The application of Internet of Things (IoT) in the manufacturing industry, popularly called the IIoT (Industrial Internet or Industry 4.0) is witnessing phenomenal growth in recent years. In the industrial segments, it is enabling the acquisition and accessibility of far greater amounts of data, at far greater speeds, and far more efficiently than ever before.
A number of innovative companies have started Industry 4.0 initiatives and driving IIoT projects to make their factories smart factories. Accenture estimates, by 2020, global spending on intelligent embedded systems and connected digital devices and platforms empowered by analytics that constitute IIoT would reach at least $500 billion. By 2030, IIoT could be adding $14.2 trillion to the global economy.
In an exclusive interaction with CXOToday, Saurabh Bhatnagar, Managing Director – Manufacturing, Accenture Strategy, explains the recent trends in IIoT, how it is impacting the enterprise as well as IIoT’s prospects in the India market.
CXOToday: Can you please highlight some of the recent trends in IIoT globally that are impacting the enterprise?
Saurabh Bhatnagar: Globally, the industrial landscape is being transformed by key drivers such as the increasing use of connected technology, platforms and data optimization, hyper-personalization and as-a-service business models. Specifically, industrial internet of things (IIoT) is unleashing enormous value by digitally enabling factory floors, products, workers and more. It is drastically changing the way companies work internally, collaborate with each other and sell to customers. This will eventually lead to the rise of the outcome economy which is the combination of living products and as-a-service business models. Industrial companies will move to more agile ecosystems and alliances with new partners.
However, success in the new digital industrial work will depend on the key enablers such as the deployment of the right technology, readiness of the digital workforce, the apt ecosystems and cyber-security. As data-driven services and insights gain importance, organisations need to focus on deploying cyber resilience.
CXOToday: What kind of prospects do you see for Industrial IoT in India? Which segments are showing increased adoption of IIoT Solutions?
Saurabh Bhatnagar: IIoT could improve productivity and competitiveness of Indian businesses across sectors including manufacturing, finance, banking and media. Taking the industrial sector as an example, Indian manufacturers have been struggling to achieve globally competitive scale and productivity. While the industrial sector in India grew at a rate of 6 percent annually since 2011 to more than US$700 billion in 2016, the value addition per employee continued to be one of the lowest in the world, at only US$6,000. IIoT can yield tremendous impact in different areas. For example, a connected factory can yield a 5-12.5% cost reduction in operations optimization, 10-40% cost savings in predictive maintenance and 20- 50% cost reduction in inventory optimization.
We are already witnessing innovative IoT implementation by businesses across sectors and social projects. In the near future, we expect widespread application of IoT across manufacturing, finance, banking and media sectors. With concentrated efforts by all stakeholders including the government, private companies and the innovation ecosystem to strengthen the infrastructure, IIoT can revolutionize the industrial sector in India.
CXOToday: Could you give us a brief overview of the Smart manufacturing and Connected Factories concept? How will these models help CIOs leverage technology to optimize business value?
Saurabh Bhatnagar: The widespread and seamless usage of technologies in factories to enable data to make real-time intelligent decisions which potentially impact yield, energy consumption, production output, and quality of finished goods is known as Smart manufacturing. The adoption of such a system of technology eliminates variability, uncertainty and hence builds robustness into the operations of a factory. When a similar data driven approach is adopted for a network of smart facilities or factories located in any part of the world to impact service at every level with the singular objective of optimization in real time, it is known as Connected Factories.
Smart manufacturing can help organizations improve innovation, speed and efficiency levels in their value chain operations, through better man-machine collaboration. Organisations can realise unprecedented gains in efficiency, quality and consistency of output across value chain operations and hence cost benefits. By automating the core processes, creating connected ecosystems and leveraging advanced analytics and digital technologies, CIOs can play a crucial role in optimizing business value.
CXOToday: What is the future of connected devices in terms of data security and privacy?
Saurabh Bhatnagar: In the connected world, data will play a crucial role in developing new capabilities across the value chain. Data security will become paramount whereby the use of customer and partner data must be made transparent and there needs to be more focus on digital trust. To ensure a secure connected future, cyber security expertise needs to be combined with industrial control systems to protect the integrity and confidentiality of critical systems. Organisations will need to insulate their increasingly complex, strategic data supply chains from risks of data theft and hack. Cyber security will play an important role in ensuring that the value benefits of IoT are captured in riskless manner.
CXOToday: What are some of the challenges enterprises face while deploying IoT and the way they can mitigate them?
Saurabh Bhatnagar: Firstly, there needs to be more awareness around IoT and focus on the infrastructure. The speed at which organisations are embracing, embarking, absorbing and internalizing IoT can be much faster. There are several factors that should be considered including software and hardware infrastructure, implementation, management and security among others. An organization’s specific application areas, its current and future state of readiness in terms of infrastructure and business intent also play important role. Our research shows that organizations get the most value out of their digital investments if they take a combined or an integrated approach, instead of a piecemeal just in time investment.
CXOToday: What Industrial IoT technologies will be available in the near future?
Saurabh Bhatnagar: It is important to understand that successful digital reinvention is not just about identifying and adopting the latest technology relevant to one’s business strategy. The right combination of technologies will help drive change and disruption.
According to Accenture research, combining five digital technologies in particular such as autonomous vehicles, augmented and virtual reality, big data, machine learning and mobile computing, could help companies achieve additional savings of over US$85,000 per employee on average. Additionally, a slightly different mix of autonomous robots, mobile computing, autonomous vehicles, 3D printing and machine learning, could help companies gain additional market capitalization of just over US$6 billion on average. However, it must be noted that the right approach to combine technologies will vary across industries, goals and over time.