By Andrey Koptelov, Itransition
Learn the benefits of bringing IoT devices and manufacturing ERP together and explore the best practices of IoT-ERP integration.
Over the years, ERPs have become a common type of software in the manufacturing industry, tying together operational data sources from various departments and providing decision makers with an up-to-date view of their enterprise’s performance. IoT, compared to ERPs, is a novelty, but the one that has brought about a digital revolution on the production floor and is now being adopted across the sector at a rapid pace.
With the connected device ecosystem being a robust source of previously untapped data, the obvious question arises — should manufacturers bring industrial IoT and ERP together or leave IoT-generated insights solely at technicians’ disposal? The short answer is, the integration between ERP and IoT is highly desirable, as it can open a wellspring of opportunities for growth and advancement. Let’s take a deeper look at the positive outcomes of ERP-IoT connection.
3 Benefits Of Integrated IIoT And Manufacturing ERP
Enable All-Round Production Monitoring
Real-time production status always has been a blind spot for ERPs. To get some product life cycle insights, manufacturers adopt dedicated PLM tools or turn to ERP consulting for suitable custom solutions. However, this sort of software can supply solely static data through bills of materials, approved manufacturer lists, product files, and similar documentation, which prove insufficient for dynamic decision making.
By embedding IoT data into their ERPs, enterprises can finally gain visibility into obscure operations and get a complete up-to-the-minute picture of the production process. Moreover, with sensors and endpoints sending a constant data stream directly to the ERP, there is minimal human effort required for capturing this data.
Improve Forecasting Accuracy
Demand and supply forecasting is a critical but tricky business operation in the industry. Manufacturing ERPs were originally intended for this task but owing to the current economic uncertainty and pandemic-induced consumer behavior shifts, the business and operational data it captures fall short of delivering precise predictions.
Owing to IoT integration, smart devices from across manufacturing facilities can supply real-time information about inventory and supply levels, production and distribution, and employees’ performance directly into the ERP. Combining this dynamic data with the business insights that the ERP collects, managers can evaluate customer demand more accurately and take appropriate actions to effectively meet it.
Boost Operational Efficiency
Operational efficiency is a vital objective for any manufacturing company. A common problem is, however, that business executives tend to lack a practice-rooted insight into production operations, state of equipment, resource consumption and waste, etc., so the strategies they come up with turn out one-dimensional and not as effective as they need to be.
IoT-ERP integration can eliminate legacy silos between the business and production departments, allowing them to stay on the same page regarding the manufacturing process. Digging into IoT-generated data, decision makers can more accurately recognize areas of improvement or critical process bottlenecks and craft a more relevant efficiency improvement roadmap.
IoT And Manufacturing ERP Integration Tips
Unfortunately, the path to IoT-ERP integration is rather thorny for now, which is why only a few manufacturers have ventured down it. Here are four tips aimed to help manufacturing enterprises navigate this tricky transformation more safely.
#1: Narrow Down The Scope Of Integrated Devices
Industrial IoT networks generate tremendous amounts of data daily. While this data is of use to technicians and field workers, hardly all of it is necessary for operational decision making. Thus, cramming swaths of IoT-generated data into the ERP database is not only challenging and expensive but simply counterproductive.
Thus, before venturing into a full-scale IoT-ERP integration, manufacturers need to define the specific problems they intend to solve with IoT data or the improvements they want to achieve. With the goals outlined, they can pinpoint the smart devices to be integrated into their ERPs.
#2: Make The Most Of Default Integration Options
Another important step is exploring the IoT integration capacity of your platform. Intended as enterprise data hubs, ERPs are easy to connect and sync up with other applications. However, due to the novelty of IoT-ERP integration, manufacturers may face a lack of meaningful ready-to-use tools.
Odoo is one of the few forward-thinking vendors that provide an end-to-end solution for tying IoT devices with their ERP platform. Odoo IoT Box is a dedicated device aimed at connecting any smart hardware to the Odoo software through Wi-Fi, Bluetooth, or other proximity protocols. Then, device-generated data is automatically sent to Odoo, where managers can view it via a single interface, compile it into meaningful reports, and manage the hardware itself.
The majority of ERP providers, however, do not offer such high-end integration features but instead provide APIs to serve as connectors. Integration via an API, however, will require some development work.
Finally, there are ERPs, either homegrown or outdated, that don’t have any means of IoT integration. In that case, the only way to bring the software and connected devices together is by building a custom IoT connector.
#3: Focus On Security
Industrial IoT is rightfully notorious for its potential security risks. Considering this and the last year’s 100% increase in smart device breaches, IIoT-ERP integration has a high chance of compromising enterprise security. This is why manufacturers need to factor in adequate protection in the integration strategy.
First and foremost, your company should arrange end-to-end communication encryption between smart devices and the ERP to prevent data from being intercepted. Another necessary security practice is to restrict access to IoT-generated data for ERP users who don’t need it to perform their duties. Also, manufacturers need to conduct comprehensive IoT training for employees who will be working with smart devices for the first time, emphasizing safe behavior and security threat recognition.
Beyond that, make sure your enterprise strictly observes all general industrial IoT security practices, including network segmentation, regular password resets, and timely software updating. Otherwise, special IoT-ERP integration safeguards will hardly prove effective.
#4: Start Slow And Simple
Finally, whether you integrate IoT and ERP under your own steam or outsource this task, we advise you to start gradually instead of trying to complete the project in one go. IoT-ERP connection is still an unconventional solution in manufacturing and, with no integration playbook at hand, the team will in some cases have to rely on trial and error. In this context, it is better to tread cautiously and implement some basic integrations first to see how they fare and then proceed to larger-scale deployments.
About The Author
Andrey Koptelov is an Innovation Analyst at Itransition, a custom software development company headquartered in Denver. With a profound experience in IT, he writes about new disruptive technologies and innovations in artificial intelligence and machine learning.