IoT And Connected Assets

Ken Pierce

The Internet of Things (IoT) involves connected products, assets, fleets, infrastructures, markets, and people. In this series of blogs, we’ll address each of these connected aspects in turn.

IoT promises to revolutionize the operation and maintenance of high-value, long-life equipment such as industrial machinery. The operators of these assets can use IoT data to optimize performance, uptime, costs, and business processes. The manufacturers and providers of service for these assets can use IoT data to optimize design, functionality, customer service, and business models.

But IoT data has remained separated from the context of business information and processes. For example, sensor data might tell you that an asset is operating outside its specifications. So you watch the asset for a period of time. If it seems like there has been an impact on production output, you send out a technician to inspect the asset. The technician estimates that the asset should be fixed and manually submits a request to maintenance. Maintenance creates a work order and procures a spare part. When the part comes in, the asset is scheduled for repair.

In the meantime, the asset fails, and production grinds to a halt.

But there’s a better way. In the past we worked to integrate the shop floor with the top floor. Now we need to integrate operational technology (OT) with information technology (IT). By capturing sensor data and combining it with other business data in real time, asset operators can achieve predictive maintenance and automated procurement of parts and dispatch of service. At the same time, manufacturers and service providers can continuously improve asset quality and even create new, more effective assets.

Three dimensions of IoT data

To achieve these outcomes, OT-IT integration needs to occur across three dimensions:

Fixed-asset insights: Companies must move from a reactive to a proactive approach to maintenance. They can achieve this through an integrated asset network that enables collaboration among manufacturers, service providers, and end customers. Fixed-asset insights let you achieve predictive maintenance and service, from identifying emerging problems early to automating parts procurement and maintenance scheduling. These capabilities can serve assets that are owned and operated by a company, as well as those that are installed at a customer site and covered by a service contract.

Manufacturing execution: Manufacturers need to gain real-time visibility across plants, suppliers, and machines. They can do this by connecting manufacturing IoT data within the business context of orders, quality, and performance. They can further connect IoT data with supply chain networks. The result is more flexible, scalable, cost-efficient, and tightly controlled manufacturing.

Manufacturing networks: Manufacturers need to identify and resolve problems across the supply chain to manage product introductions and changes, share process improvements, and improve on-time delivery. They can achieve this by combining IoT data with a collaborative B2B network. Among other advantages, they’ll be able to identify hidden production capacity and rapidly and cost-effectively scale production to respond to market demand.

IoT data, the new oil

Data in the 21st century has been compared to oil in the 19th century: a vast, valuable, and still largely untapped resource.

Some energy companies are taking that metaphor literally and realizing transformational results from integrating OT and IT. In one case, an energy company that operates numerous large gas turbines across several plants noted that 13 of those turbines needed constant maintenance. By linking data across plants, the company realized that the 13 turbines were all made by the same vendor. The new visibility can help it reduce costs for service and increase uptime. It also gives the company new options – for example, replacing the assets with turbines from another vendor or working with the original vendor to make design improvements.

Another energy company that has more than 70 plants worldwide discovered that the operational costs for its Malaysia plant are four times as much as expected compared to other plants. Integration of real-time IoT data with business data is helping the company home in on potential causes such as faulty equipment, over-maintenance, or culturally influenced approaches to plant operation.

IoT provided the data. Integration with business context delivered the insights. The good news is that the technologies and capabilities now exist to achieve this integration.

Effective IoT connectedness requires a unifying foundation. SAP has addressed this need by introducing SAP Leonardo Internet of Things portfolio, innovative solutions designed to help organizations digitally transform existing processes and evolve to new digital models. Learn more by reading about real-world use cases, visiting sap.com/iot, attending our flagship event Leonardo Live this July 11–12 in Frankfurt, and following us on Twitter at @SAPLeonardo.


Ken Pierce

About Ken Pierce

Ken Pierce is the global leader of the Internet of Things (IoT) for the Energy and Natural Resources Sector (which includes oil and gas, chemicals, utilities, mill products, and mining) at SAP. He helps customers define their IoT and digital transformation strategy, bringing to the table over 25 years of experience serving as a trusted advisor to business and IT executives. Ken focuses on understanding their challenges, establishing a solution vision, and building compelling value propositions that produce business results.