Five industrial IoT use cases with a tangible RoI

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The Internet of Things (IoT) is at the heart of the fourth industrial revolution (Industry 4.0), which will digitize industrial processes based on the use of cyber-physical systems (CPS).

Instead of using legacy isolated machines and automation devices, Industry 4.0 processes will leverage CPS systems with cyber interfaces, which will be driven by digital data and processes. As a prominent example, consider machines that will be able to flexibly and instantly adapt to the physical characteristics (e.g., physical strength, height) of their human operators, as well as industrial robots that will be driven by orders and tasks in an Enterprise Resource Planning (ERP) system. This interaction between physical and digital world processes in industrial environments is enabled by a special segment of IoT technologies, which are coined Industrial Internet-of-Things (IIoT). According to several research firms, IIoT will contribute the lion’s share of IoT’s business value in the next ten years. For example, General Electric (GE) predicts that IIoT investment could top US $60 trillion during the next 15 years[1].  The main reason for this is that there are already use cases with proven ROI (Return-on-Investment), which are driving industrial organisations’ huge investments on IIoT. In following paragraphs we illustrate five such use cases, which are indicative of IIoT’s rising importance and tangible business value.

 Use Case #1 – Predictive Maintenance

The majority of machines, equipment and other industrial assets are nowadays maintained based on preventive maintenance practices. Preventive maintenance ensures that maintenance processes are undertaken at regular intervals in order to prevent equipment failure that could lead to quality degradation of industrial processes (e.g., wear in manufacturing production), as well as “expensive” unplanned downtime. Overall, preventive maintenance processes do not lead to optimal OEE (Overall Equipment Efficiency). IIoT technologies enable the evolution of maintenance processes from a preventive to a predictive paradigm. Predictive maintenance involves the automated forecasting of a machine’s end-of-life (EOL) based on the combination and processing of data associated with a variety of sensors and other indicators that relate to the status of an asset. For example, the EOL of a machine can be estimated based on the combination of sensor data streams from vibration, temperature, ultrasonic and acoustic sensors, as well as from thermal images.

With an accurate prediction of a machine’s EOL at hand, predictive maintenance processes are capable of identifying the optimal time slot for scheduling and performing the maintenance, taking into account the status of industrial operations (e.g., pending production orders) as reflected in business information systems (e.g., ERP and asset management systems). In this way, predictive maintenance optimizes OEE and yields a considerable ROI.

 Use Case #2 – Flexible Industrial Automation

Industrial organisations seek opportunities to benefit from novel automation technologies, such as smart sensors and actuators, 3D printers and more. For example, there are additive manufacturing scenarios where the integration of a 3D printer in the shopfloor can greatly improve the efficiency of production processes. Nevertheless, the integration of new technology in a plantfloor is still associated with tedious and time consuming automation (re)configuration processes, which can take several weeks or even months. IIoT technologies provide the means for virtualizing automation technologies and devices, while at the same time (re)configuring them at the cyber/IT layer rather than at the field. This reduces the time and effort needed to (re)configure an automation architecture, while at the same time increasing its flexibility. The respective labour savings and the faster time to market lead to clear business benefits for organizations that opt to digitize their processes such as manufacturers, energy operators, oil refineries and more.

 Use Case #3 – Supply Chain Collaboration

IIoT technologies (including AutoID technologies and Wireless Sensor Networks) provide supply chain participants with rich, timely and accurate information about supply chain interactions, as well as about events that impact supply chain operations. For example, a factory can gain timely access to information about delayed shipment of source materials, but also about critical orders that must be delivered in short timeframes. Likewise, customer feedback and purchase information can flow seamlessly across all supply chain participants, such as retailers and manufacturers. In this way, IIoT enables connected and informed plants, which facilitate collaboration and minimize supply chain costs. This is another important use case for IIoT in the Industry 4.0 era.

 Use Case #4 – Quality Control in Industrial Processes

IIoT facilitates the collection of digital data (typically Big Data) about the quality of industrial processes, such as information about products’ quality corresponding to a given production recipe, defects in a production line, as well as tracking and tracing of materials and processes that led to given quality result. The processing of these data can therefore be used to optimize the quality of industrial processes, through replicating successful processes, while avoiding malfunctions and defects. Quality control is therefore one more IIoT use case with a tangible ROI.

Use Case #5 – Smart Contracts and New Business Models

As part of the collaboration across industrial organisations, enterprises and their machines/objects need to establish contracts (e.g., Service Level Agreements (SLAs)) among them and accordingly adhere to these contracts. For example, M2M (Machine-to-Machine) interactions between different assets should respect the established SLAs between their owners. Hence, a machine should adhere to the SLA between a plant operator and its machine vendor, when ordering spare parts or scheduling the visit of a technician.

The advent of blockchain technologies and its integration with IoT can enable the establishment and enforcement of smart contracts between objects (such as machines and equipment) across different application domains. Even though use cases involving smart contracts between physical and/or virtual objects are in their infancy, they are considered very promising as they represent the next evolutionary step in the automation of industrial processes. Therefore, they hold the promise to become one of the killer apps for IIoT.

The above list of IIoT use cases is by no means exhaustive. However, it is indicative of the capabilities of IIoT and the digitalization of industry. In the coming years we expect industrial organisations to invest aggressively in IIoT in order to benefit from ROI associated with these use cases. In line with the predictions of major research firms, we think that the consumer IoT space is likely to lag behind, as ROI-generating use cases are still sought, explored under validation.

[1] https://www.forbes.com/sites/louiscolumbus/2016/11/27/roundup-of-internet-of-things-forecasts-and-market-estimates-2016/#7b03aaab292d

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