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I often am asked about the benefits of the industrial internet of things and to articulate what might be different today from the way industries have traditionally used technology. One colleague recently offered his opinion that IIoT is really about improving the discrete industries. The answer is somewhat complicated, but the simple answer is no - IIoT is not just for discrete industries and has enormous opportunity for the process industries with servitization.
To explain this, we need to explore the definition of each industry segment. The most notable distinction between discrete and process manufacturing is in the way the product is created. In discrete manufacturing, identical products are duplicated by way of an assembly line. The raw materials used to produce these products in many cases are the same from the job to the next, or according to an order. Process manufacturing is more intricate due to its nature in converting or transforming raw materials and variability and complexity with moving liquid materials and dealing. With process manufacturing, the end product is in most cases chemically altered unable to be unassembled to its original raw materials. If you are part of either of these industries, you already know this, but to understand the opportunity and benefit for IoT we need to consider each industrial segment differently.
While some have stated that advantages for industrial IoT for process are only possible if industrial manufacturers are willing to outsource the modeling of their operations as well the collection and interpretation of data, I challenge this notion. There are enough discrete assets that support an industrial process that can benefit from an IIoT business model such as servitization.
Servitization involves manufacturing firms developing the capabilities they need to provide services and solutions that supplement their traditional product offerings, usually transforming a business model from a product-centric offering to a services-centric offering. In the process industries, servitization is most often used by OEM's who supply discrete assets. These "servitized" assets may be turbines, compressors, pumps, motors, exchangers, chemical catalyst, injection skids to process manufacturers. Typically these assets are essential to support the operation, but not core competency of operations. The OEM ultimately develops stronger customer ties by enhancing the service capabilities by offering significant cost advantages by being able to predict asset performance using significantly more sensors connected to the discrete asset combined with process analytics that is capable of predicting asset health based on measuring the process variables.
This new IoT model for operating an industrial process has some substantial cost and reliability benefits for owner operators and OEM's. Owner-Operators will see savings in MRO parts supply chain, maintenance overhead, reliability, and improvement in operations uptime while OEM's benefit of producing a connected product and the ability to improve the product over time having the tools to see how the product performs in an actual process.
To explain this, we need to explore the definition of each industry segment. The most notable distinction between discrete and process manufacturing is in the way the product is created. In discrete manufacturing, identical products are duplicated by way of an assembly line. The raw materials used to produce these products in many cases are the same from the job to the next, or according to an order. Process manufacturing is more intricate due to its nature in converting or transforming raw materials and variability and complexity with moving liquid materials and dealing. With process manufacturing, the end product is in most cases chemically altered unable to be unassembled to its original raw materials. If you are part of either of these industries, you already know this, but to understand the opportunity and benefit for IoT we need to consider each industrial segment differently.
While some have stated that advantages for industrial IoT for process are only possible if industrial manufacturers are willing to outsource the modeling of their operations as well the collection and interpretation of data, I challenge this notion. There are enough discrete assets that support an industrial process that can benefit from an IIoT business model such as servitization.
Servitization involves manufacturing firms developing the capabilities they need to provide services and solutions that supplement their traditional product offerings, usually transforming a business model from a product-centric offering to a services-centric offering. In the process industries, servitization is most often used by OEM's who supply discrete assets. These "servitized" assets may be turbines, compressors, pumps, motors, exchangers, chemical catalyst, injection skids to process manufacturers. Typically these assets are essential to support the operation, but not core competency of operations. The OEM ultimately develops stronger customer ties by enhancing the service capabilities by offering significant cost advantages by being able to predict asset performance using significantly more sensors connected to the discrete asset combined with process analytics that is capable of predicting asset health based on measuring the process variables.
This new IoT model for operating an industrial process has some substantial cost and reliability benefits for owner operators and OEM's. Owner-Operators will see savings in MRO parts supply chain, maintenance overhead, reliability, and improvement in operations uptime while OEM's benefit of producing a connected product and the ability to improve the product over time having the tools to see how the product performs in an actual process.