Almost four of every five manufacturers and distributors still have no plans to implement IIoT technologies. They’re making a mistake.
The Industrial Internet of Things has significant commercial and operational implications for manufacturers. It can help companies improve everything from customer experience to asset utilization to employee productivity to supply chain and logistics management. However, our 2017 Manufacturing Report found that 77% of manufacturers and distributors surveyed still have no plans to implement IIoT technologies. Many of these respondents are from small and midsized companies that likely don’t think the IIoT is necessary in their operations or simply don’t feel they have the time or resources to make significant changes to their processes.
While the IIoT isn’t suitable for every company, many of these manufacturers are making a mistake by dismissing it. The report also identified several top areas of focus and concern for manufacturers — such as workforce challenges and supply chain management — that the IIoT can help them address. Nearly 60% of respondents pointed to a lack of qualified workers as a barrier to business growth, and 64% said that supply chain management is important to their success in the next five years. Further, more than half said the ability to improve customer service and response time is a top business driver impacting their technology investment decisions.
The IIoT offers clear and impactful solutions to many of these manufacturers’ biggest stated challenges. It’s important for the leaders of these companies to seriously consider and assess the potential benefits of introducing IIoT technologies into their operations.
Streamline the Supply Chain
The IIoT can fill in gaps in intelligence that have long posed challenges for manufacturers’ customer relationships.
While advanced technology such as cloud-based ERP systems can help a company more efficiently share designs and collaborate with its customers during the production stage, the IIoT can provide a manufacturer insight into the after-sales life of a product. With the IIoT, a manufacturer can monitor its product in the field to assess performance and health in real time. Instead of having to rely on customer requests or regular site visits to ensure continued operation and optimal performance of a product, the IIoT can allow a manufacturer to proactively address emerging problems and prevent costly shutdowns. This is especially helpful for durable products with long service lives. By monitoring product usage and performance, a manufacturer can ensure it maintains strong customer relationships and wards off competitors.
It’s important for manufacturing leaders to understand that as more and more companies begin to utilize IIoT technologies, they will be able to offer other companies’ customers a heightened level of responsiveness and service. The manufacturers that can’t match this level of service risk losing market share to these more advanced competitors.
In addition to its benefits for customer relationships, the IIoT allows a manufacturer to cut down on manual processes when it comes to working with vendors. Replenishment of everyday items such as nuts, bolts, screws and fasteners is a highly manual task that typically requires a vendor to regularly visit a manufacturer and take stock of inventory to determine how much product it needs to ship. The IIoT can eliminate this manual process by sending a signal to vendors when supply runs low that then prompts automatic replenishment.
By increasing the amount of valuable data flowing through a manufacturing operation, the IIoT can help a manufacturer improve communications with vendors and customers, and streamline supply chain processes.
Address Workforce Challenges
The struggle to find the talented workers needed to run today’s increasingly high-tech manufacturing operations is a consistent pain point for the industry. While the IIoT cannot solve this issue directly, it can generate benefits that ease labor pains while also enhancing a manufacturer’s ability to recruit top workers.
By cutting down on manual tasks, manufacturers can make more efficient use of their existing resources. With IIoT-enabled equipment that reports its own condition and accurate run times, manufacturers can redeploy employees to more value-added work. Since employees no longer need to spend as much time on manual interactions with equipment, they can work to gain the technical skills needed to become higher-level machine operators and programmers.
Additionally, manufacturers that demonstrate a commitment to technological advancement will be better equipped to attract the talented and highly skilled workers they need in order to capitalize on IIoT technologies and pull insights from the massive amounts of data generated. So, there’s a potentially significant recruitment element to adopting the IIoT. Companies that refuse to embrace advanced technology will struggle to recruit the talented workers they need to thrive in today’s fast-paced, hyper-competitive economy.
Making the Move to the IIoT
Though many small and midsized manufacturers may view adopting the IIoT as an onerous and expensive project, implementing these technologies will not typically require a significant financial investment. The sensors used to monitor equipment are inexpensive, and cloud-based technology infrastructure, like ERP systems, allows manufacturers to process and manage data from the IIoT without significant upfront hardware costs.
Each manufacturer needs to assess the current state of its operations and its vendor and customer relationships to see if IIoT technologies could meaningfully enhance performance. For some manufacturers, a robust, cloud-based ERP system will be sufficient to reduce manual effort and boost efficiency. For others, adding IIoT technologies to their operations will help revolutionize supply chain relationships and alleviate workforce challenges.
Small and midsized manufacturers face many challenges today as competitive pressures mount. The IIoT can be a powerful tool to help these manufacturers address their most pressing issues and take their operations to new heights.
Greg Price is an enterprise account executive at Sikich. Evert Bos is a technical fellow for Microsoft Dynamics 365 operations at Sikich.
>> By Greg Price and Evert Bos, New Equipment Digest, January 26, 2018