Manufacturing is the production of products for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial design, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be sold to other manufacturers for the production of other, more complex products, such as aircraft, household appliances, furniture, sports equipment or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users and consumers.

Smart Manufacturing: The Nuts and Bolts

Smart manufacturing is about harnessing the power of data and using analytics to run your facility better. Internet of Things technology can communicate what needs to be done at the exact moment of relevance. Manufacturing equipment can be fitted with sensors to collect data and better understand how machines are operating.

For example, let’s say that you’re maintaining an expensive and valuable piece of equipment. In the past, the process involved a few basic steps, including:

• Measuring how frequently the machinery failed and using a preventive maintenance schedule that was slightly shorter than the average period of failure.
• Waiting for the equipment to fail.
• Fixing the equipment.

This process is not optimized because it’s using historical instead of real-time data. Using IoT sensors that are strategically placed on the machines empowers companies with more information on equipment health than was previously possible. A large amount of data is collected, but equally important are the insights made available by that data. Now, managers can truly understand when equipment needs maintenance and replacement before urgent situations arise. Here are five important benefits of IoT for the manufacturing industry to consider.

1. Greater Energy Efficiency

Energy is one of the largest expenses for manufacturing firms. Bills arrive a couple of weeks before the end of the billing cycle and highlight all of the energy used for the entire factory. But the problem is, these bills detail total energy consumption, and there is no way to break down the bill to better understand where specific inefficiencies reside. Yet nearly 77 percent of companies reported obtaining energy consumption data from their monthly utility bills or energy monitoring tools, which both have limited points of data.

IoT closes that gap, as it helps to collect and understand data right down to device level. Do you have a device that is underperforming? If so, the technology will pinpoint that device so you can figure out how to boost efficiency. In fact, every piece of machinery on the floor can be tracked and managers can gain granular visibility into energy consumption. Actionable insights are delivered about waste, how to attain more efficiency from equipment, and even potential failures and regulatory compliance issues.

This real-time data can deliver interesting insights, such as off-hour consumption, recommendations for optimizing production schedules and other opportunities for savings. It can even benchmark similar pieces of equipment to determine which machines are performing better and proactively solve problems with underperforming ones. Similarly, managers can evaluate different locations and pinpoint hidden operational inefficiencies and waste.

Key Takeaway: Manufacturers spend large amounts of money on energy consumption, yet much of that spend is a waste. IoT empowers managers to determine where they are losing energy, and fix those problem spots.

2. Predictive Maintenance

One of the largest benefits of IoT in the manufacturing industry is the ability to proactively complete maintenance. You are no longer planning maintenance schedules based on historical information, but instead receiving real-time data to understand maintenance needs at an exact moment. Sensors provide the relevant data so you can know the needs of the machine, rather than guessing. This technology drastically cuts waste from the manufacturing equation. If parts don’t need replacement or repair is not required, those resources can be used elsewhere, and money and time are saved.

For example, IoT sensors may monitor the temperature of a key piece of manufacturing equipment. If the temperature starts to increase, staff can be alerted to the situation and a predictive solution can be put into action to prevent any potential issues.

Many companies, such as the French rail company SNCF, are already using this technology to predict maintenance needs proactively. They are using machine learning to gain insight from the growing volumes of data they’re collecting about their rail network, enabling them to more efficiently detect early warning signs of potential failure and resolve issues before they affect service.

Key Takeaway: IoT moves critical data out of silos, gives access to new data points via sensors and allows managers to access and understand that data so they can proactively solve maintenance challenges. These contextual insights keep equipment up and running and minimize the risk of costly downtime.

3. Higher Product Quality

Improving the quality of products is a primary goal for manufacturers, according to an IDC report. A higher-quality product leads to many other benefits, such as reduced waste, lower costs, increased customer satisfaction and higher sales. Achieving this goal, however, is not always easy.  This is where IoT can help.

One major culprit behind product-quality issues is faulty equipment, whether it has not been set correctly, calibrated properly or maintained. But even worse, manufacturers don’t always know that equipment has a problem and as a result, the quality of the product may suffer. And they may not find out until it’s too late.

For example, let’s say an auto manufacturer is responsible for applying paint to metal parts. The company has a reputation for doing high-quality work, but one misstep may lead to months of problems.

Without warning, the temperature of the painting station shifts outside the norms. As a result, the paint does not adhere to the metal correctly, but at first glance, everything looks fine. The product sails through quality control and inspection, and it’s not until a year later that customers see the effects. A recall is issued and large amounts of resources are spent correcting the problem.

These types of quality issues have far-reaching effects, resulting in product recalls, lost trust and damage to the brand. Those customers affected may jump to conclusions and assume the faulty paint was the result of cutting corners or using a less superior paint product.

Using IoT can help avoid these types of costly problems. With this technology in play, the paint station would have had IoT sensors embedded into the equipment. At the moment the sensors detected the temperature change, staff members would receive an alert. Employees could then stop production and solve the challenge immediately. As a result, the recall, angry customers, and damaged client relationships would all be avoided.

This technology is also useful in the product design and testing phases. For example, the production of aircraft, trains and other transportation equipment can be designed with sensors that help to measure important components that determine the safety, performance, and durability of the product.

Key Takeaway: Customer demands are higher than ever, and delivering a subpar product, regardless of cause, can create long-lasting effects. Simple mistakes can be avoided with the use of IoT, which has the ability to minimize quality-control issues and recapture those lost dollars.

4. Reduced Downtime

Timely, accurate and high-quality production is at the core of profits. Without reliable production, companies risk serious loss. Plus, when a machine stops working in the middle of a run, the product on the machine can be a total loss, in addition to traditional downtime expenses.

For example, let’s say an oven breaks at a plant in the middle of a baking run. Upon the failure of the machine, you’re struggling not just with downtime, but also with the loss of all the ingredients and associated production time. IoT provides safeguards against these types of losses. Sensors immediately detect problems in the baking machine at the moment that performance declines. Staff are alerted in real time and the problem can be resolved to minimize any associated downtime costs.

Key Takeaway: Downtime has many costs, and among those costs is the loss of product during production. In addition, there is also the lost cost of opportunity. For example, you may get a request for a rush order, but be unable to fill the order because you’re down a machine due to unplanned maintenance and repair. IoT helps recapture these costs and minimizes downtime.

5. Faster, More Informed Decisions

Managers are never in the dark about equipment performance and problems when using IoT technology. They may have assumed everything was going smoothly in the past – until something broke. But the Internet of Things unlocks critical data about performance and allows those insights to flow freely to those who need them most.

Now managers can transform a reactive approach, focused on replacing parts on set schedules using historical data, into a proactive approach, in which stress is reduced, waste is decreased and visibility is elevated. As a result, they can make faster and more informed decisions at the precise moment of relevance.