North American manufacturers may be early adapters on IoT connectivity. North American manufacturing executives are less nervous than counterparts in Asia and Europe about linking their shop-floor gear to the cloud, an early-adopter tendency that could give them an edge in the global race to adopt technology from the so-called internet of things.
That’s one of the findings tucked inside a helpful report from the folks at Lux Research, offering a potential silver lining in a sector that trails the likes of energy, health care and transportation when it comes to connected tech.
If the Internet of Things is all it is cracked up to be – a McKinsey & Company report in 2016 said it will create more than $11 trillion in economic value by 2025 – a North American edge in adoption is potentially good news.
Lux Analyst Isaac Brown, lead author of the report entitled “Predictive Maintenance: The Art of Uptime,” said manufacturing is trailing when it comes to IoT adoption. Key decision makers either aren’t up to speed on the technology or don’t yet see the ROI value clearly enough to start cutting checks for the tech upgrades.
The internet of things is an emerging array of software-controlled sensors and other devices that allow machines to “talk” to each other, and to central operations centers. Efficiency and machine performance can be tracked and analyzed, allowing for predictive maintenance that avoids costly breakdowns or inefficient routine-maintenance shut-downs.
An example in the transportation sector would be connected sensors in a truck engine that detect wear in, say, a fan belt. Instead of a dashboard warning light, the information flows to a central data processor, which arranges for the repair. The driver is notified of the imminent failure and told to stop at a nearby service center, where a mechanic is waiting with the replacement part in hand. Data is also collected on the fan belt and the driving conditions that lead to its failure, information that can be factored into maintenance decisions on other vehicles.
The Lux report suggests that the same benefits described above can be seen in the manufacturing sector, but that many executives aren’t yet aware of the benefits connected technology offers. Change-averse culture and security are also obstacles, “despite a wealth of information proving its value and return on investment. One major obstacle is a ‘don’t fix what ain’t broke’ mentality,” the report reads. All this makes the thought of connecting equipment to the cloud a bigger hurdle, especially when the issue isn’t just connecting to the cloud, but putting sensor data in the hands of outside vendors.
Still, Lux researchers asked global manufacturing executives if their organization would be willing “to allow your equipment providers to monitor your equipment remotely (over the internet) in order to provide predictive maintenance services.” Globally, only 47 percent of respondents were comfortable with this type of remote monitoring. But among North American companies, that number is 61 percent. (It was 39% in Asia; 42% in Europe; and 46% in Africa.)
“This is the land of the internet,” Brown said. “Americans may be slightly more comfortable with connectivity.”
The report notes that larger companies tend to be more comfortable connecting to the cloud, perhaps because “smaller organizations have fewer resources to push into security, and less robust IT infrastructure.” Several companies were singled out for implementing IoT technology. They include GE Aviation, Tucson Electric, Saudi Armco, Arch Coal Mines and Monsanto.
Specialty Publishing President Peggy Smedley, whose Connected World Magazine has been following this sector since before the term Internet of Things was coined, said manufacturing execs are coming around, albeit slowly. They need to see real ROI from new technology before they adopt it, she said.
“That’s why they have to take it a little bit at a time and find really good tech partners to work with,” Smedley said.
She also pointed out that, while North American companies may be more comfortable connecting equipment to the cloud, “Europe has a better understanding of privacy and security issues.” This means they are ahead of us when it comes to establishing standards for who owns data. This is no small matter when it comes to vendor relationships, sensor data, and manufacturing process information that is often closely guarded.
But Smedley said the benefits of connected machines – everything from energy savings to safety to productivity to reduced maintenance costs – are coming into focus. Adoption is increasing, and she doesn’t see the trend reversing.
Given that we’re still in the nascent stages of implementing IoT technology, it’s too soon to say whether this early-adopter proclivity will become a real advantage for American manufacturers. But if the internet of things train is leaving the station, it’s at least pleasant to think that American companies may get some of the good seats.
This article was written by John Carpenter from Forbes and was legally licensed through the NewsCred publisher network.