Impact of IoT Retrofit on the Manufacturing Supply Chain

man wearing orange hard hat
Photo by Kateryna Babaieva on

According to Hubspot’s Annual Manufacturing Report, 80% of manufacturers feel smart technologies and a move toward Industry 4.0 adoption will benefit their supply chain by increasing visibility, accelerating innovation, and enabling staff to work more efficiently.  Over 90% of those polled feel the same technologies will lead to increased productivity. 

This begs the question: if smart technologies are essential to efficient manufacturing, why aren’t all factories smart?  

It’s not that simple.  

Upgrades come with significant costs and productivity ramifications.  It doesn’t make sense to pull out legacy equipment in good working order simply because it wasn’t built in the age of connectivity.  Many systems continue in good working order for decades; that’s why we use the term “industrial-strength” to define something that safeguards against failure.   

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How To Manage Equipment Obsolescence

No one wants expensive unplanned downtime. Here are key steps to avoid it when dealing with obsolete technology.

close up of a toothed gear system.  Such systems may be affected by equipment obsolescence.
No one wants downtime because of equipment obsolescence. Keep those gears turning.

Unplanned downtime due to equipment obsolescence.  

It’s a dirty subject no one wants to talk about. And for good reason.  A 2016 study by the Aberdeen Group put downtime costs across industries at a whopping $260,000 per hour, up 60% from 2014 data.  A 2014 Gartner study was even worse: placing the average cost at $336,000/hour.   One lost eight-hour shift could mean a $2.08 million to $2.68 million loss. 

Regardless of who’s right about the costs, eliminating downtime and disruption is a high priority for most businesses.   Yet more than two-thirds of companies don’t have a full understanding of when their equipment should be maintained, upgraded, or replaced.  

While we’re excited about the future of  Industry 4.0 and IIoT, where every machine can self-analyze its needs and tell you what to do before there’s a problem, we also understand most factories and industrial locations aren’t there yet. They likely won’t be for decades as they continue to operate with older systems in place. 

But old doesn’t mean unusable.  Here’s why. 

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Infographic: Why IIoT is Essential to Manufacturing

The Industrial Internet of Things (IIoT) has been described as the basis of the coming Fourth Industrial Revolution, otherwise known as Industry 4.0. IIoT is essential to manufacturing. But why? What benefits does the technology bring to the industry?

IIoT brings connectivity, automation, and data analytics to the factory floor. Embedded or attached sensors gather data, which is then used as the basis of analytics and machine learning processes to create a “smart factory.”

Smart factories employ a number of different technologies, including

  • machine learning to analyze data
  • sensors and other monitoring devices to improve production efficiency through real-time decision making
  • integrated robotics that can work alongside human workers

All of these technologies integrate with or rely on IIoT.

We’ve attached an infographic below to answer the question of what makes IIoT so valuable to manufacturing. If you find it useful, feel free to download and use the high-resolution version available at the end of this article.

Infographic: Why IIoT is Essential to Manufacturing
Why IIoT is Essential to Manufacturing

If you need to know more about how to bring your legacy equipment into the IIoT age, we’ve written about that.

AX Control, Inc provides industrial automation products and repair services to customers around the world.