJl9Xo
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IoT in Manufacturing: The

Ultimate Guide

Boris Shiklo

Chief Technology Officer, ScienceSoft

INTERNET OF THINGS

CIO BLOG

Published: Dec 25, 2018

Table of contents
Adoption driversIIoT impactShop floor visibilityConnected supply chainDistributed
operationsPotential for SMEsChallenges
Stronger demand for customization, increasing customer expectations, the
complexity of the global supply chain – these and many other challenges
encourage manufacturers to find new, more innovative ways to remain
competitive. In an attempt to gain productivity improvements and uncover
new ways of enhancing manufacturing and supply chain operations,
businesses resort to digital transformation. CGI’s study reports that 62% of
surveyed enterprises are already executing digital transformation pilots and
programs.

Industrial Internet of Things (IIoT) is a way to digital transformation in

manufacturing. Industrial IoT employs a network of sensors to collect
critical production data and uses cloud software to turn this data into
valuable insights about the efficiency of the manufacturing operations.

Drivers for IIoT adoption in

Manufacturing
Bsquare annual IIoT maturity survey (2017) reports that 86% of respondents
have already adopted IIoT solutions, 84% of them finding IIoT extremely
effective. The survey validates that IIoT adoption is progressing as more
manufacturing enterprises shift to advanced IIoT applications featuring
analytics and automation. The adoption drivers for the Industrial IoT
solutions include:

 Cost reduction. Due to optimized asset and inventory management

(hence, lower inventory carrying costs and search times), reduced
machine downtime, more agile operations, and more efficient energy
use, companies reduce operational costs and even create new
sources of revenue (for instance, smart, connected products allow to
shift from selling products to selling experience – product usage and
post-sale services). McKinsey estimates that IoT applications in
manufacturing are expected to generate $1.2 to $3.7 trillion of
economic value annually by 2025.
 Shorter time-to-market. Faster and more efficient manufacturing
and supply chain operations allow to significantly reduce product
cycle time. Harley-Davidson, for instance, leveraged IoT to
reconfigure its York, PA manufacturing facility and reduce the time it
takes to produce a motorbike from a 21-day cycle to six hours.
 Mass customization. Mass customization allows businesses to
create products tailored to the needs of a particular purchaser, while
retaining high production volumes. The manufacturing process
behind that requires a dramatic increase in the variety of produced
SKUs. The increase in the number of SKUs (each requiring different
materials and components) causes inventory to go up and become
more diverse. At the same time, manufacturing operations get more
complex: the production of, say, 20 items of SKU X can be
immediately followed by the production of 10 items of SKU Y. It
makes monitoring the effectiveness of manufacturing operations and
the location of inventory items burdensome and, in some cases, not
feasible. IIoT facilitates mass customization by becoming a source of
real-time data required for thoughtful forecasting, shop floor
scheduling and routing.
 Improved safety. IIoT helps to ensure a safer workplace. Paired with
wearable devices, IIoT allows monitoring workers’ health state and
risky activities that can lead to injuries. Along with ensuring workers’
safety, IIoT addresses safety problems in potentially hazardous
environments. For instance, in oil and gas industry, IIoT is applied to
monitor gas leakages as it travels through the pipe network.

Three dimensions of IIoT’s impact

IoT technologies are transforming the way production systems are built and
run, driving improvements across three main dimensions of the digital
transformation:
  Dimension 1. Visibility into shop floor and field operations
 Dimension 2. Visibility into the manufacturing supply chain
 Dimension 3. Visibility into remote and outsourced operations.
In the subsequent sections, we’ll have a closer look at each of the digital
transformation dimensions and explore them from the IIoT applications
perspective.

Dimension 1. Visibility into the shop floor

and field operations from the top floor
The Industrial IoT offers the revolutionary level of visibility into the shop floor
and field operations, as well as the possibility of handy control over
enterprise resources. IIoT technologies fill the gaps that lead systems like
ERP and MES to come to their limits: the reliance on manual data input
and the inability to work with detailed information (real-time equipment
status records, inventory items’ location, etc.)

By providing manufacturers with second-by-second shop floor data, IIoT

allows businesses to considerably increase manufacturing process
productivity. IBM reports that using IIoT insights for manufacturing process
optimization can lead up to 20% higher product count from the same
production line.

The IoT applications that allow manufacturers to gain a higher level of

vertical visibility fall into two groups:

 Applications supporting manufacturing operations

 Applications facilitating industrial asset management.

IoT-driven manufacturing operations

According to an IDC research, in 2016, IoT-enabled manufacturing
operations accounted for a total spend of $102.5 billion, being the largest
use case area across all industries. The researchers estimate that by 2025,
the improvements in operations driven by IoT applications could be worth
more than $470 billion per year. IoT applications for manufacturing deal
with such operations as monitoring and optimizing equipment performance,
production quality control, and human-to-machine interaction.

Monitoring equipment utilization

As ITIF research reports, IoT applications for monitoring machine utilization
can increase manufacturing productivity by 10 to 25% and produce up to
$1.8 trillion in global economic value by 2025. IoT solutions for monitoring
machine utilization provide businesses with real-time equipment utilization
metrics, thus offering a detailed view of what is occurring at every point of
the production process.

Monitoring machine utilization starts with pulling relevant data about

machine operating parameters, e.g., run time, actual operating speed,
product output, etc., from sensors, SCADA or DCS systems. The data is
gathered in real time and transmitted to the cloud for processing. The cloud
aggregates the data and develops it into informative insights about
equipment utilization KPIs (TEEP, OEE, setup and adjustment time, idling
and minor stops, etc.). After the data is analyzed, the results are visualized
and displayed to the factory workers via a user app (either web or mobile).

BC Machining LLC, a North Carolina-based metal parts manufacturer, has

deployed a machine utilization monitoring solution that helps the company
to improve productivity and optimize the utilization of computer numerical
control (CNC) machines. The IIoT solution uses real-time data from
equipment sensors to provide reports on the machines’ cycle times, the
number of parts produced, downtime, and more.

Product quality control based on condition monitoring

Monitoring the quality of the produced goods can be carried out in two
ways: by inspecting a WIP (work in progress) as it moves through the
production cycle or by monitoring the condition and calibration of machines
on which a product is manufactured. Although quality control based on
inspecting WIPs provides more accurate results (it helps to uncover minor
defects, say, inaccuracies in parts alignment), there are certain limitations
that hinder the method’s usage:

 Quality control based on WIP inspection is applicable only for

discrete manufacturing.
 It is costly, time- and labor-intensive, as the WIPs are inspected
manually.
 It is rarely possible to inspect every WIP, therefore, the method
provides a fractional view.
The second method, based on monitoring the condition and calibration of
machines, offers less differentiation in terms of scope - it provides simple
binary classification “good” and “not good”. However, it helps to detect
bottlenecks in the manufacturing operations, identify badly tuned and/or
underperforming machines, timely prevent machine damages, and more.

To monitor the quality of the production process, such parameters as

equipment calibration, machine conditions (speed, vibration, etc.) and
environmental conditions (temperature, humidity, etc.) are monitored to
identify when they go beyond the normal thresholds. If sensor readings are
approaching the thresholds that can lead to a potential product defect, a
quality monitoring solution pinpoints the source of an issue, triggers an alert
and recommends a mitigating action to fix or tune the machine and
minimize the production of low-quality products.

Maastricht Mill, a Dutch paper producing company, has turned to IoT

development to monitor the quality of produced paper. The enterprise rolled
out the network of temperature and vibration sensors to monitor the
condition of press rolls particularly critical for the quality of produced paper,
which helped the company to minimize the amount of low-quality paper.
Monitoring safety
As the International Labor Organization reports, every 15 seconds, 151
workers have a work-related accident. Industrial IoT solutions for
manufacturing help businesses address the safety issues and save $220
billion of annual injuries and illness costs.

In various industrial sectors, including mining, oil & gas, transport, etc.,
workers receive RFID tags that gather data on their location and wearable
sensors collecting data about their heart rate, skin temperature, galvanic
skin response, and other parameters. The sensor data is relayed to the
cloud where it is analyzed against contextual data (e.g. from environmental
sensors, legacy work planning systems, weather feeds, etc.) to detect
unusual behavior patterns (say, sudden vertical movements, unusual heart
rates, etc.), and prevent workers from falls, overexertion, and other injuries
and timely report a safety threat.

For instance, a combination of high skin temperature, a raised heart rate,

and no movement patterns for about a minute could indicate that a person
suffers from overheating. Whenever such a situation is recognized, an IoT
solution notifies an employee’s responsible person (a worker’s manager, a
doctor, etc.) via a mobile application.
To ensure workers’ safety, Nation Waste, Inc. is leveraging a safety
monitoring solution, powered by IBM’s Watson IoT. The solution uses a
range of sensors, including accelerometers to measure workers’
movements and detect falls, heat sensors and heart rate measuring
devices to help detect overheating and fatigue. Leveraging safety
monitoring solutions, Nation Waste managed to reduce the number of
workplace injuries and diminish their severity, not to mention the increase
in profit margins by at least 40 percent.

IoT applications for industrial asset management

Along with improving the effectiveness of manufacturing operations, the
Internet of Things is applied in manufacturing to ensure proper asset
usage, extend equipment service life, improve reliability, and provide the
best return on assets. The IoT applications facilitating industrial asset
management include:

 Industrial asset tracking

 Inventory management
 Predictive maintenance (based on condition monitoring).
It is estimated that the overall improvements arising from better asset
management and maintenance could be worth more than $360 billion per
year.
Industrial asset tracking
According to Zebra’s 2017 Manufacturing Vision Study, smart asset tracking
solutions based on RFID and IoT are expected to overtake traditional,
spreadsheet-based methods by 2022. By providing accurate real-time data
about enterprise’s assets, their statuses, locations and movements, IoT-
based asset management solutions remove the tracking burden from the
employees (freeing up to 18 hours of monthly working time) and eliminate
errors bound to the manual methods of data input.

To enable asset tracking for manufacturing, IoT works together with RFID.
Each asset – be it a magnetic locator or a crane - gets labeled with an
RFID tag, which serves as an asset identifier. Each tag has a unique ID,
which is linked to the data about a particular asset. Both the ID and the
corresponding asset data is stored in the cloud. The asset data may
include the asset’s physical parameters, cost, serial number, model,
assigned employee, area of use, etc. Once an asset, say, a crane, leaves
an equipment storage yard, an RFID reader installed at the yard entrance,
scans the tag attached to the crane and saves the record about the asset
leaving the yard to an in-cloud database. Similarly, when the crane enters,
say, a construction site, an RFID reader at the construction site entrance
scans the tag and updates the data in the database. Logging such data
throughout the asset’s journey allows technicians to see the movements of
the assets.
Along with that, GPS tracking can be used to state the location of the
movable assets, for instance, machines used in construction. For movable
items, asset tracking solutions are also used to calculate utilization. For
instance, seeing for how long each movable (say, a bulldozer) is in use,
technicians can pinpoint idling or underused machines and schedule
preventive maintenance.

Construction company VerHalen Inc., for instance, turned to IoT

development to implement a smart asset management solution. Now the
employees can use a mobile app to see where all of their assets are
located. Company’s managers can see how many tools and pieces of
equipment are at a jobsite and who operates them. With real-time data on
the tools’ usage and location, the enterprise has achieved a higher level of
asset visibility and accountability, as well as saved its employees vast
amounts of time previously spent on manual tracking and searching for the
tools.

Enterprise inventory management

IoT-driven inventory management solutions help manufacturers automate
inventory tracking and reporting, ensure constant visibility into the statuses
and locations of individual inventory items, and optimize lead time (the time
between an inventory order and its delivery). Due to these improvements,
smart inventory management solutions are reported to save 20% to 50% of
an enterprise’ inventory carrying costs.

Inventory management solutions applied in the manufacturing settings are

based on IoT and RFID technologies. Each inventory item gets labeled with
a passive RFID tag. Each tag has a unique ID that carries the data about the
item the tag is attached to. To fetch the data from the tags, RFID readers
are used. A reader catches tags’ IDs and relays them to the cloud for
storing and processing. To establish the location and the movements of the
scanned tags, along with the tags’ IDs, the data about the location of the
RFID reader and the time of the reading are relayed to the cloud. The cloud
pinpoints the location and the status of each item, visualizes the findings
and displays them to the users.

Sekisui Alveo AG, a leading manufacturer of high-performance polyolefin

foam materials implemented an inventory management solution based on
RFID and IIoT. As the company produces finished foam products, they are
labeled with RFID-tags. This makes it possible to view inventory levels in
real-time, locate specific inventory items and automate inventory tracking
processes that were previously handled manually.

Predictive maintenance, condition monitoring

According to Deloitte, predictive maintenance solutions based on the
Industrial IoT are expected to reduce factory equipment maintenance costs
by 40% and generate the economic value of $630 billion annually by 2025.
The solution leads the IoT adoption – 55% of businesses are at least
piloting predictive maintenance projects. This is how it is carried out from
the technological perspective.

Predictive maintenance relies on the insights gained with continuous

equipment condition monitoring. A piece of equipment gets sensors, which
collect data on a wide range of parameters determining its health and
performance, e.g. temperature, pressure, vibration frequency, etc.

Once collected, the real-time data from multiple sensors is transmitted to

the cloud, where sensor readings are combined with metadata
(equipment’s model, configuration, operational settings, etc.), equipment
usage history, and maintenance data fetched from ERP, maintenance
systems and other sources. The whole of data is analyzed, visualized, and
presented to shop floor workers on a dashboard or in a mobile app.

However, mere reporting and visualization is still far from prediction. To

enable prediction, the combined data set is run through machine learning
algorithms to pinpoint abnormal patterns that may lead to equipment
failures.

Data scientists use the recognized data patterns as the basis for creating
predictive models. The models are trained, tested, and then used to identify
whether any incipient problems take place, predict when a machine is likely
to fail, pinpoint operating conditions and machine usage patterns that lead
to failures, etc.

For instance, machine’s condition parameters (e.g., temperature, vibration,

etc.), operating parameters (e.g., speed, pressure, etc.), and environmental
parameters (e.g., humidity, temperature, etc.) are within normal thresholds.
However, combining these parameters and analyzing the joined data set
against predictive models helps to reveal that the combination of
parameters normal when taken separately can cause, say, a machine’s
engine failure. Once a potential failure is identified, the predictive
maintenance solution sends a notification to the maintenance specialists,
notifying them of potential degradation and recommends a mitigating
action.
VR group – a railway company in Finland – has implemented an IIoT-
enabled predictive maintenance solution to improve the reliability of the
carriages and avoid excessive maintenance activities. They use data from
sensors attached to the potential fault points (roller axle bearings, brake
disks, etc.) to gain real-time insights into the condition of the rails and
rolling stock and identify root causes of incipient failures.

Dimension 2. Visibility across the

manufacturing supply chain
Currently, for 52% of supply chain managers, end-to-end supply chain visibility
still seems far-off. However, the prognoses for the adoption of IoT-driven
manufacturing supply chain management solutions are quite optimistic: As
IDC predicts, by 2020, 80% of supply chain interactions are expected to
happen across cloud-based networks. The same source states that the
transition towards smart, IoT-enabled supply chain management solutions
is predicted to drive supply chain productivity by 15% and increase cost
efficiency by 10%.

Smart supply chain management solutions provide manufacturers with real-

time insights into the location, status, and condition of every object (be it an
individual inventory item on a warehouse shelve or a truck delivering
supplies) at any segment of the manufacturing supply chain.

An even bigger value of IoT applied for the manufacturing supply chain
optimization is that it enables the shift from knowing whether a particular
SKU is available to knowing the status of each item of that SKU.

For instance, with the traditional supply chain management methods, the
manufacturers could only get general data about the availability of an SKU:

1,435 items of SKU X are in warehouse 3.

With IoT in the manufacturing supply chain, enterprises get the data about
both the location and the properties (e.g. production date, shelf life, etc.) of
each individual item of the SKU. For instance:

1,435 items of SKU X are in warehouse 3, of those:

 1,000 items were produced 12 days ago.

 435 items were produced 22 days ago.
Along with monitoring the location and the properties of the objects, IoT is
applied to monitor the conditions, under which the objects are stored and
delivered. Before IoT came into play, the condition of goods could only be
monitored once they arrived at the delivery point. Now, the condition of
materials, components and goods can be monitored en route, which is
especially relevant for the manufacturers of breakable and perishable items
(e.g. pharmaceuticals, food, glassware, modern nanomaterials, etc.).

Consider an example of a pharmaceutical company shipping an order to a

distribution center via a third-party logistics service provider. Sensors
attached to the containers monitor the temperature inside the containers.
Suppose, because of a cooling system failure, the temperature inside the
containers is starting to rise. A temperature sensor attached to the inner
side of the container ‘detects’ the deviation from the recommended
threshold. The IoT solution notifies the manufacturer that the delivery
conditions have been violated and alerts the driver, who resets the cooling
system, thus, preventing spoilage of the transported medicines.

Dimension 3. Visibility into remote and

outsourced operations
High logistics costs, increasing demand for customization, the complexity of
the global supply chain, and the lack of local talent (hence, the need to
outsource) demand the shop floor operations to get distributed.
When an enterprise builds or buys a manufacturing facility in a different
city, state or country it still has to maintain its manufacturing and production
standards (material testing, industrial automation, predictive maintenance,
and other). Impossible to be monitored with traditional methods, the
compliance with the production standards can be monitored with IoT.

For instance, IoT-based predictive maintenance and timely prediction of

potential failures allows scheduling maintenance activities in advance and
eliminates the need to keep a local maintenance team. Similarly, IoT-driven
utilization monitoring solutions help manufacturers keep an eye on the
efficiency of manufacturing operations (by providing real-time equipment
efficiency metrics) without direct access to the shop floor.

Another example of how IoT promotes distributed operations is industrial

smart, connected products (SCPs). Smart, connected products are complex
systems comprising hardware, sensors, connectivity, embedded
intelligence, and cloud software.

For example, industrial smart, connected products located at a

manufacturing affiliate in Texas enable enterprise managers, say, in
California access real-time data about a wide range of the SCPs’ operating
(e.g., changes in the temperature of transponders, critically high rotation
speed of a milling machine’s spindles, etc.) and condition (e.g.,
temperature, vibration, etc.) parameters. The managers are informed about
possible overload conditions and breakages, as well as violations of the
standard operating procedures.
Equal opportunities for small and
medium-sized enterprises
By driving improvements in the business and manufacturing processes, IoT
provides equal transformational opportunities for small and medium-sized
enterprises.
For instance, similar to a large company having several affiliates in the
USA and in Mexico, a medium-sized enterprise with the affiliates in Illinois
and Texas is geographically distributed, hence, faces similar challenges of
distributed manufacturing. Due to reliance on cloud computing and
universal, often open-source software, IoT makes digital transformation
possible for SMEs.

For instance, an injection molding company with just 50 employees has

implemented an IoT-based condition monitoring solution that allows the
company to watch over the health and performance of industrial robots. The
solution monitors the condition of industrial machines and alerts technicians
if a machine is likely to fail. This allows the company to predict potential
equipment failures and timely mitigate them to carry out a 24/7 production.
This proves that with flexibility and visibility IoT provides, SMEs may
outcompete large enterprises if those delay digital transformation and rely
on economy of scale only.

The challenges of IIoT adoption

According to a BCG survey (2016), the toughest challenges US enterprises
face starting IoT-enabled digital transformation initiatives include
uncertainty about the ROI, data security and privacy issues, the lack of
qualified employees, and the integration with the legacy systems. Other
significant concerns include the inability to do fast experiments, and
missing IoT standards. Let’s look into the key challenges:

 Large investment needs and uncertainty about the ROI. IoT

initiatives incur several investments categories, including spending on
hardware (sensors, gateways), connectivity, cloud storage,
administrative labor, technical support, and more. Businesses also
have to consider how quickly they can roll out new solutions and how
fast it will take for a solution to start generating revenue.
 Data security issues. 58% of IIoT adopters believe IIoT is
increasing the risk of cyberattacks (however, half of IoT adopters
claim that they do not have a plan to prevent losses from possible
security threats). Verizon’s 2017 Data Breach Investigations Report confirmed
1,935 data breaches and 42,068 incidents. It found that no business
or industry is 100% secure when it comes to the compromise of data.
As IoT devices become more commonplace, the number of IoT
security threats is expected to rise. Gartner predicts that 25% of
attacks will involve IoT, while the spending on IoT security will reach
$547 million.
 Lack of qualified employees. Inmarsat found that 72% of
businesses around the world have a shortage of people at the
management level with experience in IoT deployment. Another 80%
report a lack of skills among employees in IoT deployment. Another
research found the specific skills that are lacking, which include
analytics expertise and experience in big data, embedded software
development, embedded electronics, IT security and artificial
intelligence. This leaves businesses unable to take advantage of the
potential that IoT solutions offer.
 The integration with operational technologies and legacy
systems. The difficult part of rolling out an IoT solution in the
manufacturing ecosystem is securely integrating IT and OT without
data losses and security inconsistencies. Ensuring seamless
convergence between IT and OT is difficult because in the past, the
systems had different objectives, hence, were build based on
 different technologies and networks. Today, the rapid adoption of
Ethernet protocols at the machine level and fast diffusion of web-
based user interfaces are gradually easing the integration process,
but the challenge is still to be solved.

To wrap it up
The Industrial IoT helps manufacturing enterprises to maximize productivity
through maintaining production uptime, reducing costs and eliminating
waste. Leveraging IoT data, manufacturers get a better understanding of
the manufacturing and supply chain processes, improve demand
forecasting, achieve faster time to market, and enhance customer
experience. However, considering the scale and the complexity of the
Industrial IoT initiatives, successful IIoT adoption requires thoughtful
orchestration throughout the IIoT application design and execution
segments.

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