Manufacturers need a long-term view of IoT: Gartner
By Goh Thean Eu September 25, 2015
- Too caught up with day-to-day operations, many still fail to see business benefits
- Collecting the wrong sets of data is like collecting no data at all, it’s ‘suicide’
ON the face of it, the Internet of Things (IoT) seems a shoo-in for manufacturers. By placing sensors on their factory equipment, they can get the type of insight that would allow them to reduce cost and increase efficiency.
However, not many manufacturers in Asia are jumping onto the IoT bandwagon – for the simple reason that they are too tied up with their day-to-day operations, according to Gartner research vice president Ganesh Ramamoorthy (pic above).
“Their day-to-day priority is to complete the order and deliver the goods. They are so caught up and are not willing to step back and think of the long-term perspective,” he told a recent media briefing in Kuala Lumpur.
“Eventually, everyone will fall in line. They will come to the IoT when they feel the pinch, when others have done it. Those who take the leap will become leaders,” he added.
READ ALSO: Market demand will shape the factory of the future
Need to present the business value
According to Ganesh, another reason why most manufacturers were not jumping on the IoT bandwagon may be due to the fact that solution providers were more focused on selling the technology, instead of the value proposition it brings.
“In some ways, the IoT is not really something entirely new to manufacturers. Their equipment has sensors and wireless networks.
“However, some of those sensors are not collecting the right data – in most organisations, the sensors are used to collect process information, such as the number of cars that crossed the production line, the temperature of the liquid flow in the pipe, the pressure of the steam, and others.
“The data we need is the health of the equipment, the health of the robot, to monitor the wear and tear of the equipment,” he said.
By collecting and analysing the right kind of data, manufacturers would be able to determine when to conduct predictive maintenance services on their equipment and machines, and this way, minimise the downtime that could affect the company’s operations significantly.
“First, companies need to collect the right kind of data to do analysis ... doing analysis on the wrong sets of data is like not doing analytics at all. It is committing suicide,” said Ganesh.
He said that the take-up rate of the IoT by Malaysian manufacturers is vital for the country’s economy.
“I think there’s a lot of opportunity [for the IoT] in the manufacturing sector, because of the sector’s contribution to the country’s gross domestic product (GDP).
“So, obviously, the manufacturing sector should be the first to adopt IoT,” he added. “It is the lowest hanging fruit.”
Ganesh said that more awareness programmes need to be executed, as most companies are still trying to understand what and how the IoT can benefit them.
“The biggest question for companies today is: How is the IoT different in what it can deliver, compared with the IT systems they already have?
“The answer lies in a better understanding of IoT systems, and widening their traditional views of ‘interconnected systems.’
“While the benefit of interconnecting IT systems is clear, many organisations do not see past a world in which the physical assets are also interconnected.
“This lack of understanding is a major hindrance for organisations from even taking the first step towards the IoT – which is to understand how the IoT will influence their business,” he said.
READ ALSO: Accenture opens IoT centre in Singapore
Government plays a key role
According to Malaysia’s Ministry of Science, Technology and Innovation, in the country’s IoT Strategic Roadmap, the implementation of IoT is expected to contribute RM9.5 billion (US$2.19 billion) to the economy by the year 2020, and RM42.5 billion by 2025.
It is also expected to generate a total of 14,270 high-skilled employment opportunities by 2020.
“Analytics is going to be driven by its business case and business priority, and it is about improving cost, efficiencies and customer experience,” said Ganesh.
“But you also need people who can use the analytics platform, people who are able to crunch the right sets of data to extract the value.
“While the demand can be driven by the private sector, the Government will play a key role in the supply side as well – this includes creating the infrastructure, developing the skills set, and ensuring there is a sufficient supply of data scientists.
“These are things that only the Government can do,” he added.
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