Manufacturers have long understood the benefits of moving towards an enterprise resource planning (ERP) system that is integrated with the plant floor systems, but it’s been hard to get past the cultural and technological barriers of doing so. As a result, especially for many midmarket manufacturers, the ERP system still sits in a silo, separate from the systems that govern the activities on the plant floor. Operational technology (OT) and transactional data have largely lived separate lives, rarely connecting to spark efficiencies and crucial insight across the business.
With the new imperative to embrace the internet of things, OT and IT systems — and the people who manage them — are being encouraged to become friends like never before. Advancements in technology have democratized the ability to launch IoT projects and the business benefits of integrating systems are too great to ignore. It’s no wonder, then, that the manufacturing industry leads the way in IoT investments, with IDC reporting that it spent a collective $178 billion in 2016.
IoT-enabled assets and strategies, of course, hold the most promise when the data they generate can deliver insight across the business. Yet only 16% of manufacturing companies consume IoT data in their ERP systems, according to a recent study by IFS (registration required). That’s regardless of company size, IoT adoption or digital transformation projects.
A similar trend can be found in a recent survey among midmarket manufacturers who said that the main advantages of their ERP systems were mostly found in their financial and accounting related processes.
Yet, those same midmarket manufacturers can benefit from real-time, actionable insight by integrating data from OT with transactional ERP systems. Consider the power of a machine alerting a plant manager when a valve was about to go bad, triggering the procurement system to order the necessary part and scheduling a service technician to fix it.
In a quest to get their hands around IoT, many midmarket manufacturers realize that this is an evolution impacting the entire global industry and they must start this transformation journey if they are going to remain competitive. It is not as important where a manufacturer starts, but just that they start!
Creating an enterprise IoT strategy is important. To get started with industrial IoT projects that lay the groundwork for IoT to use enterprise systems and transform business processes, manufacturers should consider the following:
Start on the plant floor. Tap into the knowledge of those who have the most experience solving problems and coming up with the best solutions. Find out how that knowledge can be automated to augment the way employees work while empowering them in their roles to work under the best possible conditions. Getting insight and buy-in at the grassroots level pays dividends, not only in terms of accelerating projects, but laying the foundation to ease change management when it comes time to deploy the solutions.
Choose a pilot or proof of concept. Pick a key manufacturing process, for example, packaging line, that allows the organization to learn fast and pick up speed. Be sure to identify the desired business outcome. Asset tracking, predictive maintenance and automation are some of the most popular IoT use cases for manufacturers. But before diving in, consider some key questions: What is the business outcome your organization is trying to achieve? Is it to increase throughput or uptime? Is it to increase the efficiency of an asset, or decrease the cost of maintaining it? What are the key metrics and KPIs to track in that regard? Let the business outcome drive the use case.
Make sure the technology will scale. One of the key challenges in implementing IoT strategies is doing so in a manner that will scale both securely and efficiently. Midmarket manufacturers should look to implement technology that will ease the process of communicating with equipment with different protocols. Cloud-based systems provide the scalability at a fraction of the costs of on-premises systems.
Start learning about and advancing real-world implementations of IoT. The IoT world is active with industry consortiums that offer guidance, help develop and advance standards, and provide valuable connections to get started with industrial IoT projects. Consider the benefits and value in investing time to be part of one.
IoT isn’t just for mega-companies. Midmarket manufacturers can take steps toward launching IoT pilots now and begin to realize the advantages of the cutting-edge technology.
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