5 Ways to Achieve Cost Efficiency with IoT

Lyn Church – June 20, 2024

Collected at: https://www.iotforall.com/5-ways-to-achieve-cost-efficiency-with-iot

Organizations today are under a lot of pressure. Using existing resources to deliver high-quality products and services at lower costs. To do so, they must continually innovate to drive growth.

One approach to achieving high growth with cost efficiency is with the adoption of IoT.

Implementing and developing new technologies like IoT can unlock revenue streams and boost productivity. Simultaneously, it reduces costs associated with unexpected downtime and enables better resource allocation by automating complex processes.

Read on as we outline five ways IoT can help you achieve cost efficiency in your organization.

Decrease Downtime and Avoid Total Equipment Failure

Unplanned downtime incurs significant costs across any industry. When machinery fails, entire production lines grind to a halt. A study by ITIC found that for 98 percent of organizations, a single hour of downtime costs between $100,000 to over $300,000.

In global financial terms, the median cost of downtime cost industries more USD$2 million each year. Another study by logistics service provider DHL and Cisco predicts that IoT will save businesses $1.2 trillion in productivity costs alone.

When it comes to dealing with or avoiding downtime and maintaining cost efficiency, prevention is definitely better than cure.

Preventative maintenance can be carried out by performing regular risk audits. Enriched sensor data and a well-planned IoT suite allows stakeholders to know exactly where something is likely to go wrong. Organizations can use this data to take steps to keep that from happening.

Avoid Costly & Unnecessary Maintenance

Across industries today, maintenance is usually done reactively. This means that equipment or processes must sustain a malfunction before maintenance is carried out. Subsequently, delays arise due to a pause in production while waiting for parts and maintenance teams to arrive on site.

The alternative is to schedule regular maintenance windows. However, with this scenario, parts that are still functioning at peak performance can get replaced. Thereby sacrificing money and production time along the way. Ultimately both solutions lead to wasted resources.

IoT devices and sensors monitor a variety of parameters within the maintenance ecosystem. This includes machinery usage, energy consumption and part inventory. Data on system disruptions can also alarm the right people if anything goes wrong or begins to show signs of going wrong.

For example, sensors can alert when the machine temperature is fluctuating, quality of output is slipping or consuming more resources than required.

Transparent inventory management also means you have the right parts when you need them which reduces waiting time between ordering and repair or replacement.

Notice and Fix Bottlenecks

It is not always immediately apparent where these bottlenecks are in an organization, or the degree that they impact productivity. IoT can quickly pinpoint which areas are slowing you down the most and even automate them to streamline efficiencies.

Accurate, real-time data provide actionable insight to eliminate congestion and improvements to optimize processes. It also allows managers or supervisors both on and off-site to react and rectify it more quickly than before.

Research by IBM has found that 30 percent of time-based preventive maintenance is unnecessary, while switching to a predictive maintenance model can reduce costs by 18 to 25 percent.

Fine-grained data and analytics also help you prioritize which steps to undertake for the highest payoff.

For example, monitoring and automatically adjusting HVAC systems in large facilities can lead to significant savings. The data also gives immediate insight into whether a solution is working, or if further tweaks are necessary to achieve an ideal outcome.

Connect and Protect Workers

Across industries, it is not uncommon for workers to occasionally disregard safety protocol due to distractions, resulting in mishaps. IoT makes the workplace safer by offering a deeper understanding to a host of overlooked issues.

IoT-enabled smart tokens gather time, location, and movement data, sent to anchors mounted strategically around the site. These tokens can notify superiors or others in the vicinity if, preventing accidents from occurring if parameters are close to being exceeded.

In addition, the United States Department of Labor estimated that organizations save an average USD$4-6 for every dollar invested in a safety program. This ensures more projects remain on time and achieve cost efficiency with IoT solutions.

Improve Long-Term Planning and Strategy

Consistently collecting data over the lifecycle of a project builds up a huge pool of information about operations and key assets. Giving key decision makers valuable insights into future changes before money is spent towards action.

It is important to realize that IoT adoption is not a static goal. It is a journey that will progressively transform your business. Thereby requiring commitment to sustain long-term strategic models based on reliable and precise data.