IIoT and The Underpants Gnomes

Capture Data. Make Profit.
November 29, 2020 by
IIoT and The Underpants Gnomes
G5 Consulting & Engineering Services, David Schultz
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Southpark. Seriously?

I admit it. I am a fan of South Park. At the start of the show, the creators warn us that the show should not be watched by anyone. And yet, I love it. On of my favorite episodes is Gnomes. In this episode, Tweak is plagued by the Underpants Gnomes that sneak into his room and night and take his underpants. As the episode unfold, we learn that the gnomes are collecting underpants to make profit. It’s big business. What is clearly missing is how they will actually realize any profit.

A similar situation exists within companies as it relates their big-data and IIoT efforts. Somewhere along the line they got the impression that by adding sensors and capturing data (collecting underpants) they will realize some kind of novel insight with a significant return (make profit). And as crazy as this sounds, there are many companies doing it. 

As I have written in the past, an IIoT journey needs to be defined as to the specific business challenge to be solved. With this is mind, you can then determine how best to proceed. I have provided a couple of examples of how and effort fail and how it succeeds for two companies below. I have changed some of the details, but the idea is the same.

Missing the Mark

There is a fairly well known retailer that has a significant supply chain and logistics infrastructure. While they are good at the retailing side, their distribution is not as well executed. They knew they could improve on it, but weren’t really sure where to start. In walked the Underpants Gnomes. They purchased a fairly expensive business analytics tool and developed some dashboards. To be sure, this was not an inexpensive endeavor. After several tens of thousands of dollar, about half of what was created is no longer used. The other half is used, but does not provide any meaningful value. Suffice it to say, there was not any measurable ROI.

Adding Umami

A food ingredient manufacture had a much different experience. When the plant was built, it had the minimum amount of control for safe operation. The plant was not expected to last last and was only built to capture what appeared to be a short-term opportunity in the market. Now that the plant had been operational for 25 years, it was decided to improve its overall operational performance.

One of the adages in business is that you cannot optimize what you cannot manage. Moreover, you cannot manage what you cannot measure. But rather than adding a lot of sensor and instruments, the specific business outcomes were defined. In this case it was related to improving process reliability and energy consumption. The plant added instruments and sensors specific to these two areas. More importantly, they created a data retention policy around these two needs. Needless to say, the investment was significant, but ROI was substantial

They are currently in the next phase of their IIoT journey. One of the areas they identified next was part of their blending and packaging area. It was determined they had very little process information which was impacting their performance. Orders are managed via paper tickets with little insight into ongoing production. By capturing this information and displaying it real-time, they expect modest investments with returns that are less than a year. The plan is to make these investments incrementally. A warehouse management system (WMS) and condition-based maintenance (CBM) are two specific areas they are exploring.

Next Steps

So, before you being you IIoT journey, identify a specific business challenge. Develop a solution that is limited to those pieces that will resolve the problem. Once they are in place, move on to the next problem. But whatever you do, don’t get snookered by the underpants gnomes.

IIoT and The Underpants Gnomes
G5 Consulting & Engineering Services, David Schultz November 29, 2020
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