How the IIoT powers the fourth Industrial Revolution

26 December 2017

IIoT and Industry 4.0 are buzz phrases that have generated plenty of chatter this year, but what do they really mean?

The first Industrial Revolution was achieved by introducing steam, the second by introducing electricity and the third, through computers.

The fourth, said Dr Gunther Kegel, CEO of German manufacturing firm Pepperl+Fuchs, involves connectivity and digitalisation. Industry 4.0 is a German-coined term to represent this latest industrial revolution.

The Industrial Internet of Things (IIoT), on the other hand, is a technological advancement providing this connectivity and digitalisation driving Industry 4.0.

Speaking at the Manufacturing Technology Asia 2017 event held in Singapore earlier this year, Dr Kegel also clarified that the IIoT is not about devices going digital.

Dr Gunther Kegel, CEO of Pepperl+Fuchs clarifies that IIoT is not about devices going digital but that they are now connected.
Credit: Pepperl+Fuchs

“That's nonsense, because most of our devices have been digital for 30 years or more. The difference now is that they are connected and that's what makes it the age of the IIoT,” he said.

IIoT: A game-changer for the manufacturing industry

By incorporating machine learning, advanced analytics, automation and robotics technology, and machine-to-machine-communication, the IIoT promises to transform the way raw materials and finished products are procured, processed and distributed. An extensive network of connected devices can give companies access to huge amounts of data that can deliver valuable insights and enable rapid decision-making.

“In the IIoT, all devices become entities that talk to one another and to the processes in between them,” Dr Kegel said. “The data thus generated will help us to do what we have always done, but in a better and more efficient way. So it's not really a revolution, but an evolution of what we have been doing.”

The IIoT is enabling new business models

Just as the internet has helped companies gather data from humans and generate profits through studying human behaviour and applying those learnings, the IIoT will help manufacturers reap the same benefits from devices. By collecting data on how their products behave and interact, manufacturers can predict and understand how these products may behave in the future. They can then optimise performance to create great user experiences, and thus drive profitable outcomes for themselves.

Besides enhancing existing products and services, the IIoT can also open up new business channels for manufacturers. Dr Kegel shared an example of how the IIoT can change traditional business relationships. Manufacturers normally install lightning protectors in their plants to prevent lightning from causing serious damage to components or cables. But these protectors are degradable and are impacted each time lightning strikes. Next-generation lightning protectors will have diagnostics, which predict the level of protection manufacturers have in their plants.

“What if you could further connect these lightning protectors to the IIoT?” Dr Kegel asked. “You can then access this data from anywhere in the world. The company that manufactures protectors can use the data to tell you the health status of your protectors and when you need to change them.”

The ability to accurately identify how much damage the next lightning strike will cause can transform business channels. Protector manufacturers can sell this data to insurance companies, whose business it is to insure plants. And so, all of a sudden, the manufacturers' product base changes as they are not just selling lightning protectors, but also data to insurance companies.

The role of the IIoT in maintenance

Data analytics helps manufacturers engage in predictive maintenance using data correlation. Dr Kegel explained that companies only need to look for anomalies in big data to detect that something is amiss, without the need for understanding what or why. But with the IIoT, they can go a step further to preventive maintenance. Studying diagnostics systems will provide them with detailed information that will enable them to act before the event, such as that their system is ageing and needs to be replaced.

“This is what we have the power to do today,” Dr Kegel said. “Simply look at data to pre-empt whatever can go wrong.”

Singapore manufacturers on standby

Manufacturers in Singapore are looking at opportunities to use the IIoT to expand and evolve their business models while enhancing their existing products and services.

Pepperl+Fuchs, for example, opened a $65 million manufacturing centre in Singapore last year – the largest among its four such global centres – marking the single largest investment in the company's history. With a combination of manufacturing floors and automated storage retrieval system, the plant displays its own use of Industry 4.0 through technology such as autonomous vehicles and automated processes. The company also infuses data from its manufacturing sites into one integrated database, which allows for better tracking of its operations. The use of the IIoT is allowing the company to customise its products and technologies to the different needs of its customers.

Recognising the importance of building the necessary infrastructure to help companies here adopt the IIoT, the Singapore government is taking steps to develop the ecosystem. IIoT initiatives form an important part of the larger Smart Nation drive the country is investing in.

In line with this, companies have also stepped up their investments and interest in the IIoT in Singapore. For instance, General Electric (GE) recently announced a string of partnerships in Singapore to help develop the IIoT technology blossom. These included two agreements – one with SPRING Singapore to co-develop an incubation programme, and another with Singapore Institute of Management’s Platform E to promote industrial internet entrepreneurship. GE is also opening an Asia Digital Operations Centre aimed at helping build digital industrial capabilities in Singapore.

With the industry still defining standards around the IIoT and structuring manufacturing processes to leverage Industry 4.0 technologies, the time is ripe for Singapore companies to jump on the IIoT train and gain an early-mover advantage.

As Dr Kegel emphasised: “It’s not a choice to implement the IIoT or not. Everything is changing around you. You either let everyone else change and trail them, or be the frontrunner and drive the change.”