Though manufacturers have been collecting information from across the manufacturing floor for decades, the cost of implementing smart sensors has gone down significantly in recent years. Meanwhile, analytics capabilities have grown extensively. As a result, today we have the technology to go beyond data capture to extrapolate near real-time insights to inform and optimize processes for better outcomes. This is the nirvana of the smart factory.
But what can manufacturers gain from getting more in tune with machines? The answer: Plenty.
In its landmark study, “The Internet of Things: Mapping the Value Beyond the Hype,” the McKinsey Global Institute proclaimed that the greatest potential for creating value from the Internet of Things (IoT) for manufacturers will be in operations optimization—i.e., making the various processes within the factory more efficient. This includes using sensors rather than human judgment (and human error) to adjust the performance of machinery. It also involves use of data from production machinery to adjust workflows to eliminate unproductive practices, capacity erosions, inefficiencies and line performance bottlenecks. This is done by remotely tracking, monitoring and adjusting machinery based on sensor data from different parts of the plant (and even across plants). Researchers say IoT applications in operations optimization have the potential to create value of $633 billion to $1.8 trillion per year in the factory setting in 2025.
Monitoring machines to harness and understand data can help manufacturers optimize machine performance by enabling more proactive, predictive maintenance. Using sensors to determine when machines need service can prevent breakdowns and save on routine maintenance costs.
Connecting equipment with sensors through a common platform can provide invaluable data about the ongoing condition of equipment that can be analyzed to predict potential points of failure for equipment breakdown and production shutdown. In the event a breakdown does occur, organizations can analyze this data to determine root cause and take corrective actions to prevent future occurrences.
Monitoring can also deliver improved quality and production throughput through greater uptime and overall equipment effectiveness (OEE), less scrap and rework, and lower operating costs. Additionally, these efforts can support continuous improvement initiatives and contribute to heightened workforce engagement by keeping front-line workers and management informed for improved responsiveness, ownership and accountability.
Remote monitoring, tracking and control of equipment and workflow also can support additional efficiencies in optimized energy usage. The cost savings here can be considerable—especially in instances when energy prices rise precipitously.
Process control and traceability are essential, and the IoT can “level up” manufacturers’ game in this area. Using sensor technology, manufacturers can track serialized and non-serialized components as they are received, warehoused and used to construct subassemblies and finished goods. Prior to the start of processing, traceability and production control can ensure the correct part is being run, the correct machine program type is being used, the part was not previously rejected as bad, the part is at the correct operation (no process was skipped), parts are not run a second time at the same operation, and part orientation is correct for processing.
Inventory represents another significant cost for most manufacturers, and an IoT approach can reduce the potential of excess inventory via automated replenishment—where machines on the factory floor can signal when quantities are low and order more raw materials to ensure the line never shuts down. Inventory can also be managed in the most just-in-time, cost-effective manner.
Via the IoT, manufacturers gain powerful capabilities to understand the overall health of operations minute by minute to take advantage of opportunities and mitigate threats to support growth and profitability in today’s fast-moving, ultra-competitive and highly complex regulatory manufacturing environment. However, the velocity and volume of data on the manufacturing floor can be a hardship to manufacturing organizations that do not have the right technology infrastructure in place. Having the right software foundation to capture, analyze and act is critical.
A unified reporting framework to simultaneously view and easily discern information from multiple, disparate data sources is just the beginning. Manufacturers need to have the operational agility to act on this data and apply these insights across the entire product lifecycle—from design, through engineering, manufacturing, delivery and service—to deliver immediate and actionable information to the necessary departments and functions with greater speed, accuracy and efficiency than ever before.
Manufacturing execution systems (MES) and enterprise resource planning (ERP) systems take on new-found relevancy in the IoT era to help manufacturers realize the full value-add of Big Data/IoT initiatives to contextualize data and integrate it into downstream process flows. Functioning as the fabric that connects people, processes, data and things in an intelligent and strategic manner, MES/ERP allows manufacturers to create value from new data streams to succeed in achieving their most critical objectives.
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