If you’re in the manufacturing industry, you’re familiar with the business challenges: global competition, supply chain disruptions, quality control, and regulatory compliance.
But what about the dreaded disruptions from downtime?
According to 2023 research by Pingdom, companies experience approximately 800 hours of manufacturing downtime every year due to maintenance, tool breakages, and adjustments, resulting in an average cost of $260,000 per hour!
Those are some shocking numbers.
Clearly, downtime is a fierce enemy in the quest for manufacturing productivity and efficiency, but for companies using ERP systems, there’s a bright light illuminating the darkness: IoT integration.
IoT (the Internet of Things) came to inception in the late nineties. It refers to a network of interconnected physical objects embedded with sensors, software, and connectivity, enabling them to collect and exchange data with other devices and systems over the internet. If you use a Google Home or Alexa device or your smartphone to set your house alarm, close your garage door, or turn up the thermostat, you’re using IoT.
IoT in manufacturing facilitates a shift in how companies operate and manage processes, and it aids significantly in driving competitive advantage and data-driven decision-making. But it also reduces costs–especially those associated with equipment downtime.
Let’s dive into how IoT in manufacturing can reduce downtime, increase efficiency and productivity, and achieve a substantial return on investment.
How IoT helps reduce downtime in manufacturing companies
Avoiding costly unplanned downtime
It’s important to note that there are two types of downtime–planned and unplanned–and the distinctions are important.
Planned downtime refers to things like scheduled maintenance, equipment inspections, and upgrades - anything that is prescheduled and anticipated so there is minimal, if any, interruption to production schedules. Think of it as your annual physical or dental checkups that you schedule ahead of time and may take you out of work for a few hours at most.
Unplanned downtime is that enemy we mentioned earlier that wreaks havoc with production lines–and profits. This type of downtime is unexpected and generally due to equipment breakdowns, power outages, software glitches, or unanticipated supply chain problems. Unplanned downtime is unpredictable, disruptive, and costly.
As the Director of Operations at an automobile manufacturer, Trevor is all too familiar with unplanned downtime. Recently, with no warning, a conveyor system malfunctioned, bringing an entire production line to a halt. As a result, the line was down for 36 hours pending repair, which affected the flow of materials and assembly. This was the third time in as many months that a similar breakdown caused the production schedule to go off the rails.
Trevor knows from experience that the financial implications of unplanned downtime can include:
Emergency maintenance and repair costs
Lost production and revenue due to lower output and reduced product sales
Increased labor costs due to inactive workers who still need to be paid
Rush orders and expedited shipping to meet customer demands
Inventory disruptions
Increased insurance premiums, in some circumstances
IoT integration can significantly minimize many of these issues through early detection.
Predicting equipment failures
Predictive analytics is valuable for planning preventive maintenance. IoT sensors are employed to monitor equipment and provide real-time data on usage to plan preventative maintenance. Scheduling such maintenance in advance has been shown to extend the lifespan of machinery, ultimately saving money.
Machine learning (ML), a separate but complementary technology to IoT, is also used in manufacturing. IoT and ML are often integrated – the IoT sensors gather data from machinery, and machine learning is subsequently applied to that data to predict needed maintenance or optimize production processes. Think of machine learning as the brain of the manufacturing plant, processing the data from the IoT-connected devices to learn about the equipment and predict any potential downtime so proactive measures can be taken.
Scheduling preventive maintenance
Preventive maintenance is a proactive process that saves companies from the high costs detailed above–it’s your armor against unplanned downtime.
Many of us have learned this from car ownership. If you go too long without an oil change, you could end up stranded on the side of the road with an overheated and possibly damaged engine. Expensive repairs and needing a rental vehicle will be your reality. Costly and inconvenient.
The same goes for industrial equipment. Proactive, planned maintenance is efficient (no surprises) and cost-effective (cheaper than repairing damage).
It’s simple: Companies that employ IoT to track the status of machinery and create predictive maintenance schedules face less downtime and lower costs than those that don’t.
Improved productivity
According to a study by the MPI Group, over just two years, factories implementing IoT solutions to plants and processes saw a 72% increase in productivity.
That’s an eye-opening statistic for manufacturers concerned about investing in IoT technology.
But IoT delivers compelling benefits beyond reduced unplanned downtime, including:
Optimized processes
Real-time monitoring
Worker efficiency
Better product quality
Quality control
Supply chain optimization
Data-driven decision making
Productivity is important, but what about the investment?
Reduced costs
As with implementing any technology, there are costs to consider. However, research shows that the increased revenues associated with IoT integration in the manufacturing industry can provide a stellar return on investment.
In fact, research from MPI Group found that 69% of manufacturers reported increased profitability from applying IoT to plants and processes.
In addition, 77% of manufacturers measuring ROI for their IoT initiatives saw improvement, averaging a 28.5% increase, according to a report from Zipdo.
Given the many productivity improvements in the previous section, this profitability data isn’t surprising–the two tend to go hand-in-hand, after all. But there’s also minimized production losses, extended equipment life, inventory management, and energy management that can contribute to cost savings and ROI.
The bottom line
If you’re wondering about Trevor and his saga of frequent and frustrating unplanned downtimes, IoT was his happy outcome.
Trevor researched and consulted with others in the industry and eventually received approval to integrate IoT with the company’s ERP system. In just a short time, the company has seen a 60% decrease in unplanned downtime, and he expects to end the year with greatly improved numbers for increased productivity.
The results have been transformational. And yours can be, too.
If your company struggles with similar challenges, discover how IoT can empower you to adapt to the digital landscape and thrive via interconnectedness and enriched data. Reach out to www.ideastosolution.com
About the Author:
Ideas to Solution provides everything you need under ONE roof. We work with the world's leading tech companies to help them develop the solutions and products of tomorrow.
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