The Business Case for Iot and IIoT for the Manufacturer
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The document discusses how the Industrial Internet of Things (IIoT) can benefit manufacturing operations. It explains that IIoT involves collecting sensor data from machines and using that data to optimize processes, increase efficiency, and reduce costs. Specifically, IIoT can help improve financial metrics like sales, costs of goods sold, expenses, and profits through predictive maintenance, continuous improvement efforts, and optimizing operational processes with large data sets. The document provides examples of how IIoT data collection and analysis can benefit areas like disposables procurement, production machinery maintenance, production line efficiency, and employee performance monitoring.
The Business Case for Iot and IIoT for the Manufacturer
- 1. THE INTERNET OF THINGS The business case for the manufacturer
- 2. What is IoT IoT stands for Internet of Things Its really about collecting data on things managed and acting on that data Think input of sensors, communication via networks, and actionable data as the output Now think industrial IIoT stands for Industrial Internet of Things Think more sales, lower Cost of Goods Sold, lower expenses, more profit 2 Internet of Things: (stylized Internet of Things or IoT) the internetworking of physical devices, vehicles (also referred to as connected devices and smart devices), buildings, and other items embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data. (from Wikipedia)
- 3. Why Operations should care about IIoT highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. - IDC 3
- 4. Why Operations should care about IIoT 4 Study in 2014 by Tata Consultancy Services $100 MILLION 12% of 795 executives were going to allocate to IoT in 2015 1 in 10 15.6 % Avg. Revenue Increase 30%
- 5. Why Operations should care about IIoT 5 invested in the U.S. alone in 2016 Investment Leaders Transportation Manufacturing $200+ BILLION Study in 2016 by IDC
- 6. Why Operations should care about IIoT Predictive Modeling Benefits Will provide significant improvements in up-time (predictive maintenance) Will provide significant information on equipment performance (real time) Data for continuous improvement efforts ever better efficiencies/utilization 6
- 7. Industrial Internet of Things Adoption 7 35% are either moving forward or have pilot projects Moving Forward 13% Pilot Projects 22% Don't Understand Don't Care 19%
- 8. How IIoT Will Improve Financials Improve your P&L Sales Income Increase sales by reducing product waste via monitoring data indicators Improving efficiency with data will increase production, annual sales volume, and capacity Cost of Goods Sold (COGS) Reduce COGS by using data to maximize efficiencies and reduce production costs Selling, General & Administrative Expenses (SG&A) Reduce SG&A by monitoring/automating disposable reorders Better proactive preventative maintenance through data eliminates collateral damage failures, or undetected early indicators of improper maintenance, etc. Reduce insurance premiums better safety record, reduced facility damage due to catastrophic failures 8
- 9. How IIoT Will Improve Financials Improve your Balance Sheet Debt Load / Current Ratio Improvements Reduce potential unplanned debt on balance sheet by proactive data-driven maintenance and repair Assets Improve lifetime of capital equipment purchased and unplanned costs 9
- 10. How IIoT Will Improve Financials Improve your Cash Flow Work In Process (WIP) Increase WIP by maximizing up-time of equipment via data-driven maintenance Increase production efficiency by looking through data for good/bad practice, and operation of machinery. Accounts Receivable (AR) Increase cash inflows by getting more production by looking for efficiency and utilization issues in the operation data. Accounts Payable (AP) Less failures, lower insurance, fewer catastrophic events, longer lifecycles of machines and disposables all reduce your AP burden. 10
- 11. Example market. Whey does Agriculture care about IoT? Seems everyone in agriculture is investing in IoT Costs of sensors and computer technology has dropped Computer processing power has increased Using statistical process control Leveraging programmable automation Improve efficiency and utilizations Production improvements through data analysis Increased sales, reductions in COGS and SG&A 11
- 12. Why manufacturers should care about IoT 12 Learn and improve safe operation Learn about performance of the equipment Improve the procurement process of disposables Reduce insurance cost Improve employee performance Improved financials by using data Learn and improve efficiency Learn and improve utilization numbers Improve up-time Detect issues with other machinery or processes Learn and improve productivity
- 13. Example: Monitoring Disposables using IIoT Actionable Data Blade Data on items purchased Promotional offers based on use of preferred brands vs. alternatives Enhanced features and functionality based on use of IIoT enabled disposables vs. alternatives Predictive analysis on when disposables need to be purchased, repaired, discarded Automation in procurement of new disposable products Option to disable operation due to use of unapproved disposables. Data on disposables performance Track and estimate amount of production waste per disposable, per employee Determine with data which disposable to use in which operation Detection of aging so as to replace before productivity, safety are compromised 13
- 14. IIoT Actionable Data Production Machinery Production Machinery Preventative maintenance Proactive detection of issues/failures within the system itself Lifecycle as a function of other factors (usage, operations, etc.) Maximize up-time using the above information and coordinate repair timing to minimize downtime 14
- 15. IIoT Actionable Data Production Machinery Production Line Efficiency, safety, utilization measures as they relate to: Other production lines (line-to-line comparison) Team members, supervisors Other identical equipment on other lines Other machinery can indicate whether another machine is underperforming past results or other machines Product tracking Use data collected from machine to determine varying levels of efficiency and utilization As part of a larger IIoT system, track product as it moves through the process. Providing real-time performance indicators Are we slowing down or speeding up? Are we stopped? Are we spending too much time at one phase of the process or too little? 15
- 16. IIoT Actionable Data Other Systems Other Systems How well are machines being maintained? Are there correlations with data supported issues/problems and other systems being used? Can we integrate our data with other systems data so as to model the entire production process and look for improvements in utilization, efficiency, safety, production, etc.? Part of an IIoT Infrastructure Eventually all systems within a plant will have sensors and data which can be integrated with all machine IoT data to improve top- and bottom-line performance 16
- 17. IIoT Actionable Data Employee Employee Time productive vs. total time on Unsafe patterns in use recognized and recorded Inefficient use of a tool observed via algorithms Frequency of a tool being maintained. 17
- 18. THANK YOU