In some ways, the term “Internet of Things (IoT)” has been hijacked by what I call the “smart toaster phenomenon.”
For years, IoT device manufacturers have been touting the benefits of smart, connected home appliances—things like smart toasters (which toast your bread perfectly to your liking every time) and smart refrigerators (which can do everything from set expiration date notifications to look up/read recipes). IoT applications like these are capturing the attention of the public, but they’re not where the real money lies.
In my view, connected devices have greater potential, at least in terms of financial impact and ROI, in enterprise settings. That subset of the IoT, called Industrial IoT—or IIoT—is slowly gaining a foothold in the market. So instead of smart security systems and smart thermostats, more focus is being redirected to smart warehouses, industrial automation, connected logistics, and numerous other business use cases. Today, IoT devices have a deeper penetration in manufacturing, healthcare, and business than in our homes or phones; you can expect that trend to continue.
For companies interested in implementing an industrial Internet of Things system, this article will provide an overview of industrial IoT, as well as some important IIoT definitions, sample use cases, information about the underlying technology, and advice on how to find the right partner for your particular venture.
Table Of Contents
Chapter 1: An Overview Of Industrial IoT
The “industrial” in industrial IoT is a little misleading. Some might say the term applies to IoT applications used in a manufacturing setting; manufacturing is, in fact, predicted to be the biggest IoT platform by 2021, reaching a market value of $438 million. It’s also leading the pack in terms of industry investment in IoT. But in my view, industrial IoT encompasses device connectivity across all industries (not only manufacturing):
- In healthcare, wearables, mobile apps, and data-based diagnostics could revolutionize the way patients access and receive medical services.
- In business, corporations can take advantage of smart buildings to optimize energy use. (Nearly half of the energy used by buildings is wasted.)
- In retail, industrial IoT applications can increase supply chain efficiencies.
- In transportation, connected sensors can help with cold chain management, fuel consumption optimization, and fleet maintenance.
- Utilities are already deploying smart grid technologies that can help detect and isolate outages, handle priority routing to emergency services, and integrate customer-owned power generation systems into the grid.
The growing categories of use cases show that all industries can reap the benefits of the IoT, not just manufacturing.
The Challenges Of Implementing Industrial IoT
While the industrial IoT has a lot of potential for generating cost savings and efficiencies, it poses a practical challenge in terms of implementation. Most companies have already invested a substantial amount of money in operational technology (OT) that wasn’t necessarily meant to be connected beyond the local network. Though there are standard ways of talking to instruments on buses (Modbus and Profibus, for example), there’s no standard way of connecting to the internet. How will the data stream be captured and routed back into existing data management software systems, while making sure it’s all secure? The real innovation in the years to come will be figuring out how to take it from the local, connected bus of instruments in a production facility and get data out from the cloud for the purposes of analytics.
For example, say you make instrumentation for food manufacturers that measures the temperature of the ingredients and the amount of additives going into the stream. That instrumentation is useful, but it creates a closed-loop process.
There’s additional value to unlock if you can also monitor the health and calibration of the instrument, and help the customer remotely with issues and settings—which requires getting the instrument connected to the internet so the data it generates can be shared. There’s Wifi available, but since the instrument is being used in your customer’s manufacturing facility, not yours, they aren’t likely to let you use it. At this point, your options are limited: You either go with a proprietary connectivity solution (and risk getting locked into a particular architecture) or you build a solution yourself (which is difficult).
How To Step Into Industrial IoT
One of biggest challenges to overcome with the industrial IoT today is systems integration, where sensors, radios, controllers, and software all work together as part of a cohesive system. Widespread standardization at this level is not likely to occur in the next 10 years given the sheer number of competing protocols and technologies.
But that’s no reason to forego the benefits of the IIoT now. Trying to implement it on a company-wide level is too complex, so to get started, my recommendation is to do something small and impactful. Pick one problem, one thing you can measure and improve, and you’ll learn so much—not only about technology but about your own organization and how you would implement things like asset tracking or energy monitoring. Just be wary of the traditional IT partners, like telcos or consulting partners, because the industrial IoT is just as new to them as it is to you, and they don’t necessarily have it nailed either. They often bring in other partners, which could lead to a more convoluted system than you intended.
Next up, we’ll look at the technical and operational definitions of the industrial IoT.
Chapter 2: Technical & Operational Definitions: What Is IIoT?
In the previous chapter, we said that the industrial IoT essentially means applying the technology of the Internet of Things to business and industrial use cases. Here’s a more technical IIot definition:
What is IIoT? It is a network of interconnected computing devices embedded in physical objects for the purpose of gathering and exchanging data, which is then applied in a business context to create operational savings and efficiencies.
The data gathered from these interconnected devices is used in a variety of ways, all of which lead to some form of operational transformation. For example, the data could be analyzed to uncover process inefficiencies; it might provide real-time visibility (and greater control) over products being shipped; or it could be used to predict impending breakdowns of industrial machinery. There are myriad other ways in which the data from the IIoT can be used, and more are being uncovered every day.
There are some common threads among all those thousands of use cases that can help formulate an operational definition of IIoT: machine-to-machine intelligence that enables an organization to generate savings through improved efficiency, improved safety, and/or increased uptime.
The most common benefit cited for the IIot is improved efficiency—companies save time, money, or both by leveraging their connected devices.
You may think you’ve optimized your processes as much as you can, but humans can only optimize processes to a certain (and limited) extent. Only when you take it to machine-level sensing and control can you see what you can improve upon.
Also, many organizations waste money because they waste energy. Whether it’s lights being left on or machines running when they’re not in use, unnecessary electricity use drives up the cost of large-scale operations greatly. Sensor-level technology is perfect for these types of scenarios. Take a construction company, for example. If upper management realizes that all their heavy, human-operated machinery is being left running when not in use, they could implement a sensor-driven solution that won’t allow the machines to be on unless someone is sitting in the seats. The costs of fuel and maintenance for idling machines can rack up quickly, especially in large organizations. If integrating IIoT can help you improve your processes across a large enterprise, it can drive savings to the bottom line.
Manpower efficiencies can also be achieved with the IIoT. Jobs that require frequent and consistent human involvement—for example, hourly monitoring of oil tank levels at an oil refinery—cost quite a bit to manage. A wireless industrial control system can read the levels wirelessly every hour, creating a more efficient system that saves manpower, which in turn improves the bottom line.
There’s no shortage of statistics showing the negative impact of unexpected machine downtimes:
- Out of every twenty dollars, somewhere between $0.40 and $1.20 is lost due to unplanned downtime.
- Automotive manufacturing can suffer from downtime losses amounting to $1.3 million per hour.
- An average factory unit can have downtime costs ranging between 5 and 20 percent of its productive capacity.
Companies with limited budgets and older equipment often find themselves facing a challenge: how to improve equipment availability without replacing all their existing machinery. The industrial internet of things offers a cost-effective solution to this problem in the form of predictive maintenance and machine monitoring, with impressive results: According to one study, IoT solutions reduced machinery breakdowns by 70% and overall maintenance costs by 30%. You can then extend the value of the solution by using the data insights to see which machines produce a higher number of faulty parts, for example.
IIoT devices are also commonly being used to ensure the physical safety of employees. Every year there are many injuries on manufacturing floors and job sites, some of which are related to faulty machines. Using the IoT to perform the predictive maintenance noted in the previous section can help decrease the number of work-related injuries. It can also be used to monitor workers’ compliance to safety standards, resulting in safer, more productive worksites.
Aside from worker safety, product safety is also often a concern. Some types of pharmaceuticals and foods are temperature-sensitive and require controlled environments through all stages of manufacturing and distribution. Any exposure to temperatures outside the specified range could render these products useless or even dangerous. Thanks to the IIoT, temperature-monitoring devices can help detect and avoid potential problems, and save money by aborting a shipment in the event an unavoidable problem occurs.
In Chapter 3, we’ll take a look at some of the ways in which businesses are currently using industrial IoT applications to generate savings in these areas.
Chapter 3 is coming soon. If you would like to be notified when the entire Industrial IoT article has been published, submit your email below.