As manufacturing enterprises actively seek innovation to compete effectively and differentiate themselves amidst digital disruption, IoT is emerging as a key driver. While IoT deployments become increasingly mainstream across the manufacturing landscape, one unavoidable question keeps popping up – ‘where, really, is the ROI in IoT?’ Though ROI has traditionally translated to returns, today it has acquired multi-dimensional proportions, ranging from better customer experience, higher uptime on service, competitive advantage, etc.
Here we explore the impact of IoT on manufacturing and three ways in which it translates to higher ROI.
#1 Proactive monitoring and predictive maintenance:
Up to 90% of maintenance of many US manufacturers is still conducted on a reactive rather than proactive basis. The reasons range from the age of their equipment to absence of spare parts and today’s rapid pace of manufacturing. IoT enables manufacturers to go beyond routine calendar-based inspections and component replacements. One of its key benefits is enabling predictive maintenance (on-site as well as remote) i.e. proactively monitoring equipment for faults and failures and triggering alerts when a part replacement is required.
Sensors embedded in smart connected textile machines can also monitor the occurrence and frequency of idle time and identify the reasons behind it. The reasons could range from workers failing to line up raw materials to machines requiring resetting often, power outages, long breaks taken by workers, etc. An effective predictive maintenance strategy can help reduce equipment downtime by identifying and resolving issues early on, as well as fixing chronic issues during regular maintenance cycles. This helps eliminate the parts, labor, and time costs incurred in conducting frequent maintenance cycles. Controlling maintenance budgets can save hard-dollars for manufacturers, besides spurring a string of other positive benefits.
#2 Tighter inventory control and optimization:
Idle capacity at production units is an all too common issue plaguing manufacturers. Lack of data from manufacturing plants keeps them from identifying which machines are the culprits and how much idle capacity exists in the system. IoT-enabled connected stockrooms can monitor inventory movements to optimize stock held at any given time, while also providing insights on equipment productivity.
The benefits are two-fold. One, manufacturers can spot idle capacity easily, preventing unnecessary capital expenditure on buying new machinery. Second, effective monitoring of stock can help manufacturers keep track of spare parts lists, enabling smoother supply chain operations across the manufacturing value chain. According to a recent survey, 70% of retail and manufacturing companies are already digitalizing their supply chain and logistics operations. Leading clothing manufacturers Zara, H&M, Benetton, and others avoid inventory build-up and optimize costs using IoT technologies such as RFID and bar-coding.
#3 Higher worker productivity:
Manufacturing units run on an ‘always-on’ mode and identifying which shifts consistently produce sub-optimal productivity numbers is critical to eliminating inefficiencies on the shop floor. Data from IoT-enabled smart machines drives efficient track-and-trace operations, helping manufacturers monitor workers’ time and productivity easily, even in the case of geographically dispersed manufacturing units. The higher visibility and transparency into operations helps increase accountability among machine operators, improving machine uptime.
Thanks to IoT-enabled automation and smart machines, the U.S textile industry is back in fashion and tech-savvy workers are getting paid higher than their predecessors. IoT technologies are helping manufacturers cut costs and increase uptime on production to compete against cheaper factories in China, India, and Bangladesh.
Finding bottom-line value from IoT boils down to seamless integration
There is no doubt that every manufacturing enterprise can benefit from IoT. What, however, separates the digital leaders from the laggards is the manner in which they integrate IoT with back-end systems to drive new revenue opportunities through innovative products and services. In essence, taking a holistic view of asset management is key to realizing IoT’s true potential in improving asset utilization, reliability, and productivity.