Smart Connected Assets: Still New but More on the Plant Floor

Nov. 2, 2016
More manufacturers are realizing that it pays to make assets smart and connected. Companies taking advantage of opportunities are achieving benefits in operational performance.

Knowledge, talk and even action on the Industrial Internet of Things (IIoT) has continued to grow this year, but not in the way you’d expect. We see concentrated focus on smaller, more targeted projects geared to fuel operations excellence from several angles—asset performance management (APM), enterprise quality management (EQM) and now smart connected assets. Companies are using the data—existing and new—to redefine work processes and the organization structure itself. The result is more uptime and better service levels for the extended supply chain: the internal customer, operations, and the customers that buy the finished goods and services.

As the data is digested, a new level of understanding is achieved. Empowered, employees begin to ask, what else can I uncover? What questions can I answer that I could not before? What questions am I not asking that I should be? This is an opportunity for assets to become smart and connected.

Investments in smart connected assets are accelerating as the insights gained and the value of becoming smart and connected becomes more clearly understood. This column discusses the state of smart connected assets in the plant and the value of being an early adopter.

Value in making legacy assets smart and connected

Legacy assets—assets that have been installed, managed and maintained for years—have decades of historical information. This information resides in various places, data, workforce knowledge and the assets themselves.

To extract more out of legacy assets, companies are embarking on their digital transformation journeys by deploying more smart sensor technology. Some assets require a few more sensors to complement existing data sources. Another option is to add software to unlock or expose this data for use.

Organizations are taking a thoughtful approach by installing sensors and software to a small percentage of assets this year. The smaller pilots (sensing a small percentage of assets) implemented last year were successful, and our data shows accelerated investments in a larger base of legacy assets, applying what was learned to a higher percentage of assets this year. This trend is expected to continue as organizations find quick wins in the pilot phase and want to quickly increase investment to scale the value of smart connected assets.

New equipment: Accelerate initiatives

Inevitably, as an asset’s life comes to an end, an opportunity will arise for organizations to look at smart connected assets. Our data indicates that, increasingly, organizations are accelerating their investments in assets that come from the manufacturer already smart and connected. These industrial companies are taking similar pilot approaches to new assets as they continue to invest in legacy assets.

The “aim small, miss small” approach allows organizations to accelerate the learning curve and rework the plans around people, processes and technology. It is clear organizations in 2015 that took this approach found success, and 2016 reveals more and more organizations will be investing in new smart connected assets and increase the number of assets that are smart and connected.

With smart connected assets comes a flood of additional APM data. We are in the beginning stages of leveraging data from legacy and new smart connected assets. The good news is we are hearing a continuous flow of customer successes and what the opportunities for them represent. A key insight that we are at the beginning stages is the fact that almost half of industrial companies (47 percent) have not deployed smart connected assets and therefore are not getting the APM-related data they so richly provide. Another split is the remaining 43 percent that do have assets that are generating APM data; a majority of which will not allow suppliers to access it. This is a missed opportunity in the relationship with suppliers.

There is great potential of sharing data. It has benefits in not only improving uptime, but also impacting the entire lifecycle of the assets, including future product designs and proactive fixes to address warranty issues, directly from the manufacturer.

Early adopters already seeing benefits

Forward-thinking companies that have taken advantage of the full smart connected assets opportunity that exists today are achieving benefits in reliability on operational performance. One of the closest relationships to understand the impact these assets are having on operations is using overall equipment effectiveness (OEE).

OEE is a product of availability, productivity and quality. Asset reliability can impact all three of those factors and organizations with higher reliability will show higher OEE. Organizations that have real-time visibility into APM data show a substantially higher OEE performance than those that do not, with a median OEE of 75 vs. 67.

>>Jason Kasper, [email protected], is a research analyst with LNS Research, primarily focused on asset performance management with collaborative coverage across sustainability, energy management and IoT/machine-to-machine practice areas. LNS Research provides advisory and benchmarking services to help line-of-business and IT executives make critical decisions. Research focuses on IIoT, digital transformation and operational excellence. Learn more at

Companies in this Article