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Chung Pin Teo, Director, Advanced Planning, Jabil Green Point
Ubiquitous computing where “technologies disappear and weave themselves into everyday life” was put forth by Mark Weisner in 1991. Digital innovator Kevin Ashton first coined “the Internet of Things” (IoT) in 1999, in the context of interconnected machines. Simply defined as a connected network of internet-enabled physical objects that contain embedded technology to communicate, sense, and interact with one another without human intervention, the IoT is a vast and exciting new frontier.
Encompassing the Industrial IoT (IIoT), as well as the Human IoT (HIoT), the pervasive connectivity driven by IoT has the potential to change how companies collaborate and create value, and how consumers experience the world. Technological advances in high-volume data storage, real-time data analytics, and cloud computing are fuelling the growth of IoT applications across a myriad of industries including manufacturing, healthcare, textiles, transportation, energy, smart cities, and homes. IHS forecasts that the IoT market will grow from an installed base of 30.7 billion devices in 2020 to 75.4 billion in 2025, while the McKinsey Global Institute predicts that the potential economic impact of the IoT will be between $3.9 trillion - $11.1 trillion annually by 2025.
In the area of IIoT, Markets and Markets has projected that the market size for IoT in Manufacturing will grow from $6.2 billion in 2016 to $20.6 billion by 2021, at a compound annual growth rate (CAGR) of 27.2 percent. This growth will be driven by the increasing need for centralized monitoring, predictive maintenance of manufacturing infrastructure, agile production, operational efficiency and control, and demand-driven supply chain and connected logistics. As more companies embarking on smart manufacturing, not only on the factory floor but also in their supply chains, the IoT market is set to grow.
The Smart Factory
The IoT and smart factories are inextricably linked. Characterized by an integrated digital infrastructure where machines communicate seamlessly with one another and integrated data flows to a centralized platform, the smart factory heralds a paradigm shift in manufacturing.
Interconnected machines and integrated advanced analytics tools form the backbone of smart factories
Interconnected machines and integrated advanced analytics tools form the backbone of smart factories. Coupled with a decision platform where manufacturing is planned, monitored, managed and maintained, communication and location technologies enable smart factories to operate, while data analytics provides the ability to capture and analyze new types of data faster than before. This delivers valuable real-time insights and transforms the way products are manufactured.
Job redesign will be a consideration for the future. With the ability to monitor and control production lines and supply chains remotely from a single consolidated interface, the need for humans to be placed at production lines will be eventually eliminated. Genex partners highlighted the reality that smart factories will replace most, if not all the human involvement in production with machines. On the other hand, smart factories will increasingly require advanced skills and human judgment, to produce optimal factory setups and human-machine relationships.
The current and future dynamic state of the business environment demands that manufacturers have to not only improve their manufacturing performance but also be agile enough to respond quickly to the changing needs. With the ability to anticipate and meet customized market demands, employing IIoT will provide a competitive advantage over other businesses.
Redefining Industry Boundaries
The potential for IoT products to redefine markets and the business-customer relationship is so powerful that companies are exploring solutions beyond their traditional areas of expertise while developing IoT solutions. For instance, some hospitality businesses have developed wearable devices that allow customers to access rooms and pay for meals to provide convenience, greater efficiency and build closer connections to their guests.
And increasingly, businesses are seeking ways to develop new areas of product functionality that redefine and revolutionize the customer experience. Think Amazon’s smart speaker, Echo, Tesla’s solar and energy solutions, and Google’s venture into home automation and autonomous cars.
For many companies, entering the IoT market requires that they redefine their traditional manufacturing processes. To innovate at speeds required to achieve the first-to-market advantage, partnering with organizations that already have established experience in IoT development is critical.
As technological capabilities advance and costs for connectivity, processing power, and data storage decrease, businesses will continue to innovate and drive IoT growth. Whether it’s providing real-time data to detect the capacity of a production line or enabling analytics to predict the need for machine maintenance, the IoT is driving powerful outcomes. And at the end of it all, it is the customer that will receive most of its transformative benefits.