The Benefits IIoT Brings to MSMEs
Published on : Thursday 07-10-2021
Manufacturing information technology solutions are key drivers to success, says Darshana Thakkar.
Industry 4.0 has been a very popular word among industry people for the last few years. What exactly is it?
The 4th Industrial Revolution originated in 2011 from a project in the high-tech strategy of the German government, which promotes the computerisation of manufacturing called smart manufacturing.
In recent decades Industry 4.0 has raised use of digital technologies to a whole new level with the help of interconnectivity through the Internet of Things (IoT). In the past few years, the digital transformation of industry, infrastructure, and cities has begun based on the concept of IoT, which in simple terms means a network of physical objects – devices and systems – over the internet.
IoT Vs IIoT
IoT and IIoT both connect devices to the internet and make them smarter. The difference is that IoT works to make consumers’ lives more convenient and easier, whereas Industrial IoT (IIoT) works to increase safety and efficiency on production facilities. As such, IIoT is a subcategory of IoT.
In short, IoT is B2C (business-to-consumer) and IIoT is B2B (business-to-business).
Why Industrial IoT?
IIoT is a subcategory of IoT, in which the “things” that are connected are industrial devices: sensors, actuators, automated machines and equipment, robots, etc. It is a key technology for smart manufacturing, enabling important new capabilities in factories.
IIoT for MSMEs
The Internet of Things is continuously proving to increase accessibility, competitiveness, and resilience among MSME industries. IoT plays an important role in the improvement of industrial operations and the digital transformation of traditional industries. For our Indian MSMEs, Digital Transformation and adoption of appropriate budget-friendly technology is still too complex and costly. I would like to share herewith some important details which will help MSME enterprises in faster adoption of digital technology.
A typical IIoT environment is made up of three main sections:
1. Sensors and actuators: They transform a physical signal into a set of data or digital signal.
2. Network: Network is the combined set of hardware and software capable of transforming and sending the data to another infrastructure.
3. Application: In this section information received is processed to be exploited.
IIoT devices are designed so that their computing needs are minimal, they are like small computers with all the elements (hardware, software, communications, need for updates, etc).
IIoT over traditional operational technologies
Technology like programmable logic controllers (PLCs), supervisory control and data acquisition (SCADA) systems, etc., are traditional operational technologies. Benefits of IIoT over the same are:
a. More effective data collection in terms of cost, speed, and scalability
b. Ability to collect and analyse a large number of data from various sources including IT database that helps in decision making with centralising Database.
c. Ability to communicate across the factories and units located at different geographical locations
d. Single point of access for all the data across the network, and
e. Better and flexible tools for data visualisation for critical decision making.
So what are the benefits and applications of IIoT? These can be summarised as:
1. Increased operational Efficiency
Data collected from sensors and other sources are processed and used to decide the optimal setting of the production equipment’s parameters as such to reduce human intervention in the system.
With the use of modern technologies following cost-effective changes are possible in MSMEs:
a. The economic range of various sensors can be placed in many parts of the plants and production lines
b. The modern communication infrastructure is very useful in collecting a large amount of data within a reasonable budget, and
c. The optimal setting of various parameters can be determined using AI technology without complex mathematical calculations and modelling.
2. Reduced maintenance cost with the help of predictive maintenance
The AI-based technique is used in predictive maintenance to sense potential equipment failure and appropriate calls for the actions.
The combination of a large amount of data, both live and historical with the help of AI processing can be used to anticipate possible equipment failure. Timely action will help to prevent breakdowns and reduce maintenance costs.
3. Integration of ERP system with shop floor operation
All the interconnected systems on the shop floor can be synchronised with Enterprise Resource Planning (ERP) software. This IIoT application is very useful for MSME companies where the people on the shop floor are not competent enough to understand the signals provided and the data available. Or maybe shop floor people don’t have sufficient resources to analyse data and decision-making authorities. In such a scenario integration of IIoT devices with the shop floor operations proves to be the key driver in timely decision making on important aspects.
With this kind of integration, data can be utilised in an optimal way for decision making which leads to cost-saving and safety of the plant and human resources.
4. Supply chain optimisation
With IIoT, real-time information of various stages of the supply chain is available. Integration of IIoT at vendor end helps to avail real-time information about the supplies. Real-time status on the shop floor is available so that the rest of the supplies from outside resources can be managed optimally without extra burden on inventory and priority-based expediting of the input material. Real-time tracking and expected arrival of goods are also added benefits of the integrated supply chain with the IIoT devices.
5. Data analytics
Every organisation has a large number of data available at a different location and in different forms. Maybe some are on the shop floor with the stores department and others are with the quality and production department. Some with finance and some with the admin. But utilisation of this scattered data is very much less, particularly in MSME organisations. Even the other department or team members are not aware of the availability of useful information in some other form and location.
Modern data analytics solutions are very helpful for MSME companies for proper and timely decision-making. This technology helps in collecting, manipulating, transforming, and analysing data. Many solutions are available in the general IT domain and more are available with IoT.
The most useful application of data analytics for MSME companies is to measure operational efficiency. Use of KPIs (Key Performance Indicators) for evaluating the efficiency of production plants, energy efficiency, manpower utilisation, and other factors related to company success.
6. Incorporating IoT capabilities in products
Smart functionalities in products manufactured are as important as they are in plants and machinery. IIoT application in the plant and machinery to improve productivity and safety is called “internal use” and the IIoT feature built-in with the final product is “external use”. Built-in IIoT capabilities in the products are having significant market opportunities. In the coming few years huge market demand for products with built-in IIoT capabilities are expected. The design of such products is usually done in partnership with companies that are specialists in software development.
The most important and useful feature for end-users is remote monitoring of the information about equipment performance.
Another important application is monitoring for maintenance and services.
7. Fleet Management
With the installation of the IIoT device, fleet management has also become more efficient. Large number of small fleet operators are in operation whose vehicles are moving across the country. With the help of smart devices real-time monitoring of the fleet is now very easy. Apart from the real-time location of the vehicle, other important parameters like speed, fuel consumption, etc., are also accessible to the business owner. This is very helpful for the business owners to identify malpractices if any by the drivers.
For the manufacturing company, the goal is not only to produce the goods that meet the customers' needs. But also to ensure that customers get the best quality products at affordable prices and on time. On the other hand, business leaders also have to make sure to create value for their shareholders. To remain competitive, it is the need of the hour for the organisation to deploy all its physical, financial, and human resources most productively and efficiently by becoming real-time information-driven.
For achieving these goals, manufacturing information technology solutions are key drivers to success. The use of automation systems to control production processes, known as Operational Technology (OT), and enterprise solutions, such as Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Supplier Relationship Management (SRM), Customer Relationship Management (CRM), and others.
The leading players in the industrial IoT market are ABB (Switzerland), Siemens AG (Germany), Bosch.IO (Germany), SAP (Germany). Honeywell (US) NEC Corporation (Japan), GE (US), Intel (US), Rockwell Automation (US), Cisco (US), Texas Instruments (US), IBM (US), etc.
Darshana Thakkar is MSME Transformation Specialist and Founder, Transformation – The Strategy Hub. An Electrical Engineer followed by MBA – Operations with rich industry experience, Darshana is an expert in transformation, cost reduction, and utilisation of resources. She has invested 25 years in transforming Micro and Small Enterprises. Her rich experience in resolving pain areas and real-life problems of SMEs helps organisations achieve quick results. Her expertise in managing business operations with limited resources helps clients transform their business practices from person driven to system driven with existing resources.
Darshana has helped many organisations to increase profitability and achieve sustainable growth. She is passionate to support the start-up ecosystem of our country. She is associated with CED, Government of Gujarat as a Business Function Expert in the Entrepreneurship Development program, as faculty for industrial subjects in the Second Generation Program (SGP), and as a start-up mentor and member of the start-up selection committee in the CED incubation centre.
