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The manufacturing industry is highly sensitive to cost, especially as manufacturing operations professionals grapple with the need to generate more usable data from machines. Many machines are older and modifications (such as adding connectivity) void manufacturing warranties, so manufacturers need to find creative solutions to help capture data from machines to prevent unplanned maintenance downtime.

In this scenario, manufacturers do not have the ability to completely “rip and replace” machines that could cost between hundreds of thousands of dollars to upwards of millions of dollars. The high cost of deployment of IoT solutions adds to this burden and manufacturers are looking to vendors and service providers to ease the capital investment in deploying smart, IoT-enabled solutions.

In a recent survey, Frost & Sullivan found that 59 percent of all manufacturers in the United States list the high initial upfront cost of deploying smart solutions as their biggest concern with developing IoT solutions. This challenge is even more of an obstacle in the discrete manufacturing industry where 65 percent of manufacturers are deterred by the high costs. In addition, 56 percent are concerned about the high software licensing and application costs, while 55 percent are concerned about the high implementation costs.

Concerns with Deployment of Smart IoT Solutions US 2017 by Company Type

Cost concerns play a significant role in determining the feasibility of developing IoT solutions. However, these are just the  costs that are known up-front. Costs associated with delays are often not factored into cost estimates, and these unknown costs can typically result in unplanned downtime and further deter manufacturers from deploying IoT solutions.

To alleviate some of these challenges, manufacturers can focus their technology efforts on acquisition of solutions or platforms that are plug and play by connecting all their devices  to existing cloud-based solutions to help reduce their overall costs. In addition, manufacturers can add sensors and devices that require zero provisioning – those that connect to existing PLCs and existing ERP applications without requiring custom coding. Such solutions can help reduce the cost of connecting the unconnected, as many existing machines do not have any form of connectivity.

The Last Word

IoT deployments are typically customized to the specific needs of a manufacturer. However, manufacturers can take advantage of the opportunity to surpass competitors by working with a partner that has a proven track record in the industry with off-the-shelf platforms and solutions that are deployment ready. Such a deployment can alleviate the challenge of high costs (initial investment, deployment costs and software licenses) while ensuring that the operations are connected with existing ERP systems to analyze the data collected, which helps the manufacturer make data-driven business decisions and maximize ROI from IoT.

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Manufacturing Deployment Concerns and Cost Sensitivity