Value Propositions for Industrial IoT
A mong all the fanfare and hoopla over the Industrial IoT, the more practical-minded among us quietly but persistently raise the question, “So, where’s the value?” It’s a fair question. The IoT represents a new area of influence for industrial automation. Before embarking on such a venture, it’s good to have some idea what the benefits may be.
As we see it, there are two main parties involved, producers and suppliers, and each of them stands to benefit in their own way:
By “producers” we mean any company in the industrial sector that produces goods or services, such as manufacturing, energy, oil & gas, chemicals, mining, water & wastewater, transportation, food & beverages, and so on.
OPEX over CAPEX
Traditionally, projects in the industrial sector require large up front capital expenses (CAPEX) and are usually accompanied by long-term commitments. Shifting these costs to operational expenses (OPEX) means that you do not need to justify a large capital expenditure over years of returns. Just like a cup of coffee, you buy it, consume it and when you need more, you buy it again.
The SkkyHub “pay as you go” model cuts costs in this way. There are no long-term commitments and no initial capital investments. Costs are reduced and shifted from high capital expenses to monthly operating expenses, which improves long-term expense planning and looks better on financial statements.
Data as a Service
There is no need for additional IT personnel or extra hardware, no programming and no upgrade headaches. SkkyHub takes care of data connectivity, freeing up customer staff and resources for higher priority tasks, while increasing ROI.
The Efficiency of Big Data
Knowing exactly what is happening at any given time in the system is a useful step that a producer can take towards improving efficiency, enhancing value. Until recently, this kind of analysis was only available to the biggest enterprises. Now SkkyHub provides a cost-effective way to bring the power of big-data collection to even the smallest enterprise. Combined with custom or third-party analytical tools, the real-time data flowing through SkkyHub can power both historical and real-time analysis, boosting KPIs and enabling significant gains in productivity.
Overall Equipment Effectiveness (OEE)
Overall equipment effectiveness (OEE) is a measure of how efficiently production equipment is being used. In manufacturing, for example, OEE is calculated according to three measures: uptime of production equipment, quantity of output, and quality of finished products. Manual methods and historical data archives give a rough idea of OEE, but according to a recent paper published by the ISA, a much more precise and relevant picture can be drawn by combining real-time operational visibility with real-time analytics. Any drop in production uptime or quantity, or in the quality of finished goods will be noticed immediately, and a fix can be applied on the spot, rather than waiting days, weeks, or months for a report to be generated.
Today’s engineers and managers recognize the need to shift from reactive to predictive maintenance. Instead of asking “What happened?” or “What’s happening?” they want to be asking “What will happen?” Instead of just putting out fires, management and production staff can use the real-time data provided by SkkyHub for optimization, data mining, and fault prediction.
By “suppliers” we mean companies that supply goods or services to industrial companies, in three broad categories:
- Raw Materials Suppliers
- OEMs (Original Equipment Manufacturers) and Equipment Vendors
- System Integrators
Raw Materials Suppliers
Connecting to a customer’s process data via the Industrial IoT provides value by giving suppliers a window into the real-time consumption rates of the raw materials they provide. This allows them to offer just-in-time deliveries, and coordinate their production with demand in real time. A well-known business model shows how the lack of communication between suppliers and producers can cause costly shortages and wasteful overruns. If the Industrial IoT is extended further to include customer order data, then the supply-production-delivery chain could be fully coordinated, with minimal waste and maximum profit.
OEMs and Equipment Vendors
Implemented properly, the Industrial IoT provides a way for OEMs and equipment vendors to monitor their tools and machines in real time. As industrial equipment grows increasingly complex, more and more specialized knowledge is required to maintain and keep it running at optimal efficiency. Meanwhile, customers constantly demand higher uptime rates.
The solution is to stay connected 24/7 in real time. This kind of connection provides vendors and manufacturers immediate notification when something goes wrong, and a convenient channel to check settings and tweak configuration. Rather than sending a technician out to the plant, the tech support team can address the problem using the full set of in-house resources. For the big picture over time, with every machine connected, the vendor or manufacturer can collect histories for every unit in the field, and analyze the data over the entire life of the product.
Given the benefits of OPEX over CAPEX, the growing complexity of machinery, and the convenience of remote monitoring and service, the Industrial IoT may well facilitate a trend towards providing equipment as a service. Plant owners pay a monthly leasing fee for the equipment, and tool manufacturers and/or vendors ensure that it is in place and functioning as expected.
System integration companies come in all sizes, from lone entrepreneurial engineers to mid-sized specialty shops to multi-national giants. Each may offer a different range of skills, products, and services. As the Industrial IoT gains traction, system integrators may begin looking for a way to offer such a service that works well.
Skkynet offers revenue sharing opportunities that meet the needs of any size system integrator working with customers in any sector or niche market. Skkynet partners are able to offer their customers a secure end-to-end solution for the Industrial IoT right now―at a fraction of the cost associated with ad-hoc or home-grown solutions. System integrators who can offer value through best of breed technology to enhance customer performance will deepen relationships with existing clients and grow their customer base.