The Internet of Things is not a buzzword anymore, it is becoming a reality in many businesses today. Although at the infant stage, its application and benefits are gaining momentum by the day. It is estimated according to forbes that forty billion devices will be connected by 2020. Many Giant companies have invested billions of dollars. Microsoft announced it will invest 5billion dollars in this concept over the next 5 years. Can these companies be wrong? The answer is definitely No.
What does the Internet of Things look like in Nigeria now; the answer to this question isn’t what any IoT enthusiast will like to hear. Over 80% percent of CLevel executives in Nigeria do not have a full understanding of what it is. The good news is, although, it seems like an option today, in the nearest term the Internet of Things will be a MUST have for businesses. Reason being
1. OEMs are equipping machines with sensors to gather data that will help in machinery performance evaluation for better designs.
2. Government bodies see IoT as an enabler for competitiveness, thus the need to make policies to create awareness and adoption.
In this article I will be discussing how manufacturing in Nigeria can leverage the Industrial Internet to impact positively on the bottom line, the challenges to adoption and how to overcome these challenges. The Industrial Internet of Things is the application of the Internet of Things in the Industrial space.
As at 2017, manufacturing in Nigeria accounts for 22% of the GDP according to Statista. However the operating condition these companies find themselves aren’t favourable, this affect their global competitiveness. From high exchange rate to internal and external supply chain problem, unstable power supply and poor asset management systems. According to energy mix report, manufacturers who generate their electricity spend 9 billion Naira daily, those who don’t lament energy cost. It is sad to know that 50% of this generated power is wasted according to energymixreport. This means that some 50% operating cost is wasted. This is a very big problem.
How can manufacturers solve these inefficiencies?
The manufacturing sector is one known to be a leading advocate of lean production. It is also one of the industry which is very rich in assets, if not the richest. Also, it is a sector that gather vast amount of data. In solving these inefficiencies, manufacturers will have to make the best use of data generated by their machines, employees and customers. This is what the Internet of Things is all about i.e people working with machines. GE calls it Minds plus Machines. The Industrial Internet is strategic to manufacturing as it helps them compete more effectively with products and services. The two most important IIoT applications in manufacturing in Nigeria are:
1. Asset Management
Monitoring the condition of an asset in real time helps reduce the time it takes to make products. Industrial IoT presents condition based monitoring as form of predictive maintenance in asset management. According to pwc2017, Asset management maturity levels can be categorized into four levels describing its evolution over the years. Most manufacturing businesses in Nigeria haven’t gone beyond the preventive maintenance which is level 2. Whilst preventive maintenance have saved costs and reduced down time, a major short coming is that it is based on the theoretical rate of failure and does not measure the actual performance of the machine. A preventive maintenance is a type of maintenance carried out at planned and periodic intervals. The time of maintenance is influenced by usage or calendar time, manufacturer recommendation or experience of employees. The major consideration of this type of maintenance is the financial returns. A preventive maintenance does not identify any correlation or patterns. Although personnel make use of historical data to make inferences and judgments, it is not enough as systems and processes may have changed between the time the data was gathered and the time the maintenance is being performed.
The Industrial Internet enables manufacturers monitor the condition of their asset in real time to successfully identify the most cost effective frequency of maintenance actions by connecting sensors and gathering data from the equipment given that the age of an asset is not only how long it has been operating but in the condition of the asset. The idea is to avoid failures by being able to intervene before defects occur. Thus a model that forecasts future component behavior is implemented. With condition based monitoring, manufacturers in Nigeria can:
1. Reduce the energy waste problem mentioned above by almost 40 percent.
2. Benchmark unit to detect inefficiencies.
3. See improved throughput as they can forecast production, quality, yield and constraint management.
Another asset performance benefit of Industry 4.0 in Nigeria is ability to present manufacturers with the Digital Twin. According to Siemens, a digital twin is a virtual representation of a physical product or process, used to understand and predict the physical counterpart’s performance characteristics. Digital twin helps to model performance, predict failures and allow for rapid testing of potential improvement. What this means is manufacturers are able to test their recommendations about any process or asset before the recommendation is implemented. This increases the success rate of doing things and also helps avoid wasting time on futile activities. Put simply, it enhances productivity. With the digital twin concept, you can speak to your asset and your asset can respond to your queries, questions and instructions
2. Supply Chain management
Supply chain costs accounts for a large chunk of the Total Delivery Cost (TDC) in Nigeria. The manufacturing industry is a material oriented one. Manufacturing is about converting raw material into finished goods. Unlike the oil industry which is more of getting the resource out of the ground which makes it a tool centric industry. The manufacturing supply chain is a complex one as until the good gets to the market and sometimes the consumer the process is not marked as complete. Many manufacturers leverage on a network of resellers to get their product to customers. This complicate the supply chain process as most resellers are not keen on giving feedbacks and update on the process. Pallets and goods are transported through remote areas that have low connectivity and limited global positioning system(GPS) coverage making them difficult to locate. Efforts to use tracking devices have also been held back by their high power consumption and low battery life. This is where IoT comes in. Manufacturers can track assets and products from insights gotten from real time data. This helps make faster and better decisions. Advanced and Low Power Wide Area (LPWA) technologies — such as Long Term Evolution for machine (LTE-M) and narrow band IoT (NB-IOT)-are helping to provide reliable , global coverage even in remote areas. For instance, knowing where inventory is at every factory or warehouse can reduce the chance of delays along the supply chain and the negative impact on shipment and customer expectations. IoT helps in the supply chain by;
1. Reducing In-transit damage: IoT enables supply chain managers to access information about the location, temperature, pressure or humidity of an asset or product. Thus, companies know the condition of goods as they move to the customers. This can help reduce the number of damages and also pin point the cause of damage should they occur.
2. Eliminating delays: Delays could be inevitable. These delays can disrupt the entire supply chain negatively. Providing managers with real real time information will help managers take contingency measures. For instance, if a route is known for delays, alternative routes can be considered. The delays can even be predicted before they occur using predictive analytics. This will help stakeholders in better planning, co-ordination and scheduling and ultimately reduction in demurrage.
3. Theft reduction and loss: Having the ability to track where a product is in the entire supply chain is useful when looking for missing items. One can tell clearly the point and time where the product or asset went missing. This will ensure better transparency in the supply chain.
4. Improving Customer experience: Customers are able to get exact visibility of where products are in the supply chain. For examples, manufacturers in Nigeria who leverage on resellers/distributors network to get their product to market can provide distributor with a platform which enables them see where their orders are in the supply chain. This will help the distributors plan and make the right promises to customers. They are able to predict correctly when products will arrive.
5. Staying Compliant: Industry regulators want evidence that products are being shipped in the right condition which require a tracking system that is constantly monitoring for changes. This will help companies provide accurate information to necessary bodies on the state of the product.
With the right IoT platform, manufacturing in Nigeria can significantly reduce operating cost by monitoring and managing assets and also the supply chain. There are a number of challenges hindering the adoption of IoT in the manufacturing space in Nigeria. However, none of these challenges can’t be overcome with the right partnerships and support. The challenges are:
1. Legacy equipment: legacy equipment are equipment that are old and cannot conform with new technologies or standards. Many manufacturing company change equipment only when it cannot be fixed. Therefore a number of equipment in manufacturing have served the companies for years. Connecting these assets to the internet presents a very hard challenge. However, by using the edge node, data can be pushed to the internet without opening two-way communication.
2. Storing, managing, interpreting and securing data: Many manufacturing companies in Nigeria do not have the infrastructure to store the data, resource to manage, skill set to interpret and a security system to secure the data. There is a realisation that existing IT resource will be challenged- both the staff and infrastructure. The good news here is IoT vendors can help solve this challenge at a cost that is cheaper than expected. What is important here is choosing the right vendor.
Choosing an IoT vendor:
Before making any investments to digitally transform your business, there are criteria which are very important in selecting vendor to support IoT projects. Key factors to look out for are:
1. Proven track record: Prospective vendors need to have customer success stories available for review and proof points.
2. Strong partner ecosystem: IoT is never a go alone technology. It works via partnerships given its’ scope. A good question to ask your vendor is if they have capable partners and belong to an ecosystem.
3. Industry specific expertise: There are many IoT providers. IoT connect things and there are things particular to the manufacturing sector. Vendors that have knowledge of the manufacturing sector and familiarity with pain points are the Go-To.
4. Inter-operable approach to solutions: Vendors whose solutions are open are more flexible. Machine to machine communication is important to make the best out of any IoT project.