This article first appeared in the Autumn 2016 issue of The Record.
I hope the title of this piece got your attention. D of course stands for ‘digital’ and IIoT for the ‘industrial internet of things’. Digital manufacturing, the digital twin, whichever way you look at it, we cannot avoid the fact that when we talk about manufacturing there is always a physical product.
When we forget that there are real, physical products using real physical production processes and not everything is virtual then I think we can safely say that D+IIoT = IDIOT. As we work diligently towards industry 4.0 and smart manufacturing we will need the board of directors at manufacturing companies to approve spending. They ask uncomfortable questions and have little tolerance for fuzzy answers. Their investments have to be backed up by hard return on investment calculations.
This is one of the dilemmas for the advancement of industry 4.0. It’s not easy to forecast benefits for smart manufacturing methods and concepts. For instance mass customisation, making products interesting and unique for an individual. How do we know that people will buy more or pay a higher price than for the standard mass product? The official industry 4.0 report suggests that buyers will pay approximately 10% more and there is a potential revenue stream from the internet of services that can add even more value.
On the cost side, manufacturing lines have to be built quite differently – product to machine communication has to be introduced etc. We could probably estimate the investment costs with some degree of accuracy if we knew exactly the type of technology we will need. This is the key to the investment dilemma, with so many technologies to choose from which one is the right one?
My view is straightforward to avoid the IDIOT syndrome: build an internal innovation team. Mix the team up with IT and operational technology experts, as well as those from sales and marketing. Design systems securely and remember this: in the end it’s the physical product that is being sold, not the IT.
Mike James is president of the Manufacturing Operations Management Institute
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