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What is IoT, IIoT & Industry 4.0?

By: Simon Spencer

October 20, 2020

What is IoT, IIoT & Industry 4.0?

The fast progress of technology is changing the way we humans connect. Not only with each other but also between our physical and virtual systems. Through Industry 4.0 and IoT applications, informative and insightful connections can be made that empower businesses and their employees. By connecting to your factory processes in real time with authentic data, you will be able to shed the weight of costly inaccurate paper records and bring your business into the Fourth Industrial Revolution.

It's all about strong connections to people and devices. A factor that was unachievable in the past is now at the forefront of development and improvement.

What is IoT?

Well, it is the Internet of Things. We all know what the ‘internet’ is. It is where all the pictures and videos of cute cats are stored. Less importantly it is a method in which data can be transmitted within a massively interconnected world on pre-existing telecommunication infrastructure. We all know what ‘Things’ are. They appear regularly with the ‘Cat in the Hat’ as Thing 1 and Thing 2.

Ok, on a serious note. IoT allows compatible devices (light switches for example) to be monitored and controlled over an existing network infrastructure. Now, unless you have been living under a rock, IoT has played a major role in our consumer goods from big name companies. Google Assistant, Amazon Alexa, and Apple Siri can be used to control all kinds of devices in your home, from lights to thermostats to door locks. This can be done either from your home or when you are out and about via your phone.

Your lights, thermostats, and locks are things (or devices) and your phone communicates to your devices via the internet. Now, you may be thinking, how is this of any use to me? Well, you can open your front door simply by approaching it. You no longer need to fumble around for a key. How is that for a simple productivity improvement?

If you look at this from an industrial standpoint, can you imagine the potential of all your employees not having to fumble for their keys?

What is IIoT and What Is the Difference between IoT and IIoT?

It is all of the above but based on the industrial scale - Industrial Internet of Things. To go a little more in depth, IIoT focuses on the use of intelligent devices to raise efficiency and productivity while collecting real time data that enables manufacturers to continuously improve their processes. IIoT is about data collection.

Businesses are now making it a priority to digitize their business processes, their facilities, their vehicles, and their employee knowledge. But why do this? What is the benefit? Apart from not having to fumble for keys anymore, a completely connected facility can benefit from many small productivity improvements, all of which add up to a very healthy sum. On a larger scale, all the collected information can lead to faster and better decisions and business outcomes.

IIoT Application - A Simple Assembly Task


Suppose your business's number one issue in an assembly process is that the wrong batteries are often installed in your devices. Your engineer decides to create a pick to light system. Whichever light is on, the assembler takes a battery from that bucket. Great!

Now the engineer still gets reports of rejections, so he adds a sensor to each bucket. If a battery is pulled from a bucket without the light on, an alarm goes off.

Ok, so there are now no more quality issues!

The engineer now sends the successful and unsuccessful data, including how many times each bucket is picked, to a data analysis tool.

He then maps the most used buckets and finds that the most used batteries are actually the furthest away from the assembler. He then redistributes the stock, putting the most used batteries closer to the assembler.

He has now just gained a very nice productivity improvement while pushing your business’s quality to new levels of excellence.

Every assembly station gets the same treatment, across all the company’s workstations and facilities. That improvement now has a quantitative and qualitative impact on the profitability and reputation of the company, driving more sales and more success.

IIoT Application - Productivity Monitoring

So you are the biggest battery-putting-into-devices company in the world. What are the other ways you can benefit from IIoT and all the data?

All your assembly stations are delivering real-time data from all your connected devices. All that information is being rolled up to overall performance data across the globe. The data now gives you amazingly useful information about each of your facilities.

Facility A on average installs Type Z batteries 10% more efficiently with fewer errors than any other facility. How do they do it? A continuous improvement team is sent in to observe the differences. They come away and implement facility A’s practices across all facilities. Now all your facilities are performing 10% better on type Z batteries installations.

Facility B always performs better than any other facility when the batteries weigh over 10Ibs. A continuous improvement team is sent in to observe the differences. They come away slightly amazed, the facility and surrounding areas are all occupied by people who are on average 2x stronger than anywhere else in the world! Now all the heavy battery installations are performed in Facility B. (Of course, suitable backup processes are implemented in every other facility, just in case.)

With growing developments, advanced projects, and new applications of IoT and IIoT being implemented daily, the next phase of industrial progress comes into play on a global scale. Now, not only are we connected to our homes and businesses, but the world comes into a whole new age of connection: Industry 4.0.

Industrial Revolutions

What is Industry 4.0?

To understand Industry 4.0 and how it is unlike its predecessors, it will be helpful to explore the past Industrial Revolutions.

  1. The 1st Industrial revolution paved the way for the beginning of the factory system, new iron production processes, and the transition from hand production methods to machine methods.
  2. The 2nd Industrial revolution began a new wave of globalization with the unprecedented movement of people and ideas via the telegraph and railroad networks.
  3. The 3rd Industrial revolution further pushed into the digital age with robotics, automation, and computing.

The past revolutions stemmed from maximizing manufacturing processes - how to collect raw materials and manufacture products faster, more efficiently, and at reduced costs.

“The fourth industrial revolution creates a world in which virtual and physical systems of manufacturing globally cooperate with each other in a flexible way.” Klaus Schwab, The Fourth Industrial Revolution.

So, What About the Current Fourth Industrial Revolution?

The Fourth Industrial Revolution is about interconnecting everything, your sensors, your software, and your data analytics. Now you can make decisions based on live data from your entire factory network. Just like our second IIoT example with batteries, this is where your IoT makes the difference and gives you the edge over your competitors.

And of course, this will also further improve manufacturing efficiencies and maximize profits.

This 4th Industrial Revolution Is All About Connectivity, Where Have You Heard About That Before?

Google - Founded in 1998 - Internet related services, for example: ‘Google search’.
LinkedIn - Founded in 2002 - Business and employment social networking service.
Facebook - Founded in 2004 - A social networking service.
Twitter - Founded in 2006 - An online news and social networking service.

Whether you use these applications or not, these companies and their foundation were the beginning of the interconnected world. I would hazard a guess that everyone has googled ‘How do I …’?.

In This Revolution, It’s the Social Side That Is Pushing Manufacturing and Industry

From a social point of view, each Industrial Revolution has led to massively improved standards of living, dramatic declines in mortality rates, substantial increases in life expectancies, and further growth of human rights and greater equality. But how can this connectivity within Industry 4.0 help this industrial age?

Industry 4.0 will empower the employee to be at the hub of progress. Not only for the CEO monitoring the results and making long-term plans, but also for the worker on the shop floor.

Below are a few different Industry 4.0 examples within diverse manufacturing and fabrication environments:

Going Visual For Assembly Work

Assembling products requires a high level of manual intervention. Due to this, it tends to be an area that struggles in terms of productivity and quality. It is for this reason that detailed visual work instructions are critical for operators to achieve success.

Our customer, Scott Electronics inc., compared their progression to VKS to being similar to how years ago, everyone transitioned from using paper maps to a GPS system.

“In the past when you wanted to drive somewhere you had to pull out this big clunky map. You didn’t know if it was outdated, it was hard to read, and you couldn't use it easily while driving. Then the GPS came out and guaranteed information in real-time, that was always up-to-date, and easy to understand. That's what VKS does for manufacturing. Everyone used to use paper (the map), and now they have the option to use tools like VKS (the GPS) where operators can see information in real-time while they are working, in a visual, intuitive way. The impact and benefit that derive from this will help lead manufacturers into a new era of operational excellence."

Read more on the 3 Ways VKS Solutions Increased Scott Electronics' Productivity

Fabrication, and Documentation That’s Up to Date

Paper everywhere and none of it is up to date! Too many companies suffer from not having the latest and greatest information at hand. The problem leads to incorrect set-ups, bad parts, costly rework, and annoyed customers. Industry 4.0 solves this problem perfectly; paper becomes a thing of the past.

Each and every work order can be linked to your latest documentation, whether that may be drawings, CAD models, machine set-up sheets, or customer specifications. The exact documentation required for any job is only a fingertip away, and available to operators as they need it on digital devices.

Connecting with Machines and Tools

Suppose again that you're a company that needs to ensure that a safety-critical factor matches customer requirements by 100%. Guaranteeing that requirement is labor-intensive, with checks, double checks, and triple checks. It needs to be correct or the liability of failure is horrendous. Again, Industry 4.0 is here to solve that problem as well.

Industry 4.0 companies invest in tools and equipment that can measure and validate every step of their operations. With tools connected directly to your work instructions, activities can be monitored and resumed faster while achieving the exact expected result. Industry 4.0 with VKS can now not only enforce these ‘Do it right the first time’ practices, it also comes with the added bonus that each and every action is recorded and can be produced as evidence to customers of adherence to processes.

Industry 4.0 Results

Your shop floor will be full of A players and each one will be connected by Industry 4.0. They will have access to the latest best practices in the form of pictures and video for each and every job they carry out. Every time they spot an opportunity, it can be communicated across the facility or the globe instantly. Through IoT, instead of having a second pair of eye’s validating activities, your tools and equipment will instantly relay any feedback of problems or non-conformances. Employees will know when something has gone wrong and will have the ability to fix it immediately. More importantly, your employees will know they have done a good job.

Industry 4.0 and VKS software will augment each and every human being with the knowledge and capability to do things right and to make improvements. The ability to rapidly share visual knowledge is the new key to success.

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