6 Questions to Assess Your Company's IoT Readiness

Estimated reading time: 5 minutes

The Internet of Things (IoT), creating "smart" devices by connecting conventional objects to the internet using sensors, is a done deal. Your fridge talks to your phone, your phone talks to Amazon and poof! Your groceries are shipped to your house before you can say "What just happened?"

And though the digitization of manufacturing is occurring, it is taking a little longer. A recent Nikkei Asian Review article cited Christian Brecher of the Fraunhofer Institute for Production Technology as he spoke at the Nikkei Asia300 Summit. Brecher said that the Industrial Internet of Things (IIoT or Industrial Internet) was more difficult to implement because production is more complex.

Part of the problem, he said, was manufacturing's inability to harness real, live data to benefit customers. He used the example of how Google Maps uses live data to create a dynamic traffic map with the ability to show the best routes for a user. Brecher says that eventually, manufacturers will be able to provide the same type of service for customers, for example, tracking live data from manufacturing processes, analyzing it and combining it with production knowledge to monitor quality in real time.

But we're not there yet.

In 2017, the World Economic Forum discussed IoT in factories as part of their annual meeting. The paper that came out of the discussion is worth a read, but the authors determined there are four problems with IoT in factories that require solutions:

• How to assure the interoperability of systems.
• How to guarantee real-time control and predictability, when thousands of devices communicate at the same time.
• How to prevent disruptors, or competitors, from taking control of highly networked production systems.
• How to determine the benefit or return on investment in IoT technologies.

Their paper talked about the need for creating "pilot environments" where technologies and strategies relating to IIoT can be adequately tested, analyzed and demonstrated. 

"This is why almost every big IT or automation technology provider has built its own smart manufacturing lab," they wrote, "where it can test and demonstrate proprietary solutions. But they are missing one important point: smart manufacturing is a network paradigm affecting wide-ranging areas from automation to IT, from digital planning of a product to its recycling, and from smart sensors to business applications."

A Collaborative Solution

The authors of the paper made a radical suggestion. Rather than companies building, staffing and operating separate smart labs, why not bring the power of collaboration to bear on building out IIoT infrastructure? What if industry and research teamed up to bring together all the players—SMEs and large multinationals; researchers and educators? Ideally, everyone with a vested interest in the success of IIoT needs to be engaged in collaboration, with the end goal of testing "innovative factory technology under realistic conditions, and moving it as quickly as possible from the laboratory to the marketplace."

From the WEF paper:

"The strength of such an association lies in its set-up as a ‘neutral’ platform: it connects technology providers and users, regardless of their competitive situation in the business world. This means that companies with overlapping business and competence areas work together, regardless of their size, history and economic situation. Here, they can develop general standards that are independent and thus not tied to a specific company or brand, and they can offer proprietary technologies and business models for use in open ecosystems.

Technology providers with complementary business or competence areas can also benefit from the networking opportunities that arise when different domains are connected, for example, at the interface between classic automation technology and IT systems, such as big data applications or digitization of maintenance processes. The network is complemented by research partners. Their role is to work on the necessary research projects and push the results into applications. Furthermore, they coordinate the collaboration of all partners."

If you're thinking that sounds a bit utopian, well, normally I'd agree. But such a model—the SmartFactory KL—has been in existence since 2005 in Kaiserslautern, Germany. Fifty partners from industry and science conduct R&D projects examining ways technology and manufacturing can and should intersect. The platform is neutral, allowing industry partners of varying sizes to engage in research. SmartFactory helps companies implement their best practices and solutions.

Some estimates say that by 2025 the IoT could generate up to $11.1 trillion a year in economic value. That's a scant seven years away, but on the other hand, I’m reading that due to long investment cycles and the need for robust processes and technologies in stodgier manufacturing circles, introduction of the IIoT will be will likely be methodical, if not slow. The WEF report says it's "highly likely that the current movement toward smart manufacturing will end up being an evolution which lasts decades." All the more reason, the report adds, to build these interdependent networks and labs. The rising tide of collaboration could help to lift the boats.

The Question of Size and 6 Questions to Consider

A recent story in Industry Week suggested that smaller manufacturing companies simply can't afford to ignore the IIoT, and yet, four out of five SMEs have no strategy for digital implementation. They either don't believe the IIoT is essential to their operations or don't think they have the time and resources to make the requisite changes. But, according to the story, two of the biggest issues facing these companies — supply chain management and workface challenges — could be addressed through IIoT technologies. 

For example, with regard to supply chain, cloud-based ERP could provide visibility during production and also monitor the product after sale and during the life of the product, measuring everything from product performance to material wear. As for workforce challenges, efficiencies created by using IIoT technology can tide a company over during the ramping-up phase with a new or re-training workforce.

The point is that small-to-medium sized companies shouldn't assume that IIoT is for the 'big boys' only. Indeed, innovations coming out of the IIoT have the potential to significantly level the playing field among companies of all sizes. 

In a 2015 paper titled "The Internet of Things: What this Means for US Manufacturing", PwC asked six questions that are still worth asking as you assess your company’s IoT readiness:

• Have you identified what and where data can be collected?
• Are you squeezing enough meaning out of the data collected?
• Are your employees using the data optimally?
• Have you conceived an IoT ecosystem strategy?
• Are you considering IP-enabled products that can lead to after-sale services?
• Does your talent base need re-training to build your IoT strategy?

You're only going to hear more about the IIoT, not less. If you've been putting off your self-education, it's time to start learning more about how these smart systems could propel your company toward efficient and lasting growth.

This article originally appeared on the East West Manufacturing blog, which can be found here.