Applying the
Internet of Things
to manufacturing
8 IoT use cases to boost ROI
Introduction
Manufacturers are under increasing healthcare, automotive and more. For
pressure to optimize profits and machine builders, it is quickly becoming
efficiencies while simultaneously reducing a business imperative. According to an
“Arguably the biggest
costs – a daunting challenge. However, IDG and Siemens IoT survey, 53 percent of
the emergence of digitalization and its companies have started an IoT initiative.
driver of productivity
associated technologies is making this feat To keep pace with leaders in the industry, and growth in the
possible for the manufacturing industry. you need to start acting now. next decade, the
Industrial Internet of
Specifically, the market has seen the
convergence of information technology
But how? Things will accelerate
(IT) and operational technology (OT) The Forrester report, “Internet-Of-Things the reinvention of
due to advances and synergies between Heat Map 2018: Prioritize IoT Use Cases sectors that account
the respective areas. This has resulted Based On Value To Your Company for almost two-thirds
in the industrial Internet of Things Operations,” details the optimal IoT use of world output.”
(IoT), which is a solution that collects cases for a wide range of industries.
and centralizes mass amounts of Combining the information in the “Winning with the Industrial
machine data gathered from industrial Forrester report, along with Siemens’ Internet of Things”
Accenture,
environments. Applications built on domain knowledge and hands-on
February 2017
these IoT platforms collect, analyze and expertise with the industial IoT, this ebook
enable you to quickly act on the data takes a logical look into how the IoT can
to fundamentally boost operational best be applied for machine builders
efficiency and production. and original equipment manufacturers
(OEMs).
The IoT has already gained traction
within countless industries, including
food and beverage, oil and gas,
Eight IoT use cases for machine builders
This section details the top use cases machine builders and OEMs can implement to add the most value
and return-on-investment (ROI) to their business.
Digitalization and the industrial IoT can be resource heavy as implementation gets under way, so it is
often best to go after the lowest-hanging fruit and then scale up. The following use cases begin with the
foundational implementations, but then each builds on the other to drive more and more value.
The Siemens Digital Maturity Model
for manufacturing processes
The Siemens Digital Maturity Model is a phased,
planned approach to IoT adoption that provides
targeted outcomes for organizations
on their digitalization journey.
01
Asset Management
Condition monitoring
Once your assets are connected and streaming data to a centralized IoT platform, you
can perform condition monitoring. Condition monitoring allows you to view specific
parameters (for example: temperature, vibration and pressure) and key performance
indicators (KPIs) to track operating conditions for all connected assets. If metrics deviate
from normal operating conditions on an asset – indicating an issue – the application
will alert users.
What is the benefit?
Proactively identify production line issues and start remedial actions
prior to asset failure, which reduces unscheduled downtime
Maximize the uptime of critical assets
Gain transparency into asset health and performance across
global locations
25%
increase in production is experienced by implementing
consistent, accurate condition monitoring.
(Source: U.S. Department of Energy)
Siemens eBook | Applying the Internet of Things to manufacturing 4
02
Asset Management
Asset performance management
By monitoring and tracking the condition and status of your machines with KPIs, you
can identify which machines are running below peak efficiency and productivity.
IoT-powered asset performance management applications generate automated alerts
when a machine moves outside of optimal operating conditions, notifying you to
make changes to a production line to enhance performance.
What is the benefit?
Quickly react to anomalies with real-time alerts that indicate the need for action,
reducing unplanned downtime. This accelerates production and creates a positive
ripple effect on allocation, time-to-market and customer satisfaction
Refine baseline KPIs to more precisely determine machine performance
Continuously adjust machines for performance improvements based
on real-time data
20%
or more improvement to a manufacturer’s bottom line
with 10% improvement in overall equipment effectiveness
(OEE) - availability, performance and quality.
(Source: “Achieve better manufacturing outcomes with close condition monitoring of your machinery and
equipment,” Innius, March 2017. https://innius.com/machine-condition-monitoring)
Siemens eBook | Applying the Internet of Things to manufacturing 5
03
Asset Maintenance
Predictive maintenance
By actively collecting and analyzing a machine’s health and performance data, you
can identify when key thresholds are met for a part, indicating it needs to be serviced
or replaced. This allows you to perform maintenance on a need-only basis, eliminating
scheduled and drastically reducing unscheduled maintenance.
What is the benefit?
Improve productivity and reduce maintenance costs by eliminating scheduled
downtime. Only service a machine when it needs it, not when it might need it
Reduce unscheduled downtime by predicting when a part needs to be fixed
or replaced. Knowing about a failure before it occurs reduces the amount of
inventory you need on hand for emergency fixes
Understand the root cause of quality and production issues to
increase asset uptime, utilization and yield
Proactively maintain machines to prolong their lifecycle
30%
reduction in overall maintenance costs
with predictive maintenance.
(Source: Operations & Maintenance Best Practices: A Guide to Achieving Operational Efficiency,
Release 3.0, Pacific Northwest National Laboratory, U.S. Department of Energy)
Siemens eBook | Applying the Internet of Things to manufacturing 6
04
Asset Maintenance
New revenue channels
The IoT provides real-time visibility into the condition of your parts and machines,
even after they leave the factory. This allows you to remotely monitor a machine’s
condition, which means you can offer new services to your customers, such as
predictive maintenance or diagnostic capabilities.
What is the benefit?
Offer maintenance as a service to open new revenue channels
Increase customer satisfaction by offering a guarantee of
machine uptime
Continuously interact with customers to foster a more loyal,
long-term relationship
70%
reduction in asset breakdowns by implementing
predictive maintenance.
(Source: Operations & Maintenance Best Practices: A Guide to Achieving Operational Efficiency,
Release 3.0, Pacific Northwest National Laboratory, U.S. Department of Energy)
Siemens eBook | Applying the Internet of Things to manufacturing 7
05
Energy Optimization
Energy management
Track and manage the energy usage of your plants and machines to identify where
you can reduce consumption.
What is the benefit?
Identify peaks or dips in energy usage that may indicate an anomaly
that needs inspection
Find ways to cut waste that contribute to excessively high energy bills
Better understand how individual machines and processes are contributing
to overall energy consumption and use this data to improve forecasts
Discover nonpeak energy times to run your machines to reduce costs
Improve your environmental sustainability efforts
37%
of energy brought into industrial plants is wasted.
(Source: “How Manufacturers Achieve Top Quartile Performance.” Emerson)
Siemens eBook | Applying the Internet of Things to manufacturing 8
06
Digital Twin
Digital twin of performance
Receive real-time data regarding the physical performance of your production line
and product. Use this data to quickly adjust production, improve product design and
enhance your virtual models.
What is the benefit?
Receive real data to supplement your virtual models. Use this data to see how
close actual performance is to what was expected, and make the necessary
1010 changes to bring them in line. This reduces the risks and costs associated with
0101 adjusting machines and processes
Quickly improve the next iteration of your product with real-time performance
feedback. This will boost quality and time-to-market by allowing you to make
immediate changes
Collect data into a centralized platform from thousands of machines sold to
customers around the world. Track the machines to see if they work as expected
to identify possible defects or supply problems, and to discover how customers
actually use them
€75B
The potential in digital twins will reach €75B by 2025.
(Source: German Association for Information Technology, Telecommunications and New Media)
Siemens eBook | Applying the Internet of Things to manufacturing 9
07
System of Systems
Inventory, warehouse and
supply chain management
A fully integrated IoT solution can help you manage supplies and inventory at all
manufacturing locations. Suppliers with an IoT platform can implement dynamic
supply chains that better align to needs.
What is the benefit?
Optimize space and minimize Gain greater knowledge on
costs by perfecting just-in- the quality of supplies coming
time (JIT) inventory and from vendors
resource forecasting
Establish mutually Rapidly pinpoint assets and
beneficial relationships equipment with location-
with attentive suppliers tracking sensors
“The client found that its workers spent 47 percent of their time just looking for the right
tools, but with an IIoT solution, the worker could be told that the tool they needed was
10 meters behind them and to the left.” ¹
Dr. Richard Soley Executive Director
Industrial Internet Consortium (IIC)
Siemens eBook | Applying the Internet of Things to manufacturing 10
08
System of Systems
New business model –
products as a service
Adding technology to your products opens up a new sales channel: products as a
service. With connected sensors and devices added to the machines you sell, you can
track the amount a machine is used in real time. This means you can start leasing your
machines and charging based on usage.
What is the benefit?
Replace capital expenses with operational: Companies that cannot afford to buy a
machine may be able to lease one. Customers that cannot afford to buy more than one
machine may be able to lease more than one
Sell outcomes versus a product. Provide customers with ongoing
For example, if a factory needs value through continuous
compressed air, that is what they want assistance maintaining asset
to buy, not the machines that create it health and performance
Track usage of your owned assets to Create predictable, ongoing
write-off a machine’s depreciation revenue streams
“Rolls-Royce, a traditional manufacturer of airplane engines, does not just sell engines anymore.
Instead, it charges its customers for the use of thrust on a power-by-the-hour basis.”
(Source: “The Dawn of Digital Industries White Paper,” Frost & Sullivan, August 2018)
Siemens eBook | Applying the Internet of Things to manufacturing 11
Extending IoT outcomes
Once a solid IoT foundation is in place, you can gain additional value by building on top of
your deployment. Two specific ways you can extend the value of your IoT implementation is by
integrating enterprise systems and emerging technologies.
Think beyond machine data systems talk with production lines the enormous amount of big data
Do not limit your IoT platform to and suppliers, you can automate being generated, AI is well-suited
physical assets – think bigger. restocking and dramatically reduce to parse through the data to find
Connecting web- and enterprise- inventory overhead. meaningful insights and alert users
based systems, such as enterprise to act. Virtual reality will increase
resource planning (ERP) and Watch emerging technologies the effectiveness of prototyping,
customer relationship management By leveraging an open IoT platform, finding possible issues faster in the
(CRM), to your physical assets your IoT deployments can evolve design process and accelerating time-
provides the opportunity to push the with advances in technology. Large to-market. Augmented reality will
IoT value beyond the factory floor. strides in artificial intelligence (AI), allow engineers to project data and
Integrating other systems into your virtual reality (VR) and augmented insights into their live environment.
platform allows you to combine data reality (AR) show promising ways For example, holding a tablet in front
sets and realize value beyond asset, of bolstering the power of the IoT. of a machine could pull up a live
production and product performance. For example, artificial intelligence diagram of the machine’s internal
For example, when inventory drives deep machine learning. With components and wiring.
Conclusion
Implementing the IoT is no longer in the production of highly customized
innovators part of the product maturity products” (Source: Forrester, Internet-of-
curve. As the risks associated with Things Heat Map 2018).
References:
digitalization have dramatically dropped,
Many organizations that are new to the 1. https://www.wired.com/
there has been an uptick in companies
industrial IoT need help ensuring long- wiredinsider/2018/07/
willing to take the first steps. Acting
term value and effectively implementing industrial-iot-how-connected-
now will set the foundation for strategic
IoT applications. Siemens provides things-are-changing-
business value before the early adoption manufacturing
expertise in both the industrial space
curve grows into the early majority.
and in IT, with significant experience
Employing the IoT in manufacturing will developing digital automation solutions.
optimize your production. “Executives With this level of leadership, Siemens
that implement IoT use cases for can help machine builders confidently
manufacturing lines seek better visibility plan and deploy IoT solutions that create
and control over operations. This can new value for their business.
enable them to change over production
To learn more about the IoT, visit:
runs faster, detect and prevent
www.siemens.com/mindsphere
emerging problems, and automate
