Automation can be the stepping stone to the IoT

Mar. 14, 2018 – Manufacturers are under more pressure to exploit technology than ever before. Trends called Industrie 4.0, Postmodern ERP, smart manufacturing and the Internet of Things (IoT) are all terms used to encapsulate a variety of technologies that have the potential to benefit a manufacturer. But reading case studies about machine learning, warehouse drones and smart machines can be intimidating and some manufacturers wonder how to get started and take advantage of all the new stuff.

Sometimes it seems like every media outlet has a story about the IoT, how it will change the way you do business, or frankly, how it will revolutionize business. While I agree with the premise, what I’ve noticed is that many manufacturing companies are struggling to decide exactly how to take advantage of the IoT.

We work with manufacturers in a number of key vertical markets and many of them, especially those in the medical device, consumer products, food and beverage, and automotive industries, have expressed an interest in the IoT. We did some research and discovered that while about two-thirds of manufacturers believe there is a business opportunity with IoT, most have limited understanding of IoT or how to apply it to their business. The two-thirds of executives, who do hope to implement IoT practices, are focusing on two distinct strategies, making internal process improvements and embedding intelligence in products connected to other control systems.

For internal process improvement, the greatest area of focus involves improving quality, increasing speed of operations and decreasing manufacturing costs. For embedding intelligence in products, the greatest area of opportunity is increased revenue from new products, increased market share and the ability to access data from products or services in the field.

So where should you begin? It is easy to be consumed with analysis paralysis when it comes to IoT and the accompanying technological complexity. However the first question to answer is what business problem am I trying to solve and where can data collection and automation help in addressing that problem.

A good place to start is within the four walls of your organization. That is where each manufacturer has the most control and influence. I have visited a plethora of plants during my career, and most of them have multiple opportunities to take the first steps towards internal process improvement. Many have been trying to achieve internal Supply Chain Synchronization, meaning synchronization between people, process and things for a long time. It is not uncommon for many to be using spreadsheets, paper and even verbal methods of execution where automation would improve accuracy – sound familiar? Others have legacy platforms that have many limitations and lack the agility to utilize more modern technologies. IoT assumes real-time synchronization for manufacturing execution. Companies can get a head start on IoT by eliminating some of the manual processes and workarounds between the back office, shop floor, warehouse and loading dock.

For manufacturers completely new to automation, we recommended starting with the basics like data collection and label printing – these are a great introduction to the technical components and mindset needed for implementing the IoT. Where possible, have such solutions integrated directly and seamlessly into your ERP. Such systems provide real-time linking of the back office to shop floor to storage. With that in place, scanning a barcode at the loading dock or calling up an order number will initiate all the appropriate up and downstream processes but eliminate the errors that often occur with manual processes.

Once a manufacturer has an effective data collection and automation system in place, that system becomes a stepping-stone to more opportunities. These lead to the exploitation of the IoT that delivers improved controls, business processes and product insights to your business.

Regardless of where you are in your understanding and adoption of IoT, one thing is for sure: IoT is still very immature and open to many interpretations. Starting small with a defined business goal then implementing an agile, iterative approach to the execution of an IoT strategy, learning from each set of failures and building upon success, is essential. By doing so, an approach and strategy will evolve that fits your business and strategic goals and ultimately setting you on a journey for continued success.

With over 20 years in the ERP industry, Tony Winter, chief technology officer, is responsible for driving QAD’s long-term technology, architecture and product release strategies. He oversees a global research and development team, manages all technical relationships with QAD global partners, and innovates on QAD’s key technology initiatives, including its user interfaces, foundation services, application lifecycle management, analytics, integration and quality.