PwC Manufacturing ReportAre you sick of hearing about the Internet of Things, yet? I hope not. That’s the big topic in industrial/manufacturing circles these days, and I doubt that it fades soon.

I think there is a paradox going down here, though. In many respects we already have connected plants. Automation has been so well accepted, that it would be hard to find a facility either manufacturing or production that has no automation. And automation requires instrumentation, networking, and data analysis.

Even considering IP–as in Internet Protocol–as a core of Internet of Things, the adoption of Ethernet-based networks such as EtherNet/IP and Profinet continues to grow significantly.

One wonders, then, what manufacturing executives think of the whole idea and where adoption ranks in their priorities.

Robert McCutcheon, Partner with PwC and US Industrial Products Leader, led a study with PwC and The Manufacturing Institute. The facts and conclusions are included in The Internet of Things: what it means for US manufacturing.

McCutcheon followed up with a blog post where he summarized the findings.

Setting the table for the discussion, he notes, “According to one estimate, the installed base for Internet-connected devices already exceeded $14 billion by early 2015, and is forecast to boom to nearly $50 billion by 2020. We are living in an era of deep data inter-connectivity.”

Further, he says, “Connected devices and new data flows are already making impressive headway in the manufacturing sector, and we expect to see this trend accelerate. In fact, another estimate shows that over the next decade, manufacturers could stand to capture about $4 trillion of value from the IoT through increased revenues and lower costs.”

With this potential value potential, what are executives thinking? Here is his summary.

“This is what we learned:

  • Smart sensors are gaining traction – nearly 40% of U.S. manufacturers are collecting and using data generated by smart sensors to enhance their manufacturing and operating processes
  • Not all think IoT strategy is critical — about 30% say that it’s “slightly important” or “not important at all” to adopt IoT strategy in their operations
  • Focus is on manufacturing plants — one in three manufacturers use data-driven technology in the manufacturing plant only, with about one in four deploying it in their plant and warehouse”

The idea is data-driven manufacturing. Many are competing to find the killer app for this.

The idea is data-driven manufacturing. Many are competing to find the killer app for this. Industrie 4.0 advocates describe a digital factory that mirrors the physical factory where engineers and executives can fine tune the process from design to ship. Smart Manufacturing envisions a platform where apps can be built upon which will provide benefits of enhanced workflow.

Even Lean (which is seldom discussed lately, but remains the best route to manufacturing effectiveness) needs data to both discover problem areas and provide feedback about the success of the project.

Where do you stand on the IoT spectrum?

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