Industrial IoT, or the Industrial Internet of Things (IIoT), is a core concept of Industry 4.0. IIoT harnesses the power of smart machines and real-time analytics to make better use of the data that industrial machines have been mass-producing for years. Smart machines are the main driver of IIoT for two reasons. The first is that smart machines capture and analyze data in real time in ways humans cannot. The second is that smart machines communicate their findings in a simple, fast manner, enabling quicker and more accurate business decisions.
IIoT is used across a wide range of industries, including manufacturing, logistics, oil and gas, transportation, mining, aviation, and energy. The focus is on optimizing operations, especially the automation of processes and maintenance. IIoT capabilities improve asset performance and enable better maintenance management. Over the long term, they move industries toward on-demand service models, deepen customer intimacy, and create new revenue streams — all of which contribute to the digital transformation of industry.
Applications of IIoT
IIoT is a game changer for every industry. Whether manufacturing physical products or managing product transport, IIoT increases operational efficiency and paves the way for entirely new business models. It has a variety of applications across a cross-section of industries.
Production
The production sector currently makes the heaviest use of IIoT technology. Smart machines powered by IIoT can self-monitor and predict potential production obstacles. The result is less downtime and greater efficiency.
Supply chain
Sustaining production output matters, but so does smooth delivery across the supply chain. With IIoT, orders can automatically replenish inventory when needed. This reduces waste, keeps stock counts current, and ensures the right amount of raw materials is always available. Automating the supply chain and ordering lets employees focus on more complex functional areas.
Building management
Most building management challenges can be solved with IIoT technology. Sensor-based climate control removes all the uncertainty involved in managing a building's indoor climate, taking into account every necessary factor such as occupancy, ventilation points, and machinery. IIoT also strengthens building security with smart devices that assess potential threats at every entry point of the building.
Healthcare
Healthcare has long embraced smart devices. Medical professionals can monitor patients remotely and be alerted to changes in their condition. This makes healthcare more precise and more personal. In the future, artificial intelligence will assist with diagnosis, enabling doctors to treat patients more accurately and effectively.
Retail
In retail, IIoT technology enables fast marketing decisions tailored to each store. Businesses can update stores based on local consumer interests and target customers with smarter promotions. These data-driven insights make a store stand out from its competitors.
Sensors are not a new technology — companies have used them for years to track products or monitor machinery. What sets IIoT apart is the ability to adopt this change at a much larger scale, thanks to falling costs for sensors, comprehensive wiring networks, and big data analytics.
According to technology analyst IDC, manufacturers worldwide spend $197 billion a year on IIoT. Transportation companies alone have invested about $71 billion. Companies are budgeting for IIoT, but how they use those budgets varies from company to company depending on their priorities.
How does IIoT work, and what are its benefits?
IoT is a network of smart devices, connected through networks linked to databases. These devices monitor, collect, exchange, and analyze data. A typical IIoT system consists of:
- Smart equipment that measures, stores, and transmits information
- A public or private internet network that serves as the data communication fabric
- Analytics applications that process raw data into data insights for optimized processes
- Tools that help decision-makers and employees use the data for better business outcomes
Data flow is critical to ensuring IIoT applications operate optimally. To support data flow, companies use a data bus to distribute and manage real-time data. This technology paves the way for applications and devices to work together as a cohesive unit. While databases manage historical data at rest, the data bus manages data in motion.
IIoT increases business productivity by streamlining and automating processes. It improves operational efficiency, lowers operating costs, and increases income generation. Higher levels of automation improve product quality, which — combined with efficient operations — supports predictive maintenance.
With IIoT, the odds of creating new revenue streams are far greater. Data insights can show how even efficiently run operations can improve productivity by addressing inefficiencies few knew existed. Performance or usage data leads to new products or services. For example, a manufacturer can develop an asset-sharing model with other manufacturers. This resource sharing optimizes space and production capacity while reducing costs. Likewise, IIoT devices can monitor HVAC systems and manage them better.
IIoT works to improve productivity and quality without straining resources. That is a major boost for business expansion.
Security considerations and challenges in adopting IIoT
Adopting IIoT can revolutionize industries, but this increased connectivity can create additional security challenges. Companies that use operational technology understand the importance of worker safety and product quality. However, the convergence of operations, the internet, automation, and smart machines raises several issues around availability, scalability, and security.
Most industries are well versed in managing availability and scalability, because both are critical to their operations and integrate easily into IIoT systems. Security is where most organizations tend to falter. Many companies still rely on legacy systems and processes, and new technology can complicate integration and end-to-end security.
The rise of smart devices — especially employee devices used for work — creates numerous security vulnerabilities. Organizations are responsible for implementing and configuring security for connected devices. Device manufacturers should also prove they can keep devices secure, but that is rarely the case.
Cybersecurity concerns are on the rise. A successful hacker could break into connected systems and potentially shut down operations. To handle these security issues, manufacturing companies should approach IIoT the way any other IT company would, focusing on the security of both physical and digital components.
Another challenge of IIoT adoption is safely integrating industrial operations with IT. User data must comply with global privacy regulations. Data collection is essential to generating the insights businesses need, but personal information must be kept separate and stored in encrypted databases. Storing personal data alongside business data can create serious exposure risks.
Several other security issues are associated with IIoT. These can include exposed ports, insufficient authentication practices, or the use of outdated applications. Beyond simply having an internet-connected network, all of these small issues can be dangerous for a company. An unsecured IIoT system can lead to operational disruption and financial loss.
The more connected an environment becomes, the higher the security risks.
- Software vulnerabilities are easy prey for hackers to attack.
- Internet-connected devices and systems are publicly discoverable.
- Hacking attempts increase, leading to targeted attacks and data loss.
- Attempts to manipulate or sabotage systems disrupt operations.
- System malfunctions can damage devices or, worse, physically harm employees.
- Compromised operational technology invites extortion attempts.
- Fines mount when personal information is disclosed in violation of regulations.
A final concern is that IoT and IIoT suffer from technology fragmentation. This can leave systems inoperable if processes are not handled correctly and efficiently.
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