Internet of Things, Boon for Manufacturers

It’s planting season and a farmer in the Midwest is busy at work, but he’s not in the field – he’s working from a digital operations center on his tablet computer. Meanwhile, one of his tractors is running low on diesel. No problem. The tank has already notified the supplier it needs a refill.

In another location, a farm equipment manufacturer is monitoring a dashboard, tracking its entire fleet of vehicles and evaluating the performance of the equipment in real-time. Diagnostic data flows wirelessly to a technician who shows up onsite to replace a part before it fails.

This is the reality of the fast-emerging Internet of Things, the network of smart connected products whose breakneck development has been the subject of starry-eyed popular attention, but whose potential application in manufacturing is far less understood and even more vast.

Refrigerators may be able to reorder milk, and toothbrushes could tell you if your kid is really brushing. But the big money is in linking industrial equipment, aircraft, cars, medical equipment—and the list goes on—to the Internet of Things.

That could have as much as a $2.3 trillion global economic impact by 2025, according to the McKinsey Global Institute, including through efficiencies that could trim operating costs by 5 percent. Eighty to 100 percent of manufacturers will be on the Internet of Things by then, McKinsey estimates, while Cisco Systems predicts that 50 billion devices will be connected to the Internet, up from the current nine billion.

“This changes just about everything in terms of the way products are created, operated, and serviced,” says Jim Heppelmann, president and CEO of PTC, which in December acquired ThingWorx, a platform designed to build and run the applications of the connected world.

In the manufacturing matrix of the Internet of Things smart products, imbued with software, sensors, and processors, allow for condition monitoring, while connection via wireless or wired networks will allow manufacturers to monitor and control those same products remotely.

Based on this, operators will be able to figure out more efficient ways to use those products, or predict when they might fail, and dispatch preventive maintenance. Suppliers could learn how their products are being used, not used, or misused by virtually “asking” them, and apply that knowledge to next-generation versions.

This concept, in manufacturing, is not entirely new. Logistics companies have long applied similar technology to control raw materials and inventories and track shipments, for example. But as the price of sensors plummets, they can now be used to understand not only the location of an object, but its condition, environment, and operation, in robust detail.

“The general concept of instrumenting and collecting information off machines has been around for a while,” says Don DeLoach, CEO of Infobright, which specializes in technology that allows the speedy analysis of machine-generated data. “But it’s been limited by the cost and accessibility and practicality of this technology.”

Now that the price is falling, DeLoach says, “The implications from a manufacturing standpoint are everything from extending capital equipment life to energy management and supply chain logistics. That in and of itself is very cool. It’s going to change life as we know it, and I see this manifesting itself everywhere.”

The cost of microeletromechanical systems sensors has dropped 90 percent in just the last five years, McKinsey reports, driving a 300 percent increase in the number of devices connected over that same period.

Thanks to this, “We’re coming up on a big inflection point in terms of the connectivity,” says Sherri McDaniel, president of ATEK Access Technologies, one of whose subsidiaries is behind the sensor in that farmer’s diesel tank.

ATEK doesn’t only monitor when a farmer needs a refill. By collecting data about such things, it helps its customers find new and more efficient ways to run their businesses—like rescheduling and rerouting diesel tanker trucks, for instance.

“We can tell them, ‘In January, this is how many trucks you’re going to need on the road,’” McDaniel says. “It creates kind of stickiness, as we call it, between the manufacturer and the customer, and you can continue to build on that. It’s also a revenue stream, where you get a customer who is ingrained with you and your system, and they see that value.”

That opens up all sorts of new possibilities for manufacturers in after-the-sale support.

There are potential pitfalls to the Internet of Things. Collecting information on a product’s use and environment may, in some circumstances, have privacy implications, while using the Internet to control machinery remotely can tempt hackers to interfere with it. And products made by different manufacturers also have to be able to communicate.

“You’ve had smart sensors around forever, but they’ve been very siloed,” says Eddie Amos, chief technology officer at Meridium, which helps industrial customers predict and prevent equipment failures by monitoring their plants. “If you have one particular vendor, such as GE, they can tell you how their equipment is doing. But most people use equipment from hundreds of different manufacturers.”

That’s the rationale behind the new Industrial Internet Consortium. Announced in March, it’s an open membership group begun by AT&T, Cisco, GE, IBM, and Intel to standardize sensor technology.

And all that data can’t take the place of the people who interpret it, DeLoach says. That’s like determining the reliability of an airplane solely on a vibration report transmitted by a sensor to the manufacturer.

“Now we can do that analysis across an entire fleet of planes,” he says. “And the inclination might be to say, ‘We don’t really need to hear from the pilot. We have all the information we need.’ But I think you still want to hear from the pilot.”

Some of this fear can be mitigated by employing business applications that create actionable “dashboards” for different audiences. Using these applications, a mechanic sees a very different set of data than an operations executive, for instance.

The opportunities created by the Internet of Things and smart connected products far outweigh the initial challenges. One of the most exciting things, says PTC’s Heppelmann, is now manufacturers can be involved with a product after it leaves the factory floor. “That’s true closed-loop lifecycle management,” he concludes.



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