IoT in Manufacturing: A Guide to Measuring and Improving Efficiency

The manufacturing industry is facing many challenges despite whether you are into dense equipment manufacture, produce standard products or engineer-to-order products. It is, hence, essential to concentrate on increasing the efficiency of your operations. Supporting lean strategies to handle down the costs of production while keeping quality and increasing production is a challenge.

As more manufacturers embrace IoT technology to link their equipment, machines, assets and even end-use products, they are capable to enhance inventory accuracy and optimize workforce usage. Utilizing smart machinery, sensors, RFID and other technologies, these companies are minimizing downtime and enhancing efficiency.

Though, with an outlook of constant improvement, manufacturers notice this more as a scope than a problem. The global smart manufacturing market size was evaluated at USD 215.8 billion in 2019 and is predicted to witness a CAGR of 11.8% from 2020 to 2027. Regardless of productivity and efficiency concerning boosting the production process of manufacturing, agriculture, or service sector companies, they assign to different things. Once we think about the dissimilarities, you can better use productivity as well as efficiency in your business.

Productivity vs Efficiency in Manufacturing

Productivity is generally described as a ratio between the volume of output and inputs. We can say that it estimates how efficiently production inputs, likewise labor and capital are being utilized in an economy to generate a given level of output. Productivity is observed as a basic source of economic development and competitiveness.

Realizing a constant balance between these two is critical to making your manufacturing company function at its best. Just think if a business concentrated primarily on improving the number of units they generate in an hour but neglected costs and quality. This might have attained their goal but at the cost of wasted materials and lower quality items.

On another side, becoming firm about efficiency may result in scare employees. This is where we require to be cautious when implementing LEAN methodologies correctly. General practice is to enhance output while investing in your employees at a time. Essential training and understanding of the whole production line, right from how essential they are in making the product or providing the service, will help.

It is just as essential for employees to know how the product is going to be utilized so they can present to improve the product or service first hand. Discovering the right combination of productivity and efficiency enables you to optimize your output while reducing losses.

To add it up, productivity is simply about output versus input. Meantime, efficiency deals with doing accurate things the right way, reducing mistakes and losses while improving the utilization of valuable resources. When these two terms come together, the company will experience an improvement in both quantity and quality.

Efficiency is wider than Productivity

Efficiency focuses more on few other parameters than just input and output by the numbers. Efficiency contains things such as the quality and effectiveness of work and can support when productivity is overly prioritized.

Apart from setting efficiency goals supports manufacturers concentrate on the huge picture and focuses to do work precisely, not just productively. Concentrating on efficiency means using resources as optimally as possible and keeping a high quality of work, reducing risk and minimizing potential losses.

Estimating and monitoring your successes, failures as well as progress is crucial to achieving success in the manufacturing world.

Manufacturing efficiency can be estimated by utilizing various sets of numbers suitable to efficiency, but the whole concept remains the same. To calculate your manufacturing efficiency, you directly divide your standard output by your actual output, then multiply by 100 to express it in a percentage form.

IoT Improves Manufacturing Efficiency

There are various ways that IoT in manufacturing can increase efficiency. Let’s take a quick look

Inventory Management

By connecting smart shelves, smart pallets as well as other equipment utilizing RFID, sensors and wireless communication, manufacturers can keep a real-time view of inventory. On the production floor, sensors connected to machines and bins can give real-time data on inventory utilization and activate automatic refill or re-ordering. This can enable just-in-time manufacturing and maintain inventories lean at the same time minimizing waste.

Asset Maintenance

Utilizing RFID and sensors, the IoT can assist analyze smart tools, machines, etc., for equipment health, schedule maintenance based on utilization and execute more efficient preventive maintenance.

Alert-driven systems can assist give insight into potential machine issues that would justify repair or replacement. This not only boosts asset utilization but also assists to stay away from costly downtime triggered by equipment failures or lost assets.

Workforce Management

Information gathered from machines, assets can assist companies to measure the productivity of their employees. Managers need not to walk the entire factory floor to see how their workers are working, they can acquire a dashboard view of productivity measures produced automatically and updated in real-time. Decisions can be made easily on how the personnel in the plant should be assembled, the breaks they should make, etc.

 Field Service

The IoT enables manufacturers to improve their abilities as service providers. With connected devices and sensors, businesses can dynamically service equipment, appliances as well as devices, planning and scheduling field service in more effective, productive and less costly ways. In few cases, maintenance and service can be operated remotely, removing truck rolls and labor hours. The IoT also gives visibility into the supply chain to analyze locations, schedules as well as the condition of products in conveyance.

There are various ways to estimate efficiency in manufacturing, all with the concern of interpreting production performance in accordance with profitability. Utilizing the IoT in manufacturing can reveal new levels of efficiency and productivity. With real-time data from connected assets, organizations can speed up their lean manufacturing initiatives, minimize costs and enhance performance.