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Not that long ago, Industrial Internet of Things (IIoT) — where connected machines in manufacturing collect and share data — was considered a pipe dream. Today, the technology is an integral part of manufacturing and industrial processes, providing everything from quality control and predictive maintenance to supply chain efficiency.

“The rise of IIoT is happening fairly fast,” says Nigel Wallis, re- search vice-president, Internet of Things (IoT) and industries at IDC Canada. “It has moved from being a niche affair to being a big part of how companies do business.”

A subset of IoT, which is geared to consumer use, IIoT is a network of computers, sensors and other automated devices that collect data in industrial environments. This information is sent to the cloud, where it can be compiled, analyzed and shared with end-users to improve their operations.

As a result, IIoT can improve a company’s efficiency by track- ing inventory, alerting staff to issues along the supply chain, flagging the need for machine or computer repairs and providing key metrics around usage and sales to help boost a company’s performance. And that’s just scratching the surface.

More Canadian companies are recognizing the value of IoT and IIoT. A 2018 IDC study found that 81 per cent of Canadian medium-sized and large organizations reported adopting at least one IoT solution, up from 70 per cent in 2017 and 52 per cent in 2016.

Companies that have had success using IoT platforms to manage their operations are adding more solutions, Mr. Wallis says. These organizations understand the need to evolve in this space to manage operational costs and remain competitive.

He predicts companies that will drive the most IIoT adoption going forward will be those already deploying the solutions today. “It’s going to be democratized very quickly,” he says.

Mr. Wallis cites the example of a Canadian auto parts company that was losing a quarter of a million dollars annually from missing shipping containers. Some suppliers would keep them or customers failed to return them. “They were losing containers all of the time,” Mr. Wallis says.

The company decided to put inexpensive sensors on the containers to track them in real- time. Mr. Wallis says the move saved the company millions of dollars and created more ac- countability among its suppliers and customers.

But beyond tracking a company’s assets, IIoT can provide businesses with data about their operations and allow them to troubleshoot. Mr. Wallis points to an airline manufac- turer that uses sensors to relay information to contractors fixing its planes. For example, when mechanics are drilling bolts into the side of a plane, a sensor will alert them when their drill hole is optimal, preventing expensive repairs and avoiding compromising the safety of the plane.

In another industry example, a railway company can receive alerts when its machines need to be repaired. “It catches mistakes before things break down,” Mr. Wallis says. “You can fix things before it becomes serious.”

IIoT can also help save lives. Schneider Electric, a global provider of energy and automation digital solutions, supplies energy management tools to organizations, such as airports and hospitals, that can’t have power failures. The company installs micro-grids that supply back-up power, employing sensors within the power grid that trigger the release of extra electricity generated by batteries in the event of power failure.

“It’s critical power back-up for critical industries,” says David O’Reilly, vice-president and general manager for the IT Solutions Division at Schneider Electric Canada. “We’re hooked into the power supply into the building; if there’s a disruption in the system, the uninterruptible power supply system will kick in.”

There’s also a push for more sustainable buildings and more companies are turning to technology like IIoT to do it, Mr. O’Reilly says. “Organizations are realizing that, if we’re going to drive sustainability and savings, then we’re going to have to look at how we’re operating our buildings,” he says.

Large organizations across sectors such as automotive, manufacturing and aviation have embraced IIoT, as have many smaller firms. However, mid-sized firms with about 250-to-1,000 employees have been slower to embrace IIoT, says Mr. Wallis of IDC.

“They’re big enough to be complicated,” he says. These firms recognize they will require numerous IIoT solutions to automate their businesses, buy-in from several different divisions and significant upfront costs.

Others are concerned about data protection and privacy. “One of the biggest inhibitors for adoption has been security,” Mr. Wallis says. “Every time you add connectivity to an industrial solution, you’re adding multiple vectors for it to be hacked.”

More companies are beginning to better understand and appreciate the advantages of IIoT in their operations, says Kaliyur Sridharan, senior director of growth programs in the energy division of Schneider Electric. “We are making strides — there are different levels of comfort in each of the industries we serve,” he says.

Mr. Sridharan believes failing to implement IIoT today could be more costly for companies in the long run. For instance, organizations stand to lose millions in energy costs if they don’t reduce their power usage and create green buildings that can regulate electricity. Companies that fail to track inventory are at greater risk of losing products and may be unable to source products in their warehouses, which can result in fewer sales.

Not having IIoT solutions could also mean losing complete control over every aspect of the business, particularly as operations become more reliant on technology. Integrated solutions that tie various functional sub-systems together are evolving, such as EcoStruxure from Schneider Electric.

Mr. Sridharan feels Canadian firms are coming around to understanding just how critical IIoT solutions are to the successes of their operations. “The awareness is there — now the comfort level has to grow,” he says.

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