Here are two reasons why companies should, and two ways to go about bringing their machines into the digital world.
Two Reasons Why
Extend usefulness of legacy machines
Unlike modern technologies like laptops which are intended to be regularly swapped out for more powerful versions, legacy machines are long-term investments meant to perform for years and even decades. They might be the result of millions in capital expenditures, years of planning, and additional investments in supply chain management, process overhaul, safety protocols and operator training. These machines were built to perform specific functions well and last a long time—and from a business perspective, they can be depreciated over their useful lives.
As the Internet of Things (IoT) becomes more and more widely adopted, it would be advantageous for companies to be able to use digital platforms to collect more data and improve efficiencies—while getting full value for the significant investments made in their legacy machines. In fact, capturing and interpreting data from these machines could help a company predict and avoid failures, make its operation more efficient and ultimately extend the capabilities and lifetime of the machine.
Harnessing data to become more competitive
Speaking of data, a digitized factory not only generates data about machine performance—it harnesses data that enables a company to take action on its biggest needs.
Many manufacturing sites still use a pencil and paper to capture data. Stacks of handwritten notes may often be laboriously transposed into an electronic spreadsheet for analysis. The process takes a lot of time and effort and still results in delayed, inconsistent and error-prone results that can have significant negative effects on business strategic planning.
Because legacy machines were created to perform a certain function rather than generate data, its operators can spend considerable amounts of time looking for that data. This pulls engineers away from performing higher-value strategic and problem-solving tasks.
An IoT-enabled factory floor provides continuous, real-time data from many different data sources: a typical production line could have five to 15 machines, often from different vendors with different protocols. This data is filtered, analyzed and reported by dynamic and accurate reporting tools that can perform instant calculations.
That data could be integrated with business data from other sources such as customer demands, supply chain logistics, traceability data and increasing demand for product customization. Generating data from legacy equipment facilitates a manufacturer to solve existing problems faster—even those problems it hadn’t been able to take care of before—and make its operations more efficient, responsive to the market and profitable.
In fact, according to McKinsey, companies that adopt digital manufacturing see increases in productivity (three to five percent) and forecasting accuracy (more than 85 percent), while reducing machine downtime (30 to 50 percent), maintenance costs (10 to 40 percent) and time to market (five to 20 percent).
Two Ways to Do It
Retrofit Legacy Equipment
Also known as a best-of-breed or wrap-and extend-solution, under this approach a business could bring in a third-party vendor to connect legacy machines to a digital platform. Technologies such as IoT platforms, IoT gateways and high-tech sensors could help enhance the productivity of these machines and generate new and valuable data.
There are definite benefits to this approach. Out-of-the-box connectivity solutions can be installed with minimal down time, and many are created to work with a variety of legacy protocols. IoT-enabled sensors are designed to be easy and quick to install and operate. In addition, the vendor’s system integrators will have the expertise and familiarity with a range of legacy systems to help advise on and implement a solution.
Also, these solutions are by nature adaptable and customizable. For example, sensors can be tailored to provide targeted information an organization needs most, and IoT gateways can be fine-tuned so that the company only pays for the functionality it needs. In fact, an IoT-enabled retrofit that provides the right kind of data can help inform business decision-making at all levels of the enterprise, not just the operation of the legacy machines themselves.
There are drawbacks to a third-party retrofit, however. These solutions can be quite data-hungry, requiring additional bandwidth and wireless investments. Edge-based processing, where a device uses analytics to process raw data at the source before sending to an IoT-enabled technology, can mitigate these costs somewhat. Another potential complication is the potential for increased system maintenance costs: a sensor network will require upkeep just as the legacy machines do, and this factor can be multiplied if several third-party vendor systems are deployed.
In-House Solutions
If a third-party vendor isn’t the right fit, the best approach might be to develop a solution in-house, using the personnel and technical resources that are already in the company to create a solution tailored to the needs of the enterprise.
One of the benefits of this approach—also one of the most appealing reasons—is that the solution is custom-made to meet the organization’s specific objectives and needs. Internal IT and operations staff would work together to create practical solutions that extract and use the data most crucial for the organization to run.
Another benefit, particularly to small and medium-sized enterprises, is that the solutions can be created on a small scale first, enabling the company to test out and improve its solutions before rolling them out across production lines and other machines on the shop floor.
A third advantage is improved installation speed and return on investment: a team can be put together to plan, develop, test and implement the solution while the larger enterprise continues doing business. However, while there may be less down time during implementation, it can take months to get the solution to that point and train employees on new technologies.
There are, of course, some disadvantages to taking the in-house route. It can be difficult, time-consuming and expensive to find and train the staff on the bespoke system so that they can fully capture, interpret and display the new data it unleashes. The custom-made solution may also require a lot of maintenance to keep it going, and expertise to adapt the system to new and innovative uses—as soon as an IoT solution is proven useful, staff will invariably want to try to do new things with it.
An in-house solution can ensure that a company is using a system that meets its needs and goals, using resources that the company already has. However, this system could lead to long-term pressures on the system’s operating staff to respond to increasing bug fixes, troubleshooting, testing improvements and maintenance—which could result in more costs down the road.
Engineering.com’s Jim Anderton discusses how to connect older industrial equipment to the cloud.
In order to remain in business, companies that use legacy machines—and there are many of them—need to be able to take advantage of the efficiencies of an IoT-connected factory without letting their legacy machine investments go to waste. The good news is, it is often possible to bring those legacy assets into the digital factory floor.
According to McKinsey, the potential economic value that IoT could bring to the global market ranges from $5.5 trillion to $12.6 trillion by 2030—and a significant chunk of that value, about 26 percent, could originate on the factory floor. What part will your company, and its legacy assets, play in that growth?