Even with Covid, industrial IoT can improve efficiencies

Alibaba Cloud and Siemens aim to assist the transformation of China's manufacturing industry (Image Ekkasit919 / iStockPhoto)
A recent survey by VDC Research found that 15% of industrial companies have implemented a largescale IIoT project. (Ekkasit919 / iStockPhoto)

COVID-19 has created challenges for industries and manufacturers going back to the spring when even toilet paper and hand sanitizer were in short supply. 

Now, there are concerns of whether the industrial supply chain can provide enough dry ice, vaccine containers, storage space and a long list of related items to keep critically-needed vaccines cold enough until they reach the hands of medical personnel to administer shots.

Some of these worries will be lessened with technology in the form of sensors and actuators as well as data analytics software to monitor if supplies are being sufficiently produced and if the vaccine supply chain is working efficiently.

“This whole Covid ordeal has emphasized the importance of automating production to maintain output and the ability to accommodate [manufacturing and logistics] workers that is different than in the traditional sense,” said Jared Weiner, an analyst at VDC Research, in an interview with Fierce Electronics.

In a May survey of 250 engineers and other industrial automation professionals, VDC found that 85% had experienced supply chain disruptions due to COVID-19, while 67% said they had decreased their organization’s production volume. An array of industries were represented, including auto, construction and heavy equipment and consumer electronics.

The virus caused these companies to alter production schedules and reduce on-site production personnel, but 40% responded they implemented new hardware and software to accommodate remote workers while 31% implemented technology to accommodate production automation.

“In a lot of instances, intelligent sensors or IIoT give manufacturers more control to improve efficiency,” Weiner said.

Weiner recalled how in March and April, some industries altered course in production, such a distillery pivoting to make hand sanitizer.

“The ability to pivot operations is greatly related to IIoT,” he said.

One way that pivoting can work efficiently is for a company to create a digital twin of a real-world operation, then test and work through updates virtually “so when you do roll out, you know how it will go,” Weiner said. Products like MindSphere from Siemens can offer the ability to create a digital twin of machines, he said.

COVID-19 has created operational and financial constraints for many companies, and developing industrial IoT applications to create greater efficiencies has taken on greater importance, Weiner said.

The VDC survey found that IIoT adoption continues to surge, with 37% saying their organization has already implemented an IIoT initiative (including 15% that said it was a largescale project), and another 42% saying they have begun the process of examining or developing a formal IIoT strategy.

When a company decides to implement hardware or software to improve production automation in a time of pandemic, it could set up diagnostics on machines that can be monitored remotely by a maintenance worker, instead of requiring the worker to show up at the plant. The need to keep maintenance workers away from the plant is acute with COVID-19, but offers a long-term lesson for efficient plant operations, Weiner said.

Jack Gold, an analyst at J. Gold Associates, said manufacturers benefit the most from the analysis and data processing of data coming off of sensors and actuators. “If you have sensors putting out lots of data, if you can’t effectively process it for insights into your operations, then you’ve essentially wasted that resource and investment,” he said.

 “The need for AI, machine learning, advanced analytics and insights analysis is key,” Gold said.  “That’s true if you are looking at any impact Covid might have, and any potential to remediate that impact. It all starts with data analysis and insights they provide.”

While the overall trend to IIoT is apparently on the upswing despite COVID-19, there are some recent market insights that matter.  When auto assembly plants were idle for most of the second quarter, they came back online in the third quarter, so semiconductor manufacturers supplying the auto industry with smart sensors and other products reported 3Q improved sales. However, analyst firm Omdia is forecasting sales to automakers for all of 2020 will be down double digits.  

Meanwhile, medical device chipmakers are seeing improved sales, while other industrial sectors will mostly be soft, said Kevin Anderson, an analyst at Omdia.  Market uncertainty generally tends to limit capital expenditures.

 A case in point is Infineon Technologies, the tenth largest semiconductor producer, which announced Monday that the auto chip sector recovered better than expected since summer. Meanwhile, factory automation chips “are still a long way from recovery,” the company said.

However, Paul Pickering, an Omdia senior analyst who covers industrial semiconductors, said he wouldn’t read too much into quarterly reports from industrial semiconductor suppliers, which is a relatively slow moving sector compared to the consumer market and very diverse compared to auto and wireless markets. 

Industrial semiconductor suppliers are seeing a “gradual recovery” from the first half of the year, Pickering added.

More generally, IIoT in the industrial market is experiencing a “slow pace of change,” Pickering said. “A short—hopefully—timescale event such as Covid isn’t expected to make much difference.”

The pandemic has led to different results for different industrial sectors: medical has benefited with more telehealth, Pickering said.  However, some aspects of factory 4.0 implementations and adoption of IIot-related networks will be slowed with delays in the release of the latest 5G specifications for industrial, he added. And that will reduce or delay growth in the test and measurement sector.

“We’re talking about years here, rather than 2020 or 2021,” he added.

Omdia analyst Alex West called Covid a "bit of a two-edged sword for IIoT." Some companies  have had fewer funds for investing in IoT projects, but even when plants have been closed there has been the opportunity to retrofit and upgrade equipment. 

In the short-term, Covid will be a net negative, but mid-term "Covid will have helped accelerate IIoT adoption," West added. 

RELATED: Infineon pegs “very respectable” quarter on auto, Cypress add

Editor’s Note: VDC’s Jerod Weiner will speak on a panel of industry and manufacturing experts at 3 p.m. ET Nov. 17 as part of Sensors Innovation Week Fall. Register online for the free virtual event.