As the markets become more consumer-centric, experts suggest it is the best time to be a consumer because the only way businesses can thrive today is by valuing their customers. The necessity to deliver exceptional consumer experiences has paved way for smart solutions enabled by the Internet of Things (IoT). But as they say, there is a price for everything.Each quality experience delivered has a series of round-the-clock efforts tagged. Since we belong to the age of automation, the major effort here is machine effort that requires considerable energy consumption. According to a 2012 survey conducted by McKinsey and Company, energy is one of the biggest operating costs in manufacturing, accounting for up to 20% of the total operating cost. [1]

However, increasing adoption of the Internet of Things presents manufacturers with tremendous business opportunities. And, through a connected factory setup, manufacturers can effectively gather and apply insights to monetize these opportunities. Today, the IoT-driven Industry 4.0 solutions are helping businesses to improve productivity, reduce operating costs and enhance worker safety. Reduced cost of ownership is one of the major benefits linked to IIoT. It can also be seen as one of the most important factors driving IoT adoption in the industrial segment. A study by Cisco predicts that IoT will help businesses save $1.2 trillion in productivity costs alone. [2]

Smart metering, for example, is an internet-based device that power companies are deploying to monitor consumer usage and adjust prices as per the time of the day and season. The concept enables utilities to reduce operating expenses by managing operations remotely.

A smart building is a system that collects and makes sense of thousands of sensors generating data all over the building. These sensors collect all kinds of information from energy usage and space utilization to occupant productivity, providing better insight, and control over a broad range of systems that span the entire building. But it is not the sensors that make a facility smart. It is the ability to process and learn from all the data these sensors provide. From elevators to heating and cooling, room usage to a coffee machine, safety of people to security of building, these sensors monitor the entire building. They can see what areas are drawing the most energy throughout the day and suggest ways to remedy inefficiencies, reducing utility costs. These sensors also know what areas of the building are most frequently used and plan and optimize space utilization and maintenance based on work schedules.

Asset tracking is another IoT backed process that can significantly help reduce operational costs by predictive maintenance. In maritime shipping, the sensors installed can provide critical asset information such as the location of the ship in the sea to status and temperature of each cargo containers. Temperature sensors, a processing unit and mobile transmitters in each refrigerated container provide real-time metrics of the goods they carry. The crew is notified in case the temperatures differ from the optimal mark and needed repair can be taken care of well in time. Asset tracking helps enterprises to monitor key assets along the supply chain to optimize logistics, maintain inventory levels, and prevent quality issues, thereby reducing operational costs.

The longevity of an asset can be addressed through predictive maintenance. The calendar maintenance is more of pre-emptive mechanism and according to some surveys it helps only 20% of the times. Therefore, 80% of the cost could be saved based on predictive maintenance. With maintenance costs being very high for remote installed systems like wind turbines, data collection and IoT enablement is a basic need to address this maintenance cost. Predictive maintenance also helps in reducing downtime of plant and thereby brings increased productivity.

With IIoT, costs can be reduced through improved asset utilization, process efficiencies, productivity, and reduced in-house IT infrastructure maintenance cost. Customers and organizations can benefit from service improvements like remote monitoring of patients in clinical settings. As per reports, “General Electric has estimated that if intelligent machines and analytics caused even a tiny reduction in fuel, capital expenditures, and inefficiencies, it would result in billions of dollars in cost savings.” [3]

Companies need to understand the IoT complexity and identify areas where it can offer significant benefits. This would require building better AI system, gathering required data, efficient data transportation and analytics capabilities with skilled talent to manage IoT devices. The data collection and IIoT enablement is first step to unlock lot of benefits (such as operational efficiency, increased productivity, smart/efficient maintenance, asset tracking, security, safety, etc.) While the monetization opportunities from IIoT are countless, the question remains, are companies prepared to take full advantage of these opportunities?

Author: Channabasavaraj Raravi, Senior Solutions Architect - Software, Product Engineering Services