IoT Applications — Value Creation for Industry

IoT Applications — Value Creation for Industry

February 23, 2020

IoT in industry is a rapidly developing area. Numerous IoT research and application projects have been done in recent years. However an important question to be further addressed is on value creation by IoT industry applications. IoT applications in the sense of this paper are solutions using IoT technologies to improve industrial manufacturing processes, enable new ways to operate production plants, offer an optimized infrastructure, reduce operational cost or improve human safety in industrial areas.

IoT Applications for Industry - Value Creation

Internet of things (IoT) has become part of your daily life. The “things connected to the internet” idea is continuously evolving in content, areas of applications, visions and technology. New real life and industrial projects have been done and joint future oriented industry and government initiatives such as Industry 4.0, have been started.

Since Industrial production is one of the world’s biggest economic factors one of the major objectives of these initiatives is to bring the paradigms of the IoT to the factories enabling them to cope with the challenges raised by popular megatrends. The foremost megatrends relevant for factories are globalization, progressing technological evolution, the dynamization of product life cycles, the aging work force and the shortage of resources. Central effects are the acceleration of innovation cycles and the increasing customer demand for individualized mass produces with highest quality expectations.

Within the context of industrial production IoT projects and applications are developing in manufacturing, supply chain, supervision and servicing. A major question in all projects is about the value, the benefit such application can bring to the user, to the owner or to society. The value question is extremely pertinent in the industry: in the manufacturing industry entire factory related processes, but also in industrial applications where it comes to ensure operation of industrial installations and provide supervision, and improved life service. It is the value which such applications bring which will determine their adoption, acceptance and wide use. However, this value is very difficult to quantify and prove, and it depends on multiple aspects which are strongly application area dependent. The present article is focusing on IoT applications form the point of view of value creation for industry and brings together expert opinions from academia, research and industry.


IOT-Value Creation for Industry


Value Creation and Challenges

IoT Applications

The following pragmatic definition for IoT applications was used in order to focus the scope and to have a common understanding: IoT applications are solutions using IoT technologies capable to improve and easy adapt industrial manufacturing processes, enable new and efficient ways to do operate and interact in production plants, create new service or supervision means for industrial installations, offer an optimized infrastructure, reduce operational cost and energy consumption or improve human safety in industrial areas.

Value, Benefit

To start a project in industry environment the expected benefit, the expected value to the company has to be estimated and later needs to be re-evaluated and proved during operation. To define the value of an industrial IoT application or IoT project is difficult. There are numerous reasons for that. The value typically shows up gradually with new process introduction and accumulates over time, the value is often difficult to quantify due to multiple interactions and complex processes, it may contain hard but also soft benefits difficult to assess. Value can be generated and may show up as a result of a combination of IoT applications with other systems or processes, or can originate in new human behavior or new interactions.

Read more:  5G mobile technology

IoT applications requirements and capabilities

The expectations toward IoT applications in industry are high. The capabilities they have to offer are depending strongly on the industrial area and the concrete application. For example the environment where IoT application may be used may range from clean room condition and normal ambient temperatures to heavy and dirty environment, locations with high temperatures, areas with explosion risk, areas with metallic surroundings, and corrosive environment on sea or underground. A list of a set of industry related capabilities and requirements is presented below, without claiming completeness.




Fig. 3.2 Status and estimated potential of IoT applications.

The IoT application capabilities for industrial application should meet requirements such as:

  • Reliability.

Reliable IoT devices and systems should allow a continuous operation of industrial processes and perform on-site activities.


  • Robustness.

The IoT application and devices should be robust and adapted to the task and hard working conditions. This should include also the certifications for the specific work environment where they are used.


  • Reasonable cost.

Cost aspects are essential and should be fully justifiable and adapted to the benefit. It is basically about the right balance between cost and benefit rather than low cost. Also the costs are related to a more holistic view and life costs and consider the impact on the whole industrial installation in case of a failed IoT device or application.


  • Security and safety.

Security requirements are related to the cyber security threats and have to be part of the entire security strategy of the company. Safety is mainly related to the device construction and the area of use but also to usability such that no safety threats occur due to use of the IoT applications and devices.


  • Simple use.

Simple, intuitive use and (almost) self-explaining are important for the overall IoT application acceptance. The IoT application should ideally be context aware and adapt to the skills of the user and location or environment aspects.


  • Optimal and adaptive set of features.

The IoT application should allow to perform desired task with the sufficient, not-richer-then-necessary, set of features.


  • Low/No maintenance.

Maintenance free or reduced maintenance IoT applications and devices over operational life would be ideal. Maintenance over lifetime is an important aspect impacting the life cycle costs of IoT based solutions. It is affected by the sometimes high number of IoT devices in place, the fact that they are typically distributed over large areas, the required skills, tools and time needed for any type of IoT maintenance operation. This is valid for all devices but especially for active IoT devices or active wireless sensing.


  • Standardization.

IoT devices and applications should be using a set of standards to support interoperability of IoT devices, easy exchange and multivendor possibilities.


  • Integration capabilities.

Easy integration in the IT and automation and process landscape of the industrial plant are required and may decide if a IoT solution will be used. This is particularly important for brown-field projects but also for green field in the view of future plant extensions.


  • Reach sensing and data capabilities.

IoT applications will relay more and more on complex sensing allowing distributed supervision and data collection and data capabilities. This is a chance in terms of additional data and real-time information but also a challenge in terms of data and processing.


  • Industry grade support and services.

The IoT applications should be supported over years in operation by a set of rich tools and continuously updated services. Typically industry application requires also a centralized management of devices and systems, managed access rights, this might apply to some of IoT devices too.



Internet of things


Challenges faced by IoT industry applications

The challenges for IoT industrial applications can be subject of a more extended treatment, however for the needs of present IoT applications and value creation they have been divided in 4 groups:

  • IoT device technical challenges
  • Lifetime and energy challenge
  • Data and information challenge
  • Humans and business


The IoT devices technical challenges are numerous and subject of intense research. A set of technical features will be especially needed in industrial applications, depending on application, such as extended capabilities for sensing in terms of sensor types and high sampling rate, communication, wireless data transfer and precise time synchronous collection of data both in single-hop and multihop industrial networks. Another aspect is related to the easy deployment, configuration and re-use of non-permanently attached devices, such as the ones used for ad-hoc sensing. One critical and often neglected aspect is the device packaging for the industrial application needs which is essential for reliable operation.

Last but not least is the heterogeneity aspect which is a problem even today. In industrial environments often encountered are combinations of one or more of: passive and active RFID with or without sensing, various fix or mobile RFID readers, wireless sensor nodes and networks, wired and wireless technologies in factory automation, use of different frequency bands 13.5 MHz, 433 MHz, 860–925, 2.4 GHz, use of various “languages” — ISO standards, and different mobile devices and ecosystems.

A special challenge related to IoT devices is related to lifetime of the IoT device which is less than of the normal industrial installation. This lifetime mismatch needs to be considered in the complete design and management of industrial installations involving IoT. The energy challenge is also important, especially for active IoT devices. Depending on application the energy harvesting can be a solution.

A very important aspect is the data and information challenge. The IoT devices are important sources of rich and spatial distributed identification, historical and sensor data in industrial environment. With the advent of more intensive use in industry and taking as an example an industrial supervision case the data amounts can really explode. Taking a simple industry sensing and supervision example with 100 sensors installed and collecting sensing data such as: temperature 1 per min, 3axes acceleration data with 10 k samples per second, and 1 audio channel with say 40 ksamples per second, also considering that data is collected only 1% of daytime, approx. 15 min per day, the total amount of raw data for 1 year sums up to 4.4 PB/year. This is only to show that such amounts of raw data need to be processed and condensed and analyzed in order to be usable at all so not data but information behind it needs to be extracted for industrial use. Adaptive data handling and data processing and data fusion methods are required to handle also the industrial IoT data emerging, and will require new methods to visualize or inform about the status of real world. Also in industry the IoT data need to be correlated to the already available automation and control data in industrial plants. This blended information will be needed for a specific installation and typically on site too. All this data and information need also special attention regarding handling and management in terms of security and access.

Another challenge and one visible in the industrial megatrends is that technology in today’s and future factories has to support the human more and more. Ageing work force and the lack of skilled people in combination with the increasing productivity, quality and cost pressure lead to the need to effectively utilize the unique human capability of purposeful behavior. IoT technologies can help to support the humans and to disburden them from doing hard routine work or wasting their time searching for information.

An important aspect why IoT applications are not as wide-spread as desired is related to human and business aspects. Besides technical challenges there is a lack of business models usable in industrial environment, the business models behind the IoT applications. New types of industrial and business processes for operation and for servicing machineries have to be put in place, considering IoT technologies supported approaches which otherwise would not have been possible. It is also challenging to integrate new IoT applications into existing running and producing plant systems with minor drawbacks – to handle brown field applications.

Human resources and skills remain essential and are also a major factor in the new IT and IoT rich industrial environment. The challenges are related to scarce resources, to the complex blend of skills needed by persons on site in a future plant, and by the aspects related to the increasing complexity and knowledge needed for industrial installations.

From an industry point of view value creation form IoT applications and sustainability are essential. How these problems will be addressed and solved will influence the use of IoT technologies in the industry, on a larger scale, in the coming years. There is a continuously evolving process both in technology and applications and newfuture plant, future service and supervision solutions will emerge.

Source: Internet of Things: Converging Technologies for Smart Environments and Integrated Ecosystems

            Dr. Ovidiu Vermesan SINTEF, Norway
            Dr. Peter Friess EU, Belgium

You can rate also
Users rated: