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How the IoT and the Cloud Are Changing the Face of Manufacturing

The Internet of Things (IoT) is creating a big buzz in business these days. This is no surprise given recent statistics: Juniper Research recently estimated that the number of IoT-connected devices will increase to 38.5 billion worldwide in 2020, up by more than 285% from 13.4 billion in 2015. Meanwhile, McKinsey estimates that the IoT could unleash as much as $2.3 trillion in global economic value by 2025.

Manufacturers, in particular, will continue to reap significant benefits as the IoT—supported in large part by cloud computing platforms that foster real-time machine-to-machine, machine-to-person, and machine-to-material communications along with enhanced access to data—catches on. GE believes that the “Industrial Internet” (its moniker for the IoT) will contribute $10 to $15 trillion to global GDP within the next two decades, according to Forbes. Such value comes, and will continue to be delivered in the form of, reduced production expenditures, improved operational and service efficiencies, and, as noted in IndustryWeek, the ability to link value streams “from the supplier’s supplier to the customer’s customer.”

Examples of how manufacturers are leveraging the IoT and cloud computing to achieve these goals have begun to emerge.

“CEOs must take the time to envision how a connected business provides value and facilitates remaining ahead of the competition.”

The IoT, along with cloud, forms the crux of VMES, a virtual manufacturing execution system platform utilized by Cisco to better orchestrate a cadre of outsourced production plants. These technologies are leveraged to connect production machines and gather real-time data from them, “enabling predictive quality capabilities in a fully outsourced manufacturing environment,” according to IndustryWeek.

At one of General Electric’s Durathon battery plants, temperature, humidity, air pressure, and machine operating data are collected in real time by more than 10,000 IoT-enabled sensors. This allows production to be monitored as it occurs and permits process adjustments to be executed on the fly, enhancing production efficiencies and conserving costs. Additionally, battery performance can be traced back to specific batches of powder at each step of the manufacturing process.

Harley-Davidson, meanwhile, utilizes an IoT connection to link every asset on the production floor of its major production facility in York, Pa. Data gleaned from these connected assets—including detailed production data—are tracked and incorporated into a real-time performance management system.

The IoT is even being used to initiate remote changes in products. Mark Fields, CEO of Ford Motor Corp., told IndustryWeek that its Sync Connect LTE-based service will, when it comes to the Ford Escape, be the lynchpin for over-the-air updates of not just the infotainment system, but also the engine, driver-assist technologies, and other vehicle components.

No matter the use case, however, the advantages afforded by IoT technology “aren’t always obvious,” according to a PricewaterhouseCoopers thought-leadership report. CEOs, as well as COOs, CMOs, and CIOs, must take the time to envision how a “connected business” provides value and facilitates remaining ahead of the competition.

“Central to success,” PwC analysts said, will be executives’ efforts to hone a “keen understanding of how you implement the IoT in product design and how you use the Big Data it will deliver.”

Quoting Dell, Inc. Chairman and CEO Michael Dell in PwC’s 18th Annual Global CEO Survey, the analysts noted that the most important opportunity surrounding the IoT involves turning the Big Data made available by the technology into knowledge and insight.

For manufacturers, successfully leveraging the IoT and its elements also entails a concerted effort to find the talent needed to “get the most out of the IoT ecosystem,” according to IndustryWeek. While training staff or hiring from the outside to expand IoT capabilities remains imperative, CEOs must recognize that it is not an easy task given competition for talent from other industries and markets.


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