According to CB Insights, world-class manufacturing sites are working at 85% of their theoretical capacity, yet the average factory is only around 60%, meaning there’s vast room for improvement in production efficiency. But how can mid-sized manufacturers use the Industrial Internet of Things (IIoT) to digitise and streamline their processes by connecting their assets to the internet? By Rob Stummer, CEO of SYSPRO Australasia.
Just like the world-class manufacturers have done, mid-sized Australasian manufacturers want to increase production efficiency, improve quality and traceability, whilst improving the customer experience by being continuously updated. IIoT technology is a key part of Industry 4.0 and large multinational corporations have already adopted it as an essential part of doing business.
It’s not good enough to adopt elements of IIoT for the sake of it though, there needs to be a clear perspective to identify the revenue and profit values at stake, the expected time frame to implement it, the technical enablers required, the optimal level of investment in technologies and services, and the capabilities that must be developed to ensure success.
According to the report IIoT platforms: The technology stack as value driver in industrial equipment and machinery by McKinsey & Company, “Equipment and machinery companies considering a transformation to embrace the IIoT need to develop a clear perspective to drive impact at scale.”
Fabricated metal companies rely on a high level of customer service to ensure repeat business. If they cannot streamline the order-entry process, maintain strict ISO standards and deliver products on or before the promised date, their customers will find someone who can. By introducing machine learning for analysing their IIoT data, they can make operational predictions 20 times earlier and with far greater accuracy.
A mid-market sector that is really booming in this region is our food & beverage manufacturing sector, which requires strict quality control: products must be stored at just the right temperature and humidity to guarantee freshness. Sensors can be used in storage facilities and even retail stores to monitor and measure these levels. Algorithms are used to turn that data into visual information on a real-time management dashboard. The system then alerts the production manager of any deviations that could affect their products.
Not only is it possible for food & beverage manufacturers to use IIoT to improve quality and optimise production levels, there is also the potential to monitor workplace environments, including air quality, heat and vibrations, and provide immediate notifications if changing conditions change might destroy products, cause downtime, or even harm employees or the public. If, for example, a machine is constantly overheating, maintenance may be needed sooner than originally expected. Food & beverage manufacturers using IIoT to monitor their machines can reduce downtime while avoiding more serious and consequently more expensive repairs.
Almost unlimited potential
While most mid-sized manufacturers have either already started or are considering IIoT technologies, there’s still some mystery around the potential benefits. Prior to implementation, manufacturers should reflect upon a few areas where IIoT can make its greatest impact. From improving decision-making to increasing efficiency, pinpointing IIoT’s value proposition can clear up confusion and open doors to a future of connectivity.
For mid-sized manufacturers, IIoT is a strategic move that can provide cost savings and improve profitability, as well as the ability to become more competitive. Not only does IIoT help in optimising operations, but from an infrastructure standpoint, these tools can also help to optimise a production facility’s energy consumption.
The advantages of IIoT don’t stop there: many mid-market manufacturers will find it can also help them to develop new customer-oriented, revenue-boosting business models. No matter if the focus is on growing the revenue from new business models, or achieving improvements in production efficiency – or both – digital advances in manufacturing absolutely need full IIoT transformation at scale.
In the highly competitive world of manufacturing, it’s a case of adapt or die. It’s not enough to invest in IIoT as an add-on to a mid-market manufacturing business. Like many large multinational manufacturers, true adoption of IIoT solutions can mean organisational and cultural changes, and new personnel and processes, but the improvements to production efficiencies can make them significantly more competitive. IIoT really does have almost unlimited potential.