Is the Internet of Things driving the Industry of Things?

Much is being made about major changes happening across the globe to manufacturing and industry. These changes are disrupting the way we work, the way we create products and the way we interact, on a global scale, with the entire myriad of connected parties in the supply chain. This is being called Industry 4.0 and it is set to be the next major industrial revolution in human history. But behind this significant shift is an underlying technology, the Internet of Things (IoT). It is the innovation that the IoT offers, that is the driver and the tipping point needed to bring about this change.

The Driving Force of Industry 4.0: Data and Sensors

A recent paper by insurer AIG has captured the speed of uptake in sensor-based Internet of Things devices in industry. It states that in the coming year, it is expected that $870 billion will be spent on industrial connected objects, outpacing consumer IoT devices by a third. The driving force is, of course, data. The explosion in data generation in the last few years, and the ability to utilize this data is making this paradigm shift into a new world of manufacturing possible. Sensors power the data generation itself and a revolution is happening here too; in recent years sensor capability has increased as costs have plummeted. Analysis by the likes of McKinsey and AIG both report that costs of IoT sensors are hurtling downwards, predictions of $1 per IoT node being forecast, for example. Affordability, coupled with capability, makes the IoT a very attractive mode of operation and these planets are aligning nicely. In a world where the ecosystem reigns, the IoT sits as a beacon connecting disparate systems and generating information that helps us to improve productivity.

And this is not future talk. This is happening now. We are in fact witnessing this new industrial order across the globe and across all industries. As everyone gets on board with the idea that the IoT will improve our productivity, a race to ‘get there first’ is happening. A wide variety of industry analysts and organizations are evidencing this, with the general consensus that the IoT is driving industrial innovation. This can be seen in a number of case studies that have been used to look at the various areas being touched by the IoT, which can then be linked back directly to the move towards Industry 4.0.

A great example of how the IoT is progressing industries is that of Ericsson Maritime in cargo tracking and monitoring. If you think about it, shipping has always been about connectivity. Connectivity through real world ports rather than digital ports, but the analogy still stands. Ericsson Maritime has created a real-time information portal, based on IoT sensors, that allows the full life cycle of a cargo to be tracked and managed. Ericsson describes this as a “real game changer” for shipping, as it connects up all of the extended supply chain, improving efficiency and reducing costs. This level of transparency and life cycle management, across the entire ecosystem of interrelated parties, is what Industry 4.0 is all about, according to a Deloitte study into Industry 4.0 challenges and solutions.

And it isn’t all about the bottom line. Although financial incentives to use the IoT to drive forward industrial innovation are compelling, the IoT also offers personal benefits to workers. For example, 20% of worker deaths in 2014 happened in the construction industry. That is pretty shocking information which has inspired startup company Human Condition Safety (HCS), to create wearables to prevent accidents. HCS have developed IoT based safety gear that provides feedback data on working conditions and helps to prevent accidents.

The case study portfolio around the use of IoT devices in industry demonstrates the effectiveness of the link between the data generated by sensors, which in turn is communicated by IoT devices, which is then used to improve efficiency and increase productivity. The whole system is like a feedback loop, which is used to push the boundaries of industry even further. Ultimately, collaboration around use case analysis across industry sectors, and understanding the pros and cons as we shake out this technology, will benefit all.

IoT The Driving Force of Industry 4.0

If you look at the effects of the first industrial revolution, which began in the 18th century, you can imagine the possible impact we will see as modern industry fully implements the IoT. The first industrial revolution saw major changes in human society. By 1850, 50% of the population of Great Britain had moved to city living, from previous rural locations. This affected many other aspects of society, including wealth and health – not all of them good ones. This new industrial revolution also brings much change, but this time it is in efficiency and knowledge. The IoT offers us a chance to conquer business globalization issues and take us all into a more competitive and productive world model. As the AIG report points out, “For businesses and industries interested in ensuring a sustainable future for themselves, collaboration is key. So far, the IoT has inspired unprecedented cooperation and coordination.”

Industry 4.0, here we come…

This article is the product of a partnership between BestTechie and member companies of American International Group, Inc. Although this post is sponsored, the information and opinions expressed in the article constitute only my own beliefs.

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