ARC Advisory Group conducted a web-based end user survey during 2016, to uncover the developments and understand trends in IIoT adoption, readiness, applications, and related challenges in India. Majority of the user responses were received from the oil & gas, automotive, chemical & petrochemical, and utilities industries. Others included pulp & paper, machinery manufacturers, food & beverages, and pharmaceuticals.
Why an IIoT maturity model?
Organisations have started reinventing their processes, systems, and business models using existing and emerging technologies like the IIoT. With the right organisational culture, companies can leverage IIoT platforms and associated technologies to control costs, enhance efficiency, and improve the overall performance of both the plant and the enterprise.
For most companies, the IIoT can be adopted in an incremental manner. To guide such companies, ARC has developed an IIoT maturity model, which helps them to understand where they stand right now, where they would like to get to, and the incremental steps needed to get there.
Companies were asked about the maturity of their technical capabilities across the six dimensions, which include both plant level and enterprise wide factors. This model gives good indication of responsiveness of organisations’ processes and the capabilities for capitalising IIoT opportunity. The term IIoT may give a perception of ubiquitous connectivity, but it needs to be kept in mind that equipment intelligence, data infrastructure, analytics, systems and software, and new business models are equally important.
Management & operational decision-making
Decision-making is as much concerned with the organisational culture as with the technologies used. The maturity of decision-making styles can range from decisions based on intuition or workplace politics to far more integrated approaches that utilise data generated by customers or external events. More than 40 per cent of the companies have said that they collect data from various sources – such as internal operations, products, from partners and customers, and they use it rigorously to drive decisions. To maximise gains from IIoT, companies need to have a data infrastructure that can collate information from across the extended enterprise, and make it accessible to everyone in a consistent manner. Equally important is a change in decision-making culture; as timely decisions are needed to take advantage of IIoT generated time-critical data.
Use of digital information
IIoT allows organisations to disseminate information more widely and efficiently. In a positive trend observed here, a majority of the companies have moved beyond spreadsheet analysis, and have achieved widespread data sharing and collaboration. By connecting previously stranded data, from smart sensors and industrial assets, with advanced applications and predictive analytics in the Cloud, the IIoT is becoming a strategic enabler to improve manufacturing performance.
Moreover, more than one-third of users are taking advantage of Big Data, or at least have strong bidirectional information flow between the plant and the business. It is seen that companies with these capabilities are more abundant in the early IIoT adopter category. Despite initial concerns, many companies now realise that, when properly implemented, internet and wireless technologies can provide appropriate security and availability of services across multiple plants and facilities.
While production, asset management, and field service applications represent one of the largest sources of Big Data today, much of this data is unstructured. It must be transformed into meaningful and actionable information before it can be applied to areas like condition monitoring, analytics, or operational intelligence.
Integrated business & production processes
How well and how richly are production operations integrated with business needs and demands? At one extreme, processes could be entirely manually driven and, on the other end, they can be fully synchronised with current business needs. The situation looks encouraging, as a majority of the end users are aware of the need for integration between plant and the enterprise. Integrated processes can have a major impact on operating costs and profitability by enabling close synchronisation between demand and supply, and further reducing friction, lowering costs, and keeping customers satisfied.
Automated control systems (DCS, PLC etc), enterprise systems, and asset maintenance management platforms are going to be the frontrunners for leveraging data from connected devices. This will bring more convergence between IT-OT layers, and better information sharing between plant and enterprise levels. Over time, we are likely to see more companies migrate to a more synchronised approach in
response to increasing market demands and pressures.
Fixed assets used for production - how intelligent & connected are they?
Through smart sensors embedded in equipment to stream real-time information, the IIoT can facilitate improved performance of large fixed assets by improving their productivity, eliminating unplanned downtime, and cutting maintenance costs. ARC anticipates asset performance and maintenance including remote machine monitoring to be among the early adopters of IIoT technologies. Moreover, as per the survey, close to 40 percent of the assets are instrumented for control purposes only, which presents a significant opportunity for upgrades.
ARC has researched asset maintenance and has discovered that the traditional preventive maintenance only works well for 18 per cent of assets, and the remaining 82 percent of assets fail at random intervals. IIoT can improve this scenario by enabling predictive maintenance (PdM) alerts using data from intelligent assets and feeding it to advanced algorithms. More than one-third of respondents are already maintaining assets through predictive approach. With advanced notice of an upcoming failure, necessary repairs can be scheduled, and parts can be replaced before they fail. Besides, the spare parts inventory can be controlled, resulting in huge cost savings.
Connecting an asset to the overall ecosystem can provide significant benefits for a wide variety of ecosystem participants; both within the plant, across the enterprise, and even within the technology supplier’s organisation. OEMs can use this data to perform remote diagnostics and support. They can also use overall asset performance information to improve the design and manufacturing of the asset.
Systems & infrastructure used in the production organisation
A modern, agile infrastructure that uses emerging technologies such as the Cloud, mobility, and advanced device connectivity will propel widespread use of IIoT. Most of the systems and infrastructure for production operations covered here are traditional. Many are not likely to have the flexibility and agility required to easily integrate into largescale IIoT applications. Also, with increasing data flow and connectivity demands, older technologies such as clientserver solutions would struggle to keep up.
As per the survey, only 15 per cent of the users have adopted a next generation IIoT Platform such as Cloud services or advanced device connectivity. In the latter case, users need to ensure that devices are able to link to the Industrial Internet. This requires connectivity that enables communication both from and to the device, and allows feedback from analytics back to the device.
Moreover, understanding of operating conditions or market dynamics that drive companies to adopt a particular technology is important. For instance, industries such as oil & gas and power have geographically distributed assets, and are likely to leverage the internet and advanced cloud based applications for remote asset management to reduce maintenance costs. In the case of smart grids / micro grids, we see both industry majors and start-ups in India come up with innovative IIoT solutions for remote management and even control. However, industries in which market dynamics favour customised or localised production, such as food & beverages, the need for IIoT-aided agile and flexible manufacturing is higher.
Cyber security approach by organisations
Cyber security professionals and business managers need to recognise the impact of technologies like mobility, IoT, and Cloud computing on cyber security strategy; and device new approaches to keep networks safe. Furthermore, taking full advantage of IIoT requires a more open and frictionless information sharing, and this increased connectivity demands a broader and robust approach to data security.
A broader scope would include extending the scope of industrial cyber security to all devices within the complete IIoT infrastructure including traditional plants, smart devices, external systems, remote devices, and networks of all types. More emphasis is required on device-centric security and secure-by-design, as IIoT will be applied both within and outside the plants.
Organisations’ viewpoint on the IIoT
The need to improve asset management including uptime, productivity, and equipment utilisation, is driving users to leverage IIoT. Users are now correlating these benefits with business metrics such as revenue, cost control, profitability, and risk management.
Capacity additions and expansions in refineries, chemicals, automotive, food & beverages, infrastructure including smart cities, smart grids, and various other process and discrete industries is expected to pick up in medium to long term; this presents immense potential for incorporation of IIoT, especially in Greenfield projects.
Are the capabilities in place to embrace IIoT?
According to ARC, early adopters of IIoT applications demonstrate stronger capabilities in all the six areas discussed here. When we compare the three IIoT user segments, their decision-making approach, and to an extent, their production & business processes are well placed. However, companies which are yet to implement IIoT, need to develop capabilities in the areas of digital information flow, asset intelligence, systems and infrastructure, and cybersecurity. Connected systems and devices are in place in many plants, but only in pockets. According to ARC, discrete automation devices including PLCs and drives represent the largest number of potentially connectable devices by far. Apart from connectivity, companies need to develop their IT and OT infrastructure to capture OT data from disparate assets and collate it in a standardised global data model for seamless sharing of information. Moreover, with the use of IIoT network, plant data can be transmitted not only up to the enterprise level but it can also be shared with the extended value chain that includes suppliers, customers, and partners,thus enabling new business models and processes.
Top inhibitors of IIoT adoption
Lack of clarity on ROI: Suppliers need to determine and justify ROI to users
Lack of technology standardisation: IIoT solutions that are available have widely differing and competing standards.
Security concerns: More supplier involvement is needed in sustaining security of all devices and systems.
In conclusion, the following are some of the ways in which IIoT can be leveraged to achieve its maximum potential:
Awareness of the IIoT capabilities is the key to adding value to existing operations
The IIoT should solve business issues, not technological ones
Implementation of IIoT is not just limited to medium and large companies. IIoT projects can be taken up for specific areas of a plant/shop floor/supply chain to derive definite value
There is no single correct IIoT solution. Each company must decide which data is important and/or necessary, and what is the desired outcome.
Suppliers need to work on their pricing strategies, and offer innovative smart products and solutions that can be easily integrated with legacy systems ☐