Top market pressures driving manufacturers to the IoT

There are pressures in every industry to move towards new technologies that enable increased efficiency and cost savings. It is no different in manufacturing. Manufacturers are historically risk-averse, which makes it more challenging to convince them of the need to take the leap into the era of cognitive manufacturing fueled by the Internet of Things (IoT). However, as more and more best-in-class firms take the leap, as detailed in the new report released by Aberdeen, “Connected Operations in the Era of IoT: The Asset Management Edge“, they are consistently driven by five key market pressures:

Figure 1: Market Pressures in Connected Operations in Manufacturing

1. Cost reduction

Not unexpectedly, out of the 500+ firms involved in the study, the number one pressure driving manufacturers to move towards IoT-enabled operations is cost reduction. With 43% citing this as a key driver, it is important to understand just how the IoT and cognitive manufacturing can improve operational efficiency. With sensor-equipped machines automatically capturing and logging data on machine performance and health, organizations can utilize it to reduces maintenance, repair, and operations costs.

We know that 89% of asset failures occur at random and is therefore incredibly difficult to prevent simply with planned maintenance. An obvious downside of this is that excessive maintenance of assets can be wasteful and potentially disruptive to an otherwise stable system. Using the IoT for Preventive Maintenance  can further improve asset availability, increase productivity, and decrease costs, as well as optimizing equipment performance and improving worker health and safety.  Predictive maintenance allows asset intensive organizations to identify impending equipment degradation or failure well in advance of the actual event and thereby proactively remedy the problem, often without impact to production schedules.

2. Driving revenue growth

Second to cutting costs is, of course, making money. With 31% of firms noting this as a key market pressure, the need to grow revenue is always top of mind. By monitoring and analyzing assets and processes, organizations gain powerful insights into their business. By applying these data-driven insights, decision-makers can drive the business with more confidence and agility, improving overall operational efficiency and increasing growth.

3. Faster time-to-market

The third biggest pressure to use connected devices in manufacturing, according to 24% of participants, is faster time to market. Manufacturers are constantly searching for ways to break down informational silos. By enabling better information flow between the plant floor and key stakeholders and decision-makers in the business, new product introductions are expedited and streamlined.

4. Handling last minute changes to orders

We live in a world of instant gratification. We want what we want and we want it now. For manufacturers, this often leads to sudden rush jobs or last-minute changes to orders. Changes could be in the form of a new design requirement, order change, or last-minute customer request, but no matter the cause, it can potentially disrupt already tight schedules, causing delays and excess cost. This is why 16% of firms consider this a top pressure towards moving to connected manufacturing operations.

5. Mass production of individually configured products

Mass customization – the individual customization of mass products – allows for product variety in a rapidly evolving market, including niche markets and individually customized products purchased in-store or online. Think about the types of products you purchase that are available to the masses but that allow you to personalize certain aspects – clothes, shoes, furniture, food, vehicles, etc. It’s never been so easy to lay in bed and order a pizza and be able to choose everything from the type of crust to the sauce to the type of cheese to the dressing you want on the side. I’ve never done this, but a friend told me it was that simple.  It provides you with a feeling that this is somehow unique to you even if anyone can get it. The manufacturing process behind that requires an aggressive increase in variety and customization without an increase in cost.

Using the IoT, raw data from your systems and machines is translated into the needed context to map production schedules, quality, and cost to enable effective decision-making. Real-time visibility allows for a more fluid and efficient supply chain so that pizza comes out perfect every time.

How best-in-class firms are responding to these market pressures

In response to these growing pressures, organizations have begun implementing the needed capabilities to address them. To learn more about what those are and how you can transform your manufacturing operations to stay competitive, read this Aberdeen report.