Discussions around the Internet of Things (IoT) mostly revolve around how it will impact our everyday lives. From drone-delivery of a pizza to turning your heating on from your phone, smart, connected devices have pervaded in recent years.
Yet far from consumers, perhaps one of the most lucrative applications for IoT is in the manufacturing industry. In fact, the IoT initiated the latest industrial revolution, commonly referred to as Industry 4.0, with the emergence of the smart factory: using an Industrial Internet of Things (IIoT) to create an intelligent, decision-making environment of connected devices and things with predictive, preventive, prescriptive, pre-emptive, proactive, i.e. basically autonomous decision making capabilities.
Manufacturers are already adopting the IoT to help improve quality control, achieve operational efficiency, transform the customer experience and more. Manufacturers using the IoT are seeing return on their investment in the form of improved product quality; greater operational efficiency and safety; better inventory tracking; and more accurate demand forecasting. Some companies are also using technology as a differentiator to enhance customer experience.
And this is arguably just the beginning. Within the next five years, 85 percent of industrial companies are expected to have implemented Industry 4.0 technologies in all key business divisions. And according to Cisco, 61 percent of manufacturers who have implemented an IoT strategy believe “they have barely begun to scratch the surface of what IoT can do for their business”.
Although the value of digital innovation is apparent, widespread adoption has been slow. This is due to a myriad of challenges. For many organisations, the biggest challenge is available talent — they simply don’t have the internal expertise to plan and execute digital innovation initiatives. With continued strain on IT budgets, organisations struggle to both manage the priorities of today and invest in the talent needed to help them transform their business.
Anew report by PwC identified hiring more Internet of Things (IoT) engineers and data scientists – while training the wider workforce in digital skills – as a key change CEOs must implement if they want to maximise the benefits from digitisation of manufacturing.
Legacy technology is another factor holding manufacturers back. The average factory today is 25 years old, according to McKinsey, with machinery that’s approaching nine years old.
