MAR-APR 2018

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INTECH MARCH/APRIL 2018 11 T he Internet of Things, Industry 4.0, and energy management can be combined to make a heady cocktail that suggests an exciting future with reduced costs and im- proved performance. However, as is the case with any cocktail, you could be left with a severe hangover, wondering where all the promise and money went. Disruptive technologies are emerging at an unprecedented rate. It is difficult to know which technologies offer genuine savings ver - sus those that may be rendered obsolete before they achieve their potential. It is challenging for organizations to cut through the hype and identify those technologies that are applicable to their needs and can deliver an immediate positive return on investment. This article examines the Internet of Things (IoT) and Industry 4.0 from the perspective of realizing energy cost and consumption savings. What options, if any, are cost effective now? How can an organization introduce the IoT and move toward Industry 4.0 without compromising its financial performance? Say what you mean so you can mean what you say . . . As with any newly arrived and rapidly evolving arena, terminology can become fashionable and be erroneously applied to all sorts of situations. Buzzwords can become the tool of marketers and sales people. So, it is worth taking a mo- ment to define what exactly what we mean by the Internet of Things and Industry 4.0. The Internet of Things The term is becoming ubiquitous, but there are many different definitions. The research consul- tancy Gartner defines the IoT as "the network of physical objects that contain embedded technol- ogy to communicate and sense or interact with their internal states or the external environment." The International Telecommunication Union de- scribes the IoT as "a global infrastructure for the information society, enabling advanced services by interconnecting physical or virtual things." These definitions indicate how broadly the IoT can be conceived. Any device that can collect and transmit data, as well as all of the associated com- munications infrastructure, could be considered part of the IoT. The potential future deployment of devices is mindboggling—50 billion devices to be connected by 2020 with an estimated 200 devices per person being possible. One way to try to grasp the scale of the Internet of Things (IoT) is to visit the website Thingful (, a search engine for the IoT. The IoT has already established that an enormous amount of data can be generated. However, it has been estimated that only 3 percent of the gener- ated data is analyzed, and only 15 percent is tagged and ready for analysis without manipulation. The challenge facing many service providers and potential end users is how best to use that data for decision making that realizes efficiencies and a return on investment on data collection infrastructure. Industry 4.0 Originally coined in Germany, Industry 4.0 is a broad term that can be applied to several trends in manufacturing and automation. In the U.S., terms such as the Industrial Internet (of Things), advanced manufacturing, or digital manufactur - ing are used. The German Federal Ministry of Education and Research defines Industry 4.0 as "the flexibility that exists in value-creating net - works is increased by the application of cyber- physical production systems [CPPS]. This enables machines and plants to adapt their behavior to changing orders and operating conditions through self-optimization and reconfiguration. . . Intelligent production systems and processes, as well as suitable engineering methods and tools, will be a key factor to successfully implement dis - tributed and interconnected production facilities in future smart factories." Although there is enough jargon in the above paragraph to be teased out over several articles, the central premise is that the IoT allows industrial processes to communicate with the outside world to manage themselves in response to changes in key production drivers, such as customer speci- fications or energy prices. The IoT is the central technology as the data generated by existing con- trol systems is collated with other data to optimize the industrial process. That said, Industry 4.0 is broader than the IoT, encompassing technologies such as "big data" analytics, machine learning, and additive manufacturing (3-D printing). Industry 4.0 can also mean very different things to different industries. According to a survey in Germany in 2015, only 10 percent of manufactur- ing companies have extensively adopted Indus- try 4.0 techniques, with more than half either not planning to implement any techniques or not giv- ing it any consideration at all. In addition, Industry FAST FORWARD l The Internet of Things has the potential to save costs and energy. l Organizations must make sure that proposed solutions are mature enough to realize promised savings. l There is significant hype surrounding digital performance management, remote monitoring and control, and smart energy consumption, but their financial efficacy has not yet been consistently demonstrated. COVER STORY

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