ARC Advisory Group

Improving Business Performance with IIoT

Blog Post created by ARC Advisory Group on Sep 12, 2016

By Ralph Rio

 

IIoT and Industrie 4.0 offer examples of new technologies that provide an opportunity to im-prove business performance for both owner-operators and OEMs:
• Plant owner-operators: Operational and business process improvements through remov-ing waste and/or better work flow
• Original Equipment Manufacturers: New sources of revenue by extending the compa-ny’s business model into aftermarket services

 

With IIoT, equipment-related data is combined with analytics to help assess an asset’s health for early detection of a fault before failure and unplanned downtime occur. Detecting and re-pairing a fault before it cascades into extensive destruction of other parts and equipment signif-icantly reduces the costs for repair and avoids costly unplanned downtime.

Operational Improvements for Owner-Operators

The first benefit, operational improvements, applies to plant owner-operators in two distinct areas: predictive maintenance and optimizing operations.

 

Predictive Maintenance by the Owner-Operator

The leading use of IIoT involves predictive maintenance for particularly critical, expensive, and/or problematic assets. These situations frequently get close management attention because of the often high dollar impact on the organization’s ability to make product and produce reve-nue.  With the clear financial benefits, even complex custom projects using IIoT, analytics, net-working, and equipment modifications typically get approved.

 

Optimizing Operations

IIoT provides equipment data (like current draw) for analysis with existing sources of process data (like flow rate). Since historians typically connect to process control systems, they contain process data.  IIoT connects to the equipment, providing equipment data.  Analytics using data from both operations and equipment provides new opportunities for coordinating resources and information to improve asset performance management (APM).

 

Revenue Enhancement for OEMs

IIoT provides OEMs with two distinct ways to enhance its products and grow revenue. One in-volves improving the equipment design; the other adds aftermarket services.

 

Closed-loop Product Lifecycle Management (PLM)

Most equipment manufacturers ship products and never obtain feedback on performance – un-til something goes wrong and the customer complains. Other than testing some prototypes, product development is often performed “open loop,” without direct customer feedback.  However, with IIoT, product designers can “close the loop” using IIoT-derived data from a va-riety of field operating environments.  Analyzing these data for product development provides opportunities to optimize designs, gain a competitive advantage, and grow market share for increased revenue for existing product lines.

 

Business-Growth-with-IIoT.jpgPredictive Maintenance by OEMs

Business Growth with IIoTWhen a critical piece of equipment fails, production can be inter-rupted, affecting shipments and revenue. To achieve quick repair, the owner-operator has its own on-site maintenance staff.  Most OEM’s services strategy supports these resident mainte-nance technicians.  With IIoT- enabled remote monitoring and PdM, OEMs have an opportunity to significantly expand services with new sources of revenue.

No one knows the equipment better than the OEM that designed it. The OEM can develop ana-lytics that use IIoT data to assess condition and provide value-added PdM services that inform users of a pending issue before they experience the problem.  The OEM sells PdM services and technical support to achieve near-zero unplanned downtime for its equipment installed in cus-tomer plants.  The support can be offered as an aftermarket subscription in various levels from a simple email alert service with a help desk, to having the OEM’s field service technicians make repairs.

 

Preventing Lost Alerts and Improving Data Quality

IIoT-enabled asset health monitoring solutions can generate alerts when an issue arises. But what happens next?  Responses from ARC surveys indicated that “ad hoc communications” is the most common method used to transfer an alert to maintenance.  These ad hoc communica-tions can include email, phone calls, or even a chance meeting in the hallway.  As a result, alerts are often lost and the equipment fails just as predicted.

By automating these types of business processes, owner-operators can capture alerts to prevent unplanned downtime. IIoT-derived equipment data goes into the historian and analytics (either custom algorithms or machine learning) to assess equipment health.  In the following diagram, the PdM system has access to both process and equipment data.  Alerts generated by the PdM system are automatically transferred to the EAM system, which automatically generates a maintenance work order for review, approval, and scheduling by the maintenance planner.

 

Business-Process-Automation-Prevents-Lost-Alerts.jpg

Business Process Automation Helps Prevent Lost Alerts

Mobile devices allow technicians to process the work order while they are doing the work. Mo-bility solutions can also help improve data quality and timeliness in the EAM system. Business Process Automation Prevents Lost Alerts

 

See a YouTube  video recordingof the author’s presentation of this topic with additional information during a recent ARC Forum.

 

"Reprinted with permission, original blog was posted here"

About ARC Advisory Group (www.arcweb.com): Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.

For further information or to provide feedback on this article, please contact nsingh@arcweb.com

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