What would your annual cost savings be if you could eliminate unplanned production downtime?
January 30, 2017 by Rick Huijbregts Cisco Canada
Jan. 30, 2017 – The Industrial Internet of Things (IIoT) — or the Internet of Things (IoT) — is on the minds of most Canadian manufacturers as we begin 2017. But the question I get asked most is: what is the IIoT?
The IIoT brings together the machines, processes, people and data on your plant floor through a secure IT network. This network is similar to the one that connects your office computers, printers and other devices to each other, except it connects the equipment, sensors and assets on your factory floor. The IIoT is an essential component of the fourth industrial revolution, Industrie 4.0, and Lean manufacturing.
But Canadian manufacturers have yet to realize the value of the IIoT. According to KPMG’s 2016 Canadian Manufacturing Outlook report, manufacturers don’t consider technology key to growth. And the Canadian Manufacturers & Exporters (CME) Industrie2030 Action Plan showed 39 per cent are uncertain of the economic ROI of new technologies — so they simply don’t adopt them.
This misunderstanding of what the IIoT is, its value and what purpose its technologies serve for manufacturers must end. The truth is that leveraging the IIoT to connect your plant floor operations — a transition we call digital transformation — has a significant impact on your bottom line because processes are completed faster, more accurately and with less waste than ever before.
Improved manufacturing performance
One manufacturer estimated that unscheduled downtime costs them more than $20,000/minute in lost profits and productivity. With an IIoT digital network, this downtime can be reduced dramatically, if not altogether. How? Data is collected from sensors and devices throughout your plant floor and analyzed immediately. This analysis, depending on how many machines and devices are connected and sharing data, allows manufacturers to make real-time maintenance and equipment decisions to avoid unplanned outages.
For example, a machine sensor detects that volume is low for a particular part on your assembly line. Data analysis determines, based on production speed and previous output totals, that the part needs to be re-stocked in one hour. With this information, a plant manager can arrange for the part to be refilled before it runs out and can avoid a production stoppage.
Unscheduled downtime due to equipment failure can also be almost completely eliminated through the IIoT. Analytics can estimate maintenance requirements based on equipment usage and wear characteristics, so repairs can be scheduled during planned outages. Ask yourself: what would your annual cost savings be if you could eliminate unplanned production downtime?
Additional performance benefits of a digital, or connected, factory include a reduction in cabling and engineering costs, higher Overall Equipment Effectiveness (OEE) scores and the agility necessary to meet the mass customization demands of today’s consumers.
Improved product quality
The average cost of a recall for a food company is US$10 million, not including costs associated with lost sales or damage to the company’s brand. Recent recalls in the auto industry cost automakers billions of dollars.
By comparison, the required investment to digitize your plant floor is minute — and yet it can dramatically impact whether unsafe goods leave your facility, or are present in your supply chain.
With a secure IIoT network, connected equipment can safely transmit data in real-time to your data centre for analysis. Every time that equipment is used, for example to tighten the bolt on a car door or check the temperature of a frozen food product, that data is recorded and tracked against quality controls. If those controls are not satisfied, the worker is alerted so that corrective action can be taken. Because the data is recorded and tracked, if a quality issue does arise, you can localize and contain the affected products quickly, accurately and for less cost.
Many manufacturers are not aware that adopting IIoT technologies can help them achieve their sustainability goals by monitoring asset and capacity utilization, as well as energy consumption, over time. By optimizing how and when assets and equipment are used to eliminate waste, our research has shown manufacturers can reduce energy costs by up to 18 per cent. For a manufacturer with several production facilities, this decrease could equate to hundreds of thousands of dollars of savings annually.
I encourage you to start your journey to the IIoT today, if you haven’t already. Select an element of your production process that could be more efficient, productive or sustainable, and track the output, if possible. Then learn how much better it could be with IIoT technologies providing the intelligence you need to operate a leaner, more efficient facility. It’s time that leaders from the top floor to the shop floor realized that the IIoT is not just about technology.
Rick Huijbregts is the vice president of digital transformation and innovation at Cisco Canada. He leads a team responsible for fuelling the digitization of customers across the country. He can be contacted at firstname.lastname@example.org.