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How is IIoT transforming manufacturing and creating the Industry 4.0?

22 Mar 2019

"IIoT" stands for Industrial Internet of Things (or Industrial IoT) and can be defined as machines, computers and people advancing intelligent industrial operations using advanced data analytics for transformational business results. 

Accenture estimates that IIoT alone could add $14.2T to the global economy by 2020 and that it will be growing 10% yearly for the upcoming 4 years!

Furthermore, the manufacturing industry is dominating the growth of IoT network connections in the last year, showing year-on-year growth of nearly 84% in terms of new network connections! This can be contrasted to the ever-popular transportation industry with a year-on-year growth of 41% or transportation with 40%. 

iot network connections by industry

The following figure further indicates industries Industrial IoT can be applied in:

type of iot industrial applications

The nature of the term “IIoT” can have a very broad meaning as an Industrial IoT system could be as simple as a connected bug trap system that sends a signal when activated by a fly. On the other hand, it could also represent a fully automated mass production line that tracks maintenance.

Within this article we will be covering the latter part and the complex maintenance and manufacturing systems that are transforming manufacturing to Industry 4.0!


the waves leading up to industry 4.0

Industry 4.0 refers to the 4th wave of the industrial revolution as seen in the image above. Let’s refresh the memory real quick:

The 1st wave of industrial revolution happened in the 18th – 19th century in Europe and North America when the steam engine was developed.

The 2nd wave refers to the the development of the internal combustion engine during WW1 and other major technological advances such as the creation of the light bulb and the telephone.

The 3rd wave can be attributed to the digital revolution with IT when the internet and computers that came out which were integrated within the supply chain.

The 4th wave (Industry 4.0) was invoked by the advances in IoT, nanotechnology, 3D printing and autonomous vehicles. Within this article we will try to show why IoT is the main driver behind the transformation of Industry 4.0!


Well let’s take manufacturing as an example.

In 2016, manufacturing operations in IoT alone accounted for $102.5 billion of the total 178$ billion (all IoT cases combined). What this means is that over 57% of IoT spending occurred in the manufacturing industry. With a total $102.5 billion overall spend, the segment of manufacturing operations (within industrial IoT) outweighs all other cases of investments across all industries (including consumer IoT).

Hence, this is the biggest IoT market with the biggest impact. (Picture taken from i-scoop)

the amount of investment into iot manufacturing


Does it work in the same way as the normal IoT process and its communication layers?

Well first of all, an Industrial IoT system consists of:

1. Intelligent assets (like applications, controllers, sensors and security components)

2. Data communications infrastructure (like the cloud)

3. Analytics and applications that generate business information from raw data

4. People

industrial iot 4 main things to make it work

The IIoT infrastructure can be seen in the picture below. This is the same way normal IoT processes look like as the sensors are connected to IoT gateways (or cellular networks) and then the data is transferred to the IoT platform and server, with the last step being data analysis.

The edge devices together with intelligent assets transfer information directly to the data servers, where it is converted into actionable data on how a machinery is operating. Then this information can be used for predictive maintenance as well as to optimize business processes.

iiot infrastructure

But there’s still a big difference between these activities!


overlap of iot and industrial and industry 4.0
picture made by https://medium.com/@daniel.sontag

Although both have many technologies in common such as cloud platforms, sensors, connectivity, machine to machine communications and data analytics, there are some significant differences.

IoT applications connect devices across multiple verticals, including agriculture, healthcare, consumer and others. They include smart appliances, fitness bands and other applications that generally don’t create emergency situations if something goes wrong.

However, Industrial IoT applications connect machines and devices in industries like oil and gas, utilities and manufacturing. System failures in IIoT deployments can lead to high-risk situations or even life-threatening situations. These applications as well are more concerned with improving efficiency and health, versus the user centric value of IoT applications.


In 2017, Cisco produced a report of survey results showing that 76% of the companies considered their IoT initiatives as failures, and the majority said that the IoT initiatives looked good theoretically, but turned out to be far more complex.

In 2018, Gartner had released its first 2018 Magic Quadrant for Industrial IoT, which took in companies that provide IoT platforms that work amongst multiple verticals (like transportation, manufacturing, utilities). The results showed that no company crossed Gartner’s bar for execution (at this time of writing), showing that the products didn’t live up to the expectations!

The main issues within IIoT:

1. Building a strong foundation of data

2. Measuring and improving metrics

3. Security issues

industrial iot main problems


Let's tackle these issues to get a better understanding of their inner workings. First of all, building a strong foundation of data is evidently complex. The whole concept of Industry 4.0 is based on the opportunity of networking machines together and gathering the data in form of dashboards that can inform actions.

However, often, this data is not deeply considered despite networking and data aggregation being done well. The easiest part is to collect the data but it isn’t enough to drive major process improvements.

Pass-fail data is useful for showing that a problem exists, but shows no indications of where engineers should look next into development. Hence, the data that makes the foundation for Industry 4.0 has to be actionable and relevant enough for the whole process.


We digress to the second aspect. Here we must consider a new dimension of IoT, namely data analysis. In any data analysis you need to know what metrics to aim for and start measuring them. If it’s possible to create a better business outcome from the relevant data, then the project for the new technology will be successful. For manufacturing, those are evident: yield, throughput, uptime, efficiency, and time to market.

Improving any one of these metrics can lead to high ROI (return on investments). The bad news is that there is no magic way to “raise all metrics” technology that can be just implemented into an existing process. Even with technology it takes hard and diligent work to improve these metrics.


Finally, the third and perhaps most crucial topic to not overlook - IoT security. Within this topic, there are  vulnerabilities that can be exploited to permit theft of valuable data already on your available network.

One thing that can keep IIoT secure is that it would be able to borrow the increasingly common practice of automatic downloading and patching from the consumer side of IoT. Some companies will dislike this process, preferring to have absolute control over the software, but it would help in terms of security.


Yes, you’re absolutely correct. There are enormous opportunities to grow within the IIoT space and the main reasons are:

1. You can maximize machine systems uptime

2. Increase the efficient field service

3. Optimize asset utilization

4. Create a smart factory

Here in the graph below it shows which benefits were voted as most important by other business owners within the IoT field. Improving efficiency ranks the highest, whilst improving productivity comes second and then creating new business opportunities comes third!

benefits of IIoT

The top benefit of predictive maintenance is that it involves organizations using real-time data generated from IIoT systems to predict defects in machinery. For example, enabling companies to take action to fix a machine before it breaks due to tracking its performance in real time.

The second point about improving field service is that IIoT technologies help field service technicians identify potential issues in customer equipment before they become major issues. This enables engineers to fix the problems before they cause inconvenience the consumers.

The third point of IIoT is asset tracking. Usually, suppliers and manufacturers can use asset management systems to track the location, status and condition of products throughout their supply chain. The system will send instant alerts to stakeholders if the goods are damaged or at risk, giving them the chance to take immediate action.

Lastly, IIoT improves the facility management as manufacturing equipment is susceptible to wear and tear, as well as certain conditions within a factory, sensors can monitor vibrations, temperatures and other factors that can lead to operating conditions less than optimal.




ABB logo

ABB (Asea Brown Boveri) is a multinational operating within the energy and automation industry. One of their core activities is producing industrial robots and manufacturing services for varieties of industries, including automotive, electronics and even the food industry.


Well, ABB had opportunities and challenges like many other organisations within their industries. They noticed that they had to start moving from reactive services to proactive services and real time monitoring due to the industry advancements.

For ABB, it was building a connected industrial robotics environment and offering it with connected services.  As in the past they could only offer maintenance and support services to its customers when they had an issue with an industrial robots after it has been damaged.

Even in many other industries there are agreements on service, and fixing machines but nothing can outperform pro-activeness, especially as it creates opportunities to new services, for instance regarding real-time performance insights.

Thanks to its IoT initiatives the company now can avoid the interruption of operation in case of issues with its products. You can imagine what it means from a business perspective if a robot keeps functioning instead of being out for a few days in manufacturing environments.

A specific example to make it clearer…

Let’s imagine any car company in the world such as Ford, Tesla, Toyota amongst many others.

As a hypothetical scenario, let’s say they have 100 robotic machines in total with 10 different type of stages of progression (as seen in the image below).

process of automatives in supply chain

So there are around 10 machines within each stage. If 1 machine in a stage broke down, it would greatly affect the performance of the whole factory as that stage would be a specific bottleneck.


bottleneck example

A bottleneck is a point in the productions system that occurs when workloads arrive too quickly for the production system to handle.

So as in the hypothetical example, if there are 10 machines in the stage before 9 machines (if they have constant and equal performance), there will be a bottleneck.

This will cause the manufacturing car company to lose its production by 10% until its fixed. Hence, you have to call your services manager or engineers to fix it and it would take around 48-72 hours at best.Which still means you lost 10% of your production everyday, which can have significant impact on your revenues.

But imagine if you could know that if the machine would break down in advance, or at least if it broke down it would only take 4-6 hours to fix it. That’s a significant improvement from the previous scenario!

Now, we are not partnered with ABB and we do not know how they help their clients, this is an assumed example of what they could be doing just for us to understand.

So what other benefits did they receive from IoT?

Well in general it could be broken down to these points:

  • The ability to move from reactive support to proactive maintenance

As well as the real time identification of issues without the need to send engineers to detect the issue for the case. This results in automation and saving time and reducing the probability of losing revenue due to operations robotics problem.

  • Reduce down-time and so increase efficiencies and productivity

Along with the possibility in some cases to just solve issues from distance (hugely important as multinationals are all over the world)

  • The ability to developed a new service

When embracing a new technology, especially with IoT, they could offer new services such as condition monitoring and diagnostics, backup management, remote access, asset optimization and even fleet assessment.


dundee logo

DPM (Dundee Precious Metals) is a Canadian-based international mining company engaged in acquisition, exploration, development ,mining and processing of precious metal properties.

Several years ago, DPM wanted the IT division to look into new possibilities of how technology could improve the performance of their business to enhance longevity, safety and operational efficiency.

In a few years, they became an Industrial IoT company and being one of the first Industry 4.0 projects with multiple benefits, process automatization, productivity improvements also making DPM a pioneer within the mining industry


Futhermore, how is that even possible in an underground mine and remote locations?

When the IT division presented a way to forget the “old processes” such as reactive maintenance and a new way where information would be available in real-time, maintenance had to become proactive.

DPM further wanted to increase the production at its Bulgarian mine by at least 30%!

However, they had to do that without additional workers or vehicles, but by diving deep into the technological processes and technological parameters of the mine to have a good supply chain overview of their business.

manufacturing iot in mines

The parameters included, locations of miners and of mining equipment, production (number of buckets filled) and the state of the vehicles.

It’s easy to see how location (and movement) and filled buckets are related with productivity but less obvious with vehicles. But as seen from the previous cases, you know what happens when a machine or any other asset in the supply chain fails: loss of revenue and impact on productivity.

That’s why vehicle status monitoring is so important and tracking various tech parameters to ensures its condition.


iot connection in mining


If you know IoT, the majority of its importance is due to connectivity with the cloud and the ability to track something.

So how is that possible in mining with very remote locations?

In traditional underground mines Wi-Fi didn’t work efficiently, except if workers were in the same tunnel. If you don’t have Wi-Fi or any other form of connectivity you need to wait until you get production data in paper and you don’t have insights in any types of interruptions that are about to happen right here in the mine (in real time).

But this is where Cisco technology came in (with other partners) and a wireless IP network was realized within the mines. This enabled the IoT devices to be connected underground!

Connectivity obviously means transmission of data from “things” and in this case also connection of IP phones, in vehicles tablets, cameras, PLCs on the conveyor system and so on.

Now the drivers have an overview of the production and can use their tablets in case of an issue that impacts their productivity to share video of the issue with an expert.

As well, RFID tags are added to the caps of miners and vehicles which signals are leveraged in an application which adds to the safety of the miners.


We hope that this convinced you that even if you are in Industrial company, that IoT can always optimize the supply chain and make it more productive which increases your revenue! The Internet of Things is a complex topic. But we can help. Feel free to send us a message – we have worked with clients big and small and are always open for new challenges with our multiple years of expertise within the field. 

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