Internet of Things (IoT): Driving a Revolution in Digital Manufacturing

The Internet of Things (IoT) is a vision of a world where almost any kind of object can and many will carry some kind of transmitter to send and receive data from the internet.  Think sensors and smart appliances everywhere, and all able to communicate, both by M2M (machine to machine) and M2H (machine to human).

Gartner estimates that in 2020 more than 26 billion devices will be able to communicate and signal via the internet.  Cisco estimates the IoT market will add more than $14 trillion to the global economy, of which McKinsey says $310 billion represents incremental revenue for businesses.

Susan Hauser, Microsoft Vice President, said that “the challenge for successful companies in the coming year will be to harness this data to act on key insights, improve customer service, reduce time to market, enable new innovation in product and services development, and ultimately transform themselves with new business models and revenue streams.”

One area where IoT is poised to drive innovation in particular is manufacturing.  By embedding sensors across all devices and elements of the shop floor, businesses will be able to collect real time manufacturing data, enabling very precise monitoring of the production process.  Companies will be able to do predictive maintenance to reduce downtime, better manage their inventories, and also to become more flexible and responsive to changes in market conditions.  A SAS survey found that 18 percent of industrial machinery companies have already started to use ‘IoT devices’ to increase production and reduce costs.

Sansa Security predicts that 2015will be the year where device sensors will by default use common, rather than proprietary, protocols to communicate, enabling devices to better interact and be controlled through a single interface.  But businesses will need to make investments.  Old equipment will need to be upgraded or replaced in order to support the new paradigm of digital manufacturing.

John Nesi, Vice President at Rockwell Automation, said that IoT technology is needed to address “global competitive pressures that are challenging industrial and manufacturing companies to drive inefficiencies out of their systems, manage workforce skills gaps and uncover new business opportunities.”  Done properly, the benefits will be “faster time to market, improved asset utilization and optimization, lower total cost of ownership, workforce efficiency, enterprise risk management and smarter expenditures.”