Internet of Things Enables 3.88 Trillion Values To Manufacturers

Date: 4/14/2014

The Transformative, Industry-Changing Power of IoT Is Visible In How The Internet Is Merging People, Process, Data And Things (IoT) To Build Bridges Between Previously Separate Systems And Devices

Internet of Things (IoT) Enables $3.88 Trillion in Potential Value to Manufacturers. Manufacturers And Other Industrial Organization Need To Prepare Their Plants For The Emerging, Connected World Of The Internet Of Things

  • By: ARC Advisory Group / Craig Resnick
  • Publishing Date: March 2014

ARC Advisory Group believes that the emerging Internet of Things (IoT) will offer value across multiple industrial sectors and applications. Cisco expands on this, using the term, "Internet of Everything" (IoE) to describe its vision of bringing people, process, and data together via the Internet of Things. The company predicts that the IoE could enable manufacturers to generate $3.88 trillion of value through a combination of increased revenues and lower costs over the next ten years.

Innovative, forward-thinking manufacturers are realigning their technology and business imperatives to capture this value by leveraging Internet Protocol (IP) technology. Pivoting the business to take advantage of this paradigm shift is not trivial. It requires a sound incremental strategy built around business use cases applied throughout the manufacturing and business value chain.

Today, IP-enabled microprocessors – the brains inside many digital devices – can seamlessly connect conventional automation equipment, such as I/O modules and variable frequency drives. But the explosive growth of other IP-enabled devices – many adopted from other disciplines – is transforming the industrial landscape.

Video cameras, RFID readers, digital tablets, security swipe cards – these open-standard, IP-enabled devices can help manufacturing operations reach new heights of production quality, efficiency, security, and safety. Over the next ten years, new innovation will dramatically extend the reach of IoT devices, enabling early adopter manufacturers to gain a competitive advantage.

High-Value Use Cases

  1. Automation: Today's manufacturing companies must become more responsive to changing market and operational conditions without sacrificing automation efficiency. This has created urgency for manufacturers to converge and connect the multitude of isolated production systems and processes throughout their value chain.
  2. Security and Compliance: By implementing Industrial IP across the entire enterprise, organizations can increase network security through a common architecture that decreases inconsistencies in network protocols, security practices and training.
  3. Mobility: Manufacturing and industrial users recognize the risks and rewards of proliferating mobile devices in production environments. The desire for context-based information – available on whatever device the user chooses – requires a converged communication fabric that supports both industrial and commercial technologies.
  4. Video: Video technology has historically been underutilized in manufacturing and production, largely because it required its own network infrastructure. Building digital communications fabrics based on Industrial IP allows video to be used to its fullest potential.
  5. Industrial Compute: Migrating from monolithic servers and databases with isolated islands of processing to virtualize computing and cloud resources creates new opportunities for manufacturers. Internet Protocol provides an appropriate environment for building tomorrow's cloud-based information architectures.
  6. Remote Assets and Services: Diverse manufacturing environments and shrinking in-house engineering staffs mean it's much more difficult to have direct line-of-sight to all machines and processes. Connecting these assets to an Industrial IP communications fabric greatly improves the ability to monitor and respond to changing conditions and more effectively leverage intellectual capital.
  7. Energy Management: Energy is one of the most volatile and fastest- growing costs of production, but until recently, energy data was locked away inside automation systems. By leveraging Industrial IP across the enterprise, manufacturers can use the same networking platform as their enterprise network to access energy data at the load and device levels, and up through the enterprise.


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