industrial internet of things (IIoT)

The industrial internet of things (IIoT) is the use of smart sensors and actuators to enhance manufacturing and industrial processes. Also known as the industrial internet or Industry 4.0, IIoT leverages the power of smart machines and real-time analytics to take advantage of the data that 'dumb machines' have produced in industrial settings for years. The driving philosophy behind IIoT is that smart machines are not only better than humans at capturing and analyzing data in real time, they are better at communicating important information that can be used to drive business decisions faster and more accurately.

Connected sensors and actuators enable companies to pick up on inefficiencies and problems sooner, and save time and money in addition to supporting business intelligence (BI) efforts. In manufacturing specifically, IIoT holds great potential for quality control, sustainable and green practices, supply chain traceability and overall supply chain efficiency. In an industrial setting, IIoT is key to processes such as predictive maintenance (PdM), enhanced field service, energy management and asset tracking.

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How IIoT works

IIoT is a network of intelligent devices connected to form systems that monitor, collect, exchange and analyze data. Each industrial IoT ecosystem consists of:

  • Intelligent assets that can sense, communicate and store information about themselves;
  • Public and/or private data communications infrastructure
  • Analytics and applications that generate business information from raw data; and
  • People.

Edge devices and intelligent assets transmit information directly to the data communications infrastructure, where it is converted into actionable information on how a certain piece of machinery is operating, for instance. This information can then be used for predictive maintenance, as well as to optimize business processes.

IIoT infrastructure

Benefits of IIoT

One of the top touted benefits the industrial internet of things affords businesses is predictive maintenance. Organizations can use real-time data generated from IIoT systems to predict defects in machinery, for example, before they occur, enabling companies to take action to address those issues before a part fails or a machine goes down.

Another common benefit is improved field service. IIoT technologies help field service technicians identify potential issues in customer equipment before they become major issues, enabling techs to fix the problems before they inconvenience customers.

Asset tracking is another IIoT perk. Suppliers, manufacturers and customers can use asset management systems to track the location, status and condition of products throughout the supply chain. The system will send instant alerts to stakeholders if the goods are damaged or at risk of being damaged, giving them the chance to take immediate or preventive action to remedy the situation.

IIoT also enables enhanced customer satisfaction. When products are connected to the internet of things, the manufacturer can capture and analyze data about how customers use their products, enabling manufacturers and product designers to tailor future IoT devices and build more customer-centric product roadmaps.

IIoT also improves facility management. Manufacturing equipment is susceptible to wear and tear, which can be exacerbated by certain conditions within a factory. Sensors can monitor vibrations, temperature and other factors that might lead to operating conditions that are less than optimal.

IIoT versus IoT

Although the internet of things and the industrial internet of things have many technologies in common, including cloud platforms, sensors, connectivity, machine-to-machine communications and data analytics, they are used for different purposes.

IoT applications connect devices across multiple verticals, including agriculture, healthcare, enterprise, consumer and utilities, as well as government and cities. IoT devices include smart appliances, fitness bands and other applications that generally don't create emergency situations if something goes amiss.

IIoT applications, on the other hand, connect machines and devices in such industries as oil and gas, utilities and manufacturing. System failures and downtime in IIoT deployments can result in high-risk situations or even life-threatening situations. IIoT applications are also more concerned with improving efficiency and improving health or safety, versus the user-centric nature of IoT applications.

IIoT applications and examples

In a real-world IIoT deployment of smart robotics, ABB, a power and robotics firm, is using connected sensors to monitor the maintenance needs of its robots to prompt repairs before parts break.

Likewise, commercial jetliner maker Airbus has launched what it calls the "factory of the future," a digital manufacturing initiative to streamline operations and boost production. Airbus has integrated sensors into machines and tools on the shop floor and outfitted employees with wearable tech, e.g., industrial smart glasses, aimed at cutting down on errors and enhancing workplace safety.

IIoT applications

Another robotics manufacturer, Fanuc, is using sensors within its robotics, along with cloud-based data analytics, to predict the imminent failure of components in its robots. Doing so enables the plant manager to schedule maintenance at convenient times, reducing costs and averting potential downtime.

Magna Steyr, an Austrian automotive manufacturer, is taking advantage of IIoT to track its assets, including tools and vehicle parts, as well as to automatically order more stock when necessary. The company is also testing "smart packaging" that is enhanced with Bluetooth to track components in its warehouses.

Vendors in IIoT

There are a number of vendors with IIoT platforms, including:

  • Ability by ABB, a power and robotics company;
  • IoT System by Cisco, a networking company;
  • Field by Fanuc, a supplier of industrial automation equipment;
  • Predix by GE Digital, an energy management company;
  • Connected Performance Services by Honeywell, a software-industrial company;
  • Connyun by Kuka, a manufacturer of industrial robots (created in partnership with Infosys, an IT consulting firm);
  • Wonderware by Schneider Electric, an energy management company; and
  • MindSphere by Siemens, an industrial manufacturing company.

The future of IIoT

Bain & Company predicted industrial IoT applications will generate more than $300 billion by 2020, double that of the consumer IoT segment ($150 billion).

Similarly, IDC Research reported the top three industries investing in IIoT in 2018 are manufacturing ($189 billion), with a focus on asset management; transportation ($85 billion), with a focus on freight monitoring and fleet management; and utilities ($73 billion), with a focus on smart grids, while consumer IoT spending will reach $62 billion.

More optimistically, Accenture expects IIoT to add $14.2 trillion to the economy in the same time period, growing at a 7.3% compound annual growth rate (CAGR) through 2020.

This was last updated in July 2020

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