A smart world of connected things, devices, and users exchanging information in real time to perform assigned tasks is already a reality on a smaller scale. Internet of things (IoT) has transformed the way humans receive, respond, interact, and perform actions in their day-to-day life. These smart objects enabled humans to make quicker informed decisions saving precious time and money leading to simpler life with an efficient lifestyle. Eventually, its spillover into the industrial environment did not come as a surprise, given IoTs numerous benefits.

Industrial IoT envisioned a global manufacturing scenario, where every machine communicated seamlessly within its own internal world of machines as well as to the external end-user.

Technology concepts such as Big Data analytics, cloud storage, cognitive intelligence, and edge computing form the basis of the industrial IoT architecture.

Frost & Sullivan identified the four functional facets of Industrial IOT as

  • Convergence of IT-OT-Crossover of ideas, technologies, and processes between the worlds of information technology and operations technology will form the core of the fourth industrial revolution.
  • Services 2.0 -These explore newer avenues for service innovations, such as cloud-based service platforms, and evaluate the potential for new profit centers. They also offer opportunity analysis for ICT technology in services.
  • Supply Chain Evolution -The dawn of the future factory is set to disrupt existing supply chain networks. Digitalization and increased connectivity is set to disrupt and realign existing value-chain networks in the future.
  • The Industry 4.0 Business Ecosystem- The advent of advanced information and communications technology (ICT) will promote new inter-relationships and interdependencies, giving way to unexpected business collaborations and partnerships in the future.

On a global scale, industries in advanced economies such as North America and Europe have showed increased interest in implementation of industrial IoT. Emerging economies in the Eastern Europe and Asia are expected to follow suit in order to remain competitive in a sluggish market scenario. According to a recent IMF study, the Asia-Pacific region enjoyed a robust growth amidst uncertain market conditions in 2016. The growth is expected to remain broadly stable in 2017 as well. China’s switch toward being a more consumption and service sector oriented market is expected to cast its downside effects worldwide. Implementing comprehensive fiscal and macro prudential policies is expected to help position Asia-Pacific region as a global growth leader.

Being a manufacturing powerhouse of the world, key industries in Asia-Pacific include oil and gas, mining, automobile, electronics and pharmaceuticals industry. This Frost & Sullivan article explores the opportunities for industrial IoT in major industrial sectors in emerging economies.

Interlinking Barrels with IoT

The year 2016 has been depressing for oil industry with crude oil prices dipping more than 60% from the high of 2014.The plummeting prices force oil companies to take up efforts in reducing operational cost so as to remain profitable even in the event of an unprecedented price drop. In 2016, chief information executives in the oil and gas upstream companies in the Asian markets have expressed the willingness and urge to increasingly implement digitization techniques and data analytic tools, to reduce above the ground costs. Southeast Asian countries such as Malaysia and Singapore are considered as major oil and gas hubs in the Asia-Pacific region.

Embracing industrial IoT arises as the only key for survival of the distraught oil and gas companies. IoT ecosystem has been accepted and implemented significantly in downstream operations when compared to the upstream space of Asian oil and gas industry. Major oil firms in China, India, South Korea, and Vietnam are leading the technological integration movement in Asia.

Industrial IoT offers oil firms the ability to remotely monitor heavy assets and optimize their performance by undertaking predictive maintenance. With miles of pipes, valves, pumps and gauges, the oil industry is composed of a lot of legacy infrastructure which require real –time health tracking. With the proliferation of network devices and readily available “connected plant” product offerings from leading automation vendors, monitoring a site has been made simpler. Operators continuously monitor site-specific processing data which are analyzed using Big Data and machine learning techniques to spot dormant and emerging performance problems. The analysis provides actionable information to maintain peak plant performance and reduce operational downtime. Furthermore, having access to more information bridges knowledge gaps amongst operators and technicians, enhancing worker skill set, morale, and conformity to regulatory standards.

Need to Expand Pockets of Excellence

The global automobile market is on the path of transformation to electric and autonomous cars. Energy and fuel efficiency are expected to be the primary focus of automobile manufacturers leading to exploration of newer materials, designs, and production processes. The urge to out beat competition and maintain consumer delight often demands faster prototyping and shorter product lead times with higher success rate.

For several years Asia-Pacific has served as the homeland for major automobile companies. The companies have made their presence felt by not only investing in manufacturing setups but also by setting up their global R&D centers in Asia. China, India, and Southeast Asian countries such as Thailand house the major automakers and auto component manufacturers in the Asia-Pacific region. While cheap labor and supportive government policies laid the foundation for manufacturing setups, organizations face challenges in terms of ensuring worker safety, product quality compliance, and product traceability in addition to rising labor costs. Being a forerunner in adopting new technology, automobile companies are accepting industrial IoT models as a part of their process.

One of the applications of industrial IoT in automobile manufacturing is the smart worker system. Combining RFID technology with sensor-to cloud software, real-time position of any product part in the shop-floor can be identified with a unique ID and alarms are generated using near-field technology to warn a worker in dangerously close quarters. The same technology is extended to ensure safety of remote workers using mobile or satellite communication technology. Full scale penetration of industrial IoT into various levels of manufacturing such as product design, prototyping, product engineering, process planning, and quality assurance is limited to Tier-1 automobile manufacturers who are able to invest enough to integrate the factory environment to the business planning system. In the case of Tier 2, Tier 3 suppliers and auto component manufacturers, the high investment risk prevents them indulging into full fledged connectivity. This leads to individual islands of connectivity in the production floor installed only for high priority needs such as worker safety, product quality, and remote asset management. By partnering with right organizations to identify suitable technology initiatives, SMEs can align themselves to global trends and improve their business competence.

The advent of industrial IoT has led to a phenomenal growth spurt of start-ups specializing in its various facets such as data analytics, cloud deployment models, remote monitoring, and visualization tools. Furthermore, emerging economies are looking forward to grooming themselves into becoming more service oriented countries. Similarly, government policies supporting digitization are expected to expand penetration of IoT in industries. Though the pace of mass industrial digitization is slower when compared to developed regions, the trade policies and data culture in the emerging economies indicate to the emergence of a digitized manufacturing power house in the near future.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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