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Industry 4.0 - ERP and IIoT Integration - Opportunities, Challenges, and Future

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Industry 4.0

Enterprise Resource Planning (ERP) integrates the essential functions required to run a company into a single system. Any modern ERP system comprises a long list of software depending on which industry they serve and the modules. Even the implementation of small-scale ERP takes at least a few months to complete. Larger-scale projects often require more than two years.

The time required to implement system monitoring and data collection technologies is significantly reduced by integrating ERP and IIoT. In the near future, improvements in IIoT technologies are poised to decrease the cost of ERP implementation.

More than 22 billion devices are currently connected to IIoT devices. Experts predict this number to reach 50 billion by 2030. The amount of data that these devices will come across is difficult to sort.

Integration with ERP will improve data quality and availability; since wireless solutions that are easy to deploy and enable more straightforward and more cost-effective access to data, they drive higher revenues. This article will understand the importance of ERP and IIoT integration and explore the various challenges during its implementation.

What is the Integration of ERP and IIoT?

Unlike ERP applications which have been around for more than 25 years, IIoT is a technology that has risen to prominence quite recently. The basic functionality of ERP tools involves sharing a standard process and data model, which covers both broad and deep operational end-to-end processes. These processes include finance, HR, distribution, manufacturing, service, and the supply chain.

ERP applications simplify various administrative and operational business processes across multiple industries, including the line of business, customer-facing, administrative, and asset management features of an enterprise by automating these processes.

This large-scale amalgamation of functions done by ERP can be challenging to track. By integrating ERP applications with IIoT, any fluctuations in asset health and utilization are directly reported in the ERP system in real-time. This enables all the concerned workers to access vital information and take the required action as soon as possible.

Opportunities in ERP and IIoT Integration

The integration of ERP and IIoT brings together the already established ERP applications and relatively new IIoT devices and allows the organization to reap the benefits. Some of the current opportunities for utilization of ERP and IIoT integration include:

  • RFID (Radio Frequency Identification)

RFID tags continue to be a large part of monitoring the movement of an item in, out, and across the warehouse, store, or supply chain. When the information provided by these RFID tags is integrated with ERP applications, processes like receiving, tracking movements, and shipping out products become entirely automated.

  • Quality Processes in Manufacturing

When IIoT technologies are integrated with ERP, they can make the efficiency of traditional quality processes much more efficient. Without this integration, the checking can be inaccurate and delay the plan to fix the product. IIoT technologies give us the ability to monitor the manufacturing equipment and product line throughout the process.

  • Fleet Management

Fleet management industries have benefitted mainly from integrating IIoT and ERP since it provides valuable applications like vehicle tracking and geofencing. Data passed from IIoT sensors can help validate and help achieve business goals.

  • Digital Supply Chain

Unlike before, supply chains are no longer a set of opaque warehouses, stores, shipping terminals, or trucks. The use of IIoT devices integrated into ERP applications has made it a constant barrage of movement, providing you the capability to look at operations at an SKU level when required.

  • Digital Worker - Robotic Process Automation (RPA)

What is a Digital Worker? Digital Worker and the Robotic Process Automation suite of software augment the human worker by automating tasks while understanding human intent. It utilizes all available advancements in Artificial Intelligence, Machine Learning, Data Analytics, Predictive Maintenance, and Computer Vision, to name a few. Software and robotics are increasingly being used to automate processes such as data input, analysis, and decision making. The aim is to augment human skills with robotic tools: the digital worker.

IIoT integration can help this process by providing access to all of an ERP system’s data. For example, it could enable a logistics company’s robots in China or Brazil to autonomously order spare parts from one of its warehouses in France without human intervention while simultaneously processing customer orders at another warehouse on the other side of the world.

In healthcare, for instance, hospitals hope that robot doctors will soon be able to carry out tasks like scheduling appointments more quickly than humans - freeing up staff time so they can focus on patients who need more attention and care.

Challenges in ERP and IIoT Integration

The lack of trust in IIoT as a new technology trend seems to be one of the more difficult challenges that stop companies from integrating. Most companies that have already invested heavily in ERP usually have data security as a top concern and are worried about the accuracy and reliability of the data coming from an IIoT system.

ERP had its inception much before IIoT, which has resulted in ERP systems that are so well-maintained that even a single record could represent a few million dollars. This may serve as a barrier for companies to explore novel technologies since it’s simply too risky to experiment with anything new.

Future of ERP and IIoT Integration

  • Improved Asset Management

Since IIoT can provide real-time information by tracking and monitoring expensive assets, materials, or equipment in the supply chain, integrating ERP coupled with IIoT sensors directly sends this information into the ERP system and allows all parties involved in the supply chain to stay informed and make a decision.

  • Greater Operational Efficiency

Integrating ERP with IIoT technology means that many manual tasks will be automated and allow for better operational efficiency. For example, an operator would not be required to scan a barcode and input the data manually into the ERP system.

  • Improved Forecasting

Forecasting consumer purchases and using a product is probably one of the most demanding challenges companies face and can result in dire consequences when companies get it wrong. It is easier to make informed supply chain decisions when you start analyzing massive quantities of IIoT data. Then, by integrating your ERP with IIoT, you can establish a direct link between production and consumption by allowing businesses to access real-time data. Predictive maintenance aspects can be implemented to reduce downtime as well.

The appeal of integrating ERP with IIoT devices lies in the modernizing of your ERP to push innovation and provide business value. The implementation of ERP and IIoT applications working together can change the very way we receive information.

The biggest positive takeaway of ERP + IIoT implementation is in the higher efficiencies that are achieved - the heights of our imagination are the only limiting factor. This journey is unique to each business; this means that there is no one-fits-all solution. Decide on a solution that is custom-tailored to your special IT and business needs.

If you have questions about digital transformation that you’d like for us to cover, please email contact@solveforward.com or @solveforward on Twitter. We’d love to hear from you!