Can IoT technology help manufacturers resolve crippling economic and operational challenges?
04/07/2023 Ubisense Ltd
By Steven Manifold, Chief Marketing Officer, Ubisense
It is no secret that manufacturers around the world have been put under great financial pressure in the last few years. From the outbreak of Covid-19 in 2020, which led to factories closing, through government-enforced lockdowns, to the ongoing energy crisis – there has been little respite. Supply chain disruption alone cost 1,500 leading global businesses $182 million in lost revenue, on average, in 2022. During this turbulent period, manufacturers have had to make tough decisions as they desperately try to succeed on three fronts: remaining profitable, meeting customer expectations and evolving with the latest industry and technological advancements.
IoT technology can play a significant role in helping manufacturers achieve these objectives, and these last few years have shown how imperative it is for technology providers to work alongside organisations to better understand their needs and challenges. For instance, what are the most pressing financial pressures for modern manufacturers and what role can technology, and in particular IoT, play to help them become more efficient and profitable? We recently surveyed aerospace, automotive and defence manufacturers, across Europe, North America and Asia, and found that nearly two thirds (62%) of business leaders have adopted IoT in their assembly processes – an increase from 44% in 2021. Yet, despite this, we still found that many organisations are suffering from poor real-time visibility of their operations and failing to identify how to best optimise their processes.
When you combine these operational inefficiencies with numerous economic difficulties, manufacturers are facing a tough challenge to not only succeed now, but also plan for the future. While some of the economic factors are outside of manufacturers’ control, investing in and adopting IoT solutions, like real-time location-based systems (RTLS), can put the power back into organisations’ hands.
Weathering the economic storm through IoT
Manufacturers have never been afraid to embrace new technology. We saw an acceleration in automation well before the Covid-19 pandemic, as many organisations sought greater efficiency in their assembly processes. Investing in IoT technology, such as RTLS, helps to deliver shorter cycle times, increase the quality of output and eliminate errors. However, achieving these goals becomes a challenge when the current economic backdrop is causing turmoil for many industries.
When we spoke with manufacturers, they revealed that supply chain disruption, employment shortages and inflation are causing their biggest financial headaches. Following the pandemic, operations have returned to some semblance of normality, but since then many have been hampered by the recent rise in costs. This may be leaving some manufacturers feeling uncertain about when it will be right to further invest in IoT solutions.
However, our research also found that the vast majority of manufacturers do have IoT front of mind when considering how they can make savings. More than three-quarters (76%) of manufacturers told us that they are more likely to invest in IoT because of the current economic situation. With this willingness to invest in mind, it is important for manufacturers to consider that their financial headaches and potential operational efficiencies are not mutually exclusive.
Resolving operational inefficiencies
While the adoption of IoT technology in manufacturing processes is on the rise, more than a third of organisations still face operational challenges, on top of financial ones, according to our research. This could be down to a lack of correct implementation of RTLS solutions, or simply a lack of investment compared to other IoT technology. For instance, 44% of manufacturers say they use RTLS but 36% admit that they struggle to find factory floor supplies in their daily operations. These include tools, equipment, parts, and materials, which are all vital resources that are now costing more to make and acquire.
Using the UK as an example, the average manufacturer potentially wastes £2,441 per year looking for things. Only 9% of manufacturers never have this problem. More than a third (35%) of organisations reported that things frequently happen in the wrong sequence or take longer than planned. Such difficulties lead to wasted materials and time, as well as a potential loss in revenue.
The lack of visibility highlights the urgent need for some manufacturers to engage with RTLS providers about how to introduce new technologies into their existing infrastructures. Investment in such technology may be daunting but, with the right support, manufacturers should be exploring their options and be positive about spending now so they can save in the long term.
Embracing RTLS to establish a successful future
The ongoing economic situation might be putting a strain on profits and resources, but it is also being compounded by operational inefficiencies. More than a third of manufacturers (36%) told us that they frequently can’t measure the efficiency of their operations. This suggests that their inefficiencies are causing losses, regardless of financial factors. The current economic circumstances and pressures mean it has never been more essential to invest in technology to improve operations and reduce waste.
Organisations are struggling to assert themselves in what is a very temperamental climate, leaving them in a catch-22 situation. If they do not have the necessary visibility of their operations to identify areas of waste and inefficiency, they cannot access the information that would help them understand why RTLS would solve those issues.
The first step in resolving this dilemma is to open a dialogue about RTLS technology both internally and externally. Once stakeholders recognise which areas of the manufacturing process need support, they can make the business case for investing in IoT and RTLS solutions. For example, RTLS sensors can monitor the performance of machines and equipment in real-time. This allows an organisation to identify potential issues before they occur and perform maintenance proactively, reducing downtime and costs. By engaging with RTLS experts, manufacturers can explain their concerns over their current processes and receive clear guidance on how these solutions can help. This technology not only improves processes, but also helps to deliver operational efficiencies and better overall financial stability.
For further insights from our latest IoT in Manufacturing survey, download the full report, Why embracing location-based services is imperative for survival, for free from the Ubisense website.
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Ubisense Ltd
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Web: https://ubisense.com/
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