How to Leverage IoT in Manufacturing to Usher in Industry 4.0

AJINKYA BAGADE | April 3, 2020

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IoT for manufacturing is disrupting the business process through analytical and cognitive capabilities. Connectivity of systems is allowing quality, operations, warranty and maintenance personnel obtain greater value from the manufacturing processes and assets.

The industrial internet will further disrupt the manufacturing industry as Industry 4.0 and the Internet of Things will become more interdependent and data-driven throughout the whole product lifecycle. Industry 4.0 of course is one the major buzzwords these days as powerful AI based technologies are looking to transform the manufacturing process.

But as in any industry, a lack of real understanding remains a key obstruction for digital transformation in manufacturing.

Table of Contents:

What is IoT in manufacturing?
What is Smart Factory?
What are the principles that propel us into a new way of thinking about the industry?
How to adopt IoT in your manufacturing business?

What is IoT in manufacturing?

IoT or let’s say connecting devices in manufacturing is nothing new. Yet recent trends such as the rise of the fourth industrial revolution, Industry 4.0, and the convergence of the digital and physical worlds including information technology (IT) and operations technology (OT) have made the transformation of the supply chain increasingly possible. Adoption of interconnected, open system of supply chain operations known as the digital supply network, couldlay the foundation for how companies compete in the future. For this to happen, manufacturers will be needed to unlock several capabilities: horizontal integration through the myriad operational systems that power the organization; vertical integration through connected manufacturing systems; and end-to-end, holistic integration through the entire value chain.

This integration is known as Smart factory.

What is Smart Factory?

The smart factory is a switch to a fully connected and flexible system— one that can use a constant stream of data from connected operations and production systems to learn and adapt to new demands. A factory that can integrate data from system wide physical, operational, and human assets to drive manufacturing, maintenance, inventory tracking, and digitization of operations through the digital twin, and other types of activities across the entire manufacturing network. The result can be a more efficient and agile system, less production downtime, and a greater ability to predict and adjust to changes in the facility or broader network, possibly leading to better positioning in the competitive marketplace.

READ MORE:Smart manufacturing: don't miss out on the industrial revolution

What are the principles that propel us into a new way of thinking about the industry?

There are four principles:

• Transparent information — it is vital that a virtual copy of the physical world can be created, and this can only be done if data is freely available, from raw sensor data attached to machines all the way up to a higher-value, contextual information.

• Interoperability of components — the Internet of Things (IoT) underpins Industry 4.0 and allows for the various machines, devices, and sensors to communicate effectively with one another.

• Technical assistance — technology should not be invested in just for the sake of it, but rather because it provides clear assistance to humans, either in doing their job or making informed decisions.

• Decentralized decisions — by making information more transparent and readily available, it should move the decision making process closer to the point of action, with only exceptional decisions escalated up the hierarchy.

READ MORE: Transforming manufacturing with edge and IoT solutions

How to adopt IoT in your manufacturing business?

Here are 3 innovation plays along with suitable use cases that will help you clearly understand how to apply IoT in your manufacturing business:

1. Leverage data from a digital ecosystem

As companies build IoT-enabled systems of intelligence, they’re creating ecosystems where partners work together seamlessly in a fluid and ever-changing digital supply chain. Participants gain access to a centralized view of real-time data they can use to fine-tune processes, and analytics to enable predictive decision-making. In addition, automation can help customers reduce sources of waste such as unnecessary resource use.

PCL Construction is a group of independent construction companies that perform work in the United States, Canada, the Caribbean, and Australia. Recognizing that smart buildings are the future of construction, PCL is partnering with Microsoft to drive smart building innovation and focus implementation efforts.

The company is using the full range of Azure solutions—Power BI, Azure IoT, advanced analytics, and AI—to develop smart building solutions for multiple use cases, including increasing construction efficiency and workplace safety, improving building efficiency by turning off power and heat in unused rooms, analyzing room utilization to create a more comfortable and productive work environment, and collecting usage information from multiple systems to optimize services at an enterprise level. PCL’s customers benefit with greater control, more efficient buildings, and lower energy consumption and costs.

However, the path forward wasn’t easy.

Cultural transformation was a necessary and a driving factor in PCL’s IoT journey. To drive product, P&L, and a change in approach to partnering, we had to first embrace this change as a leadership team.

- Chris Palmer, Manager of Advanced Technology Services, PCL

2. Develop a managed-services business

Essen, Germany-based Thyssenkrupp Elevator is one of the world’s leading providers of elevators, escalators, and other passenger transportation solutions. The company uses a wide range of Azure services to improve usage of its solutions and streamline maintenance at customers’ sites around the globe.

With business partner Willow, ThyssenKrupp has used the Azure Digital Twin platform to create a virtual replica of its Innovation Test Tower, an 800-foot-tall test laboratory in Rottweill, Germany. The lab is also an active commercial building, with nearly 200,000 square feet of occupied space and IoT sensors that transmit data 24 hours a day. Willow and thyssenkrupp are using IoT to gain new insights into building operations and how space is used to refine products and services.

In addition, ThyssenKrupp has developed MAX, a solution built on the Azure platform that uses IoT, AI, and machine learning to help service more than 120,000 elevators worldwide. Using MAX, building operators can reduce elevator downtime by half and cut the average length of service calls by up to four times, while improving user satisfaction.

The company’s MULTI system uses IoT and AI to make better decisions about where elevators go, providing faster travel times or even scheduling elevator arrival to align with routine passenger arrivals.

We constantly reconfigure the space to test different usage scenarios and see what works best for the people in the [Innovation Test Tower] building. We don’t have to install massive new physical assets for testing because we do it all through the digital replica—with keystrokes rather than sledgehammers. We have this flexibility thanks to Willow Twin and its Azure infrastructure.

- Professor Michael Cesarz, CEO for MULTI, thyssenkrupp

3. Rethink products and services for the digital era

Kohler, a leading manufacturer, is embedding IoT in its products to create smart kitchens and bathrooms, meeting consumer demand for personalization, convenience, and control. Built with the Microsoft Azure IoT platform, the platform responds to voice commands, hand motions, weather, and consumer preset options.

And Kohler innovated fast, using Azure to demo, develop, test, and scale the new solutions. “From zero to demo in two months is incredible. We easily cut our development cycle in half by using Azure platform services while also significantly lowering our startup investment,” says FeiShen, associate director of IoT engineering at Kohler.

The smart bathroom and kitchen products can start a user’s shower, adjust the water temperature to a predetermined level, turn on mirror lights to preferred brightness and color, and share the day’s weather and traffic. They also warn users if water floods their kitchen and bathroom. The smart fixtures provide Kohler with critical insights into how consumers are using their products, which they can use to develop new products and fine-tune existing features.

Kohler is betting that consumer adoption of smart home technology will grow and is pivoting its business to meet new demand. “We’ve been making intelligent products for about 10 years, things like digital faucets and showers, but none have had IoT capability. We want to help people live more graciously, and digitally enabling our products is the next step in doing that,” said Jane Yun, Associate Marketing Manager in Smart Kitchens and Baths at Kohler.


As these examples show, the possibilities for IoT are boundless and success is different for every company. Some firms will leverage IoT only for internal processes, while others will use analytics and automation to empower all the partners in their digital ecosystems. Some companies will wrap data services around physical product offerings to optimize the customer experience and deepen relationships, while still others will rethink their products and services to tap emerging market demand and out-position competitors.

Many would argue that the IoT adoption in the manufacturing industry has fallen short of the expected growth rate but given the benefits of connected devices, its wide adoption is only a matter of time.

What might we be missing right now is the talent or the C-level willingness to bring about IoT transformation and steer us towards Industry 4.0.

READ MORE:Why artificial intelligence will finally unlock IoT.



Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China...


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Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in mainland China...