How the Industrial IoT is transforming industry

by Alan Griffiths
@cambashi_alan
LinkedIn

Cambashi, an international, industry analyst company based in Cambridge, has just completed a research project into the ‘industrial’ application of the Internet of Things to establish the market’s structure and direction.  In the fifth article on this subject, Alan Griffiths discusses how IoT is transforming industry.

Opportunities for Industrial IoT

As described in earlier articles, the ‘Industrial Internet of Things’ involves a wide range of technology from semiconductors to cloud computing and artificial intelligence. Businesses can take advantage of this technology to make their processes more efficient, and they can use the digital technology of IoT to transform their businesses and industries.  The potential opportunities for IoT include customer and supplier relationships as well as internal processes.

Manufacturers are defining and prioritising IoT projects in exactly the same way as they would treat any new technology – “it can be done” doesn’t mean “it should be done”: the proposer needs to build a business case.

New business models

But IoT projects can offer whole new business models such product-as-a-service, so the right people need to be involved to assess the opportunity and develop ideas to fit their organisation’s priorities, timescales, budgets and culture.  For example, to introduce its “Sigma Air Utility operator model”, with pricing based on the consumed quantity of compressed air, Kaiser Compressors needed to build instrumented, connected machines. If the machines fail, the revenue stops.  So, as with all ‘as-a-service’ business models, there is commercial pressure to build reliable machines and minimise maintenance downtime.  This approach needs broad involvement in decision making.

Existing processes that gather requirements and define plans for projects of this type may not be sufficient – transformation may be needed.  As the apocryphal quote attributed to Henry Ford explains, “My customers would have asked for faster horses”.  However, what counts as transformational can depend on your point-of-view.  For example a new (IoT) remote access system which allowed authorised process engineers to login to their factory production lines triggered the comment “It changed my life” from one of the process engineers.  This individual had previously struggled to accept night-shift duties.  For him, the change was transformational – even though the remote access needed is hardly new technology.  Now, he volunteers for the night shift “…and if I can’t handle it online, I can usually guide the onsite team to fix problems.”

Monitoring, Optimisation and Autonomy

Remote access is entry-level IoT.  The next step is to feed asset data into analysis and control systems.  Taking an IoT approach rather than a traditional machine-to-machine approach pays off here, because in addition to solving remote and multi-site communication questions (an internet connection is all that’s needed), it also simplifies connection to suitable analysis software hosted in the cloud.  The IoT approach supports many configurations, so, for example, if low latency response must be guaranteed, an IoT system can use local (‘edge’) servers to cache the data.  The spectrum of capabilities was recently summarised by Brett Murphy of RTI as a range from ‘monitoring’ at the simple end, to ‘optimisation’ where data from one or more assets can be analysed and the results used by an operator to adjust settings for better performance, up to ‘autonomy’ where the IoT software makes the adjustments automatically.

These monitoring, optimisation and autonomy examples are happening inside a manufacturer’s organisation, and may be local to the production groups.  They can be transformational because they may open up the next step for lean manufacturing initiatives.

Industrial IoT in action

However, it can be easier to see transformational effects from projects which offer something new to customers.  Field service and asset management are the low-hanging fruit.  For example, see box 1 where GE Digital and PTC have formed a partnership to provide innovative solutions to companies like Elekta.  Here, the transformation is due to the connectivity of the machines Elekta sells to its customers rather than the connectivity of the machines it uses in its factories.

Box 1: Transforming Field Service and Asset Management at Elekta

Elekta, a Swedish manufacturer of medical technologies for treating cancer and brain disorders, uses connectivity and smart device technology to help differentiate their service business and expedite the way their products are being serviced. Learn more »

Swedish medical device manufacturer Elekta partnered with PTC and ServiceMax to implement Connected Field Service . In the first year of the project Elekta carried out more than 600 preventative actions, which translates to uninterrupted treatments for more than 14,000 patients.

Another example where predictive maintenance is transforming the way products are sold to customers is Rolls-Royce, which introduced its TotalCare® Services some 20 years ago.  TotalCare® employs a “power by the hour” model in which customers pay for service based on engine flying hours (see box 2).  Rolls-Royce analyses engine data to manage customers’ engine maintenance and maximize aircraft availability.  For security and availability reasons, ground-to-aircraft communications are independent of the Internet, using a specific Aircraft Communications Addressing and Reporting System (ACARS).  Since its introduction, the scope of TotalCare® has grown in parallel with the growth in sensors-per-engine, and the capacity to analyse large volumes of data.  Now, the Efficiency Insight service includes Engine Health Monitoring, and tracks the health of thousands of engines operating worldwide.

Box 2: Rolls-Royce changes business model

Rolls-Royce has more than 13,000 engines for commercial aircraft in service around the world.  For the past 20 years, it has offered customers comprehensive engine maintenance services that help keep aircraft available and efficient. It is now using the Microsoft Azure platform and IoT Suite to better serve its customers by analysing increasing volumes of data from the many different types of aircraft equipment.

Flight delays and disruptions cost the airline industry millions of dollars every year, so even a small reduction in “aircraft on ground” (AOG) time translates into a significant amount of money.  Fuel accounts for about 40 percent of airlines’ operating expenses, so even a 1 percent optimization of fuel consumption can save an airline millions of dollars annually.  Many factors affect how much fuel is consumed on a flight, including the flight path selected, weather, engine efficiency, and operational choices such as how much fuel to carry on each flight.

About 20 years ago, Rolls-Royce began extending comprehensive maintenance services to the airlines that use its engines.  The company’s TotalCare® Services provide a “power by the hour” model in which customers pay based on engine flying hours. The responsibility for engine reliability and maintenance rests with Rolls-Royce, which analyses engine data to manage engine maintenance and maximize aircraft availability.  Airline customers increasingly rely on Rolls-Royce to provide information that optimizes the cost and scheduling of engine maintenance.

Rolls-Royce can now provide meaningful insights across more of the airlines’ operations.  According to Nick Farrant, Senior Vice President, Rolls-Royce; “The market and the customer need have become much broader as aircraft and engines have gotten more talkative and the scope of our services has increased. There are terabytes of data coming from large aircraft fleets, with gigabytes per hour—rather than kilobytes—to process and analyze.  Just managing all this data is driving us into different areas, but it also gives us opportunities to solve different problems through machine learning and analytics. We can use data and insight in new ways to refine our customers’ operations to add more value to them and allow them to do more with less.”

With Azure IoT Suite, Rolls-Royce will be able to collect and aggregate data from disparate and distributed sources at an unprecedented scale. “With the increase in the volume and velocity of data that we’re looking at, Microsoft Azure IoT Suite will have a key part to play in our ability to reliably aggregate data across our customers’ fleets,” says Richard Beesley, Senior Enterprise Architect Data Services, Rolls-Royce.

Using Microsoft Cortana Intelligence Suite, Rolls-Royce will be able to analyze a rich set of data and perform data modeling at scale to accurately detect operational anomalies and help customers plan relevant actions. Farrant says, “Microsoft Cortana Intelligence capabilities are helping us filter the signal from the noise across large data sets so we can focus on finding the real value in the data. Our vision of future digital capability will need to aggregate many sources of data and provide a platform for collaboration with customers.”

The dramatic fall in sensor and communication costs have broadened the potential of these concepts to other industries.  For example, food processing machinery makers Minerva Omega created the startup DSC Nexus, which has brought IoT capabilities to machinery including slicing machines found on retail meat and cheese counters.  For these relatively low cost machines, sensing is achieved by monitoring the electric current/voltage profiles during start up; during no-load, and while cutting.  So a new power cord with an integrated sensor and Wi-Fi connectivity is all that’s needed to retrofit an existing machine.  When the electricity waveform demonstrates it’s time for a new blade, the appropriate operator or technician action can be scheduled.

Industrial IoT transformation in other industries

While predictive maintenance takes centre stage in the industrial machinery sector, transformation is also happening other sectors.  The common theme is business justification based on achieving familiar goals:

• Reduce costs and improve operations
• Achieve competitive advantage by offering customers a better experience
• Open up new revenue streams.

The balance of these three goals varies, but they are always there, whether it’s connected car in automotive, cloud services for voice control of consumer goods, or smart metering and smart grid architectures in utilities.  In agriculture, use of equipment across the whole business network is changing, from the supply of agricultural machines to the operation of fleets in the field using GPS, automated harvest collection, and product identification and tracking.  In construction, the trend towards off-site manufacturing and on-site assembly is being taken to the next level in OPTIMISED, a €7m EC funded H2020 Factory of the Future project focussed on advanced manufacturing.  According to Graham Herries, the EU ‘OPTIMISED’ Project Coordinator, this will apply a range of IOT technologies including RFID, edge computing, drones and deep learning to item tracking and personnel management using wearables – all based on building information modelling (BIM) management.  In retail, IOT is helping deliver every supply chain manger’s dream of visibility and food security; companies like Walmart, working with IBM, are taking the opportunity to integrate ‘blockchain’ technology for distributed ledgers to ensure tracking and food security throughout the supply network (see box 3).

Box 3: IBM’s Blockchain and Food Safety

In August 2017, IBM announced that it is working with Dole, Nestlé, Unilever, Walmart and other major retailers to introduce blockchain technology and make the food supply chain safer.

Blockchain improves food traceability by providing trusted information on the origin and state of food and a trusted environment for all transactions.   It allows all the participants in global food supply – growers, suppliers, processors, distributors, retailers, regulators and consumers – to have permissioned access to known and trusted information about the origin and state of food throughout the supply chain.  This enables food providers and other members of the ecosystem to quickly trace contaminated products to the source and ensure safe removal from shelves, thus preventing the spread of illnesses.

Marie Wieck, general manager, IBM Blockchain said:

“Unlike any technology before it, blockchain is transforming the way like-minded organizations come together and enabling a new level of trust based on a single view of the truth.  Our work with organizations across the food ecosystem, as well as IBM’s new platform, will further unleash the vast potential of this exciting technology, making it faster for organizations of all sizes and in all industries to move from concept to production to improve the way business gets done.”

Further challenges ahead

As success stories such as these – from the ‘early adopters’ – become more common, the technology will be taken up by the majority in that industry, and it will become mainstream.  But there are still challenges that need to be overcome, and different possible futures for industry; this will be the subject of the next article.