What is IIoT? Definition and Benefits of Industrial Internet of Things

Last Updated: January 30th, 2023
Researched and Written by: Russ Davidson

The industrial internet of things (IIoT) refers to interconnected sensors, tools, and devices that are connected via computer networks (the cloud) and software applications for primarily manufacturing and energy management. By communicating machine-to-machine (M2M) and sharing big data, industrial industries can use some of the latest technologies (such as robots, sensors, and more) to improve their production processes.

What is Industrial IoT?

The industrial internet of things (IIoT) is an ecosystem of intelligent devices connected to form systems that collect, monitor, and exchange data with one another. IIoT focuses on machine-to-machine communication through big data and machine learning via interconnected sensors, instruments, and other devices within a manufacturing and energy management environment. This concept of connecting devices with an electronic interface to one another via the Internet serves the purpose of optimized process controls and digital transformation through a higher degree of automation.

Sensors within machines in a factory can connect to wireless networks and gather information and share data. These sensors are generally tiny, low cost, and can connect via high-bandwidth wireless networks–meaning even the smallest devices can be connected. This provides a new layer of digital intelligence and tracking across the varying industries, such as manufacturing, retail, utilities, and transportation.

While IIoT solutions are disrupting manufacturing, a modern manufacturing execution system (MES software) will continue to spur initiatives, pilots, and studies. MES software manages industrial assets, collects data, and ensures traceability in an industrial setting.

Software bundles help manufacturers track and document processes, get an overview of shop food operations, and maintain transparency across assets. IIoT can be thought of as an enabler and a complement to MES–allowing manufacturers to stand up line downtime and overall equipment effectiveness (OEE) in a matter of days without the substantial investment that MES typically brings.

Monitor your manufacturing performance with the best overall equipment effectiveness software.

How Does Industrial IoT Work?

Equipment connected to the Industrial IoT is fitted with sensors that collect data from the machine and send it forward to the cloud. Once in the cloud, the data is passed to the quality management software or equivalent monitoring system. This analyzed data is then sent to the end-user. In short, the sensors gather production data and uses the cloud to transform the data into valuable insights.

Real-life examples of IIoT include:

  • Predictive Maintenance: Collect data from sensors and devices to assess current conditions, identify warning signs, deliver alerts, and trigger maintenance procedures.
  • Asset Tracking: Detect and monitor key assets along the supply chain to maintain inventory levels and prevent quality issues.
  • Business Intelligence: Connect disparate silos of data from varying sources around your organization–providing unified visibility across manufacturing, supply chain, and logistics.
  • Extending ERP/MES capabilities: Put industry 4.0 initiatives into effect through connectivity, interoperability, mobility, and crowd-sourced intelligence.

What Industries Use Industrial IoT?

The Internet of Things can be used by countless industries and cover many use cases and applications. Originally intended as a convergence of IT and OT, the Industrial Internet of Things creates opportunities in automation, optimization, asset performance, and intelligent manufacturing.

The biggest benefactor is the manufacturing industry, which is the largest IIoT market. In the automotive industry, industrial robots can be maintained through IIoT–helping spot potential problems before production is disrupted. In agriculture, sensors can detect data about soil moisture and nutrient levels–allowing farmers to produce an optimal crop yield.

In 2016, manufacturing operations alone accounted for an IoT spend of $102.5 billion on a total of $178 billion, all IoT use cases in manufacturing combined. This means manufacturing operations outweigh all other IoT use case investments across all industries.

Other industries that benefit from Industrial IoT include logistics and transportation. These firms value advanced communications and monitoring systems that are enhanced by the Internet of Things. One big example is freight monitoring, which allows operations centers the chance to gain visibility into blind spots in their freight processes. Examples include the condition of freight, humidity levels in trucks, temperature, and ambient light intensity. Geofencing can also be established to determine if freight is outside established boundaries.

Industrial IoT in the energy and utilities industry powers oil and gas, including smart grid operations and other use cases. Many utility companies have initiatives that prioritize energy conservation, such as using motion-sensitive energy-efficient lights or limiting the use of their HVAC systems. This method of conservation focuses on the overall equipment effectiveness (OEE) of the facility, which in turn leads to energy conservation and savings.

In wastewater treatment plants, water leakage detection can know when loss, theft, and pressure management occurs. Water quality, temperature, pressure, consumption, and more can be tracked via smart devices that communicate directly with water utility companies to analyze data and share information with the consumer.

Benefits of Industrial IoT

The Industrial Internet of Things can augment existing assets and maximize workforce efficiency. While many challenges may exist in implementing these processes, Industry 4.0 utilizes wireless automation to enhance performance overall. By exploring the benefits, applications, and challenges manufacturers face, one can better understand the real-world practical use of IIoT.

Some of the biggest drivers behind Industrial IoT implementations include a desire for improved operational efficiency, improved productivity, creating new business opportunities, and reducing downtime. Usually, it’s the combination of the below benefits that make the decision to move forward with Industrial IoT an easy one to make.

Increase Manufacturing Efficiency

A study by the American Association for Quality found that those businesses shifting to digital processes and Industrial IoT have seen as high as 82% increase in efficiency accompanied by 49% fewer defects. Why? According to the study, relying on smart connected factories (a complete integration of computers and machines made possible through artificial intelligence (AI), machine learning, and deep analytics) can provide the following benefits:

  • These technologies can perform at a micro level that humans cannot.
  • They can work faster than humans.
  • They can allow for faster, objective, and more accurate decision-making.
  • Systems can process and analyze data to “see” patterns and trends not readily discernable by humans.
  • They can decentralize decision-making by allowing many autonomous or semi-autonomous decisions from the platforms themselves.

Manage Predictive Maintenance

Predictive maintenance is the act of analyzing performing trends and using condition-based monitoring to alert your team to potential problems. By tracking material and equipment degradation over time, you should be able to reasonably predict when maintenance is necessary. This is opposed to reactive maintenance which only occurs after equipment or assets have already broken down or preventive maintenance which offers more routine scheduling regardless of performance.

According to the Aberdeen Research Group, downtime across all manufacturing types equates to an average cost of $260,000/hour–something usually blamed on a lack of proper and predictive maintenance. This is because reactive maintenance equals a huge time loss determining what the issue is, how it can be fixed, and the cost of repairs. These are issues that can be prevented completely with the use of Industrial IoT solutions.

Industrial Internet of Things technologies predict equipment health and maintenance needs by using the following:

  • Sensors: Outfit machines with sensors to detect variances and monitor for performance abnormalities. Measure conditions, motion, and vibration.
  • Connectivity: Link machines and sensors to one another.
  • Machine Learning: Enable systems to learn and operate independently
  • Cloud Computing: Pull all data together for complete visibility

The combination of these things creates a baseline level of consistent performance. Any variance from this baseline allows companies to see issues before they occur–allowing them to schedule maintenance prior to the downtime. It also provides companies the time needed to order parts required for the job, calculate the cost beforehand, and move production to another area of the facility.

Improve Safety

Many industries turn to IoT devices to improve efficiencies and safeties. Examples include being able to auto-adjust thermostat settings for optimal energy efficiency, accessing security cameras remotely when it provides notifications of an alert, or controlling door locks to ensure your facilities are secured when you are not in operation.

71% of manufacturers used IoT devices in 2019, citing reasons such as keeping employees safe and healthy while also lowering operating costs. The most popular use of IoT within a manufacturing environment is through sensors. Sensors on manufacturing equipment can pinpoint failures and breakdowns (as mentioned in the previous section). But sensors can also serve further safety purposes:

  • Camera sensors: Computer vision can identify safety risks and trigger alerts of unsafe behavior and uncover areas to promote a safer working environment. Ensure employees are wearing proper safety equipment, abiding by zones, ensuring proper clean-up, and more.
  • Wearables: Track employee location during a crisis and detect falls.
  • Energy Management: Monitor water, temperature, humidity, and overall flow to reduce the risk of property damage or accidental water events.

Whether wearable technologies or smart security devices, integrated safety systems are protecting workers in the event of a workplace accident in order to limit damages. Additional benefits include corrective actions that can be determined based on monitoring employee engagement with regard to proper workplace safety procedures.

Using Software and Industrial IoT Platforms

To streamline operations on the shop floor, many businesses over the years have turned to solutions such as manufacturing execution systems (MES software), which enables complete shop-floor control and scheduling capabilities via monitoring and corrective action guidance for quality and performance continuous improvement. These solutions monitor industrial processes and assets by collecting data and ensuring traceability.

In today’s world, manufacturing execution systems coincide with IIoT initiatives through a number of its capabilities, including documentation, shop floor monitoring, and providing transparency across assets. These capabilities provide functionalities including production scheduling, change management, dashboard reporting, and manufacturing functions such as routing and tracking.

This is not to imply that IIoT platforms and MES systems are the same. The use of the Industrial Internet of Things derives from Distributed Control Systems (DSC)–improving upon the degree of automation offered through the use of cloud technology to optimize process controls. This means IIoT platforms are typically more flexible than MES. This is because MES can be considered “centralized”–meaning it performs its list of provided functionalities, but won’t perform outside of that. IIoT acts as a middleware that connects the sensors, devices, applications, and users.

MES software is also proprietary and developed by a specific vendor, which means it does carry certain restrictions. IIoT platforms will usually provide the capabilities of MES through applications, all while expanding on the work. In short, IIoT is more of an open platform that can be scaled and thought of as decentralized when compared to traditional manufacturing execution systems.

The best way to approach the relationship between MES software and Industrial IoT is to determine what level of multi-enterprise collaboration and cross-enterprise collaborations you are looking for. IIoT platforms can be thought of as a more modern option. In today’s world where cloud computing is becoming increasingly popular, IIoT platforms mirror the affordability of these options–compared to the higher initial costs of MES.

Hydra MES Software Industrial IoT
A terminal line status in Hydra MES.

Extending MES with an IIoT Platform

MES systems can connect to almost any solution in the cloud, including any Industrial IoT. IIoT platforms typically enter the MES conversation when:

An organization chooses an IIoT platform instead of an MES An organization decides to extend its MES with an IIoT platform

Option B is becoming a more popular choice for organizations in regulated industries. These businesses primarily focus on improving visibility and reducing costs. By syncing MES with an Industrial IoT platform, their existing MES can essentially build on new functionality on top of the existing system. MES will remain the system of record while the IIoT platform collects the data on the shop floor and serves the front-line workers.

An IIoT platform can make data more readily available through connection to sensors, machines, other business systems (such as an ERP application), and employee records. This together provides a more complete real-time picture of your manufacturing performance. And since MES systems can be considered a critical system, incorporating an Industrial IoT platform means engineers are able to analyze processes and solve problems as they come up without disrupting the manufacturing chain.

The combination of these forces allows MES to be used by those who understand the data the most and allow front-line workers to use platforms to have more control over the manufacturing processes. This should help with the ultimate goal of speeding development cycles while preserving IT resources, as well as getting the maximum value from your MES solution.

PerformOEE IIoT
The plant watch feature in PerformOEE.
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