Manufacturing in the U.S. and Europe seemed to have stagnated since the 1980s. However, the Industrial Internet of Things and other allied technologies that come with the Fourth Industrial Revolution are breathing new life into the sector.
Since the introduction of the power loom and the Industrial Revolution it ushered in the 18th century, humankind has gone from strength to strength. However, this trend seems to be witnessing a slowdown with a widespread perception that growth in manufacturing (the key indicator of industrialization in the developed world) is dwindling. In part, this is due to the Covid pandemic that has disrupted economic activity. It caused workforce shortages and supply chain instability that reduced operational efficiency and margins. Nowhere was this seen more than in the manufacturing sector. But this decline in manufacturing has long preceded the pandemic and has been especially true for small and medium-sized enterprises (McKinsey, 2017).
There prevails a general idea that the world stands on the brink of a new era. This is true, epitomized not just by a shift in industrial capitalism through the speed and scope of technological evolution but also in a paradigm shift in the very outlook of technology and its effected societal patterns. Nevertheless, this period has also been described as having a productivity paradox, with slowdown in productivity growth despite rapid development in technologies like artificial intelligence and advanced robotics.
In this regard, the 2022 Manufacturing Industry Outlook report by Deloitte comprehensively analyzes the sector’s trends and predicts a growth of 4.1% for the year ahead. In fact, the Covid pandemic might just be a boon in disguise, a wake-up call for the industry all over the world. Flexibility and resilience are now seen as mandatory requirements for every enterprise instead of being optional extravagances. And in order to attain these objectives, enterprises have already begun to rethink their approach and invest in technologies that can bring about a metamorphosis.
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Need for digitalization
In a world where the potential for physical innovation has plateaued, the need to increase revenue and making processes more efficient can only be realized through digital transformation. Digital Performance Management: The Next Frontier for a Lean, Agile and Connected Manufacturing Operation, a report by the Shared Services & Outsourcing Network (SSON) states, “The acts of maximizing performance of the enterprise are still stuck in analog methods and showing diminishing returns over time.” The report goes on to say that today’s bottlenecks can be complex and dynamic and in order to take them out of the picture, a single version of truth is required, “where everyone on the shop floor knows and is aligned on the most pressing problems of the moment.”
For manufacturing concerns, this is where digital transformation comes into the picture. The process begins with digitization — yet not fully embraced by everyone — or the conversion of existing non-digital processes into digital ones. It provides an instant thrust to productivity, allowing manufacturers to rapidly move from design to floor and back. The conversion of physical models into CAD files is an example of such an innovation. Digitalization then facilitates net new business or process creation.
Reshaping the process
The entirety of digital transformation is achieved through a total product data loop, where the Industrial Internet of Things (IIoT) is used to gather and process real-world data about things like maintenance requirements in order to refine, or in some cases upgrade, the manufacturing process. IIoT sensors feed real-time data into analytics systems, which then enable the remote adjustment of machinery for instance. Another McKinsey report published in 2015 predicted that IoT will have a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. This will be especially true for factory operations management and predictive maintenance where IoT value may accrue to the tune of $1.2 trillion to $3.7 trillion. Work sites are also expected to see a value addition of $200 billion to $900 billion.
The same report says, “Currently, most IoT data are not used. For example, on an oil rig that has 30,000 sensors, only 1 percent of the data are examined. That’s because this information is used mostly to detect and control anomalies — not for optimization and prediction, which provide the greatest value.” This untapped potential is indicative of the lack of interoperability between IoT systems, a critical prerequisite for optimal Digital Performance Management (DPM).
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Allied technologies
The fifth generation technology standard for broadband cellular networks, 5G, is going to play a major part in the adoption and optimal deployment of IIoT. According to semiconductor, software, and service giant Qualcomm, 5G delivers higher peak data speeds, more reliability, massive network capacity, increased availability, and a more uniform user experience to more users while ensuring very low latency. All this will result in higher performance and improved efficiency for industries.
In order to monitor assets and production lines in real time, manufacturers are relying on Augmented Reality (AR). Computer-Aided Design (CAD) and IoT data have also come together to enable teams to access a feedback loop of how their products are performing in the field, boosting reliability. For manufacturing assets that have a long lifespan, Product Lifecycle Management (PLM) can chart the strategic process of managing the complete journey of a product, or asset, from its inception, through its development and service, right up to its disposal. PLM can drive faster, high-quality innovations to fully unlock the potential of IIoT.
The prospects
IIoT, allied technologies, and the entire process of DPM — which is more than the sum of its parts — eliminates (i) bottlenecks, (ii) reveals hidden capacity that unlocks innovation, productivity, and efficiency, and (iii) addresses change management. A case study by Cognizant concludes, “Real-time notifications and web-based user interfaces enable remote experts to collaborate with shop-floor personnel, empowering the company’s next generation of smart workers.”
IoT research provider IoT Analytics predicts that between 2018 and 2024, global IIoT platforms for manufacturing are likely to grow at a compound annual growth rate of 40%. By using IIoT to connect systems and processes, digital twins of machines, factories, and even larger things can be created. Organizations can also start accumulating information about the operation of the connected physical systems. This can be taken a notch above by adding more data — such as environmental data and general information — to enrich the digital twin.
